Universiteit van Amsterdam
Winter Semester 2016Master’s Thesis
EU Leniency Requirements and the Right to Anti-Trust
Damages in German Law
by
Benjamin Blum
02.01.2017
1st supervisor: Dr. Daniela Obradovic
Faculteit der Rechtsgeleerdheid, Europees Recht 2nd supervisor: Dr. Kati Cseres
1. Introduction _________________________________________________________________1 1.1 Problem ___________________________________________________________________1 1.2 Research Question ___________________________________________________________3 1.3 The Aim of the Paper _________________________________________________________3 1.4 Hypothesis _________________________________________________________________4 1.5 The Structure of the Paper _____________________________________________________4 2. Enforcement of EU Competition Law _____________________________________________4 2.1 Public Enforcement of EU Competition Law ______________________________________5 2.1.1 The EU Leniency Program ___________________________________________________6 2.1.2 The Role and Significance of the Leniency Program for the Public Enforcement of EU Competition Law _______________________________________________________________8 2.2 Private Enforcement of EU Competition Law _____________________________________9 2.2.1 Action for Damages against Private Parties _____________________________________10 2.2.2 The European Competition Law Damages Directive and its Effect on Obtaining Access to Evidence ____________________________________________________________________11 2.3 Complementarity between Public and Private Enforcement of EU Competition Law _____12 2.4 Access to Leniency Corporate Statements by Private Parties _________________________14 2.4.1 The Situation prior to the Introduction of the European Competition Law Damages
Directive ____________________________________________________________________14 2.4.2 The Situation Stipulated by the European Competition Law Damages Directive ________17 3. The Balance between the Protection of Leniency Incentives and the Right to full
Compensation of Cartel Victims in German Law _____________________________________19 3.1 The Situation prior to the Introduction of the European Competition Law Damages Directive _ 20
3.2 The Situation after the adoption of the European Competition Law Damages Directive ____21 3.2.1 Access of Individuals to Leniency Statements under German Law ___________________22 3.2.2 Access of German Courts to Leniency Statements under German Law _______________27 3.2.3 Access of Individuals to Leniency Statements during Proceedings before National Courts under German Law ____________________________________________________________27 4. Critical Assessment of the capacity of German Law Implementing the European Competition Law Damages Directive to Balance the Protection of Leniency Incentives with the Right to full Compensation of Cartel Victims __________________________________________________28 4.1 An Effective or Vague Legislation? _____________________________________________28 4.2 Does is Provide for the Optimal Balance between Public and Private Enforcement _______29 4.3 Room for Improvement ______________________________________________________32 5. Conclusions ________________________________________________________________34
Abstract
This paper examines the impact of the European Competition Law Damages Directive on the establishment of a more efficient system for claiming damages resulting from the breach of EU Competition Law. It assesses how the rules that implement the Directive into German law will change the German legal practice of claiming anti-trust damages. In particular, the paper examines
whether the German implementing measures to reconcile the requirement of the Directive for maintaining an effectively working cartel detection system, hence the Leniency program with its requirement for ensuring full compensation of individuals suffering losses due to cartel formation.
This issue is important because Leniency statements are usually the only source of evidence necessary for substantiating an anti-trust damage action.
The paper’s main findings therefore deal with the future role of German courts in the process of balancing those two opposing interests. It concludes that it is unlikely that the law implementing the
Directive in Germany will enable its courts to efficiently address the existing problem concerning the fact that, while pre-existing documents which are submitted when applying for Leniency, and other documents submitted by informants joining the Leniency program at a later occasion can be
subject to disclosure to private parties, self-incriminating Leniency statements by whistleblowers can only be disclosed under high burdens.
The European Competition Law Damages Directive therefore strengthens the individuals’ right to full compensation but fails to fairly balance the public and private enforcement of Competition Law,
List of Abbreviations
Abbreviation Meaning Page
- EU European Union 1
- NCAs National Competition Authorities 4
- TFEU Treaty on the Functioning of the European Union 4
- ECN European Competition Network 5
- CJEU Court of Justice of the European Union 9
List of Cases
A) Cases before EU Courts
I. Cases before the General Court of the European Union
1. Case T-237/02, Technische Glaswerke Ilmenau v Commission, ECLI:EU:T:2006:395.
2. Case T-623/13, Unión de Almacenitos de Hierros de España v Commission, ECLI:EU:T:2015:268.
3. Case T-677/13, Axa Versicherung AG v Commission, ECLI:EU:T:2015:473.
II. Cases before the Court of Justice of the European Union
1. Case C-6/90, Francovich v Italy, ECLI:EU:C:1991:428.
2. Case C-178/94, Dillenkofer v Bundesrepublik Deutschland, ECLI:EU:C:1996:375. 3. Case C-453/99, Courage v Crehan, ECLI:EU:C:2001:465.
4. Case C-295/04, Manfredi v Assitalia SpA, ECLI:EU:C:2006:461. 5. Case C-266/05, Sison v Council, ECLI:EU:C:2007:75.
6. Case C-360/09, Pfleiderer AG v Bundeskartellamt, ECLI:EU:C:2011:389. 7. Case C-199/11, Europese Gemeenschap v Otis, ECLI:EU:C:2012:684. 8. Case C-536/11, Bundeswettbewerbsbehörde v Donau Chemie AG,
ECLI:EU:C:2013:366.
9. Case C-365/12, Commission v EnBW, ECLI:EU:C:2014:112.
10. Case C-557/12, Kone AG v ÖBB-Infrastruktur AG, ECLI:EU:C:2014:1317. 11. Case C-352/13, CDC Hydrogen Peroxide v Akzo Nobel, ECLI:EU:C:2015:335.
B) Cases before German Courts
I. Case 51 Gs 53/09, Pfleiderer, AG Bonn, decision of 18.01.2012.
II. Case V-4 Kart 5 + 6/11 (OWi), Kaffeeröster, OLG Düsseldorf, decision of 22.08.2012.
List of Legislation
A) Selected Legislation of the EU
1. Directive 2014/104/EU of the European Parliament and of the Council on certain rules governing actions for damages under national law for
infringements of the competition law provisions of the Member States and of the European Union, 2014 L 349/1.
2. TFEU, Consolidated version of the Treaty on the Functioning of the European Union, 2012/C 326/01.
3. Council Regulation 1/2003/EC on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, 2003 O.J. L 1/1.
4. Commission Regulation (EC) No 773/2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty, 2004 L 123/18. 5. European Parliament and Council Regulation (EC) No 1049/2001 regarding public
access to European Parliament, Council and Commission documents, 2001 L 145/43.
B) Selected Legislation of the Republic of Germany
1. Introduction
1.1 Problem
During the last decade, European economics became increasingly complex. For several reasons, undertakings need to find new and more sophisticated ways to run their businesses.
