Giulia Rizzo and Mariya Serafimova*

 

1. Introduction

 

On 11 December 2018, the European Union adopted the long-awaited novel set of rules boosting the powers of the national competition authorities across the EU in the form of the ECN+ Directive 1/2019 (the Directive).[1] The Directive was published in the Official Journal of the EU in January 2019. Member States have two years to transpose the Directive into national law by 4 February 2021.

 

Competition law enforcement in the EU has developed significantly over the last two decades. Already Council Regulation (EC) 1/2003 (Regulation No. 1/2003)[2] has marked a paradigm shift. Prior to its entry into force in May 2004, the enforcement of the EU antitrust rules rested primarily in the hands of the European Commission. This enforcement system was changed radically under Regulation No. 1/2003, which created a modernised system of parallel powers of the European antitrust watchdogs. National competition authorities (NCAs) were empowered to apply the EU antitrust rules on the prohibition of cartel agreements and concerted practices as well as the prohibition of the abuse of a dominant market position (now Articles 101 and 102 TFEU) alongside with their national antitrust law to restrictive practices that may affect trade between Member States. As a result, 85% of the decisions enforcing the EU competition rules have been adopted by the NCAs since 2004 as opposed to decisions taken by the European Commission.[3]

 

Furthermore, Regulation No. 1/2003 has strengthened competition law enforcement by creating the European Network of Competition Authorities (ECN), a network that facilitates the close coordination of the activities of the European Commission and the NCAs when applying the EU antitrust rules. [4]

 

Despite the overall improvement of the enforcement of the EU competition rules, considerable qualitative and quantitative differences in the enforcement level between the Member States still have remained. This pertains in particular to the resources and instruments available to the NCAs. While certain competition authorities have adopted more than 100 decisions on EU antitrust law between 2003 and 2015 (the French, German, Italian and Spanish NCAs), other authorities from smaller EU Member States, such as the Bulgarian, Estonian and Irish NCAs, have adopted fewer than 15 decisions for the same period.[5] Therefore, the European Commission proposed a new legislative act in 2017 based on the results of a public consultation launched in 2015. The reason for this proposal was to make the enforcement of the NCAs more effective by empowering them with new and more enhanced tools and powers. The means of a directive was chosen to preserve proportionality and not to interfere with Member States’ autonomy in determining the specific design of national antitrust enforcement law. The Directive is structured into four main blocks, i.e. Independence and Resources (Chapter III), Powers (Chapter IV), Fines (Chapter V) and Leniency Programmes for secret cartels (Chapter IV), all rounded up by additional provisions on fundamental rights (Chapter II) and mutual assistance (Chapter VII), limitation periods (Chapter VIII) and further general provisions on the role of NCAs before courts and access to file by parties among others (Chapters XI and X).

 

Given the wide scope of the Directive, the following paper will discuss only certain topics covered thereby, starting from the guarantees of independence and resources for competition authorities (at 2.), the enhancement of EU competition law enforcement through the new investigative toolkit for NCAs (at 3.) and finally the novel rules on leniency programmes (at 4.) to provide an outlook for future developments of the enforcement of EU competition law (at 5.).

 

2. Basic guarantees of independence and resources of the NCAs

 

Some of the most fundamental requirements for enhancing the effectiveness of competition law enforcement concern the necessity for independence and resources for NCAs. The Directive sets out said guarantees in its Articles 4 and 5. In the preparatory materials for the Directive, the Commission pointed out that not all NCAs can apply the EU competition rules independently.[6] For example, in some Member States it is not guaranteed that competition enforcers are not obliged to comply with instructions from the government, or that the head officials of the NCA are elected in transparent proceedings.[7]

 

In that regard, the Directive provides enhanced standards for the independence for NCAs. Among others, Member States shall safeguard that NCAs are able to exercise their competences independently from political or other influence from state or other entities (Article 4(2) lit. a) and b) of the Directive). Overall, the new provisions regarding independence will bring EU competition enforcement a step further. For regulatory bodies in general, the ability to adopt measures and decisions independently of external influence or pressure is an indispensable prerequisite for the effectiveness of their work. Similar provisions have been developed already for the railway sector[8] and data protection law.[9] In Germany, for example, a provision that the Federal Competition Office is independent from any instructions from the Federal government or the Federal Ministry for Economic Affairs and Energy does not exist explicitly in the Act against Restraints of Competition (ARC). In practice, however, there have been no general instructions over the past three decades from the German government.[10] The ECN+ Directive would thus require the striking of the current Section 52 ARC on the publication of general instructions given by the ministry of economics to the German Federal Cartel Office (FCO) which implies that instructions can be ordered, and thus foster the codification of the current status quo.

 

In addition, the selection of the members of the decision-making body of the NCA shall be subject to clear and transparent procedures, which have been laid down in advance in national law (Article 4(4) of the Directive). This provision shall entail some improvement in the processes for the appointment of the relevant officials and at the same time preserve national autonomy with regard to the exact procedural steps. Nonetheless, the ECN+ Directive did not go as far as to describe the concrete transparency criteria and procedures for electing the staff of a competition authority. This is somewhat regrettable, considering the fact that other EU directives in respect of the regulated industries have provided that Member States shall ensure that members of the executive board of the regulatory body shall “[…] be appointed under clear and transparent rules which guarantee their independence by the national cabinet or council of ministers or by any other public authority which does not directly exert ownership rights over regulated undertakings.”[11] A more clear-cut approach on the clear and transparent procedures could have been put in place for competition authorities, at least as far as the heads of the respective competition bodies are concerned. It is plausible that this was not set out in the Directive to comply with the principle of subsidiarity under Article 5(3) of the Treaty of the European Union. This principle requires that (i) the area concerned does not fall within the exclusive competence of EU; (ii) the objectives of the proposed action cannot be sufficiently achieved by the Member States; and (iii) the action can be implemented more successfully by the Union. The EU courts have put significant weight on the scrutiny of the last criterion, i.e. the better regulation at EU level.[12] Arguably, the added value for regulating the clear and transparent rules for appointing leading personnel at the competition authorities of the NCAs can be affirmed due to the creation of uniform constitutional standards across the EU.

 

Another point of criticism is that the provision on independence of the NCAs is not regulated for the European Commission too.[13] Most recently, the current Commissioner Margarethe Vestager has been assigned the additional role of being also head for the digital policies of the new European Commission, which has raised some concerns by legal practitioners in the EU in how far can the competition policy of the EU remain independent of potential influences from the digital policy department.[14]

 

Nonetheless, the Directive brings some improvements to the institutional framework especially of smaller NCAs, as the independence guarantee is rounded by the power of competition enforcers to set priorities, similarly to the European Commission (see Article 4(5) of the Directive). The new directive shall also support NCAs to tap their full potential by ensuring that they have sufficient human and financial resources at a minimum to conduct investigations, adopt decisions and cooperate within the ECN regarding the application of the EU competition rules (see Article 5(1) and 5(2) of the Directive). Furthermore, the ECN+ Directive provides for a certain degree of budget autonomy of the allocated resources to the authority, which shall add to its prioritisation power (Article 5(3) of the Directive). Besides, the NCAs are obliged to report on a regular basis to the national governments or parliaments on the spending of the allocated resources (Article 5(4) of the Directive). This provision might lead in practice to a more restricted level of independence of the NCAs.

