Already shortly after the entry into force of its current Leniency Notice in 2006, the European Commission (EC) suggested it might be a good idea if it gave some guidance on how it would be applied in practice. Now, more than 15 years later, the EC has finally issued its guidance in the form of a Frequently Asked Questions (FAQ) document published on its website on 25 October 2022. Essentially it seeks to encourage leniency applications, mainly by removing (self-created) uncertainties about eligible conduct.
The 15 pages of FAQs are meant to provide guidance on the EC's leniency policy and practice. And, not surprisingly, they do just that, quite generously citing the EC’s own decisional practice and never really going beyond what outside counsel regularly dealing with leniency applications would have known anyway.
But that is not necessarily a bad thing. The decrease in leniency applications observed over the last few years is not so much because of any shortcomings inherent in the Notice itself. Awarding immunity to the „first one in“ and incentivising those who follow suit with fine reductions of up to 50% (plus a possible further 10% if the case is settled) still makes a lot of sense. So do the rules on how to get there as set out in the EC's Notice. And rumour has it that the EC has become slightly more generous recently – both when awarding fine reductions and with what it might have perceived early on in its leniency practice as shortcomings in an applicant's cooperation.
So, it does not necessarily come as a surprise that the particularly noteworthy issues addressed in the FAQs are linked to the uncertainties of whether or not to make a leniency application in the first place. In that context, the EC tries to incentivise companies with both carrots and sticks:
- First, by inviting them to reach out informally to so-called Leniency Officers to see whether the conduct in question is eligible for a leniency application – which might indeed prove helpful nowadays, when the EC also imposes fines on more ambiguous conduct which even the most sophisticated antitrust lawyers might not necessarily consider an infringement at all (as in Car Emissions);
- Secondly, by threatening to pursue even time-barred conduct (though not being able to impose fines for any such conduct) in an effort to disincentivize companies from not reporting (but only terminating) their involvement in a cartel, hoping that it will become time-barred without anyone noticing;
- Thirdly, by making it clear that it will make quite some effort to protect an applicant's leniency submission in foreign fora.
Whether the FAQ document will help boost leniency applications remains to be seen. And that might, by the way, not just be because of the more often than not quite terrifying damages claims looming down the road. Rather, believe it or not, it is at least equally likely that all the compliance efforts made by companies over the last 20 years or so have started bearing fruit.