Court of Justice of the European Union Rules Leniency Programs of the EU and Member States Coexist Autonomously (January 20, 2016) [1]
On January 20, 2016, the Court of Justice of the European Union (Court) ruled [3] that in the area of competition law, the leniency programs of the EU and those of member states can coexist autonomously. According to the press release [4], the European Competition Network (ECN) ensures the coherent application of competition laws between the European Commission and member states. In 2006, the ECN adopted a leniency program, designed “to promote the uncovering of unlawful conduct by encouraging participants in cartels to report them” and “based on the principle that the competition authorities are to grant immunity from fines to the undertaking that reports its participation in a cartel if it is the first to submit evidence.” In 2007, Italian authorities enacted a similar regime. In 2007 and 2008, four companies submitted independent applications to both the Commission and Italian authorities, alleging that EU competition law had been violated in the international freight forwarding sector. In 2011, the Italian authorities decided that Schenker was the first company to submit evidence, and thus granted it immunity from fines, which the other companies had to pay. DHL brought suit in Italy, arguing that its leniency application with the Commission predated Schenker’s application in Italy. The Court held “that instruments adopted in the context of the ECN . . . are not binding on national competition authorities, irrespective of the judicial or administrative nature of those authorities.” The Court further noted that “there is no legal link between the application[s] for immunity” submitted to the Commission and the national authorities, and therefore the national authority is “not required to contact the Commission in order to obtain information on the purpose and results of the leniency procedure carried out at the European level.” Finally, the Court clarified that the parallel systems allow a company to receive both full immunity at the national level if they are the first to file and a reduction in fines on the EU level if a competitor files there first.