 

3. Strengthening the enforcement toolbox of the NCAs

 

3.1           Necessity for the harmonization of the enforcement powers of the NCAs

 

For about 20 years, special attention has been paid in Europe to the effective enforcement of antitrust law.[15] Important milestones included the reform of antitrust procedural law by Regulation 1/2003, the reform of the European Leniency Programme and the Guidelines on Fines (2006), and the debate on increased private enforcement, including the adoption of the Antitrust Damages Directive 2014/104/EU. Despite some partial convergence of the substantive provisions at EU level (see Article 3 of Regulation 1/2003), still significant differences in the antitrust enforcement tools of the Member States have remained: for instance, in some Member States there is a lack of basis for authorising certain forms of investigations or sanctions. The Commission has therefore responded to the enforcement issues by proposing the ECN+ Directive in March 2017.[16]

 

The main aim of the new rules under the ECN+ Directive is inter alia to “ensure a truly common competition enforcement area in the Union”.[17] The EU legislator follows the premise that more coherent and effective antitrust enforcement contributes to sustaining competitive markets for businesses and also benefits the consumers.[18] Especially the NCAs of smaller Member States have encountered difficulties in carrying out their work.[19] Despite the coordination within the network of the ECN,[20] the enforcement situation in the European Union has provided a very scattered picture across the different Member States, as well as different standards in terms of procedural law.[21] Soft convergence has not been helpful, as the underlying problems relate among others to deficits in the powers and tools of the NCAs.

 

For this purpose, the ECN+ Directive provides for a minimum set of powers and instruments that the NCAs shall have in order to be fully equipped to exercise their competence to apply the EU competition rules effectively and coherently within the ECN. Among others, the new directive encompasses provisions on the powers of NCAs to dawn raid businesses and other premises, grant leniency and prosecute competition law infringements. The enforcement model of the European Commission has been clearly set as a starting point.[22] The comprehensive framework of the directive comprising 37 articles outlines four main elements necessary to boost competition enforcement in particular: safeguarding independence of the actions of the NCAs from any public or private parties, ensuring adequate resources, providing the NCAs with the basic enforcement and fining powers necessary to effectively investigate and sanction breaches of EU competition law as well as harmonising the national leniency programmes (see Article 1(1) of the ECN+ Directive).

 

Besides creating new powers for the NCAs, the lawmakers of the ECN+ Directive also seek to enhance mutual assistance within the European system of competition enforcement (see Chapter VII) and foster cooperation within the ECN as stipulated in Article 1(3) of the Directive. The Directive covers both the application of the EU competition rules and the parallel application of national law to the same case, yet it does not apply to purely national cases.

 

3.2           Investigative and decision-making powers of the NCAs

 

The powers toolkit of the NCAs has been recognised as the main area where the NCAs can develop their full potential to become more effective enforcers.[23] There are still some gaps in the fact-finding powers of some NCAs in their national jurisdictions. For example, many NCAs lack the necessary enforcement tools to detect competition law infringements in respect of digitally stored data from mobile phones, laptops etc. Given the vast amount of data stored electronically in the digital age, this hurdle has major negative impacts on the level of enforcement.

 

3.2.1      Powers to inspect business and other premises (Articles 6 and 7 of the Directive)

 

Article 6 of the Directive provides that NCAs must be able to carry out unannounced inspections and access any information that is accessible to the company or association being inspected, irrespective of the medium in which the information is stored, see Article 6(1) lit. b of the Directive. According to recital 73 of the Directive, the envisaged access necessarily includes “covert recordings made by natural or legal persons that are not public authorities, provided that they are not the sole source of evidence“. This provision is in line with EU case-law.[24]

 

Among others, following the Directive, NCAs must be able to obtain explanations on facts or documents relating to the subject matter and purpose of the inspection and to record the answers from any representative or member of staff of a company or association, Article 6(1) lit. e of the Directive. Some consider this right to go beyond what is provided at EU level pursuant to Article 7 of Regulation 1/2003.[25]

 

As regards the power to inspect the homes of the responsible employees of undertakings for the purposes of investigation of alleged antitrust law infringements, the Directive has regulated this matter in Article 7 of the Directive. Pursuant to this provision, NCAs will have access also to private premises for the necessary investigations, including the homes of directors, managers and other employees. The legal threshold for this lies within reasonable suspicion that business records are kept in these premises and the NCA has obtained a warrant from the national judicial authority or a public prosecutor. This provision is of high relevance inter alia for the Bulgarian CPC, which currently lacks the power to inspect private premises, thus new provisions will have to be created.[26]

 

Likewise, collecting evidence from digital private sources such as laptops and tablets is equally important, since information exchange now largely takes place in digital form. Prior to the adoption of the Directive, at least six NCAs faced limitations on accessing digitally stored data on clouds and servers located in other countries.[27] Besides, other NCAs could not gather evidence from mobile phones during competition law investigations even if it was relevant for proving the communication between cartel members.[28] Among other NCAs, this provision is of significant relevance for the Bulgarian CPC. Notably, in order to empower the competition authorities with the new tool, Member States also have to provide the necessary technical resources to access digital data from private electronic devices, chatrooms and private messaging services. Also, the access of NCAs to data stored in cloud or on servers located in countries other than their own shall be ensured. Currently, a big issue for many NCAs including the Bulgarian one is to access mobile phones during inspections of company employees concerning the alleged infringement due to constitutional concerns. In that respect, also rights of defence and fundamental rights (as mentioned in Article 3 of the Directive and stipulated in the Charter of Fundamental Rights of the EU) must be respected. The Court of Justice of the European Union has already interpreted the standard for applicability of the Charter pursuant to Article 51 of the Charter of Fundamental Rights of the EU extensively.[29] This can be argued in particular when NCAs are implementing the EU competition rules. Above all, the defence rights of undertakings including the right to be heard and the right to effective judicial protection under Article 47 of the Charter of Fundamental Rights of the EU must be highlighted.[30] Also, the strict benchmark of proportionality for any measures must be applied.[31] There is a general necessity to weigh up the principles of effectiveness of competition law enforcement[32] with the EU fundamental rights.[33] As put by Advocate General Geelhoed, “it must be said that the interplay between the fundamental rights of legal persons and competition enforcement remains a balancing exercise: at stake are the protection of fundamental rights versus effective enforcement of Community competition law.“[34]

 

Interestingly, since the provisions of the Directive are largely modelled on the procedural rules for the European Commission pursuant to Regulation 1/2003,[35] they do not take into account the fact that in certain Member States, in particular Germany, natural persons can be fined as affected parties in antitrust proceedings. As a result, Article 3(2) of the Directive does not mention the rights of defence of the natural persons concerned as opposed to the undertakings mentioned in the provision. For the German implementation lawmakers, this implies that defence and procedural rights of potentially concerned natural persons derived from the general right of personality and reflected in particular in the German Code of Criminal Procedure, may not be restricted by the provisions of the Directive. Unlike the imposition of administrative fines, as in Bulgarian law, German law differs between different standards of procedures. Therefore, the German lawmakers have to differ in the implementation of the Directive as to whether the provisions relate to the (i) administrative proceedings conducted by the competition authorities (Kartellverwaltungsverfahren) or (ii) fining procedure concerning the violation of the antitrust rules (Bußgeldverfahren). Depending on the procedural principles enshrined in fundamental rights and the rights of the defence of the categories of participants concerned, the German law may be subject to narrower or less restrictive implementation limits.[36]

 

3.2.2      Requests for information and interviews (Articles 8 and 9 of the Directive)

 

Prior to the adoption of the ECN+ Directive, the Commission has identified issues in the powers of some NCAs that cannot issue binding and enforceable requests for information.[37] Certainly, this is a tool that is indispensable for the proper investigatory work of competition authorities. Under Article 8 of the Directive, NCAs will be empowered to request undertakings and/or associations and any third parties for information that may be relevant for the enforcement of Article 101 or 102 TFEU as long as the questions do not invite them to provide self-incriminating answers, Article 8 of the Directive.

