Decision of Local Court of Bonn strengthens leniency programme

30.01.2012

Today it was announced that the local court (Amtsgericht) in Bonn has decided in the decor paper case that Pfleiderer AG will not be granted access to the leniency applications of the cartel participants. This decision has far reaching consequences for the future practice of the Bundeskartellamt in the prosecution of hard-core cartels. With its decision the court affirmed the Bundeskartellamt's view that leniency applications are subject to particularly strict confidentiality.

Andreas Mundt, President of the Bundeskartellamt, stated: "Attractive leniency programmes are of the utmost importance for effective cartel prosecution. Leniency applicants often play a decisive role in detecting and proving cartel agreements. If we were not able to guarantee them confidentiality, they would think twice before cooperating with us."

In 2008, the Bundeskartellamt imposed fines totalling EUR 62 million on several manufacturers of decor paper for agreements on prices and capacity closure (cf. Bundeskartellamt press release of 5 February 2008). Subsequently, Pfleiderer - a customer of the cartel participants - asked for access to the Bundeskartellamt's files on the case in order to prepare a civil action for damages. In accordance with § 406 e of the German Code of Criminal Procedure (Strafprozessordnung, StPO), the Bundeskartellamt is generally obliged to grant victims of cartel agreements access to its files. In order to protect its leniency programme, however, it was not willing to grant access to the documents relating to the leniency applications. The Amtsgericht Bonn, to which Pfleiderer appealed, has now confirmed the decision of the Bundeskartellamt. The decision is final.

Course of proceedings:
The Amtsgericht Bonn first referred the matter to the European Court of Justice (ECJ), seeking clarification on whether European Law prohibits the disclosure of leniency applications to third parties who have suffered damages from the competition law violation. The ECJ ruled that while such disclosure was not prohibited by law, the court was required to weigh and balance the interests of the aggrieved parties against the necessity of effective cartel prosecution, for which leniency programmes are acknowledged to be significant (ECJ, decision of 14 June 2011, C-360/09). The Amtsgericht Bonn subsequently decided that in the present case the threat to the effective detection and prosecution of competition law infringements justified the refusal of access to the leniency applications. This was so because the attractiveness of leniency programmes would suffer considerably if potential leniency applicants had to fear the disclosure of documents voluntarily submitted by them to third parties who claimed to have suffered damages. The relevant aspect here was not to "jeopardize the purpose of the investigation" (§ 406 e StPO). Since this will also apply to other cases in which access to leniency applications is requested, the significance of the court's decision extends far beyond the particular case in question. The Federal Ministry of Economics intends to codify this legal opinion in the amendment of the German Act against Restraints of Competition (GWB) which is currently in progress.

Background:
German jurisdiction offers a well functioning system for civil damages claims. In the last years, its effectiveness has been further strengthened by legislative measures and significant court rulings. Of key significance is the fact that the finding of a competition law infringement by the competition authorities is binding on the judge in the civil damages proceedings.

Andreas Mundt: "Private claims for damages suffered from cartel law violations are an important supplement to public antitrust enforcement. But to be able to claim damages, the victims of cartel agreements depend on the competition authorities to uncover the cartel. If the leniency programme does not function properly, significantly fewer cartels will be uncovered. This would not only hamper the punishment of the perpetrators, but also the compensation of the victims. We therefore strongly support the plans of the Federal Minister of Economics to codify the special protection of leniency documents and thus guarantee their confidentiality." Logo: Offene Märkte | Fairer Wettbewerb

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