Leniency programme
Leniency programme on imposition of fines in accordance with the Article 22 of the Act No. 143/2001 Coll., on the Protection of Competition and on amendment to certain Acts (Act on the Protection of Competition) (hereinafter referred to as “the Act”) as amended, on prohibited agreements distorting the competition, on condition that certain additional requirements are fulfilled the parties to the cartel can be granted immunity from a fine or a reduction of a fine (hereinafter referred to as „Leniency programme“)
Through this notice the Office for the Protection of Competition (hereinafter referred to as “the Office”) sets out the framework for leniency programme of imposition of fines upon undertakings which are or have been party to secret cartels which decide to collaborate with the Office in the investigation of the alleged cartel. Cartels are horizontal agreements between two or more competitors aimed at coordinating their competitive behaviour on the market and/or influencing the competition through practices such as the fixing of purchase or selling prices or other trading conditions, the allocation of production sales quotas, the sharing of markets including bid-rigging and restrictions of imports or exports.
Such cartel agreements lead not only to increase in price and reduced goods choice for the consumer but also have negative impacts on relevant economic sector through the restriction of competition, avoiding pressures that lead them to innovate, both in terms of product development and the introduction of more efficient production methods. Finally, such cartel agreements result in artificial prices and reduced choice for the consumer and in the long term, they lead to a loss of competitiveness and reduced employment opportunities.
Cartel agreements have serious negative impacts on competition and the Office considers the combat against such agreements as its priority. By their very nature, secret cartels are often difficult to detect, investigate and prohibit without the cooperation of undertakings or individuals implicated in them. Therefore, the Office considers in the public interest to apply the leniency programme for those undertakings, which are willing to put an end to their participation on illegal practices and cooperate in the Office’s investigation, independently of other parties to an agreement.
The Office considers that through this procedure the Office will execute its function which is in the first place protection of competition in itself and that the interest on restitution of competition will outweigh the particular interest on punishment those parties to secret cartel who, though as cartel participants were concerned in competition distortion, have contributed to cartel detection and termination. Furthermore, this procedure conforms to the effort of Commission of European Communities (hereinafter referred to as “Commission”) to combat cartel agreements. This Leniency programme results from ECN Leniency Programme [1] and Commission Leniency Programme [2].
Leniency programme refers both to agreements forbidden under the Article 3 of the Act and Article 81 of the Treaty establishing the European Community (hereinafter referred to as “the Treaty”). Non-imposition of the fine on the basis of this programme is possible (hereinafter referred to as “Leniency type I”) along with possibility to reduce the amount of the fine (hereinafter referred to as “Leniency type II“).
I. Conditions for Leniency programme application
1.1. Immunity from a fine which would otherwise have been imposed for conduct distorting the competition (Leniency type I)
This part regulates conditions under which the Office will grant immunity from a fine to the competitor who was a party to the cartel. Further distinction between Leniency type 1A and Leniency type 1B is set, according to character of information provided by the competitor to the Office.
Leniency type 1A
1.1.1. The Office will grant an undertaking, which admits its involvement in the alleged cartel (hereinafter referred to as “the applicant”) immunity from any fine which would otherwise have been imposed if:
a) The undertaking is the first to submit evidence which in the Office’s view, at the time it evaluates the application, will enable the Office to carry out targeted inspections in connection with an alleged cartel; relevancy of these information is evaluated by the Office,
b) The Authority did not, at the time of the application, already have sufficient evidence to adopt an inspections decision/seek a court warrant for an inspection or had not already carried out an inspection in connection with the alleged cartel arrangement, and
c) The conditions attached to leniency are met.
1.1.2. The leniency applicant is obliged to provide the Office with the following information and evidence:
a) In so far as it is known to the applicant at the time of submission:
- A detailed description of the alleged cartel arrangement, including its aims, activities and functioning etc.; the product and service concerned, the geographic scope, the duration of and the estimated market volumes affected by the alleged cartel; the specific dates, locations, content of and participants in alleged cartel contacts, and all relevant explanations in connection with the pieces of evidence provided in support of the application;
- The name and address of the undertaking submitting the immunity application as well as the names and addresses of all other undertakings that participate/participated in the alleged cartel
- The names, positions, office locations and, where necessary, home addresses of all individuals who, to the applicant’s knowledge, are or have been involved in the alleged cartel, including those individuals which have been involved on the applicant’s behalf
b) Other evidence relating to the alleged cartel in possession of the applicant or available to it at the time of the submission, including in particular any evidence contemporaneous to the infringement.