First of all, highly developed structures nowadays require an eminent level of efficiency, meaning that companies have to rely upon innovative technologies in order to increase productivity and growth. 1
Secondly, the economy’s growth rate has not increased over the last 20 years which generates pressure on the companies, as they still need to increase their turnovers. 2
By consequence, both national and international corporations sometimes decide to collaborate with each other in order to obtain more control over the market conditions.
Such behavior, which is typical for cartels, is meant to enable the participants to substitute high levels of investments in technologies with counter practices, such as collusion, that restrict negative influences of current market conditions whilst still obtaining optimal outcome.
In order to confront such uncompetitive conduct, Competition Law has been established both on a national and European Union (hereinafter, EU) level. However, it is not sure whether such rules are able to cope with the arising problems and the continuously changing circumstances.
Both public and private enforcement of EU Competition Law are meant to create a powerful deterrence for the breach of cartel law as well as to provide for the compensation of disadvantaged consumers and competitors.
European Commission, „The Importance of Innovation“, Innovation, [website], 2016, https://ec.europa.eu/
1
growth/industry/innovation_en, (accessed on 21.11.2016).
„European Union GDP Annual Growth Rate“, Trading Economics, [website], 2016, http://
2
Until now, private parties that suffer damage from cartels are hardly compensated, as an effective private enforcement of EU Competition Law is provided for in theory, but only executable with great difficulties in practice.
For that reason, a new European Union Directive 2014/104/EU (hereinafter, the European 3
Competition Law Damages Directive) that has to be implemented by the Member States until the 27th December of 2016, is adopted in order to improve the enforcement of European Competition Law in general. In particular, it is intended to enhance the efficiency of EU Competition Law 4
enforcement through the establishment of an improved system of private enforcement. 5
Due to divergent legislatures in the EU it is doubtful whether the European Competition Law Damages Directive will successfully balance the public and private enforcement of EU Competition Law. It tries to do so by facilitating damages actions brought forward by private individuals. As it is only a Directive that leaves a certain leeway to the national legislators, is has to set clear guidelines for the Member States, as a highly diverging legal situation in the Member States cannot contribute to a sound enforcement of EU Competition Law.
The main problem is that while the Directive requires the Member States to adopt measures which will improve the efficiency of actions for damages for breach of EU Competition Law, it prohibits the disclosure of Leniency statements which are usually the only source of evidence for commencing an anti-trust compensation action. The non-disclosure rule encourages undertakings to inform public authorities about cartel practices. Those requirements of the Directive are intended to preserve the balance between the private and public enforcement of EU Competition Law which is one of the Directive’s objectives. The Directive’s mutually exclusive requirements are to be reconciled through the process of the implementation by national authorities.
Directive 2014/104/EU of the European Parliament and of the Council on certain rules governing actions
3
for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, 2014 L 349/1.
Directive 2014/104/EU, recital 6.
4
Ibid, recitals 12 and 54.
1.2 Research Question
This paper aims at the examination of the question whether the European Competition Law Damages Directive is capable of achieving its afore mentioned objective through the process of implementation. More specifically, the question is whether German legislation can improve the claims of damages by private parties in Competition Law without harming the public enforcement of Competition Law. In connection to that, it will be assessed in which way German courts are likely to decide in future cases.
More specifically, the paper is intended to examine whether the German law implementing the EU Competition Law Damages Directive is capable of reconciling the requirement to improve the efficiency of actions for damages for breach of EU Competition Law with the requirement of non-disclosure of Leniency statements which are usually the only source of evidence for commencing an anti-trust compensation action.
Consequently, I shall analyze the current German legal situation and assess the Directive’s aims and impact in order to determine whether an optimal balance between public and private enforcement of Competition Law can be attained in the implementation process in Germany.
The paper in hand intends to find out whether the European Competition Law Damages Directive is able to significantly change the current situation in order to render private individuals’ damage claims more effective. The question is whether the Directive really is the milestone that some consider it to be or whether it is simply another legislative act that is based on good intentions but that lacks outstanding innovations that are really able to achieve the expected change.
1.3 The Aim of the Paper
The prediction of the effects of the German law implementing the EU Competition Law Damages Directive upon the Directive’s requisite for the reconciliation of its contradictory requirements for the improvement of efficiency of action for damages for breach of EU Competition Law and the prohibition of the disclosure of Leniency statements as a source of evidence for commencing an anti-trust compensation action.
1.4 Hypothesis
I expect that the implementation of the European Competition Law Damages Directive achieves some minor improvements, but I do not yet believe in its overwhelming importance. The German law implementing the EU Competition Law Damages Directive will only marginally contribute to the reconciliation of its contradictory requirement for the improvement of efficiency of actions for damages for breach of EU Competition Law for non-disclosure of Leniency statements as a source of evidence for commencing an anti-trust compensation action.
1.5 The Structure of the Paper
First of all, the paper will explain how EU Competition Law is principally enforced by highlighting the importance of both the public and the private enforcement as well as the interplay between them. It will then proceed to address the issues concerning the access of individuals to information generated within the EU Leniency program. Afterwards, the legal situation before and after the implementation of the European Competition Law Damages Directive in Germany will be examined and explained. The paper is then going to be concluded with a critical assessment of the attainment of balance between public and private enforcement of EU Competition Law in Germany’s legislation implementing the European Competition Law Damages Directive.
2. Enforcement of EU Competition Law
In order to understand the issues and difficulties that will be addressed by this paper, it is necessary to provide brief information on the general framework of EU Competition Law.
The enforcement of EU Competition Law consists of the public and the private one. Those two parts are operating separately, but do compliment each other, as only the efficient enforcement of both parts can provide for an effective deterrence to cartel formation and a disgorgement of all advantages gained by the cartel.
2.1 Public Enforcement of EU Competition Law
For the public enforcement, the responsible bodies are both the Commission and the National Competition Authorities (hereinafter, NCAs).
The distribution of all cases is related to the following pattern:
National Competition Authorities are responsible for Competition Law cases that do not feature any cross border interest, meaning that no trade between Member States is concerned.
On the contrary, the European Commission can only get active if there is a link to EU law. Hence, the Competition Law cases treated by the Commission need to involve more than a single Member State and its market, which can also be derived from Art. 101 (1) of the Treaty on the Functioning of the European Union (hereinafter, TFEU), that relates to „cross border trade“. This „cross border 6
trade“ element is the main trigger for the application of EU Competition Law, as it does only apply to situations concerning such cross border trade.
This system seems to be pretty understandable and simple at first, but does nevertheless comprise several difficulties. To determine whether cases need to be treated on a national or European Union level, the relevant market needs to be specified. However, it can be extremely challenging to gain all necessary information and to investigate whether trade between Member States might in any way be affected, which is why the division of competences between the Commission and the NCAs is, despite the Commission’s guidelines, not always perfectly clear.
