Announcement of New Leniency Programme

On 15 March 2006 the Bundeskartellamt published a new Leniency Programme which replaces the previous regulation from 2000. With its Leniency Programme the Bundeskartellamt assures those cartel participants wishing to leave a cartel and cooperate with the Bundeskartellamt in its uncovering immunity from or a reduction of their fines.

Bundeskartellamt President Dr Böge stated: “In the last few years the Leniency Programme has become an important instrument in the fight against illegal agreements between competitors about prices, sales quotas and market sharing. With the new version we intend to build on the experience we have gained in the last few years and make the Leniency Programme even more effective.”

In the 7th Amendment to the ARC (Act against Restraints of Competition) the legislator expressly authorised the Bundeskartellamt to issue a Leniency Programme. Due to the conspirative nature of cartel agreements, competition authorities are often reliant on information from the circle of cartel participants in order to uncover a cartel. However, it is also in the interest of a company to end its participation in a cartel agreement if it is established during merger proceedings that it was a member of a cartel. Without the Leniency Programme the impending high fine would constitute an incentive to continue the cartel agreement. According to Böge, those who have suffered damage due to a cartel agreement and the economy as a whole are much better served if the cartel agreement is ended as a result of the Leniency Programme than they would be if the state insisted on its, often merely theoretical, right to fine all cartel participants.

In addition, with the 7th Amendment the legislator has readjusted the maximum level of fines against companies to 10 per cent of their total turnover. Even before this readjustment fines set by the Bundeskartellamt against cartel participants amounted to three-digit million figures. Companies and members of staff responsible can avoid these fines if they cooperate with the Bundeskartellamt.

Bundeskartellamt President Dr Böge stated: “As the offer of immunity from fines in exchange for a company voluntarily reporting itself only applies to the first company willing to cooperate, companies should not hesitate to come forward and work together with the Bundeskartellamt. Otherwise another member of the cartel could benefit from this opportunity.” 

The new Leniency Programme contains the following new features:

• An applicant who is the first to come forward and cooperate with the Bundeskartellamt and enables it to obtain a search warrant against the other cartel members automatically obtains immunity from fines, which is assured to him in writing. 
• A cartel member can still obtain full immunity from fines after the search has been conducted. The condition for this is that he is the first to cooperate with the Bundeskartellamt and submits evidence to prove the offence.
• Each cartel member which has lost the race for the first place can, as the second or third applicant, have his fines reduced by up to 50 per cent. Here again, the time of the announcement of intent to cooperate is decisive for the level of reduction in fines.
• As of now the Bundeskartellamt is to apply a so-called “marker system”. Whoever would like to cooperate with the Bundeskartellamt can place a “marker“ by providing a necessary minimum of information about the cartel. The marker assures the applicant his status as first applicant if he provides necessary additional information within a maximum period of eight weeks.
• In addition the new Leniency Programme offers considerable simplifications to companies willing to cooperate and leave a European-wide cartel. In future the status of priority of an applicant will already be guaranteed by the placement of a marker. 

The leniency programmes of the Member States and the European Commission have not yet been harmonized. For this reason a working group was set up within the Network of the European Competition Authorities (ECN), which, with the assistance of the Bundeskartellamt, is elaborating a model harmonization programme. The revised version of the Leniency Programme has taken up the findings and recommendations of this working group and does not preclude further adaptations after a possible approval of a model programme by all the European competition authorities.