Leniency type IB
1.1.3. The Office will grant an undertaking, which admits its involvement in the alleged cartel (hereinafter referred to as “the applicant”) immunity from any fine which would otherwise have been imposed if:
a) The applicant is the first to submit information and evidence which in the Office’s view, enables the finding of an existence of an alleged cartel
b) The Office did not have sufficient evidence to find infringement in connection with alleged cartel,
c) No undertaking had been granted conditional immunity from fines according to leniency IA in connection with the alleged cartel, and
d) The conditions attached to leniency are met.
1.2. Reduction of a fine which would otherwise have been imposed for distorting competition (Leniency type II.).
1.2.1. The Office will grant an undertaking, which admits its involvement in the alleged cartel (hereinafter referred to as “the applicant”) and is not eligible for immunity for immunity from fines under the Leniency type I (par 1.1.), immunity from any fine which would otherwise have been imposed if:
a) An undertaking provides the Office with evidence of the alleged cartel which, in the Office’s view, represents significant added value relative to the evidence already in the Office’s possession at the time of the application, and
b) The conditions attached to Leniency application are met
1.2.2. The concept of “significant added value” refers to the extent to which the evidence provided strengthens, by its very nature and/or its level of detail, the Office’s capability to prove the alleged cartel.
During the assessment the Office usually evaluates written evidence originating from the time referred, rather than evidence elaborated later on. In general, it is considered that the evidence related directly to the concerned questions shall be deemed more valuable than evidence related indirectly. The evidence’s value is determined also by the level of acknowledgement received form other sources necessary to ensure reliability of the evidence offered.
Conclusive evidence shall be deemed more valuable than evidence in form of statement, which is to be acknowledgement in case of disputableness.
1.2.3. If the conditions attached to Leniency type II application have been fulfilled the Office will reduce a fine
- To the first applicant providing the Office with information and evidence representing significant added value, by 30 – 50 %,
- To the second applicant providing the Office with information and evidence representing significant added value, by 20 – 50 %,
- To the other applicants providing the Office with information and evidence representing significant added value, up to 20 %.
During the determination the appropriate level of reduction of the fine, the Office will take into account the time at which the evidence was submitted and the assessment of the overall value added to its case by that evidence.
If the applicant is the first to submit additional evidence and information in terms of par. 1.2.1., which the Office uses to establish additional facts which have a direct bearing on the amount of the fine, such as gravity or duration of the infringement, this will be taken into account and considered as non-aggravating for the undertaking which submitted the evidence.
1.3. Common conditions attached to Leniency programme
1.3.1. In order to qualify for Leniency programme, the applicant must satisfy the following conditions:
a) The Applicant must cooperate genuinely, helpfully, fully and on a continuous basis from the time of its application with the Office until the conclusion of the administrative proceeding. . This includes especially:
- Providing the Office promptly with all relevant information and evidence that comes into the applicant’s possession or under its control;
- Providing the Office only with complete and exact, not misguiding information,
- Remaining at the disposal of the Office to reply promptly to any requests that, in the Office’s view, may contribute to the establishment of relevant facts on this subject;
- making current and, to the extent possible, former employees, directors and members of statutory bodies available for the interviews with the Office;
- not destroying, falsifying or concealing relevant information or evidence which falls within the scope of alleged cartel agreement; and
- not disclosing the fact or any of the content of the leniency application before the Office has initiated administrative proceeding on this subject.
b) The applicant ended its involvement in the alleged cartel agreement immediately following its application
c) At a time when contemplating making Leniency application the applicant must not have destroyed, falsified or concealed evidence relevant to alleged cartel or disclosed its intention to submit application or a part of intended application, except having done this to any other competition authority.
d) The applicant didn’t initiate concluding of the cartel, didn’t take steps to coerce other undertakings to join the cartel or to remain in it or didn’t have a leading role in the alleged cartel.