Thinking about the authorities’ possibilities to obtain information or evidence about a cartel, it is clear that this creates serious problems. Cartels are not anymore typically formed in the well known „smoke filled rooms“ leading to „gentlemen’s agreements“, but through various other means that are meant to keep the agreements a secret. Written documents or other records are not available in most cases and the use of electronic devices and encryption technologies renders the chance to actually reveal such records extremely low. The authorities do therefore need other mechanisms to
Consolidated version of the Treaty on the Functioning of the European Union, 2012/C 326/01.
detect and prosecute cartels, which is why the system of Leniency has been established in EU 7
Competition Law.
2.1.1 The EU Leniency Program
The above mentioned NCAs work together in the European Competition Network (hereinafter, ECN). Competition Law breaches should in theory be detected, investigated and prosecuted with the proceedings being initiated through a claim of a competitor or a consumer or on the authority’s own motion. Even if all available information is shared within the ECN, it is rare to actually 8
discover a cartel, which is why the Leniency program is more and more relied upon by EU Competition Law enforcement authorities.
Its functioning is as follows: The first participant of a cartel, who provides the authority with all available and necessary information to reveal it, gets full immunity from publicly imposed fines. 9
This applies to both the cases when the authority did not have any knowledge of the existence of the cartel and in the situation when it has already started the investigations but is still missing important information to effectively prosecute the cartel. In other words, cartel participants are not eligible 10
for an immunity of fines if the information they are able to disclose to the Commission is already known or in the Commission’s possession. Moreover, cartel participants that fulfilled a special 11
role in the cartel such as forcing others to join the cartel or to remain in it, are likewise not able to receive immunity from fines. 12
Commission Notice on immunity from fines and reduction of fines in cartel cases, 2006/C 298/11, C
7
298/17, 08.12.2006; Amended by: Communication from the Commission concerning Amendments to the Commissions Notice on Immunity from fines and reduction of fines in cartel cases, 2015/C 256/01.
T. Carmeliet, „How lenient is the European leniency system? An overview of current (dis-)incentives to
8
blow the whistle“, Jura Falconis, 2011-2012, No. 3, p. 464. Commission Notice C 298/17, para. 8.
9
M. Polo and M. Motta, „Leniency Programs“, Barcelona Graduate School of Economics, [website], 2005,
10
p. 3, http://www.barcelonagse.eu/tmp/pdf/motta_leniency.pdf, (accessed 22 September 2016). Commission Notice C 298/17, para. 10.
11
Ibid, para. 13.
In the case that another undertaking discloses information, while not being eligible for immunity of fines, it can nonetheless be subject to a reduction of fines that might apply up to a certain percentage. Such a reduction requires the disclosure of „significant added value with respect to the 13
evidence already in the Commission’s possession“ . 14
But what effect does the Leniency program have? Cartels are a criminal union of undertakings. Those undertakings make secret agreements and need to rely on each other in order to not be detected, as there is a high chance not to be revealed in case that no one blows the whistle. Besides, cartel agreements are not legally enforceable which makes discrepancies among the participants hardly solvable. Lastly, the fines applying to cartels were raised significantly during the last years, imposing a serious threat to the concerned undertakings and their businesses.
The Leniency program imposes a so called prisoners’ dilemma on the cartel members. This prisoners’ dilemma refers to a situation in which two or more undertakings are participating in a cartel, all of them generally acting in their own interest and, at the same time, knowing that another participant can possibly make use of the Leniency program and submit a Leniency corporate statement to the authorities in charge. The „dilemma“ in this situation is the following: All 15
members of a cartel know that it would be best if no one of them cooperated with the cartel authorities, as this would safeguard their hidden activities that are profitable for all of them. However, every participant is aware of the fact that he will be better off if he confesses first, in case that another member is also planning on cooperating with the authorities.
By consequence, the cartel stability is suffering from the weakness of its members, who would all be better off if they remained silent. However, the fear of being the one to receive the full punishment and to receive the full amount of fines renders the participants eager to confess and makes cartels a very fragile unity.
After all, the Leniency program enables participants to get rid of the risk to be subject to high fines, which is why cartels have become more unstable. All members are in a constant fear and can never
Ibid, para. 23.
13
Ibid, para. 24.
14
C. R. Leslie, „Antitrust Amnesty, Game Theory, and Cartel Stability“, Iowa Journal of Corporation Law,
15
know whether they can still rely on each other, which is based on a constant uncertainty about their colleagues taking the decision to not further participate in the cartel and to obtain immunity from fines.
2.1.2 The Role and Significance of the Leniency Program for the Public Enforcement of EU Competition Law
It is clear, though, that the Leniency program is not only a valuable opportunity for cartel members to escape the cartel with the least possible damage. It also constitutes one of the most important tools concerning the detection of cartels for the Competition Law authorities.
Without any doubt, the costs of monitoring and enforcing the cartel prohibition stated in EU Law are substantial. By consequence, there is a disequilibrium between the explicit aim to fight cartels and the actually available means. Public funds are limited, which is why the Leniency program obviously empowers the authorities to fulfill their work in a time and resource saving manner.
Furthermore, the Commission’s powers of investigation are restricted. However, they have been increased by the implementation of Regulation 1/2003. The Commission’s powers now also 16
comprise the possibility to either investigate in specific sectors of economy or in certain kinds of agreements throughout several sectors. In order to be able to do so, the authority does also have 17
the right to request all necessary information from the affected undertakings. 18
The increase in the Commission’s investigative powers brought about by the Regulation 1/2003 did not considerably improve the efficiency of public enforcement of Competition Law though, because the Commission can only request existing documents when it has sufficient indication of the alleged infringement. 19
Council Regulation 1/2003/EC on the implementation of the rules on competition laid down in Articles 81
16
and 82 of the Treaty, 2003 O.J. L 1/1. Ibid, Art. 17.
17
Ibid, Art. 18.
18
A. Resvik, „The introduction of „Leniency Plus“ as a Tool for the European Commission in the Fight
19
Apart from that, the Commission remains rather passive and mainly works with complaints from employees or competitors. 20
The Leniency program, on the other hand, has proved to be extremely effective while saving resources at the same time. Special attention needs to be drawn to the fact that the concept of Leniency has continuously gained importance over the last 15 years. 21
Between 2000 and 2011, the Commission treated 73 cartel cases with 471 members in total. 88% 22
of those cases involve Leniency applications and in each case, more than half of the undertakings applied for fine reductions. Until October 2014, another 13 cases were processed by the 23
Commission, containing 72 applications for fine reductions. 24
These statistics make the role of Leniency in the progress of enforcement of EU Competition Law very clear.
However, the Leniency program does also have its disadvantages which mainly appear in the context of private enforcement of Competition Law.
2.2 Private Enforcement of EU Competition Law
Private enforcement is the second method of EU Competition Law enforcement.
It is closely related to the doctrine of „direct effect“ of Art. 101 and 102 of the TFEU that governs EU law. This „direct effect“ embodies the principle of EU law creating rights also for EU citizens and not only for Member States.
