Cartel case settlement
What is a settlement?
A settlement is used by the Commission to speed up the procedure for adoption of a cartel decision when the parties admit to the Commission's objections, and in return receive a 10% reduction in the fine.
Settlements compared to commitments decisions: A settlement is different from a commitments decision in that:
- a settlement decision does establish an infringement and requires an admission of guilt from the parties, whereas a commitment decision does not establish an infringement and does not require any admission by the parties;
- a settlement decision simply requires a "cease and desist" of past behaviour, whereas commitments decision requires commitment to future behaviour;
- a settlement procedure is only available for cartels whereas commitment decisions are appropriate in all antitrust cases except for cartels.
Settlements compared to plea bargains: A settlement is not the same as a plea bargain. The Commission has to show the parties that it has sufficient evidence to bring a final decision, and must send a Statement of Objections.
How have settlements been used?
Since the Settlement Notice was announced in June 2008, several cartel cases have been settled. The first settlement decision was adopted in 2010 (DRAMS). Since then, about half of the decisions adopted were concluded following the settlement procedure.
You can find information on these cases in the respective press releases. Typically, the title of the press release refers to the settlement process.
Settlement discussions may currently be ongoing in other cases, but the Commission does not provide information on them.
In case one or more of the settling parties opt out of the settlement procedure, the Commission may settle with the remaining parties and follow the 'normal' procedure for the parties that opt out (so-called hybrid cases). The press releases issued at the time of the adoption of the settlement decision usually identify the undertaking(s) that have opted out.
To date, the Commission has only once stopped the settlement procedure for all parties. This occurred in the smart card chips case.
From the viewpoint of a company involved in a cartel, the advantages are a shorter procedure and a reduced fine.
The Commission benefits from a shorter, quicker administrative process, allowing for more efficient use of staff in the cartel department, and a reduced number of appeals to the court.
How does it work?
When parties are convinced of the strength of the Commission's case in view of the evidence gathered during the investigation and of their own internal audit, they may be ready to admit their participation in a cartel and accept their liability for it.
The philosophy behind settlement is that the Commission services need to obtain a "common understanding" with all settling parties on the facts and the scope of the Commission's potential objections in a case.
Can companies negotiate with the Commission?
No. Companies cannot negotiate with the Commission about the existence of an infringement or the appropriate fine. But the Commission can reward their cooperation by speeding up the proceedings and reducing the fine.
Does the settlement procedure apply to all cartel cases?
Only the Commission can decide which cartel cases are suitable for settlement, and of course not every one is.
However, companies are not obliged to enter settlement discussions or ultimately to settle, and the Commission may only apply the settlement procedure upon parties' explicit request.
Does the settlement procedure apply to other antitrust cases?
No, cartels only.
How does the leniency programme relate to the settlement procedure?
The "Leniency Notice" rewards companies who voluntarily disclose to the Commission the existence of a cartel and bring evidence to prove the infringement. The reduction of the fine varies widely depending on the timing and significant added value of the information and evidence provided.
In contrast, settlement is a tool that aims to simplify, speed up and shorten the procedure leading to the adoption of a formal decision, thus saving human resources in the cartel department. The "Settlement Notice" rewards concrete contributions to procedural efficiency. All parties settling in the same case will receive the same reduction of the fine (10%), because their contribution to procedural savings will be the same.
Leniency is an instrument to gather the evidence while settlement is an efficiency instrument.
The Settlement Notice, answers to other frequently asked questions and background information can be found here.