 

This provision poses new questions in particular with regard to defence rights and potential higher standards under national law. For example, German law guarantees a constitutional right of nemo tenetur, i.e. the right to remain silent.[38] However, there is huge debate in how far this right of defence also applies to undertakings, as the legal nature of this right stems from the core of the constitutional guarantee of human dignity.[39]

 

By contrast, under EU law, the right to not provide self-incriminating statements has a much tighter scope. It does not include the right to remain silent as in German law.[40] The scope of the defence right in EU law has been extensively elaborated in the Orkem case of the CJEU:

 

“Thus, the Commission may not compel an undertaking to provide it with answers which might involve an admission on its part of the existence of an infringement which it is incumbent upon the Commission to prove.”[41]

 

In the logical consequence, the German lawmakers might have to narrow the scope of the right to remain silent for purely national cases.[42] An interesting question can be raised with regard to potentially different standards of the rights of defence for the undertakings being subject to proceedings before a NCA on the one hand and before the European Commission on the other. As the Directive only provides minimum harmonisation, it appears possible that higher standards are allowed for the Member States. Article 34 of the Directive concerning the transposition only states that Member States shall comply with their obligation to implement the Directive in line with Article 288 TFEU, yet it does not explicitly forbid higher national standards of defence. This would in turn mean that different levels of protection of defence rights may be granted across the EU, thus leading to a patchwork of different standards between the Member States or the EU respectively.

 

In Germany, some authors consider the new provision to go beyond the current powers of the FCO in Section 81b ARC.[43] Under Section 81b ARC, the legal person or association of persons that is subject to the imposition of a fine has certain disclosure duties upon demand, in particular to provide to the authority turnover information, any corporate links, the transfer and receipt of assets as well as changes in the legal structure, and to submit documents. Nonetheless, pursuant to Section 81b(3) ARC, individuals acting on behalf of the legal person or association of persons may refuse to answer questions if the answers would expose them personally or a relative as specified in Section 52(1) of the German Code of Criminal Procedure to the risk of being prosecuted for a criminal or administrative offence. This provision may have to be modified for the implementation of the ECN+ Directive in Germany.

 

The Directive also brings about new changes with regard to the power to initiate interviews. According to Article 9 of the Directive, NCAs must be able to summon natural persons or representatives of legal persons for interviews and to impose fines on those who fail to appear. This power is not an exact copy and paste provision from the enforcement toolbox of the European Commission, as Regulation 1/2003 requires also the interviewee’s consent for interviews led by the Commission. For the proceedings before the NCAs, this has not been considered necessary by the EU lawmakers.

 

3.2.3      Interim measures (Article 11 of the Directive)

 

In the area of decision-making powers of the NCAs, the Directive encompasses the harmonisation of provisions on the finding and terminating of an infringement (Article 10 of the Directive), interim measures (Article 11 of the Directive) and commitment decisions (Article 12 of the Directive). the European Commission found that structural deficits exist in this area, as more than 10 NCAs cannot impose structural remedies to restore competition on markets.[44]

 

Currently, the most interesting and discussed power is the one on interim measures, as this tool is not very common for many NCAs. So far, mainly the French NCA has made use of this instrument with moderate level of success,[45] whereas the European Commission, for example, has applied this instrument only in few cases. Remarkably, however, the European Commission recently applied interim measures in the Broadcom case: the Commission ordered interim measures to stop applying certain provisions in its exclusive agreements with TV and modem manufacturers.[46] The prerequisites for adopting interim measures for NCAs are close to the ones for EU interim measures pursuant to Article 8 of Regulation 1/2003. This tool is reserved for cases of urgency and based on prima facie finding of infringement (at first sight). It shall not, however, be equated with the necessity for speedy proceedings and applied only where suitable.[47] By means of example, also the German system does not have wide application for this instrument. The power to order interim measures exists under Section 32a ARC within the administrative toolbox of the FCO (as opposed to the sanctioning procedures).[48] Nonetheless, commitment decisions under Section 32b ARC are by far the more frequently applied option (equivalent to Article 9 of Regulation 1/2003 in EU law), as they provide a flexible solution in particular for clear-cut cases.

 

3.3           Fining powers of the NCAs

 

One crucial power for the effective enforcement of competition law is the fining competence of NCAs. The ECN+ Directive has been motivated by the difficulties some NCAs experience with imposing effective fines.[49] In that regard, three major aspects shall be mentioned.

 

Firstly, it is to be welcomed that the Directive regulates the notion of an undertaking in line with EU public enforcement law(see Article 13 of the Directive). In particular, Article 13(5) of the Directive addresses the issue of parental and successor liability, which has been an issue for long for many NCAs. In Germany, for example, certain undertakings could evade being sanctioned with a fine by restructuring and liquidating their previous legal form, an issue also known as the “Wurstlücke” (the so-called “sausage gap”) which has been fixed in Germany with the 9^th Amendment to the ARC.[50] Nonetheless, this issue still exists in other Member States. Across the EU, five NCAs could not hold parent companies liable for infringements committed by subsidiaries under their control prior to the adoption of the ECN+ Directive, while eight NCAs cannot hold legal or economic successors of an infringer liable for fines irrespective of the long established case law of the European Courts.[51] Nonetheless, the process of harmonisation of the rules on fining within the EU has been viewed in part sceptically by legal doctrine.[52]

 

Recently, the CJEU dealt with the question of the concept of undertaking and legal succession in a private enforcement case in its landmark judgement in Skanska.[53] The Court ruled that Article 101 TFEU must be interpreted as meaning that a legal successor of all the shares of a cartelist company and continued its commercial activities may be held liable for the damage caused by the cartel in question. The Court reiterated the EU concept of an ‘undertaking’ in public enforcement law that designates the perpetrator of an infringement of EU competition law.[54] The case concerns the asphalt cartel on the Finnish market between 1994 and 2002. In 2004, the Finnish NCA imposed fines on the cartelists, but one of the cartel participants had been dissolved in voluntary liquidation proceedings. Its sole shareholder became Skanska and it continued the economic activity of the former cartelist, subsequently sued by one of the alleged cartel victims for damages. The issues arose from the fact that the Finnish law did not apply the principle of economic continuity, thus the attribution of the acts of the former subsidiary to Skanska was not possible under national law. The Court followed the reasoning of the Opinion of AG Wahl that the concept of liability for the breach of competition law stems directly from Article 101 TFEU[55] and found that the undertaking which infringes the EU antitrust rules must also be, inversely, the one to be held responsible for the damage caused by the infringement.[56] Thus the position of the Court has strengthened the coherence between public and private enforcement of competition law.

 

Secondly, as regards the calculation of fines for infringements of the EU antitrust rules, Article 14 of the Directive provides new guidance which can improve the overall scattered picture between the different Member States. In the findings of the European Commission, the level of fine can vary up to 25 times for the same infringement between the Member States.[57] Besides, different methodologies are often being applied. This can also be true at national level, for example differences may exist between the fines set by the NCAs and reviewed by the courts. In Germany, this already is a problem concerning the fines set by FCO, as those have been scrutinised and modified even more strictly over the last few years by the Higher Regional Court of Düsseldorf at the instance of appeal.[58]

 

Thirdly, it is also to be welcomed that the maximum amount of fines has been harmonised. Pursuant to Article 15 of the Directive, the fine that NCAs may impose on each undertaking or association of undertakings participating in an infringement of the EU antitrust rules is not less than 10 % of the total worldwide turnover of the undertaking or association of undertakings in the business year preceding the decision. There is, however, still some leeway left for national differences. For instance, in the Netherlands, the maximum fine is set by multiplying the cap of 10% by the number of years of the cartel infringement, subject to a maximum duration of four years, and this ceiling doubles for repeat offenders.[59]According to recital 47 of the Directive, the Member States can take into account for the calculation of fines factors such as “the nature of the infringement, the combined market share of all undertakings concerned, the geographic scope of the infringement, whether the infringement has been implemented, the value of the undertaking’s sales of goods and services to which the infringement directly or indirectly relates and the size and market power of the undertaking concerned”, but also repeated infringements by the same perpetrator. In Germany, for example, such factors can be included in the current Section 81(4a) ARC which stipulates that the economic situation of the undertaking or the association of undertakings is taken into account when setting the fine.