J. P. Choi and H. Gerlach, „Global cartels, leniency programs and international antitrust cooperation“,
20
International Journal of Industrial Organization, No. 30, 2012, p. 530.
Schweitzer and Hüschelrath, „Public and Private Enforcement of Competition Law in Europe“, p. 27.
21
H. Schweitzer and K. Hüschelrath, „Public and Private Enforcement of Competition Law in Europe: Legal
22
and Economic Perspectives“, [e-book], p. 25, Heidelberg: Springer; 2014, available from: eBook Collection (EBSCOhost), Ipswich, MA, accessed 7 October 2016.
Schweitzer and Hüschelrath, „Public and Private Enforcement of Competition Law in Europe“, p. 27.
23
C. Marvao, „The EU Leniency Programme and Recidivism“, Review of Industrial Organization, Vol. 48,
24
2.2.1 Action for Damages against Private Parties
But why is this important? Goods are usually distributed through a so called supply chain. This means that there are several manufacturers of a certain good, who then sell the good to wholesalers. Those wholesalers in turn sell to distributors who proceed the good to the retailers and as a last step, the consumer receives the final product.
In most cases, cartels take place in a higher level of the supply chain. Let us, just as an example, imagine that there is a cartel at the distributor level which enables the distributor to set higher prices. As the retailer wants to keep his profits high, he will also raise the prices, which is why he will not suffer damage from the cartel. The consumer, however, as the last link in the supply chain, will be the one that is harmed by the breach of EU Competition Law. This is why individuals need to be able to bring actions if they suffer harm as a consequence of a violation of EU Competition Law.
More specifically, the Court of Justice of the European Union (hereinafter, CJEU) established in
Francovich that EU citizens can claim damages from their Member States for breaches of EU law. 25
This paved the way for Courage and Manfredi in which the CJEU held that private parties 26 27
suffering damages from contracts that are in breach of Competition Law can claim damages directly from private parties that are liable for breaches of EU Competition Law. However, neither EU law nor all EU Member States provide for a collective action. 28
One needs to be aware of the fact, though, that damage claims by private individuals were only rendered considerably effective after the introduction of Regulation 1/2003, which enabled the national courts to apply EU Competition Law. Also Regulation 773/2004 that further regulates 29 30
Case C-6/90, Francovich v Italy, ECLI:EU:C:1991:428.
25
Case C-453/99, Courage v Crehan, ECLI:EU:C:2001:465.
26
Case C-295/04, Manfredi v Assitalia SpA, ECLI:EU:C:2006:461.
27
B. Rodger, Competition Law - Comparative Private Enforcement and Collective Redress across the EU,
28
The Netherlands, Kluwer Law International, 2014, p. 170.
W. van Gerven in: J. Basedow, Private Enforcement of EC Competition Law, The Netherlands, Kluwer
29
Law International, 2007, p. 23.
Commission Regulation (EC) No 773/2004 relating to the conduct of proceedings by the Commission
30
Competition Law related proceedings has contributed to the increase of the efficiency of the private enforcement of EU Competition Law.
2.2.2 The European Competition Law Damages Directive and its Effect on Obtaining Access to Evidence
Like in all other legal proceedings, the claimant has to prove his claim in Competition Law proceedings. As has been established by the Court in Courage, the claimant needs to prove the breach of Competition Law, the damage suffered and the link between the breach and the damage.
Damages actions for the breach of EU Competition Law can be commenced in two different manners.
Firstly, the Commission or any other NCA can establish the breach of Competition Law, which offers the private claimant the big advantage that he only needs to prove that he suffered damages because of the respective breach. Such claims would then be called „follow-on“ actions.
Secondly, it is possible that no competition authority has taken action for whatever reason. In this case, the private claimant also has to establish the actual breach of Competition Law by himself. This kind of action is called „stand-alone“ action.
Most of the time, it is the defendant who is in possession of the relevant information and it is unlikely that any defendant is going to provide that information to the claimant.
The claimant thus has to investigate on his own, which, firstly, requires huge financial means that are usually not available and, secondly, also constitutes a time-consuming project.
By consequence, the right to claim damages for private parties is more or less of a formal nature and very difficult to enforce in practice.
In order to solve this issue, the European Competition Law Damages Directive has to be implemented by the Member States for the purpose of strengthening private interests in EU Competition Law enforcement and fairly balancing the public and private enforcement.
2.3 Complementarity between Public and Private Enforcement of EU Competition Law
The enforcement of EU Competition Law is based on an extensive complementarity between the public and private actions.
On the one hand, the public enforcement with the possibility of the imposition of severe fines (e.g. roughly 1.38 billions in Carglass ) is meant to create deterrence for undertakings participating in 31
cartels. Those fines cover two aspects:
Firstly, they are set at a level high enough to render it unprofitable for undertakings to enmesh in any anti-competitive behavior. 32
Secondly, the fines relate to the actual possibility of being detected, meaning that the fines increase with a decreasing probability of detection. 33
On the other hand, the private enforcement rather aims on recovering damages suffered by competitors or consumers as a consequence of the cartel practices.
It cannot be said that one method of enforcement is more important than the other, as EU Competition Law relies on the interplay of both public and private enforcement. As has been first mentioned in Regulation 1/2003, complementarity in European Competition Law means that „the role of the courts here complements that of the competition authorities […]“ . Hence, the courts’ 34
task is to apply the Competition Law rules in proceedings between private individuals, whereas the competition authorities pursue the aim of public enforcement of EU Competition Law.
The European Competition Law Damages Directive seeks to further enhance the complementarity between public and private enforcement. Its proposal hereof once again refers to the interplay 35
between the two „pillars“ of EU Competition Law enforcement. Case COMP/39.125 - Car glass, 12 November 2008.
31
C. Migani, „Directive 2014/104/EU: In Search of a Balance between the Protection of Leniency Corporate
32
Statements and an Effective Private Competition Law Enforcement“, Global Antitrust Review, 2014, p. 84. Ibid, p. 84.
33
Regulation 1/2003/EC, recital 7.
34
COM(2013) 404 final, 2013/0185 (COD), Proposal for a Directive of the European Parliament and of the
35
Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, 11.06.2013.
In its Memorandum on the proposal for the European Competition Law Damages Directive, the Commission, inter alia, states that both the courts and the NCAs apply the relevant provisions in individual cases. This means that civil courts and public authorities work together by both 36
applying the same provisions while having different aims.
Moreover, the Commission also addresses the afore mentioned principle of complementarity by explaining the structure of the public and private enforcement and by emphasizing the fact that neither of the two methods is able to fulfill the aims of EU Competition Law on its own. 37
According to the Proposal, it is the optimal complementarity between public and private enforcement, the application of fines and the compensation of harm suffered, that renders EU Competition Law enforcement effective and that ensures maximal compliance with Competition Law provisions. 38
As mentioned above, there can be both stand-alone actions , i.e. claims where there has been no 39
prior establishment of a Competition Law breach by a public authority, and follow-on actions , i.e. 40
private actions that follow a proceeding in which a public authority has already established the breach of Competition Law. The problem, however, is that offenders are in tenure of the relevant information in stand-alone actions, whereas the information is held by public authorities as a consequence of Leniency statements in follow-on actions.
