Along with the other detection and investigation tools at the Commission’s disposal, the leniency programme was set up in 1996 to allow undertakings a limited opportunity to admit to their wrongdoing and avoid or reduce a potentially heavy fine for competition infringements.
The main characteristics of the programme are currently provided in the 2006 Notice on immunity from fines and reduction of fines in cartel cases (the “Leniency Notice”).
The Leniency Notice covers agreements and concerted practices which are considered hardcore restrictions between competitors. It does not cover vertical restraints.
In essence, the leniency programme offers those undertakings involved in a cartel which self-report and hand over evidence, either total immunity from fines or a reduction in the fines which the Commission would have otherwise imposed on them. It also allows the Commission to discover secret cartels and to obtain insider evidence of the infringement. The leniency policy also has a deterrent effect on cartel formation and it destabilizes the operation of existing cartels as it can create distrust and suspicion among cartel members.
The first cartel participant that informs the Commission of a cartel and provides sufficient information for the Commission to commence an investigation receives full immunity from any eventual fine, if it complies with the conditions of the Leniency Notice.
Any other cartel participants that apply for leniency after the investigation has started could receive a reduction in any eventual fine if they provide sufficient evidence that represents "significant added value". Evidence is considered to be of a "significant added value" for the Commission when it reinforces its ability to prove the infringement. The first company to meet these conditions is granted a reduction in the fine of between 30% to 50%, the second between 20% to 30%, and subsequent companies up to 20%.
As the timing of a submission influences the qualification and ranking of the immunity or leniency applicants and therefore the fine reduction that will ultimately be granted, any undertaking reporting the cartel should apply as soon as possible.
Applications for leniency are treated with strict confidentiality and cannot be used in other proceedings against the applicants. There is no criminal liability under EU competition law. Therefore, the immunity contemplated in the EU leniency programme is immunity from the administrative fine that would otherwise have been imposed and which could have been up to 10% of the worldwide turnover of the respective undertaking.
The applicant must co-operate genuinely, fully, expeditiously and on a continuous basis with the Commission from the moment of the application and throughout the administrative procedure (which includes not destroying, falsifying or concealing evidence of the alleged cartel when contemplating making the application, and not informing others about the application).
The applicant must terminate its involvement in the cartel immediately following its application, unless doing so would, in the Commission's view, jeopardise the inspection.
The applicant must not have destroyed, falsified or concealed evidence of the alleged cartel when contemplating making its application and must not inform others that it has applied for immunity.
The Commission will grant immunity from fine if that undertaking is the first to submit information and evidence which in the Commission's view will enable it to:
- carry out a targeted inspection in connection with the alleged cartel; or
- find an infringement of Article 101 of the Treaty in connection with the alleged cartel, if the Commission did not have, at the time of the submission, sufficient evidence in its possession.
Any applicant for immunity and/or leniency has to fulfil in all cases the following conditions:
- cooperate genuinely fully, on a continuous basis and expeditiously from the time it submits its application throughout the Commission's administrative procedure;
- ended its involvement in the cartel immediately following its application, except for what would, in the Commission's view, be reasonably necessary to preserve the integrity of the inspections;
- must not have destroyed, falsified or concealed evidence of the cartel nor disclosed the fact or any of the content of its contemplated application, except to other competition authorities.