 

Recognition deserves as well the provision on the maximum amount of fines for an association of undertakings under Article 15(2) of the Directive, pursuant to which the maximum amount of the fine shall be not less than 10 % of the sum of the total worldwide turnover of each member active in the market. This provision may also require implementation in many Member States, including German law.

 

Overall, the new directive has contributed to the enhanced enforcement of fines. This is true also for cases where the infringer is not seated in one EU Member State, relevant for example for online sellers. Besides, Article 26 of the Directive ensures mutual assistance for the enforcement of fines when companies have no legal presence or assets in the territory of the NCA imposing the fine. As a result, the ECN+ Directive can be viewed as an important step towards more effective and coherent enforcement rules for EU competition law.

 

4. Harmonisation of the national leniency programmes for secret cartels (Articles 17 to 23 of the Directive)

 

The harmonisation of the national leniency programmes through the Directive was mostly a formal act to make the already existing agreements in the ECN binding. That does not mean that there will be no impact on the national leniency programmes.

 

Even though the ECN Model Leniency Programme (MLP) existed since 2006 and was supposed to ensure that potential leniency applicants would not be discouraged from applying because of the differences between the national leniency programmes,[60] divergences still remained until now.[61] Four years after the revision of the MLP,[62] the ECJ decided explicitly in 2006 that the MLP is not binding on the NCAs and demonstrated how the MLP still needs improving.[63] The Commission reacted with proposing the Directive, setting the legal framework for the best practice of the NCAs that they agreed on in the MLP. The codification of the MLP will have a different impact in the Member States depending on the proximity of the rules that the NCAs adopted before the Directive came into force.

 

4.1           The leniency instrument

 

As the Directive is supposed to provide the minimum guarantees and standards for the NCAs being effective enforcers,[64] it emphasises that all Member States without exception need to have leniency programmes.[65] As of now only Malta does not have such a programme.[66]

 

The national leniency programmes need to have the following least common denominators in future. First, it is mandatory for the different programmes to ensure that the NCA is enabled to grant immunity from or reduction of fines for the applicant, if the prerequisites are met (Articles 17-19 of the Directive). Secondly, the NCAs are obliged to offer applicants the possibilities of applying for markers (Article 21 of the Directive) and submitting summary applications (Article 22 of the Directive). Thirdly, the Directive addresses the interplay of leniency and sanctions for natural persons (Article 23 of the Directive).

 

4.1.1      Immunity from and reduction of fines (Articles 17-19 of the Directive)

 

The conditions for leniency can be divided into general ones (Article 19 of the Directive) and special ones: either for immunity (Article 17 of the Directive), or reduction (Article 18 of the Directive). The general conditions and either of the two types of possible special conditions must be met cumulative. That means that no immunity or reduction can be granted, if the applicant does not meet the general conditions. Having these coherent conditions for leniency in all Member States, increases the legal certainty for applicants.[67]

 

Roughly summarised, the general conditions for leniency are for the applicant to end its involvement in the alleged secret cartel at the latest immediately after the application and its genuine, full, continuous and expeditious cooperation with the NCA from the time of the application until the closing of the procedure. On top of that, it is necessary for the applicant to ensure that evidence is not destroyed, falsified or concealed and that the contents of the application was not disclosed to anyone other than the NCAs in the EU or NCA of third countries.

 

As soon as these general conditions are fulfilled, the applicant can hope for immunity from or a reduction of fines. For both outcomes the applicant must disclose its participation in a secret cartel. Moreover, each of the options has further special conditions.

 

Immunity can be granted, if the applicant is the first to submit evidence that either gives the NCA the opportunity to carry out a targeted investigation, or that is sufficient to find an infringement covered by the leniency programme. Both alternatives are set under the condition that the NCA did not have sufficient evidence before the submission. Immunity can never be granted to participants that have taken steps to coerce other undertakings to join or to remain in the cartel. If the application for immunity is denied, the applicant concerned can request for its application to be considered as one for reduction of fines.

 

A reduction of fines is possible, if the submitted evidence represents significant added value for the purpose of proving an infringement covered by the leniency programme. If the submitted evidence leads to higher fines for the participants of the secret cartel, the NCA is obliged to ensure that the submitted evidence does not affect the fines of the applicant in a negative way because of that.

 

4.1.2      Markers (Article 21 of the Directive)

 

Furthermore, an undertaking involved in a secret cartel has the possibility to apply for a marker to secure its position in the queue for leniency according to Article 21(1) (immunity from fines) and Article 21 (5)  (reduction of fines) of the Directive. The prerequisites for a marker are naturally lower than the ones for leniency applications as the marker is supposed to enable the concerned party to gather the necessary evidence in order to apply for leniency.[68] For this purpose, the concerned authority specifies a time period on case-by-case basis in which the application for leniency must be completed and submitted. The German NCA already uses markers very effectively.[69] The specification of the time period that lies within the discretion of the NCAs, will be significant for the success of the use of markers for leniency applications.[70] If the time period is too short to gather the necessary information, markers will become a useless tool to boost the effectiveness of leniency programmes. Certainly, best practices will have to be discussed and implemented among the NCAs for the future.

 

4.1.3      Summary applications (Article 22 of the Directive)

 

The Directive also codifies the possibility of submitting a summary application in Article 22 that can help facilitate the application for leniency in a system with multiple jurisdictions[71]. Due to this provision, the NCAs are obliged to accept summary applications from undertakings that applied for a marker or submitted a full application for leniency to the Commission. All those applications must concern the same secret cartel and cover at least the affected territories of four Member States. As long as it is not decided whether the Commission pursues the case partially or wholly, the Commission is the main interlocutor of the applicant. If the Commission received a full application and the NCAs summary applications, the Commission informs the NCAs about the state of affairs at their request. The NCAs are obliged to verify the order of the applications submitted to them related to the same alleged cartel and to inform the applicant when its application was the first and fulfils the requirements.  The NCA must ensure that the applicant is given the opportunity to submit a full application if it is decided that the NCA is competent for pursuing the matter. In case of such a full application to an authority the application is deemed to have been submitted on the date of the submission of the summary application, if it covers the same affected products and territories as well as the same duration of the alleged cartel of the summary application.

 

4.1.4      Interplay between leniency applications and sanctions on natural persons (Article 23 of the Directive)

 

The Directive also strengthens the position of whistle-blowers by creating the possibility of full protection from non-criminal sanctions and full or partial protection from criminal sanctions, if the conditions are fulfilled.

 

Article 23 of the Directive[72] comprises current or former directors, managers and other members of staff of applicants (together: the individual). The conditions for protection depend on whether there is a threat for non-criminal or for criminal sanctions. In both cases, the actions of the individual must concern the secret cartel covered by the application for immunity that relate to the violation of national law that mainly pursues the same objectives as Article 101 TFEU.

 

The protection from administrative and other non-criminal sanctions requires that the application for immunity from fines fulfils the conditions of Article 17(2) lit. (b), (c) of the Directive, i.e. that the individual actively cooperates with the NCA pursuing the case and that the application for immunity predates the time, when the individual was made aware by the NCAs of the proceedings leading to the imposition of the mentioned sanctions.

 

Obtaining protection from criminal sanctions requires additional conditions. First, the conditions set out for the protection from non-criminal sanctions need to be fulfilled and the individual must cooperate with the competent prosecuting authority. If the individual does not cooperate with the prosecuting authority, the latter is allowed to continue its investigation. The competent authority must be able to refrain from or mitigate the criminal-sanction depending on whether the contribution of the individual to the detection and investigation of the cartel outweighs the interest in prosecuting/sanctioning this individual. This provision creates reasonable incentives for the individual to cooperate with the relevant authorities and can therefore only be welcomed.

