No “one stop shop” for leniency applications

In 2007, logistics company DHL Express applied to the Commission for leniency in connection with its participation in an international air, maritime and road freight forwarding cartel. The Commission granted DHL conditional immunity from fines for the entire international freight forwarding sector, and later decided only to pursue the cartel activities for international air freight forwarding services, resulting in a EUR 169 million fine for 14 international groups of companies. DHL received full immunity from fines because of its leniency application to the Commission.

Parallel to its leniency application to the Commission, DHL had filed a summary application to the Italian competition authority as mentioned in the ECN model leniency programme. This programme aims to alleviate the burden associated with multiple filings by introducing a model for a uniform summary application system for cases for which the Commission is particularly well placed. However, the Italian Competition Authority found that DHL’s summary application did not include any cartel information on road freight forwarding services. Meanwhile, another cartel participant had filed a leniency application with the Italian Competition Authority that did include information on road freight forwarding services. As a result, the Italian Competition Authority granted the latter cartel participant full immunity, whereas DHL only obtained a 50% fine reduction for cartel activities in road freight forwarding services. DHL started legal proceedings before an Italian court, claiming it had been the first to apply for leniency and that its summary application should have been considered in conjunction with its leniency application to the Commission. The Italian court requested a preliminary ruling by the ECJ on whether there is a legal connection between the main application for immunity submitted to the Commission and the summary application submitted to the Italian Competition Authority. If that connection existed, the Italian Competition Authority would have to assess a summary application for immunity in light of the main Commission application for immunity.

Advocate General Wathelet found that this legal connection does not exist. A leniency application filed with the European Commission and a summary application submitted to a national competition authority constitute two independent applications. Based on the Commission Notice on cooperation within the ECN and the ECN model leniency programme, there is no “one-stop shop” for leniency applications.  The applicant must take steps to anticipate possible proceedings by competition authorities. A summary leniency application to a national competition authority should be precise enough to safeguard the applicant’s place in the order of receipt of leniency applications. This applies in particular where the Commission, as here, decides not to act on all the information in the main leniency application. If the summary application’s scope is not sufficiently precise, the leniency applicant runs the risk of losing its place in the order of receipt of leniency requests at the national competition authority.

Companies involved in cross-border cartels should therefore apply for leniency to all competition authorities that could pursue a case against them in order to benefit from full leniency protection. Given the importance of timing in most leniency systems, it is advisable to file these multiple leniency applications simultaneously with all relevant authorities. In addition, the information contained in the leniency application should be sufficiently precise to guarantee the applicant’s protection.