II. Procedure
2.1. General provisions
2.1.1. An undertaking, party to alleged cartel agreement, wishing to ask for immunity from a fine or reduction of a fine, should apply to the Office for the Protection of Competition. Formal application can by made only by individuals entitled to represent or act on behalf of the undertaking.
2.1.2. The submission including application for Leniency programme (hereinafter referred to as “the application”) is voluntary notice, made by an undertaking or on its behalf regarding awareness of the cartel agreement and its role in the alleged cartel, made particularly for purposes of the submission. Any statement addressed to the Office in connection with this notice is part of administrative file and can be used as evidence.
The application can be submitted orally, in writing or in electronic form undersigned with certified electronic signature [4]. In condition that the submission is confirmed within the 5 days or eventually supplemented as listed in previous sentence, it is possible to make the submission through the other technical instruments or media such as teletype, telefax or public data network without certified electronic signature in particular.
2.1.3. Applicant for Leniency type I is obliged to inform the Office about the foregone applications for Leniency programme submitted to other competition authorities or about the applicant’s intention to submit application in future.
2.1.4. The Office issues, if requested, application receiving certificate and certificate of receiving all subsequent ¨submissions with evidence. The date and where appropriate time will be stated in the confirmation in case of each additional submission.
2.1.5. The Office will not consider other Leniency applications until it assumes an attitude towards the already submitted application concerning idem infringement. At the same time, the Office will not consider application for reduction of a fine until it assumes an attitude towards all submitted applications for reduction of a fine concerning idem infringement.
2.1.6 The Office will disregard all the Leniency type I applications submitted after the publication of stipulations in framework of administrative proceeding relating to agreement in question. The Office will also disregard all the Leniency type II applications submitted after issuing the first-instance decision on the merit.
2.1.7. Final decision on immunity from a fine or reduction of a fine will be announced in the decision at the end of the administrative proceeding.
2.2. Procedure for immunity from fines applications (Leniency type I)
2.2.1 The complete application must be submitted to the Office, containing all requested information (see below). However, any competitor may confer on the Office with information and evidence in hypothetical terms, or may ask for protection of applicant’s place in the fine non-imposition queue, allowing it to gather the necessary information and evidence (hereinafter referred to as “marker“).
2.2.2. An undertaking making an application for immunity from fine must provide the Office with all relevant information and evidence concerning the alleged cartel that comes into the applicant’s possession or under its control as stated in conditions for Leniency IA and IB.
2.2.3. An undertaking may initially present this information and evidence in hypothetical terms; in which case the undertaking must present a detailed descriptive list of the evidence it proposes to disclose at a later agreed date. This list should accurately reflect the nature and content of evidence, whilst safeguarding the hypothetical nature of its disclosure. Copies of documents, from which sensitive parts have been removed, may be used to illustrate the nature and content of the evidence. The name of applying undertaking and of other undertakings involved in the alleged cartel need not to be disclosed until the evidence described in its application is submitted. However, the product or service concerned by the alleged cartel, the geographic scope of the alleged cartel and the estimated duration must be clearly identified.
Once the Office has received the information and evidence in hypothetical terms submitted by the undertaking and has verified that it meets the conditions set out for Leniency type IA or type IB, it will inform the undertaking as appropriate.
2.2.4 An undertaking wishing to make an application for immunity may initially apply for a “marker” which protects an applicant’s place in the queue for a given period of time and allows it to gather the necessary information and evidence in order to meet the relevant evidential threshold for immunity as agreed with the Office. To be eligible to secure a marker, the applicant must provide the Office with its name and address as well as information concerning the parties to the alleged cartel, the affected product and territory, the duration of alleged cartel and the nature of the alleged cartel conduct. An undertaking applying for immunity from fine should justify an application for a “marker”.
Where a marker is granted, the Office determines the period within which the applicant has to complete the marker by submitting the information required to meet the relevant evidential threshold for immunity. If the applicant perfects the marker within the set period, the information and evidence provided will be deemed to have been submitted on the date when the so-called “marker” was granted.