 

4.2           A One-stop shop approach in the EU vs. the solution of the ECN+ Directive

 

One of the most controversial issues in respect of the Directive has been whether there is a necessity for a one-stop shop approach concerning leniency in the EU. Under a one-stop shop approach a leniency application to the Commission or an NCA would be decisive for the place in the queue for the entire ECN,[73] i.e. the moment the applicant submits one application (or marker) only to one authority, its place in the queue for leniency is secured for every other procedure that concerns the alleged secret cartel as well. Currently there is no such approach in the EU, since the Commission’s and the NCAs’ leniency programmes are legally independent and subject to varying requirements.[74] As a result, undertakings that apply for leniency are prone to a certain degree of legal uncertainty concerning their place in the queue when more than one NCA are possibly involved in an investigation. It is questionable if the Commission’s attempted solution to this issue is the best constellation to boost the effectiveness of national leniency programmes in the EU or if a one-stop shop would have been favourable.

 

4.2.1      One-stop shop or not – a practical issue

 

The practical issue of a one-stop shop approach for leniency applications in the EU arose first with a case that was tried before the ECJ.[75]

 

DHL Express Srl and DHL Global Forwarding (Italy) SpA (together: DHL) and the Italian CA, Autorità Garante della Concorrenza e del Mercato (AGCM), argued about DHL’s place in the queue for leniency. The Consiglio di Stato that functions as the Supreme Administrative Court of  Italy referred the case to the ECJ for a preliminary ruling.

 

In the main proceedings, DHL was the first to submit a full application for immunity from fines to the Commission in the sector of international freight forwarding, which was granted for the entire sector, i.e. maritime, air and road transit. After DHL submitted evidence concerning international freight forwarding in Italy in 2007, the Commission decided to only pursue the infringement relating to international air freight forwarding, leaving the AGCM the possibility to pursue the cartel in relation to road and sea freight forwarding. DHL had applied for leniency at the AGCM at the same time as it did to the Commission. The AGCM found that the submitted information about the illegal actions in the international freight forwarding and transportation market is not sufficient for including the road freight forwarding sector. Therefore, the AGCM found that DHL’s application only concerned the international sea and air freight forwarding sector and not the international road freight forwarding sector. Submitting an additional summary application for immunity to the AGCM, one year later, in 2008, DHL wanted to extend the application from 2007 to the international road freight forwarding sector. DHL argued that the newly reported conduct does not equal to a separate infringement, as it is simply a manifestation of already reported conduct. Before DHL’s submitted its summary application, Schenker Italiana SpA (Schenker), Agility Logistics International and its subsidiary (together: Agility) had applied for leniency to the AGCM providing information about road freight forwarding in Italy.

 

Following this, the AGCM opened a procedure assessing whether there was an infringement of Art. 101 TFEU, leading to an affirmation of an infringement by several undertakings in the international road freight forwarding sector in Italy. The NCA granted Schenker immunity from fines as the NCA decided that it was the first to apply for it for road freight forwarding in Italy. DHL and Agility fines were reduced. According to the AGCM DHL’s summary application for the road freight forwarding sector was to be seen separately from its application one year earlier that only included the air and sea freight sector. Therefore, DHL submitted its application for leniency later than the other undertakings. As a result, immunity from fines could not be granted to DHL.

 

Subsequently, DHL appealed the decision of the AGCM partially before the Regional Administrative Court for Lazio as it was convinced that it should be entitled to the first place in the queue for the national leniency programme. However, the court rejected the appeal.

Appealing yet again in the next instance, the Consiglio di Stato decided to refer three questions concerning the interpretation of EU law (Article 101 TFEU and Regulation 1/2003) to the ECJ for a preliminary ruling.

 

The first question was, if the rules of the ECN, especially the MLP, are binding on the NCAs. The ECJ held that the ECN rules including the MLP are not binding on NCAs because the ECN does not have any legislative power.[76]

 

The second question referred to the legal connection between the full application for immunity from fines to the Commission and the summary application to the NCAs. In light of the autonomy and independence of the NCAs in respect to each other and to the Commission, the ECJ decided that there is no legal link between an application to the Commission and summary applications to NCAs. Therefore, the NCA is not obliged to assess the summary application with the full application to the Commission in mind. If the material scope of a summary application is narrower than the one of the full application to the Commission, the NCA is neither required to verify the contents with the Commission, nor with the applicant itself.[77]

 

The third and last referral tackled the question whether NCAs are allowed to accept a summary application for immunity from fines in case the applicant only applied for reduction of fines to the Commission. The ECJ found that EU law does not hinder NCAs to accept summary applications in the situation as describes in the third question.[78]

 

The ECJ ruled in favour of the decision of the AGCM, since the Court did not deem DHL’s objections valid. The case put on display how important timing in connection with a precise, well-thought out and foresighted assessment of the possibly involved authorities and sectors for leniency applications is. Due to the complexity of this assessment the effectiveness of leniency concerning EU law and more than one NCA involved is uncertain. To be on the safe side, it is recommendable for undertakings in similar situations to apply for leniency to as many NCAs as possible and to be precise when it comes to the contents of the application.[79] The problematic issues of the case would not have arisen if a one-stop shop existed. The centralised recording of leniency applications would have saved DHL’s position in the queue, as the scope of the first recorded leniency application would have applied in all procedures within the EU.

 

The Commission attempted a solution to this issue through the Directive, however, without establishing a one-stop shop. It stipulates an approach that combines the opportunities to apply for markers and submit summary applications. If a full application for leniency or an application for a marker is made to the Commission, the applicant must submit summary applications to all other possibly competent authorities at the same time to ensure its position in the queue. Since full applications to the Commission and summary applications to NCAs are legally independent, the provisions of the Directive would not have altered the outcome of the case at hand as it only changes the answer to the first question by making the rules of the MLP binding. Ultimately, that would not have changed the decision of the AGCM, because the independence of the different applications, the NCA not being obliged to request verification of the contents of the summary application and to interpret leniency applications in the light of applications submitted to the Commission. The Directive states explicitly that the applicants bear the responsibility to change the scope of their summary application if the scope of the application to the Commission changes.[80]

 

4.2.2      A more preferable solution?

 

It is disappointing that the Directive only adopted the already existing rules of the MLP for the most.

 

It is certainly an improvement for applicants that the ECN programme is now binding on the NCAs. That way there are standardized minimum leniency rules for all NCAs in the EU and the applicants have more certainty about prerequisites for leniency. Profound legal certainty, however, will not be achieved by the transposition of the Directive into national law as the Member States still have the freedom to take different approaches concerning the formulation of the national law, which is a necessary side effect of a decentralised system. Unfortunately, the Directive did not remedy the legal uncertainty and obscurity satisfactorily when it comes to the place in the queue for leniency if more than one NCA is involved. It seems hard to understand if not even arbitrary why summary application should only be possible if four or more territories of Member States are affected. This puts applicants that took part in secret cartels that affected only two or three Member States’ territories at disadvantage. The case DHL Express (Italy) v. Autorità Garante della Concorrenza e del Mercato showed that the involvement of one NCA next to the Commission is enough to cause confusion und perplexity for the applicants.

 

It is understandable that the Member States and the NCAs are not fond of the idea of harmonising too many legal aspects as they are sovereign and thrive of their differences. The charged relationship between harmonisation and heterogeneity normally keeps a good balance of power between the EU and the Member States. Concerning leniency programmes, however, it hinders the development of more effective leniency programmes. Even though there are good arguments for a centralised system for leniency application,[81] a one-stop shop in the sense that an application to one authority (either the Commission or an NCA) is decisive for the entire ECN, was not yet possible. There are several advantages to a one-stop shop approach.