In both stand-alone and follow-on actions, private parties experience a lot of problems in obtaining the relevant evidence. Because of that, the EU Competition Law Damages Directive is intended by the EU law maker to facilitate the access to evidence of private parties in Competition Law damage cases.
COM(2013) 404 final, 2013/0185 (COD), p. 2.
36
COM(2013) 404 final, 2013/0185 (COD), p. 2.
37
COM(2013) 404 final, 2013/0185 (COD), p. 2 and 3 and 4.
38
see p. 11 of this Master’s Thesis.
39
Ibid.
2.4 Access to Leniency Corporate Statements by Private Parties
What should be clear by now is the fact that undertakings applying for Leniency need to submit all available information and evidence to the responsible authority.
Private parties are heavily dependent on that information when they want to claim damages, which is why the possibility to disclose that information would help them enormously. However, one needs to be aware of the fact that keeping the received information undisclosed to the public is the key part of Leniency. Undertakings will not apply for Leniency if they know that private parties can use this information afterwards to sue them for damages, as this is exactly what they want to avoid in the first place. Moreover, even if the undertaking chooses to apply for Leniency anyway, it is 41
likely to submit as little information as possible and only to submit information that is useful for the authority, but not for the private claimant. Hence, the quality of the Leniency application will 42
decrease.
On the other hand, an effective private enforcement is simply not possible without any evidence, which is why the balance between public and private enforcement of EU Competition Law needs to be assessed in particular.
2.4.1 The Situation prior to the Introduction of the European Competition Law Damages Directive
As mentioned above, claimants often struggle with obtaining evidence in order to prove their claims. Due to information asymmetries and a relatively high burden of proof, individuals that have been harmed by a breach of Competition Law tend to inform the EU Commission about the
T. Raff, „Wirtschafts- und Gesellschaftsrecht (einschl. Sonderprivatrecht der öffentlichen Hand),
41
Anmerkung zur Rs. C-360/09, Pfleiderer AG/Bundeskartellamt “, GPR, No. 6, 2011, p. 295. H. Schweitzer, „Perfekte Kompensation für alle? Das neue System wettbewerbsrechtlicher
42
Schadensersatzklagen nach Inkrafttreten der Richtlinie 2014/104/EU“, Zentrum für europäisches Wirtschaftsrecht, Vorträge und Berichte, Nr. 212, p. 5.
unlawful behavior. As a result, the Commission will do the investigative work and individuals 43
might be able to engage in a follow-on action instead of a stand-alone action. 44
In case that individuals want to claim damages, Leniency documents are often the only available hard documents that provide information on the undertakings’ behavior. By consequence, the CJEU had to deal with the question whether Leniency statements should be disclosed on private parties’ requests in the Pfleiderer and Donau Chemie cases. 45 46 47
In Pfleiderer, the CJEU held that access to Leniency statements by individuals is not per se precluded. However, as there is no specific binding EU Law which regulates the conditions for disclosure of Leniency statements to private parties, the national courts are to decide on a case by case basis on this issue. Unfortunately, the CJEU did not give any specific instructions concerning the matter, but only referred to the weighing of interests protected by European Union law and the interests of private parties. 48
By consequence, individuals can obtain access if no EU interests are violated. Such European Union interests might be the protection of the Leniency program, which is why the Court’s judgment did not really become a milestone.
In Donau Chemie, the CJEU extended its previous Pfleiderer judgment and stated that the possibility to disclose Leniency related documents being dependent on the parties consent without the court being able to weigh the parties’ interests would undermine the efficiency of EU Competition Law rules, as parties would never incriminate themselves and disclose the requested documents.
P. Kirst and R. Van den Bergh, „The European Directive On Damages Actions: A Missed Opportunity to
43
reconcile Compensation of Victims and Leniency Incentives“, Journal of Competition Law & Economics, Vol. 12, p. 4.
Kirst and Van den Bergh, „The European Directive on Damages Actions“, p. 4.
44
Case C-360/09, Pfleiderer AG v Bundeskartellamt, ECLI:EU:C:2011:389.
45
Case C-536/11, Bundeswettbewerbsbehörde v Donau Chemie AG, ECLI:EU:C:2013:366.
46
Kirst and Van den Bergh, „The European Directive on Damages Actions“, p. 4.
47
Case C-360/09, para. 32.
Similar remarks have already been made by the Commission in its White Paper on Damages actions for breach of the EC antitrust rules from 2008. The Commission stated that the current 49
ineffectiveness of the private enforcement of EC antitrust rules would inter alia bear on the deficient possibilities of private parties to get access to relevant information. 50
It once again found the preclusion of access to Leniency statements to be necessary in order to safeguard an effective public enforcement of EU Competition Law, and did not even relate to any possible balancing of public and private interests.
On the one hand, the Commission insists upon an efficient public enforcement of EU Competition Law. On the other hand, the just mentioned Working Paper requests that „[…] all victims of infringements of EC competition law […] can be fully compensated for the harm they suffered“ . 51
A strict prohibition of disclosure of Leniency statements does therefore not seem to facilitate this pronouncement from the White Paper.
To sum up, documents that were obtained through a Leniency application can currently be disclosed if the claimant’s interests outbalance the public interests concerning an effective enforcement of EU Competition Law rules. It is to be mentioned, however, that such overwhelming interests of private parties are unlikely to be assumed by the Court, which will always try to keep the effectiveness of public enforcement of EU Competition Law on the highest possible level.
This situation is intended to be changed after the implementation of the European Competition Law Damages Directive.
COM(2008) 165 final, White Paper on Damages actions for breach of the EC antitrust rules, Brussels,
49 02.04.2008. Ibid, p. 3. 50 Ibid, p. 2 and 3. 51
2.4.2 The Situation Stipulated by the European Competition Law Damages Directive
The European Competition Law Damages Directive has the effective application of Art. 101, 102 TFEU as its aim. Once again, it clarifies the settled case law of the CJEU by stating that „[…] 52
anyone […] can claim compensation […] caused to them by an infringement […]“ of EU 53
Competition Law. 54
Concerning the access to evidence by individuals, the Directive recognizes the afore mentioned fact that the relevant evidence is mostly held by the defendant or third parties and that the claimant is hardly able to know about the existence of such evidence, not to mention the struggles to actually obtain it. 55
Consequently, several provisions refer to the possibility of ordering the disclosure of documents by national courts, deeming this to be inevitable for a successful private claim. 56
By sharp contrast, the European Competition Law Damages Directive then excludes Leniency statements from disclosure. The only reason offered is that the Leniency program is one of the 57
main tools in discovering cartels and that Leniency applicants might be deterred if they knew that their documents would be processed to individuals which can then effectively start their damage claims against the applicant. 58
Interestingly enough, the Directive also refers to Regulation 1049/2001 (hereinafter, the 59
Transparency Regulation) in its Article 6 (2), which contributes to the democratic legitimacy of the
Directive 2014/104/EU, recital 1.
