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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, eleven cartel cases have been settled: DRAMs, in June 2010; the "hybrid" case Animal Feed Phosphates in July 2010, Detergents in April 2011, CRT glass in October 2011, refrigeration compressors in December 2011, water management products in June 2012, automotive wire harnesses in July 2013, yen derivatives and Euro derivatives ("hybrid" cases) in December 2013, foam in January 2014 and power exchanges in March 2014.

Settlement discussions are currently ongoing in other cases. As always, the Commission ensures that companies' rights of defence are respected and that the process is fair, transparent and non discriminatory.

Why settlement?

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.

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