 

Firstly, it would facilitate applying for leniency and promote transparency.[82] On top of that, it would have prevented DHL’s predicament, since the scope of the application to the Commission would have applied to the other application for leniency as well. Whether a one-stop shop is compatible with a decentralised system, as it exists in the EU, massively depends on the set up of such an approach. If the position in the queue for leniency would be determined according to the first marker or application that was submitted to a NCA in the EU (or to the European Commission to that matter) concerning the alleged cartel, the NCAs could still lead their procedures independently and conduct their own investigation, i.e. leaving the decentralised system unaffected.[83] The NCA receiving the first application of an undertaking would not influence the other procedures in any other way than marking the time of receipt of the application for any other possibly competent NCA. In other words, an application to an authority would be a marker for leniency in another jurisdiction. Increasing administrative expenditures caused by this approach could be handled by using modern technology for example.

 

Instead of establishing a one-stop shop that was not (yet) wanted because of the Member States strongly advocating in favour of a decentralised system, the Directive would have been a good chance to take the MLP one step further. Article 12 of the Regulation 1/2003 certainly sets basic rules on the information exchange between the different NCAs and the NCAs and the Commission. The Directive could have set minimum standards built on those basic rules, so that the differing procedural standards and industrial property rights would not cause confusion at times.[84]

 

In addition, the Directive could have extended the scope of undertakings submitting summary applications. This would entail an increasing administrative expenditure, but in turn it would also lead to more certainty for undertakings, since estimating how many Member States are affected by the cartel can sometimes be tricky. Moreover, cartels concerning only two to three Member States could especially involve medium size or small undertakings that have higher difficulties to manage applications for leniency.

 

To be welcomed is yet the additional protection of the leniency instrument according to Article 31 of the Directive that limits the accessibility of information only to parties of the antitrust and court proceedings for the purpose of exercising their rights of defence.

 

5. Outlook for the future enforcement of the EU competition rules

 

The Directive entered into force on 4 February 2019. The Member States now have time until 4 February 2021 to transpose the Directive into national law (Article 34(1) of the Directive).

 

Certainly, the level of modification of the current system varies from Member State to Member State. Smaller Member States will be more affected than bigger ones, as their leniency programmes are often still rudimental. Therefore, the bigger Member States such as Germany, France, Italy and the UK will not have to adjust as many provisions of national law as the smaller ones, including Bulgaria. However, being under the obligation to make less changes to national law does not equal to the Directive not having any impact on the NCAs work.

 

In Germany, the implementation of the Directive will come together with the planned 10^th Amendment to the ARC early next year, which among others is expected to include changes to the abuse of a dominant market position, too. The draft bill was published on 7 October 2019.[85] Amendments to mention are among others the extension of the formerly narrow prerequisites for interim measures in Section 32a ARC. The condition of a “risk of serious and irreparable damage to competition“ was substituted by an “infringement within the meaning of section 32(1) {ARC that} appears predominantly probable and {that} the order is necessary for the protection of competition or because of an imminent threat of serious harm to another undertaking“.[86] It will be interesting to see if the German FCO is going to use interim measures more often because of these lower requirements. Furthermore, the German legislator will dedicate an entire segment to the leniency programme (Section 81h to 81l ARC). The new draft bill covers also the toolbox of the competition authority and provides that the FCO should in future enjoy the same rights as the prosecution office in appeals proceedings[87] in line with the VEBIC case-law of the ECJ.[88] An interesting constitutional debate has revolved around the question whether the right to remain silent will have to be modified too. The approach by the German lawmakers perpetuates the right to remain silent for individuals.[89] Overall, the Directive’s content, especially relating to the systematics of the prerequisites for immunity application and reduction of fines was closely adhered to.

 

In essence, the Directive increases the protection of whistle-blowers immensely, since it changes the current legislative situation and makes whistle blowing more attractive. In the context of criminal sanctions, it is interesting to see whether the German lawmakers will modify the German provision relating to bid rigging (Section 298 of the German Penal Code).[90] In Section 298(3) of the German Penal Code, individuals are encouraged to actively (try to) prevent the completion of the offence by offering them immunity from sanctions in exchange (so-called “tätige Reue”). This provision, however, does not aim at encouraging whistle-blowers at later stages of the criminal offense, as it only applies as long as the offence is not completed. If the person cooperates with authorities after the completion, this cooperation does not matter, as the leniency provision in the German Penal Code (Section 46b) does not include Section 298 of the German Penal Code. The implementation would mean that an extension of that provision is necessary. That in turn will facilitate the work of the NCA in discovering secret cartels, as whistle-blowers will not have to be afraid of sanctions (non-criminal or criminal) if they meet the conditions.

 

For Bulgaria, the main area of changes involves the investigative powers of the CPC; in particular, the power to inspect non-business premises and to gather data from private sources including personal electronic devices.

 

Likewise in Italy, the implementation of the Directive will mainly impact the toolbox and the procedure of the AGCM, including for example the undertakings rights of defence, the AGCM’s right to also search the private homes of individuals working for the undertakings and the power to impose higher fines.

 

Due to the implementation of the Directive, the Autorité de la concurrence in France will roughly have the following new possibilities. The opportunity to allocating cases according to their priority, adopting interim measures, to impose structural remedies as well as imposing higher fines.

 

If the UK will implement the Directive remains unsure, as the Brexit chaos is still in full swing.[91] What is clear is that the UK are obliged to implement the Directive as long as it is part of the EU, so there is no option left concerning that issue than to wait and see, if Brexit will happen before the deadline for implementation expires in 2021.

 

Of all the changes, it will be especially interesting to see if and how interim measures will be used by the NCAs and if they will prove to be a suitable instrument to tackle the challenges of the digital economy. We can remain excited about the next generation of competition law enforcement.

 

***

 

* Giulia Rizzo and Mariya Serafimova are both doctoral candidates at the European University Viadrina, Frankfurt (Oder) at the Chair of Civil Law and European Private Law of Prof. Christoph Brömmelmeyer.

[1] Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, OJ L 11, 14.01.2019, p. 3-33.

[2] Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 04.01.2003, p. 1-23.

[3] See European Commission, Impact Assessment, SWD (2017) 114, Part 1, p. 6.

[4] See the European Commission’s Communication on Ten Years of Council Regulation (EC) 1/2003, SWD(2014) 230, p. 4.

[5] See https://ec.europa.eu/competition/ecn/statistics.html#top, statistics under 2. More detailed figures on antitrust cases.

[6] See European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 25.

[7] With reference to the NCAs in Poland and Greece, see Argyro Triantafyllou, ‘The Enforcement of Competition Law in the light of the Proposal for an ECN+ Directive – Tagung des Studienkreises “Wettbewerb und Innovation” am 27. April 2018 in Würzburg –’, NZKart 2018, 472, 473.

[8] See Article 55 of the Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area, OJ L 343, 14.12.2012, p. 32-77.

[9] See Article 52 of the General Data Protection Regulation, Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC, OJ L 119, 05.05.2016, p. 1-88.

[10] See Argyro Triantafyllou, ‘The Enforcement of Competition Law in the light of the Proposal for an ECN+ Directive – Tagung des Studienkreises “Wettbewerb und Innovation” am 27. April 2018 in Würzburg –’, NZKart 2018, 472, 473.

[11] See Article 55(3) sentence 1 of the Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area, OJ L 343, 14.12.2012, p. 32-77.

[12] See ECJ, case C-508/13, Estonia v Parliament and Council, para. 44 et seq.; ECJ, case C-58/08, Vodafone and Others, para. 78.

[13] See Giorgio Monti, “ECN Plus Directive: Empowering NCAs? Strengthening the Network?”, European University Institute, http://fcp.eui.eu/wp-content/uploads/sites/7/2019/02/1_Monti-FCP2018-ECN-plus.pdf (last retrieved: 27.10.2019).

[14] See MLex, press release dated 26.09.2019, “Vestager’s dual role won’t undermine independent competition enforcement”.

