The Bundeskartellamt’s new guidelines
1. Guidelines on the setting of fines
Fines for cartel infringements are usually substantial. They regularly amount up to a three-digit million range. A fine is only limited to 10 % of the total worldwide turnover achieved in the business year preceding the decision. If this turnover is less than EUR 1 Mio., the upper limit is EUR 1 Mio.
The Bundeskartellamt (Germany’s national competition authority) determines the amount of the fine at its own discretion. The method for setting the fines is subject of new guidelines recently published by the Bundeskartellamt. The guidelines are published in German language only on the Bundeskartellamt’s website (Bußgeldleitlinien_Oktober2021.pdf (bundeskartellamt.de)).
The criteria to be taken into account when setting fines for cartel infringements include the turnover achieved with the products or services that were the subject of the anti-competitive agreement, i.e. the turnover linked to the infringement. This turnover has also already been used for the calculation of fines in the past. In the future, the size of the company will also be a decisive factor. Compliance measures introduced before or after an infringement can be taken into account to mitigate the fine.
The guidelines replace the previously applicable guidelines of July 25, 2013. The Bundeskartellamt expects that the level of fines will not change significantly as a result of the new guidelines.
2. Guidelines on the leniency programme
The leniency programme is essential for the Bundeskartellamt to uncover cartels because cartels usually take place in secret. In order to create an incentive for members of a cartel to uncover it, national and international competition authorities have long been working with so-called leniency programmes.
Cartel participants receive full or partial immunity from fines, if they contribute to the discovery of the cartel and the success of the authorities’ investigation. As a rule, the economic advantage gained is not skimmed off the leniency applicant. However, “the earlier cooperation occurs, the more valuable it usually is and the more it can be rewarded.”
The first cartel participant to cooperate comprehensively and fully, enabling a search warrant or proof of the offense, can expect full immunity from fines. Companies cooperating later can hope for a reduction of up to 50% of the fine. The amount of the reduction is at the Bundeskartellamt’s discretion. It depends on the time of initial cooperation and the usefulness of the information for the investigations.
The “place in line” can be reserved with a so-called marker. To get the marker, cartel participants have to declare their willingness to cooperate, provide initial information and must submit detailed information and evidence within a deadline set by the Bundeskartellamt.
Possible civil law consequences, e.g. claims for damages remain unaffected by the position as key witness. However, the law provides privileges for key witnesses.
The 10th amendment of the Act Against Restraints of Competition enshrined the leniency programme in law for the first time. The Bundeskartellamt has published guidelines on the leniency programme in German language on its website (Bekanntmachung_Kronzeugenprogramm_Leitlinien_Oktober2021.pdf (bundeskartellamt.de)) and summarized the guidelines in a leaflet (Merkblatt – Kronzeugenprogramm.pdf (bundeskartellamt.de)).
Cartel infringements will continue to be sanctioned with high fines in the future. It may therefore be worthwhile to cooperate in uncovering the cartel under the leniency programme. If there is a suspicion of being a member of a cartel, we recommend that you look into the possibilities of the leniency programme at an early stage.
Nevertheless, the application under the leniency programme may be disadvantageous for the persons involved. The leniency programme only works in favour of the undertaking but not for the acting person itself. This may be relevant in cases such as collusive tendering (Section 298 of the German Criminal Code). However, the cooperation of natural persons is assessed independently in criminal proceedings and can have a mitigating effect.
Disadvantages may arise for key witnesses in the proceedings for damages that may follow the fine proceedings. Key witnesses are obliged to fully cooperate and to participate in the enlightenment of the cartel. Information submitted to comply with these obligations may therefore be used to the disadvantage of the key witness at a later stage.