An empirical assessment of the european leniency notice

Journal of Competition Law and Economics

Volumn 5, Issue 3, 2009, Pages 537-561

  Stephan, Andreas ^a  

^a UNIVERSITY OF EAST ANGLIA   (United Kingdom)

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[No Author keywords available]

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EID: 70349593669     PISSN: 17446414     EISSN: 17446422     Source Type: Journal    
DOI: 10.1093/joclec/nhn031     Document Type: Article

References (100)

1. OECD, Fighting Hard Core Cartels: Harm, Effective Sanctions and Leniency Programmes, Reports to the Organization for Economic Co-Operation & Development (2002).
2. J. Vickers, "Competition Economics," Speech delivered to Royal Economic Society annual public lecture. Royal Institute, London (4 December 2003).
3. If immunity were available to more than one undertaking, parties to a cartel might rely on leniency to assist them in punishing firms that deviate from the collusive agreement. Firms might also wait until an investigation has been opened into their industry before self-reporting. See, e.g., findings in J. Chen and J.E. Harrington, The Impact of the Corporate Leniency Program on Cartel Formation and the Cartel Price Path, CIRJE Discussion Paper 358 (August 2005).
4. Although some argue that providing leniency discounts to subsequent parties who come forward will dilute the incentive for the first firm to come forward, because the second and third firms to come forward do not face the full fine. See, e.g., C.J. Ellis and W.W. Wilson, CARTELS, PRICE-FIXING AND CORPORATE LENIENCY POLICY: WHAT DOESN'T KILL US MAKES US STRONGER (University of Oregon, 2003).
5. U.S. Department of Justice, "Corporate Leniency Policy," available at: http://www.usdoj.gov/atr/public/guidelines/0091.htm (accessed September 12, 2008)
6. Immunity under US leniency normally extends to the company's employees. Unlike the EC where only administrative fines in a civil process can be imposed on companies, in the US criminal sanctions can be imposed on both firms and individuals.
7. S.D. Hammond, "Cornerstones of an Effective Leniency Program," Speech delivered to ICN Workshop on Leniency Programs, Sydney (November 2004).
8. 'Commission notice on the non-imposition or reduction of fines in cartel cases' OJ [1996] C 207.
9. See "OFT's Guidance as to the Appropriate Amount of a Penalty," OFT423 (2004)
10. and "Leniency in Cartel Cases," OFT436 (2005).
11. European Commission, "Commission Notice on Immunity from Fines and Reduction of Fines in Cartel Cases," OJ [2002] C 45/3. For a list of all Commission decisions in this period, see Appendix A.
12. DG Competition Press Release, MEMO/02/23 (February 13, 2002).
13. DG Competition Press Release, IP/01/1011 (July 18, 2001).
14. F. Arbault and F. Peiro, "The Commission's New Notice on Immunity and Reduction of Fines in Cartel Cases: Building on Success," EC Competition Policy Newsletter, No 2 (June 15, 2002).
15. Most recently, N. Kroes, "Reinforcing the Fight against Cartels and Developing Private Antitrust Damage Actions: Two Tools for a more Competitive Europe," Speech delivered to Commission/IBA Joint Conference on EC Competition Policy, Brussels (March 2007).
16. This has also been observed by S. Arlman, "Crime but No Punishment: An Empirical Study of the EU's 1996 Leniency Notice and Cartel Fines in Article 81 Proceedings," Universiteit van Amsterdam Masters Thesis (2005).
17. See, e.g., S.D. Hammond, "When Calculating the Costs and Benefits of Applying for Corporate Amnesty, How Do You Put a Price Tag on an Individual's Freedom?" Speech delivered to Fifteenth Annual National Institute on White Collar Crime, San Francisco (March 2001).
18. R. Hewitt Pate, "International Anti-Cartel Enforcement," Speech delivered to ICN Cartels Workshop, Sydney (November 2004).
19. The prospect of adopting a system of negotiated settlement in EC cartel cases is discussed in A. Stephan, "The Direct Settlement of EC Cartel Cases' Competition," Public Consultation on Cartels Settlements (January 2008).
