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Regulation on Leniency

Depending on the outcome of the investigation conducted by the European Competition Authority, in order to reduce the amount of fine, if any, to be imposed on the Undertaking, we may think of applying for leniency program (active cooperation with the Authority) set forth under the Regulation on Leniency and the Guideline on Explanation of the Regulation on Active Cooperation for Discovery of Cartels[1].

 

According to the Regulation on Leniency, the leniency program is available for cartelists. A definition of “cartel“ is also provided in the Regulation on Leniency for this purpose. A cartelist may apply for leniency until the investigation report is officially served. Depending on the application order, there may be total immunity from, or reduction of, a fine. This immunity or reduction includes both the companies and its Managers, with the exception of the “rig-leader“, which can only benefit from a second-degree reduction of fine. The conditions for benefiting from the immunity/reduction are also stipulated in the Regulation on Leniency. For example:

 

  • the first incumbent firm to file an appropriately prepared application for leniency before the investigation report is officially served may benefit from total immunity  and Managers of the first applicant will also be totally immune. However, in order for total immunity to be awarded, the applicant must not be the ring-leader. If this is the case (ie, if the applicant has forced the other cartelists to participate in the cartel), the firm will receive a fine reduction of between 33% and 50% and the  and/or Managers will receive a reduction of between 33% and 100%;
  • the second incumbent firm to file an appropriately prepared application will receive a fine reduction of between 33% and 50%.  and Managers of the second applicant that actively cooperate with the authority will benefit from a reduction of between 33% and 100%;
  • the third applicant will receive a reduction of between 25% and 33%.  and Managers of the third applicant that actively cooperate with the authority will benefit from a reduction of between 25% and 100%; and
  • subsequent applicants will receive a reduction of between 16% and 25%.  and Managers of subsequent applicants will benefit from a reduction of between 16% and 100%.

 

The applicant must continue to cooperate actively with the authority until a final decision on the case has been rendered.

 

The Managers of the company can separately apply for leniency. Such an application would be independent from applications by the cartelist itself, if there are any. Depending on the application order, there may be total immunity from, or reduction of a fine for such manager/employee. The requirements for such individual application are the same as stipulated above.

 

 

[1] The Guideline on Explanation of the Regulation on Active Cooperation for Discovery of Cartels was published in April 2013.

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