52
Ibid, recital 3.
53
Ibid, Art. 1 (1).
54
Ibid, recitals 14 and 15.
55
Ibid, Art. 5 (1), (2) and Art. 6 (1).
56
Ibid, recital 26 and Art. 6 (6) (a).
57
Ibid, recital 26.
58
European Parliament and Council Regulation (EC) No 1049/2001 regarding public access to European
59
EU by granting the public access to documents held by either the Commission, the Council or the European Parliament. 60
According to that Regulation, individuals generally have a right to get access to publicly held documents. Moreover, the European General Court has confirmed that the Regulation at hand is 61
applicable to Competition Law proceedings in its Technische Glaswerke Ilmenau judgment. 62 63
However, this does not apply to documents where a disclosure would undermine the protection of the purpose of investigations. Although this regulation provides for public access to the 64
documents held by some EU institutions, it does not enable individuals to access Leniency statements on the basis thereof when EU interests are at stake. What makes the related provision different from the one set by the European Competition Law Damages Directive, though, is the fact that the Regulation makes an exception of the exception, meaning that the disclosure of Leniency statements can be directed in case that public interests override the purpose of the investigation’s protection. The General Court dealt with this specific issue in its Unión de Almacenistos de 65
Hierros de España and Axa judgments. It held that the opposing interests of the concerned 66 67
parties have to be weighed up on a case-by-case basis and that Leniency statements can be disclosed if the Leniency program’s effectiveness is not in danger. 68
Nevertheless, it needs to be acknowledged that the CJEU, in its judgments EnBW and CDC 69 Hydrogen Peroxide , explicitly stated that the Transparency Regulation needs to be interpreted 70
Ibid, Art. 1 (a) and Case C-266/05, Sison v Council, ECLI:EU:C:2007:75, para. 43.
60
Regulation 1049/2001, Art. 2 (1).
61
Case T-237/02, Technische Glaswerke Ilmenau v Commission, ECLI:EU:T:2006:395.
62
P. G. de Zarate Caton, „Disclosure of Leniency Materials: A Bridge between Public and Private
63
Enforcement of Antitrust Law“, College of Europe, Department of European Legal Studies, Brussels, [research paper], 08/2013, p. 5.
Regulation 1049/2001, Art. 4 (2).
64
Ibid, Art. 4 (2).
65
Case T-623/13, Union de Almacenistos de Hierros de Espana v Commission, ECLI:EU:T:2015:268.
66
Case T-677/13, Axa Versicherung AG v Commission, ECLI:EU:T:2015:473.
67
Case T-677/13, paras. 122 and 123 and Case T-623/13, paras. 89 and 90.
68
Case C-365/12, Commission v EnBW, ECLI:EU:C:2014:112.
69
Case C-352/13, CDC Hydrogen Peroxide v Akzo Nobel, ECLI:EU:C:2015:335.
very narrowly when dealing with the disclosure of Leniency statements and the prevailing public interests. 71
As a consequence, it can be stated that the Transparency Regulation relativizes the former rigid treatment concerning the disclosure of Leniency statements as constituted by the European Competition Law Damages Directive.
To conclude, the CJEU leaves it to the authority of the Member States’ courts to decide when Leniency statements should be disclosed to individuals. Because of that, the analysis now turns on the practices of national courts, specifically to the practice of German courts.
3. The Balance between the Protection of Leniency Incentives and the Right to full Compensation of Cartel Victims in German Law
First of all, an obligation for cartels to cover the damages that they caused already exists in Germany on the basis of the German legal code for Competition Law (Gesetz gegen Wettbewerbsbeschränkungen, hereinafter, GWB). However, the GWB used to impose serious 72
burdens of proof on the claimant in the past, which were very difficult to fulfill. After the 73
introduction of the current GWB version, those burdens were abolished and it became significantly easier for claimants to go to court, which is why Germany is now known as one of the countries that are most suitable and efficient in dealing with private damage claims concerning harm suffered from violations of Competition Law. 74
Regulation 1049/2001, Art. 4 (2).
71
Gesetz gegen Wettbewerbsbeschränkungen, BGBl I Nr. 32, 29.06.2013, p. 1750.
72
H. Janssen, „Schadensersatz wegen Verletzung des Kartellrechts - Auswirkungen der neuen
EU-73
Richtlinie“, Compliance-Berater, 1-2/2015, p. 35. Ibid.
3.1 The Situation prior to the Introduction of the European Competition Law Damages Directive
In order to establish the impact of the European Competition Law Damages Directive more effectively, the situation prior to the implementation needs to be assessed as well.
German courts had to decide several times about whether to allow private individuals to get access to Leniency statements. In spite of that, due to differences and diverse motivations of the courts, there is no real settled case law yet. It can, nevertheless, be said that a certain approach can be observed.
First of all, the German district court of Bonn had to cope with the related issue in its Pfleiderer 75
ruling. After delaying the proceedings and bringing an action before the CJEU, the German court decided that the claimant, Pfleiderer, would not get access to the Leniency statement held by the German cartel authority as a consequence of the Leniency application. While it granted access more extensively to several types of documents that had been adjusted and bowdlerized from e.g. business secrets, it nevertheless found that the Leniency program and its importance for European Competition Law enforcement prevailed over the private individual’s interest to claim damages.
Secondly, the German higher regional court of Düsseldorf was also concerned with a similar case. In Kaffeeröster , the court decided that access could be granted to penalty notices cleared from all 76
kind of confidential information. However, the claimant was once again not able to gain insight into the valuable Leniency corporate statements, as his interest was not able to outbalance the interest of maintaining the efficiency of the Leniency program itself.
Thirdly, by contrast, the German higher regional court of Hamm most recently gave its consent to a German civil court’s request to access to Leniency statements. While this seems to be an 77
important change in German case law at first sight, a significant detail also needs to be mentioned: the court did not allow any individuals to get access to Leniency statements. It only granted access to another court, which in turn has to decide in its own proceedings about whether the interest to
Case 51 Gs 53/09, Pfleiderer, AG Bonn, decision of 18.01.2012.
75
Case V-4 Kart 5 + 6/11 (OWi), Kaffeeröster, OLG Düsseldorf, decision of 22.08.2012.
76
Case 1 VAs 116/13, OLG Hamm, decision of 26.01.2013.
claim damages prevails over the general interest to conserve the high effectivity of the Leniency program.
By consequence, one can notice that German courts did not allow individuals to use Leniency statements to strengthen their claim for damages in the past. Even if the last mentioned court decision seems to be different at first sight, it is nothing really contrary to the other rulings that have been referred to, as it simply shifts the power to decide to another court without giving any instructions about how to balance the opposing interests of individuals and cartel authorities.