[15] See Carsten Nowak, “Richtlinienvorschlag der Europäischen Kommission zur Stärkung der privaten Kartellrechtsdurchsetzung sowie zur Optimierung der Interaktion zwischen behördlicher und privater Durchsetzung des EU-Kartellrechts“, https://www.europa-uni.de/de/forschung/institut/institut_fireu/newsletter/fireu-Newsletter14.pdf (last retrieved: 27.10.2019).

[16] See Proposal for a Directive of the European Parliament and of the Council on the strengthening of the competition authorities of the Member States with regard to a more effective enforcement of the rules on competition and the smooth functioning of the internal market, COM(2017) 142 final.

[17] See recital 8 of the Directive.

[18] Cf. the Management Plan of the European Commission for 2019 considering the effective enforcement of antitrust rules to be the first objective with a view to consumer welfare protection, available at: https://ec.europa.eu/info/sites/info/files/management-plan-comp-2019_en.pdf (last retrieved: 27.10.2019).

[19] See Ailsa Sinclair, “Proposal for a Directive to Empower National Competition Authorities to be More Effective Enforcers (ECN+)”, JECLAP 2017, Vol. 8, no. 10, p. 625, 627.

[20] See European Commission, “Ten Years of Antitrust Enforcement under Regulation 1/2003: Achievements and Future Perspectives”, SWD(2014) 230, https://ec.europa.eu/competition/antitrust/legislation/antitrust_enforcement_10_years_en.pdf (last retrieved: 27.10.2019).

[21] See e.g. ECJ, case C-681/11, Schenker on sanctioning law governed by national law. See also the different approaches of the NCAs in the flour mills cartel, where one of the undertakings achieved the annulment of the fine imposed on this undertaking based on violation of the ne bis in idem principle, as the Belgian NCA had failed to calculate the fine in respect of the affected turnover generated in Belgium only, see Giorgio Monti, (2019), Galvanising National Competition Authorities in the European Union. In D. Gerard & I. Lianos (Eds.), Reconciling Efficiency and Equity: A Global Challenge for Competition Policy (Global Competition Law and Economics Policy, pp. 365-382).

[22] Konrad Ost, „Die Richtlinie 1/2019: Ein Meilenstein für die Rechtsdurchsetzung im European Competition Network“, NZKart 2019, 69.

[23] See in particular recitals 6 and 7 of the Directive.

[24] See General Court, case T-54/14, Goldfish and Others v Commission, paras. 62 et seq. That case concerned covert recordings of telephone conversations between competitors, in which they exchanged competitively sensitive information. The recordings were made unlawfully by a private party and collected by the Commission in its inspections. The General Court found that the Commission was entitled to use them as evidence in its infringement decision.

[25] See German Bundesrechtsanwaltskammer, Opinion no. 8 delivered in March 2019, https://www.brak.de/zur-rechtspolitik/stellungnahmen-pdf/stellungnahmen-deutschland/2019/maerz/stellungnahme-der-brak-2019-8.pdf (last retrieved: 27.10.2019); see also Carsten König, “Zur geplanten Stärkung der nationalen Wettbewerbsbehörden bei der Durchsetzung des EU-Kartellrechts“, NZKart 2017, 397, 400.

[26] See European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 16; see also ECN Recommendation on Investigative Powers, Enforcement Measures and Sanctions in the context of Inspections and Requests for Information, http://ec.europa.eu/competition/ecn/recommendation_powers_to_investigate_enforcement_measures_sanctions_09122013_en.pdf (last retrieved: 27.10.2019).

[27] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 16.

[28] See European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 16.

[29] ECJ, case C-617/10, Åkerberg Fransson, paras. 19 et seq.; see also Gunnar Kallfaß, “Durchsetzung des Unionsrechts in den Mitgliedsstaaten – am Beispiel des Kartellrechts“, EuR 2018, 175, 185.

[30] See more recently on defence rights, ECJ, case C–318/19 P(R), Lantmännen.

[31] See established EU case-law on investigative powers with regard to inspections, in particular ECJ, case 46/87, Hoechst v Commission.

[32] See ECJ, case C-177/16, AKKA/LAA, para. 64.

[33] See ECJ, case C-681/11, Schenker & Co. and Others, paras. 36, 49;

[34] See also Opinion of AG Geelhoed, delivered on 19 January 2006, case C-301/04 P, Commission v SGL Carbon AG, para. 67.

[35] Gunnar Kallfaß, “Durchsetzung des Unionsrechts in den Mitgliedsstaaten – am Beispiel des Kartellrechts“, EuR 2018, 175, 187.

[36] See German Bundesrechtsanwaltskammer, Opinion no. 8 delivered in March 2019, https://www.brak.de/zur-rechtspolitik/stellungnahmen-pdf/stellungnahmen-deutschland/2019/maerz/stellungnahme-der-brak-2019-8.pdf (last retrieved: 27.10.2019).

[37] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 15.

[38] See Konrad Ost, “From Regulation 1 to Regulation 2: National Enforcement of EU Cartel Prohibition and the Need for Further Convergence”, JECLAP 2014, Vol. 5, no. 3, p. 125, 129; see also for the German administrative offence law Albin Eser, in: Meyer, Charta der Grundrechte der Europäischen Union, 4. Ed. 2014, Art. 48, para. 11.

[39] See with regard to German constitutional law Federal Constitutional Court (BVerfG), 1 BvR 2172/96; see also Gerhard Dannecker/Christoph Dannecker, “Europäische und verfassungsrechtliche Vorgaben für das materielle und formelle Unternehmensstrafrecht“, NZWiSt 2016, 162, 176 et seq.

[40] See also Opinion of AG Geelhoed, delivered on 19 January 2006, case C-301/04 P, Commission v SGL Carbon AG, paras. 62 et seq.

[41] See ECJ, case 374/87, Orkem v Commission, paras. 18 et seq., para. 35.

[42] A similar striking difference between defence rights at EU level and German law concerns the right of legal privilege, but in the latter case the EU law provides higher standards of protection, see Wouter Wils, “Legal professional privilege in EU antitrust enforcement: Law, policy & procedure”, February 2019, Concurrences Review N° 1-2019, Art. N° 90634.

[43] Konrad Ost, “Die Richtlinie 1/2019: Ein Meilenstein für die Rechtsdurchsetzung im European Competition Network“, NZKart 2019, 69.

[44] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 17.

[45] E.g. the French Autorité de la Concurrence adopted interim measures ordering the French incumbent gas operator GDF Suez to provide access to information contained in its database with respect to customers under the regulated gas tariffs which was considered to be essential for the successful entry of new operators and to allow them to make competitive non-regulated offers and therefore for the development of the energy market (Decision of the French NCA 14-MC-02 of 9 September 2014).

[46] See European Commission, press release dated 16 October 2019, available at https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6109 (last retrieved: 27.10.2019).

[47] See statement of Johannes Laitenberger at the 19^th International Conference on Competition, Berlin, March 14-15^th 2019, see MLex press release dated 14 March 2019, “Interim antitrust orders should be distinguished from need for speed, EU’s Laitenberger says”.

[48] See Ahmad Chmeis, “Der Richtlinien-Vorschlag der Kommission zur Stärkung der nationalen Wettbewerbsbehörden im ECN“, NZKart 2017, 403, 404.

[49] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 31; see with regard to fines in EU proceedings: Éric Barbier de La Serre/ Eileen Lagathu, “The Law on Fines Imposed in EU Competition Proceedings: Consolidating the Foundations Before the Tide Goes Out”, JECLAP 2016, Vol. 7, No. 5, p. 335, 336 et seq.