20. This was amended in the 2002 notice.
21. See Hammond, supra note 16.
22. W.P.J. Wils, "Is Criminalization of EU Competition Law the Answer?" Speech delivered to ACLE Conference on Remedies and Sanctions in Competition Policy, Amsterdam (February 2005).
23. A leniency discount has never been granted in a case primarily involving vertical collusion.
24. All figures of fines contained in this section are at the levels imposed by the European Commission before appeal to the Court of First Instance and Court of Justice, many of which are still pending.
25. European Commission, Amino Acids - Commission Decision of June 7, 2000 (Case 36.545) OJ [2001] L 152, 412.
26. European Commission, Interbrew and Alken-Maes - Commission Decision of December 5, 2001 (Case 37.614) OJ [2003] L 200 at 356.
27. European Commission, Brasseries Kronenbourg, Brasseries Heineken - Commission Decision of September 29, 2004 (Case 37.750) OJ [2005] L 184.
28. Interbew went on to receive immunity for revealing the Dutch Brewers case: DG Competition Press Release, IP/07/509 (April 18, 2007).
29. European Commission, Choline Chloride - Commission Decision of December 9, 2004 (Case 37.533) OJ [2005] L 190 at 3.
30. As indicated in Table 2, of the €3.459 billion imposed in cases triggered by leniency applications, €2.179 billion was imposed in cases involving international cartels with prior/simultaneous US investigations.
31. See Interbrew and Alken-Maes, supra n 25
32. European Commission, Luxembourg Brewers - Commission Decision of December 5, 2001 (Case 37.800) OJ [2002] L 253
33. French Brewers, supra n 26
34. and European Commission, Dutch Brewers - Commission Decision of April 18, 2007, DG Competition Press Release IP/07/509.
35. See Interbrew and Alken-Maes, supra n 25, at 157 and 321.
36. European Commission, Carbonless Paper - Commission Decision of December 20, 2001 (Case 36.212) OJ [2004] L 115 at 430.
37. DG Competition Press Release, IP/04/1313 (October 26, 2004).
38. DG Competition Press Release, IP/04/1065 (September 3, 2004).
39. DG Competition Press Release, IP/06/1222 (September 20, 2006).
40. This includes only completed cases, where the Commission has delivered its decision.
41. In the case of Vitamins, three sub-cartels were still operating but the other six had collapsed.
42. S. Mahdi et al., "A Review of the Impact of Regulation on the Chemical Industry," Final Report to the Royal Commission on Environmental Pollution (2002).
43. K. Chapman and H. Edmond, Mergers/Acquisitions and Restructuring in the EU Chemical Industry: Patters and Implications, 34.8 REG. STUDIES, 753-67 (2000).
44. K. Eichenwald, THE INFORMANT (New York: Broadway 2000).
45. European Commission, Methionine - Commission Decision of July 2, 2002 (Case 37.519) OJ [2003] L 255.
46. European Commission, Methylgucamine - Commission Decision of November 27, 2002 (Case 37.978) OJ [2004] L 38, 153.
47. European Commission, Food Flavour Enhancers - Commission Decision of December 17, 2002 (Case 37.671) OJ [2004] L 75.
48. European Commission, Organic Peroxides - Commission Decision of December 10, 2003 (Case 37.857) OJ [2005] L 110.
49. DG Competition Press Release, IP/01/1355 (March 19, 2002).
50. European Commission, Citric Acid - Commission Decision of December 5, 2001 (Case 36.604) OJ [2002] L 239, 35.
51. Id., at 38
52. Id., at 223
53. Id., at 118
54. Id., at 62
55. European Commission, Vitamins - Commission Decision of November 21, 2001. (Case 37.512) OJ [2003] L 6, 342.
56. Id., at 253
57. Id., at 46
58. Id., at 348
59. Id., at 448
60. Id., at 46
61. Id., at 490
62. J.M. Connor, "Extraterritoriality of the Sherman Act and Deterrence of Private International Cartels," ExpressO Preprint Series, Paper 263 (2004).
63. See Vitamins, supra note 51, at 223
64. European Commission, Sorbates - Commission Decision of 1 Oct 2003 (Case 37.370) OJ [2005] L 182
65. L. Jarvis, Sorbates Could Stabilize with Exit of Two Players, 260 CHEMICAL MARKET REPORTER 10 (2000).
66. C. Boswell, Upward Pricing Pressure for Organic Peroxides, 29 CHEMICAL MARKET REPORTER FOCUS, 29 (2000).