The results of the courts’ rulings usually are determined by the area of law in which it mostly operates. 78
While both the district court of Bonn and the higher regional court of Düsseldorf are experienced in cartel law proceedings, the higher regional court of Hamm is more specialized in criminal proceedings, which results in different approaches towards and different interpretations of the existent law. Once again, the courts’ rulings do not differ from each other that much, but the 79
diverse approaches might be a consequence of their specialization.
Nevertheless, the situation could change after the implementation of the European Competition Law Damages Directive, as the district court of Hamm explicitly mentioned that it is aware of the legislation de lege ferenda but that it will not consider it as it has no legal validity yet. 80
3.2 The Situation after the adoption of the European Competition Law Damages Directive
As mentioned before, the European Competition Law Damages Directive has to be implemented until the 27th of December. How this implementation might look like in the German legislation will be the object of the following assessment.
C. Grave, „Kartellrechtlicher Schadensersatzprozess: OLG Hamm zur Einsicht in Kronzeugenanträge“,
78
Rechtsboard Handelsblatt, [website], 2014, http://blog.handelsblatt.com/rechtsboard/2014/02/27/ kartellrechtlicher-schadensersatzprozess-olg-hamm-zur-einsicht-in-kronzeugenantrage/, (accessed 07.11.2016).
Ibid.
79
Case 1 VAs 116/13, para 93.
What has already been addressed before is the fact that German Competition Law is mainly regulated within the GWB. By consequence, the European Competition Law Damages Directive is also going to be implemented by adopting new legislation or changing the current one in the GWB. In order to implement the European Union Competition Law Damages Directive, Germany is going to amend the existing GWB law into the 9th GWB amendment. Until now, no final bill has been passed. Meanwhile, a ministerial draft bill has been passed. On the base of this ministerial draft 81
bill, the German government has recently adopted the draft of the 9th GWB amendment . 82
Please note in that context, that all following references to the GWB are relating to the GWB as it is drafted in its 9th amendment by the German government.
In order to clarify the prospective legal situation, it is necessary to distinguish between the request to disclosure of Leniency statements by private individuals and by national courts. The afore mentioned draft bill also does so by referring to those two situations in §33g GWB and §89c GWB.
Let us first address the possibilities for private individuals.
3.2.1 Access of Individuals to Leniency Statements under German Law
According to §33a I GWB, anyone that has caused harm to others by violating national or EU Competition Law provisions has the duty to make good the damages that occurred. By consequence, §33g I GWB states that anyone who is in possession of documents that might be necessary to render a damage claim successful, is obliged to release those documents to anyone who can substantiate that he actually has such a claim.
Hence, there is a general duty to provide victims with information and documents they need in order to be able to successfully bring an action before a national court.
Referentenentwurf des Bundesministeriums für Wirtschaft und Energie, Entwurf eines Neunten Gesetzes
81
zur Änderung des Gesetzes gegen Wettbewerbsbeschränkungen (9. GWB-ÄndG), 01.07.2016.
Gesetzentwurf der Bundesregierung, Entwurf eines Neunten Gesetzes zur Änderung des Gesetzes gegen
82
Nevertheless, §33g IV Nr. 1 GWB contains specific regularizations regarding Leniency documents. It states that the disclosure of all documents that comprise a voluntary declaration of a private individual or an undertaking towards a cartel authority and which have as their content the confession to be part of a cartel or to have knowledge thereof, is strictly precluded.
The mentioned provision aims to implement Art. 6 (6) (a) of the European Competition Law Damages Directive. It does so by directly adopting the main sense of the just mentioned provision, while at the same time defining the details in a more elaborated way. 83
More specifically, Art. 6 (6) (a) of the European Competition Law Damages Directive states that „Member States shall ensure that […] national courts cannot at any time order a party or a third party to disclose […] leniency statements“. 84
On the contrary, §33g IV Nr. 1 GWB, as mentioned above, already moves on to define the scope of the provision. Hence, it contributes to eliminating vague provisions by including an actual definition of „Leniency statements“, which makes it possible for everybody to understand which kind of documents will be excluded from disclosure.
Does this already mean that individuals will not be able to gain access to Leniency statements at all?
As has already been discussed before, there is a possibility to receive access to Leniency related documents on the basis of the Transparency Regulation at EU level. Such regulations are directly applicable in the Member States and do not require any special implementation or adoption. 85
As a fact, this normally means that individuals can rely on such regulations before national courts, which in turn would lead to the result that German individuals could also require access to the respective documents based on the Transparency Regulation.
C. Kersting and N. Preuß, „Umsetzung der Kartellschadensersatzrichtlinie durch die 9. GWB-Novelle“,
83
Langfassung des Beitrags aus: WUW, 02.09.2016, p. 394-403, p. 56. Directive 2014/104/EU, Art. 6 (6) (a).
84
Art. 288 (2) TFEU.
Nevertheless, the Transparency Regulation clearly relates to documents that are held by either the European Parliament, the Council, or the Commission, which means that it can not be applied to national public authorities such as e.g. the German Bundeskartellamt. By consequence, the problem of the prohibition of the Leniency related documents’ disclosure can not be solved by simply copying the existing EU law’s system.
More specifically, one needs to distinguish between two possible scenarios.
Let us first suppose that the Commission has received a Leniency application. It is then able to prosecute the cartel and can impose fines on the participants. Any private individual who suffered damages from that cartel could now bring a follow-on action before a German court. As the Leniency records are in the Commission’s possession, the claimant could rely on the Transparency Regulation in order to get access to the respective documents held by the Commission. Moreover, Leniency applicants have to submit their applications to all relevant legislations, meaning that all cartel authorities that could possibly be involved need to be informed. Clearly, the Commission as the EU’s main cartel authority is likely to be involved in almost all proceedings concerning the violation of Competition Law provisions, which is why many applicants are going to be sent to the Commission as well. By consequence, even if the Commission is not in charge in one specific case, it might still be in possession of Leniency related documents, which can then be required by relying on the Transparency Regulation in conjunction with the European Competition Law Damages Directive.
Let us then, however, suppose that in another example, the Bundeskartellamt receives a Leniency application and, as a consequence, proceeds in the same manner as the Commission in the above mentioned example. In that case, the individual that brings an action before a German court could not rely on the Transparency Regulation, as the Bundeskartellamt is not listed in the authorities to which the Transparency Regulation applies.
By consequence, the German legislator has to come up with another possibility to enable private individuals to get access to Leniency related documents, as the Transparency Regulation cannot be relied on in a purely internal situation.
Regarding the provisions of the GWB that have been discussed so far, one could assume that the rather vague provisions that are inherent in the European Competition Law Damages Directive and that occur even more when applying the Transparency Regulation have been drafted pretty clearly by the German legislator by completely precluding the disclosure of Leniency related documents without mentioning any exception. Nevertheless, this assumption will prove to be wrong in the following.
