European Cartel Cases: Focus on Plea Bargaining and Private Damage Actions
03/09/2007Speaking at a conference on 8 March 2007, the European Commissioner for Competition Policy, Neelie Kroes, announced changes to the way cartels are dealt with in Europe. Once implemented, the changes could have a significant impact on companies involved in a cartel with effects in Europe. Wishing for "…the future for cartelists to continue to look as bleak as possible", Commissioner Kroes lifted the veil on two of her plans for further strengthening the fight against cartels:
Plea Bargaining/Direct Settlement
As the number of European leniency applications continues to rise, the European Commission is looking into ways to simplify the handling of cartel cases. Commissioner Kroes intends to implement a system similar to the US "plea bargaining" system, allowing the Commission to reach agreement with cartel participants on the nature, scope and duration of the cartel as well as their individual liability. The changes would ease the burden on the European Commission, which is generally obliged to investigate each case completely and to fully reason its decisions. The incentive to enter into a direct settlement would be a further reduction of the fine on top of that already possible under the 2006 Leniency Guidelines (Commission notice on immunity from fines and reduction of fines in cartel cases, Official Journal 2006/C 298/17). Apart from the lower fines, the changes could cut back on the average three years it takes the European Commission to prosecute a cartel case and limit subsequent litigation, freeing up resources of both the European Commission and the involved cartel participants.
The new system would complement the current ability of the European Commission to negotiate so-called "commitments" in antitrust cases where fines are not likely to be imposed (Article 9(1) of Council Regulation (EC) 1/2003 on the implementation of the rules of competition laid down in Articles 81 and 82 of the Treaty, Official Journal 2003/L 1/1).
Private Litigation
Commissioner Kroes believes that promoting a right to damages is necessary to guarantee effective European antitrust rules. The European Commission will therefore produce a discussion paper (White Paper) later this year, detailing an alignment of national procedural rules to allow for more private antitrust litigation. In this respect, the Commissioner specifically mentioned "representative actions" by consumer interest groups and "double damages" as possible ways to enhance private antitrust litigation.
McDermott Will & Emery has a long and successful track record in cartel cases. The EU Competition Group is currently representing clients in infringement proceedings before the European Commission and is—as one of the few law firms in Europe—negotiating "commitments" with the aim of avoiding a fine. The group is also involved in litigation before the UK courts in one of the first major private antitrust litigation cases in Europe.