[50] See now Section 81(3a) ARC which reads: “Where any person in a leading pursuant to Sec. 30(1) no. 1 to 5 of the German Administrative Offences Act committed an administrative offence pursuant to paragraphs 1 – 3 by which the duties incumbent on the undertaking have been infringed or the undertaking has gained or was to gain a profit, a fine may also be imposed on further legal persons or associations of persons that made up the undertaking at the date when the administrative offence was committed and that directly or indirectly exercised decisive influence over the legal person or association of persons within which the person holding a leading position committed the administrative offence”, see also Armin Jungbluth, “Die 9. GWB-Novelle – Digitalisierung, Schließung der Wurstlücke, Kartellschadensersatz und anderes mehr…“, NZKart 2017, 257.

[51] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 20; see also Christian Kersting, „Haftung von Schwester- und Tochtergesellschaften im europäischen Kartellrecht“, ZHR 182 (2018), 8-31.

[52] Cf. Rafael Harnos, “Harmonisierung des Kartellbußgeldrechts qua effet utile?“, ZWeR 2016, 284; Stefan Thomas, “Die sogenannte wirtschaftliche Einheit: Auslegungsfragen zur neu eingeführten akzessorischen Konzernhaftung im deutschen Bußgeldrecht“, AG 2017, 637.

[53] See ECJ, case C-724/17, Skanska Industrial Solutions; see also Patrick Hauser, “Der Ersatzpflichtige im Kartelldeliktsrecht: Anwendung des Grundsatzes wirtschaftlicher Kontinuität“, WuW 2019, 123.

[54] See ECJ, case C-724/17, Skanska Industrial Solutions, paras. 29 et seq.; ECJ, case C‑516/15 P, Akzo Nobel and Others v Commission, para. 46; see also ECJ, case C-97/08 P, AkzoNobel NV v Commission.

[55] Opinion of AG Wahl delivered on 6 February 2019, case C-724/17, Skanska Industrial Solutions, paras. 60 et seq.

[56] See ECJ, case C-724/17, Skanska Industrial Solutions, para. 31.

[57] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 20.

[58] For detailed references to the divergent calculation of fines in German case-law where the FCO takes into account the relevant turnover of the infringer on the basis of a reference period, whereas the Higher Regional Court of Düsseldorf looks at the group sales, see Konrad Ost/ Ludger Breuer, “Behördliche und gerichtliche Bußgeldzumessung im Kartellrecht: Fakten und Mythen“, NZKart 2019, 119.

[59] This practice is compatible with the new enforcement provisions, see recital 47 of the Directive.

[60] 2006 ECN Model Leniency Programme, para.2.

[61] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 24.

[62] 2006 ECN Model Leniency Programme: 2012 revision; the revision entailed three main changes: The most important one was that the scope of applicants allowed to use summary applications was extended. In addition the ECN agreed on a standard template for summary applications and published a list of authorities accepting summary applications in English.; for more information on the changes see Stephanie Jungheim, „Zusammenarbeit im ECN und die Rechte der Unternhemen“, EWS 2013, 305 (308 et seqq).

[63] ECJ, case C-428/14, DHL Express (Italy) v. Autorità Garante della Concorrenza e del Mercato.

[64] See European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 67.

[65] See Article 17 of the Directive.

[66] See the website of the Maltese NCA: https://www.mccaa.org.mt/ (last retrieved: 27.10.2019).

[67] European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 69.

[68] See Recital 58 of the Directive.

[69] See for detailed information on the German FCO handling markers: Daniel von Brevern, „Praxisfragen zum Setzen eines Markers beim Bundeskartellamt und der Europäischen Kommission“, NzKart 2016, 399.

[70]  See Daniel von Brevern, „Praxisfragen zum Setzen eines Markers beim Bundeskartellamt und der Europäischen Kommission“, NzKart 2016, 399 (404).

[71] See for information on the differences between the NCAs acceptance of summary applications Alisa Sinclair, “Proposal for a Directive to Empower National Competition Authorities to be More Effective Enforcers (ECN+)“, JECLAP 2017, 625 (629).

[72] This provision was received with much scepticism in Germany as an overreaching protection of criminal sanction for individuals might infringe criminal law principles in Germany, see on this topic Carsten König, “Zur geplanten Stärkung der nationalen Wettbewerbsbehörden bei der Durchsetzung des EU-Kartellrechts“, NzKart 2017, 397 (401 et seqq); moreover, it makes the extension of Section 46b of the German Penal Code necessary, which is criticised a lot –  see for further information on the criticism Heintschel-Heinegg, BeckOK-StGB, 34. Edition 2017, § 46 b StGB para. 4; Kinzig, Schönke/Schröder, 29. Aufl. 2014, § 46 b StGB para. 2; less critical Maier, MüKoStGB, 3. Aufl. 2016, § 46 b para. 7 et seqq.

[73] Christoph Brömmelmeyer, „Der Kronzeuge im EU-Kartellrecht – unter besonderer Berücksichtigung des Richtlinienvorschlags der Kommission vom 22.3.2017“, NzKart 2017, 551, 557.

[74] For more information about problems in a decentralised system for EU competition rules see the European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 7-31.

[75] ECJ, decision of 20 January 2016, C-428/14, DHL Express (Italy) v. Autorità Garante della Concorrenza e del Mercato.

[76] See for detailed reasoning to the first question: ECJ, case C-428/14, DHL Express (Italy) v. Autorità Garante della Concorrenza e del Mercato, para. 29-44.

[77] See for detailed reasoning for the second question: ECJ, case C-428/14, DHL Express (Italy) v. Autorità Garante della Concorrenza e del Mercato, para. 54-67.

[78] See for detailed reasoning for the third question: ECJ, case C-428/14, DHL Express (Italy) v. Autorità Garante della Concorrenza e del Mercato, para. 74-84.

[79] For further analyses of the case see Cristoforo Osti, “DHL Express (Italy) v Commission: Guidance on Parallel Immunity/ Leniency Applications“, JECLAP 2016, 460; Christian Krohs/Boris Uphoff, “EU-Kronzeugenantrag schützt nicht vor nationaler Kartellgeldbuße“, BB 2016, 643.

[80] See recital 63 of the Directive.

[81] Christoph Brömmelmeyer, „Der Kronzeuge im EU-Kartellrecht – unter besonderer Berücksichtigung des Richtlinienvorschlags der Kommission vom 22.3.2017“, NZKart 2017, 551, 557; the Commission on the other hand is convinced that a one-stop shop would endanger the system of parallel competence or requires a full harmonisation of application procedure in order to make all authorities accept the applications that were submitted to other NCAs, see European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 58.

[82] See European Commission, Impact Assessment, SWD(2017) 114, Part 1, p. 58.

[83] About the possibility of establishing a one-stop shop without replacing the general decentralised system see Christoph Brömmelmeyer, „Der Kronzeuge im EU-Kartellrecht – unter besonderer Berücksichtigung des Richtlinienvorschlags der Kommission vom 22.3.2017“, NZKart 2017, 551, 557.

[84] For an overview about information exchange in the ECN see Peter Gussone/Roman Michalczyk, „Der Austausch von informationen im ECN – wer bekommt was wann zu sehen?“, EuZW 2011, 130.

[85] See Referentenentwurf eines Zehnten Gesetzes zur Änderung des Gesetzes gegen Wettbewerbsbeschränkungen für ein fokussiertes, proaktives und digitales Wettbewerbsrecht 4.0 (GWB-Digitalisierungsgesetz).

[86] Compare Section 32a ARC after the 10th Amendment to the ARC and the planned changes to it according to the draft bill.

[87] See Sec. 82 lit. a) of the German draft implementation law.

[88] See ECJ, case C-439/08, VEBIC, paras. 58 et seq.

[89] See the new Section 59(3) and (4) of the German draft bill

[90] See German Bundesrechtsanwaltskammer, Opinion no. 8 delivered in March 2019, p. 26, 27, https://www.brak.de/zur-rechtspolitik/stellungnahmen-pdf/stellungnahmen-deutschland/2019/maerz/stellungnahme-der-brak-2019-8.pdf (last retrieved: 27.10.2019).

[91] Reference date: 27 October 2019.