2.2.5 Once the Office has verified the evidence submitted is sufficient to meet the relevant evidential threshold for Leniency type I application, it will grant, without undue delay, the undertakings conditional immunity from fines in writing.
If the Office receiving the application finds that the applicant has not met the conditions set out for Leniency programme application IA or IB it will inform the applicant of this promptly in writing. In that case the applicant may apply for receiving of documents submitted to the Office or may apply the Office to consider its submission as Leniency application (Leniency type II). The Office is not restrained to use its usual investigative authorities to gather further information.
2.2.7. If the Office having granted conditional immunity finds that the applicant has fulfilled all of the conditions attached to Leniency programme application, the Office will not impose a fine upon the applicant. In the final position the Office shall state that the applicant has fulfilled the conditions attached to Leniency programme application (type I) and general conditions set for Leniency programme application.
If the applicant has not fulfilled the conditions attached to Leniency programme during the proceeding, it will not benefit from any favourable treatment under this programme in respect of the same proceedings.
2.2.7. In cases where the Commission is the most suitable authority to deal with case in accordance with paragraph 14 of the Commission’s Notice on cooperation [5], the applicant for Leniency type IA may file “summary applications”. In that case the applicant may submit the general (complete) application with the Commission, whilst submitting the summary application with the Office. Summary applications must include at least:
- The name and address of the applicant;
- The other parties to the alleged cartel identity
- The affected products and services
- The affected territory related to the alleged cartel
- The duration of alleged cartel
- The nature of the alleged cartel conduct
- The Member states where the evidence is likely to be located; and
- Information on its other past or possible future Leniency application in relation to the alleged cartel at other competition authorities.
Having received a summary application, the Office will acknowledge receipt and confirm to the applicant that it is the first to apply for immunity from fine. Should the Office having received a summary application decide to request specific further information, the applicant should provide such information promptly. Should the Office decide to act upon the case, it will determine a period of time within which the applicant must make a full submission of all relevant evidence and information required to meet the threshold. If the applicant submits such information within the set period, the information provided will be deemed to have been submitted on the date when the summary application was made.
2.3. Procedural rules apply to Leniency application
2.3.1. An undertaking making immunity from a fine application to the Office must provide the Office with all information and evidence relating to the alleged cartel available to it as specified in Leniency type II conditions. The evidence and information submitted as substantiating the application must be clearly and explicitly marked.
2.3.2. If the Office comes to the conclusion that the information and evidence submitted by an undertaking constitutes “added value” and the applicant fulfilled the conditions attached to Leniency programme it will inform the applicant in writing of conditional fulfilment of the conditions and of the framework within the fine could be reduced. The Office will provide the applicant with this information along with publication of stipulations at the latest.
If the Office comes to the preliminary conclusion that the applicant is not eligible to be granted the reduction of a fine, it will inform the undertaking in writing within the same period.
2.3.3. If the Office conditionally granted the undertaking reduction of a fine and the undertaking has fulfilled the general conditions for Leniency programme, the Office will grant the undertaking reduction of a fine in its final decision. In the statement of the reasons the Office will state especially:
a) Whether the information and evidence submitted by the applicant represented significant added value relative to the evidence already in the Office’s possession at the time of the application.
b) Whether the cumulative conditions for Leniency application were met,
c) Exact amount of reduction of a fine for the undertaking in framework as specified in point in 1.2.3.
The Undertaking which did not fulfil conditions for Leniency programme application from the time of its application will not benefit from any favourable treatment under this programme in respect of the same proceedings.
III. Final provisions
3.1. If the Office discovers that application relates to wrongful conduct under the provision of Article 22(5) of the Act of period limitation for fine infliction, the Leniency program applications shall not be considered.
3.2. Matter of fact that either protection from fines was granted or the amount of the fine was reduced can not safeguard the competitor against private legal consequences of his participation on wrongful conduct.
3.3. Only the parties to the proceeding will be allowed by the Office to access the Leniency program application; pursuant to law the Office can not guarantee application safeguard in case of passing on the administrative file to the court or to the body responsible for criminal proceedings.