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EC mulling leniency applicants immunity from damages – Lear Rome

The European Commission (EC) is undergoing an internal exercise to understand proposals to immunise leniency applicants from damages, though there are no “straightforward answers”, an EC official has said.

Xandra Reintjes, a policy officer working in the European Competition Network & Private Enforcement unit of DG Competition, made the remarks during a panel discussion of Leniency and Damages Litigation during the Lear Competition Festival in Rome.

The European Commission encourages corporates to admit cartel infringements, offering a discount from fines if they do so – but that does not shield a company from the increasing risk of private damages suits that follow in the wake of cartel decisions. Now the EC and national agencies are examining ways that leniency applicants could be immunised from damages.

Osborne Clarke partner Thomas Funke noted that the German Monopolkommission is at the end of this month closing a public consultation on a legislative proposal to immunise leniency applicants from civil damages actions. 

Funke said Germany’s Monopolkommission proposal posits an exemption from civil liability for the first leniency recipient, unless that company is dominant, and except where compensation is unavailable to an injured party via another cartelist. 

Funke said that he was unsure whether a member state such as Germany would be able to implement such a policy alone or whether it would need to be introduced at EC level. 

Asked whether the EC is investigating such proposals to immunise leniency applicants, Reintjes said she could not be very concrete, but that the “exercise internally is going on to understand matters, [the] reasons behind [such proposals], and to gain more information including through data”. It’s a work in progress, she added.  

“There are clear legal questions to be considered; it’s of course a balance to be struck,” Reintjes said, noting that changing one aspect of the leniency regime would doubtless impact on others.   

Reintjes said the right to full compensation “is of course very important and is established by law” but added that other issues to be considered included the incentive of other cartel participants, and “potential effects on market structure”, that might flow from such a policy. 

Referencing the Monopolkommission’s suggestions that the exemption should not apply to a dominant player, or where no redress could be sought from other cartelists, Reintjes said: “These are not straightforward solutions; there are not straightforward answers.” 

Last October, the head of the German competition authority told PaRR he saw an urgent need to discuss some type of “privilege” for leniency applicants with regard to private damages. Existing elements in German law could be developed when considering how to develop such a tool, Andreas Mundt said in an interview

In a speech on cartel enforcement delivered at the Italian Antitrust Association Annual Conference last October, EC EVP Margrethe Vestager said the EC was engaged in talks with other competition enforcers to learn from experience in other territories on how the leniency programme is working.

Read more PaRR articles from the Lear conference here:

EC mulling leniency applicants immunity from damages – Lear Rome

Greek petroleum market study imminent – Lear Rome

Italian, Greek agencies ready themselves for DMA cooperation – Lear Rome

EU FSR draft implementing regulation to be published in December, says official – Lear Rome