67. F. Mirasol, Gluconate Prices Moving Up Steadily as Production Costs Continue Escalating, 254 (3) CHEMICAL MARKET REPORTER 5 (1998).
68. See Amino Acids, supra note 24, at 32
69. Id., at 45
70. Id., at 360
71. B. Shearer, Organic Peroxides Growing with the Plastics Industry, 249 CHEMICAL MARKET REPORTER 5 (1996).
72. E.g., see Citric Acid, supra note 46, at 118
73. L. Jarvis, Choline Chloride Producers Attempt to Recapture Margins 2 CHEMICAL MARKET REPORTER, 3 (2001).
74. L. Jarvis, Sorbates Could Stabilize with Exit of Two Players, 260 CHEMICAL MARKET REPORTER, 10 (2000).
75. See Food Flavour Enhancers, supra note 43, at 37
76. European Commission, MCAA - Commission Decision of January 19, 2005 (Case 37.773) OJ [2006] L 353.
77. A. Wood, Getting in a Fix, 167 (4) CHEMICAL WEEK 5 (2005).
78. European Commission, Fine Art Auction Houses - Commission Decision of October 30, 2002 (Case 37.784) OJ [2005] L 200.
79. European Commission, "Commission notice on immunity from fines and reduction of fines in cartel cases," OJ [2006] C 298/17.
80. S. Gale, The Leniency Regime and the Fight against Cartels by the Directorate General for Competition, 25 (11) COMPANY LAWYER 324-330 (2004)
81. M. Jephcott, The European Commission's New Leniency Notice - Whistling the Right Tune, 23 (8) ECLR 378-87 (2002)
82. J. Carle, The New Leniency Notice, 23 (6) ECLR 265-272 (2002).
83. For a more detailed discussion of the 2002 reforms, and the trend of convergence with the U.S. leniency, see D.J. Arp and C.R.A. Swaak, A Tempting Offer: Immunity from Fines for Cartel Conduct under the European Commission's New Leniency Notice, 24 (1) ECLR 9-18 (2003).
84. For a discussion of how the 2006 notice has addressed some issues, and for an overview of some procedural issues that remain, see J.S. Sandhu, The European Commission's Leniency Policy: A Success, 28 (3) ECLR 148-157 (2007).
85. For a discussion on the problem of multiple filings on the national level, see N. Levy and R. O'Donoghue, The EU Leniency Programme Comes of Age, 27(1) WORLD COMPETITION 75-99 (2004).
86. For a discussion on a one-stop-shop for leniency, see C. Gauer and M. Jaspers, Designing a European Solution for a 'One Stop Leniency Shop, 27 (12) ECLR 685-692 (2006).
87. Under such a system, applicants need only provide the relevant national competition authorities with a brief description of the infringement to secure their place in the queue with that authority for immunity or a leniency discount.
88. DG Competition Press Release, IP/07/209 (February 21, 2007).
89. European Commission, Methacrylates - Commission Decision of 31 May 2006 (Case 38.645) OJ [2006] L 322.
90. European Commission, Hydrogen Peroxide and Perborate - Commission Decision of May 3, 2006 (Case 38.620) OJ [2006] L 353.
91. DG Competition Press Release, IP/06/1647 (November 29, 2006).
92. D. Henry, Leniency Programmes: An Anaemic Carrot for Cartels in France, Germany and the UK, 26 (1) ECLR 13-23 (2005)
93. J.M. Joshua and P.D. Camesasca, Where Angels Fear to Tread: The Commission's 'New' Leniency Policy Revisited, 2005 EUROPEAN ANTITRUST REVIEW 10 (2005).
94. See, e.g., Id., 20-23.
95. Under "Amnesty Plus," a firm negotiating a fine at plea bargain can obtain a further discount by providing information that relates to a different infringement. For arguments as to why this should be adopted in the EC, see D. McElwee, Should the Commission Adopt 'Amnesty Plus' in Its Fight against Hardcore Cartels, 29 (5) ECLR 558-565 (2004).
96. See, e.g., J. Hinloopen, An Economic Analysis of Leniency Programs in Antitrust Law, 154 (4) DE ECONOMIST, 415-432 (2003).
97. J.M. Joshua, "That Uncertain Feeling: The Commission's 2002 Leniency Notice," in C.-D. Ehlermann and I. Atanasiu (eds), EUROPEAN COMPETITION LAW ANNUAL 2006: ENFORCEMENT OF PROHIBITION OF CARTELS (Oxford: Hart Publishing 2007).
98. M.J. Reynolds, Immunity and Leniency in EU Cartel Cases: Current Issues, 27 (2) ECLR 82-90 at 83 (2006)
99. K. Nordlander, Discovering Discovery - US Discovery of EC Leniency Statements, 25(10) ECLR 646-659 (2004).
100. See 2006 Leniency Notice, supra note 75, at 6.