In case of the issue in hand, the access of individuals to Leniency statements in Germany is, firstly, dependent upon the definition of „Leniency applicant“ in German law. The European Competition Law Damages Directive defines the Leniency statement in more or less the same way as the German GWB does. It is also clear that §33g IV Nr. 1 GWB and Art. 6 (6) (a) of the European 86
Competition Law Damages Directive are meant to safeguard the Leniency applicants’ rights and interests. The interesting question is, though, if it is only the first applicant, who receives full immunity from fines according to the German Leniency system , whose statements are excluded 87
from disclosure. Being the one that reveals the cartel and provides all evidence to the cartel authorities, the first applicant’s documents would be exempted from disclosure for logical reasons. Statistics show that, in Germany, Leniency applications are very often filed by several members of the same cartel, which is why there are almost twice as many Leniency applications than Leniency cases. This means that there also have to be many applicants that will not get full immunity, but 88
that will only receive a partial reduction of fines. Coming back to the initially asked question, the 89
problem now seems to be more obvious: do Leniency applicants, who do not get full immunity from fines but who only get a reduction up to a certain degree also fall under the scope of „Leniency applicants“, as used by §33g IV Nr. 1 GWB?
There is no precise answer to that question yet, meaning that both options are de facto possible. A logical approach would, however, take account of the fact that the first applicant reveals himself and the other cartel members to the cartel authority, whereas the subsequent applicants only add
Directive 2014/104/EU, Art. 2 (16).
86
Bekanntmachung Nr. 9/2006 des Bundeskartellamts über den Erlass und die Reduktion von Geldbußen in
87
Kartellsachen (Bonusregelung), 07.03.2006, §3, 4.
Bundeskartellamt, „Bonusregelung“, Beim Bundeskartellamt gestellte Bonusanträge - 2001 bis 2014,
88
[website], http://www.bundeskartellamt.de/DE/Kartellverbot/Bonusregelung/bonusregelung_node.html, (accessed on 11.11.2016.).
Bekanntmachung Nr. 9/2006, §5.
information in order to lower their fines as much as possible. While the first applicant’s submission of documents is hence self-incriminating, the following applicants’ transmission of documents are appreciated by the cartel authorities but that does not change the fact that those applicants have committed a crime for which they will be punished. By consequence, whistleblowers, hence the first undertakings to apply for Leniency, will be safeguarded by excluding their statements from disclosure while informants joining later cannot profit from this advantage due to their minor role and importance for the efficiency of the Leniency program.
What is also crucial in the process of defining the documents that are actually precluded from being disclosed is the distinction between Leniency statements and Leniency documents. As mentioned by the European Competition Law Damages Directive, Leniency statements cannot at any time be subject to disclosure to private parties. As mentioned above, §33g IV Nr. 1 GWB provides a 90
definition of Leniency statements. It states that a Leniency statement is a voluntary declaration that refers to the role of e.g. an undertaking in a cartel. Such statements are self-incriminating and are made by the undertakings due to their application for Leniency, which means that they are not pre-existing. By contrast, other documents that might also be included in the Leniency application and which did already exist earlier, are not referred to as „Leniency statements“ but as „Leniency documents“. 91
As the disclosure of Leniency statements would put the Leniency applicant in a worse position than the other cartel members due to the self-incriminating nature of that statement, such statements’ disclosure needs to be prohibited. On the other hand, pre-existing documents that have also been 92
included in the Leniency application do not need to be safeguarded, as the cartel authority in charge could also have found them on their own. Besides, such documents do not relate to the 93
undertaking applying for Leniency but do incriminate all cartel members in the same way, which is why they can be subject to disclosure without jeopardizing the effectiveness of the Leniency program itself. 94
Directive 2014/104/EU, Art. 6 (6) a.
90
Case C-360/09, Opinion of Advocate General Mazak, 16.12.2010, para 17.
91 Ibid, para. 46. 92 Ibid, para. 47. 93 Ibid, para. 44. 94
To sum up, individuals can get access to Leniency documents, whereas Leniency statements are precluded from being disclosed.
3.2.2 Access of German Courts to Leniency Statements under German Law
Having only spoken about the access to Leniency related information or documents by private individuals so far, the access to such documents by national courts has to, secondly, be thoroughly examined in the following.
As has already been mentioned before, §89c GWB copes with this specific issue. It regulates the general authorization for national courts to request records from authorities, as long as the claimant wishes to do so. Self-evidently, a violation of Competition Law provisions and a respective proceeding before a national court are also prerequisites.
It is noteworthy that there are rather low thresholds for the court to make such a request to e.g. the cartel authority. Interestingly enough, §89c II GWB then continues by establishing a second step, in which the records that the court has brought in its possession in the first step can be made available to the third party, thus the claimant.
One has to bear in mind that no documents have left public authorities so far, as all information only flew from e.g. the national cartel authority to the national court. The Leniency program and all the related issues concerning the confidential treatment of Leniency corporate statements have not been endangered yet, as no disclosure has taken place so far.
3.2.3 Access of Individuals to Leniency Statements during Proceedings before National Courts
under German Law
Admittedly, this situation changes significantly when the records are revealed to the individual claimant. By consequence, §89c II Nr. 3 GWB determines that the claimant is only supposed to get access to such data as long as this is proportionate. In case that the court determines the claimant’s request to be inappropriate, any disclosure of information is prohibited by §89c III GWB.
Now, related to the issue concerning Leniency statements, §89c III Nr. 3 GWB provides for additional guidance by linking the assessment of proportionality to the protection of the Leniency’s efficiency.
As already mentioned before, the higher regional court of Hamm allowed a national civil court to get access to Leniency statements but at the same time imposed the duty to thoroughly assess and balance the opposing interests upon the civil court. This is exactly the same situation as is now stipulated by the 9th GWB amendment. A court can receive records from national authorities under relatively non-demanding conditions, but then has to fulfill the task of balancing the proper functioning of the Leniency program and the interest of the private individual to be compensated for his losses.
The outcome of this examination will be critically assessed in the next chapter.
4. Critical Assessment of the capacity of German Law Implementing the European Competition Law Damages Directive to Balance the Protection of Leniency Incentives with the Right to full Compensation of Cartel Victims
4.1 An Effective or Vague Legislation?
The question arises whether the provisions of the German GWB are more specific than the ones of the European Competition Law Damages Directive. On the one hand, one could argue that they became significantly clearer as the disclosure of Leniency related documents is simply forbidden for private parties. On the other hand, the exact opposite could also be said for the provisions concerning the access to Leniency records by or through courts.
By consequence, it cannot be concluded that the German law after implementing the European Competition Law Damages Directive became significantly clearer than the ones of the respective Directive, as it simply shifts the power to decide from the cartel authority to the civil courts.
This power shift towards the civil courts is the reason for their problematical role in the decision about the proportionality of information requests by individuals. The law itself does not provide for
