The EU Leniency Policy. Reconciling Effectiveness and Fairness, Baskaran BALASINGHAM

Baskaran Balasingham

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The book is the result of a thesis defended in 2016 at King’s College London, under the supervision of Alison Jones and Richard Whish. Based on a careful study of the English and German language sources, it deepens the recent studies available on the repression of cartels with respect to fundamental rights (see not. Andreas Scordamaglia-Tousis, EU Cartel Enforcement: Reconciling Effective Public Enforcement with Fundamental Rights, Kluwer Law International, 2013, and Pieter Van Cleynenbreugel, Effectiveness through fairness? ’Due process’ as institutional precondition for effective decentralised EU competition law enforcement, in P. Nihoul and T. Nihoul. Skoczny (ed.), Procedural Fairness in Competition Proceedings, Edward Elgar, 2015).

The thesis is based on the assumption that cartels are an absolute evil that must be eradicated at all costs. This idea could have been qualified by asking whether it is possible for economic relations to be entirely free of cartels. On the other hand, it could have been asked whether the leniency policy might not indirectly constitute an incentive to denounce (rather than confess) the companies involved in the cartel. Is it not more logical, despite the evidentiary difficulties, to repress cartels by preventing them from occurring in any event rather than by encouraging participants to denounce them? Baskaran Balasingham confines himself to the study of substantive law, which for some time has relied on the policy of leniency as the main instrument for detecting cartels. Indeed, over the last ten years, 82% of the cartels detected have been detected as a result of the leniency regime. The study fails to note the concomitant decline in the number of cartel cases before the EU Court of First Instance compared to the number of state aid cases, even though state aid is certainly less common in practice than cartels.

The author argues that in order to be recognized as legitimate, the leniency regime must be not only effective but also fair, both substantively and procedurally, and that this objective has been achieved. According to the analysis proposed by Baskaran Balasingham, if immunity and reductions of fines are granted too generously, the thresholds of deterrence and repression are disproportionately lowered, with the result that the benefits of the leniency regime are insufficient to safeguard the public interest. The European Commission’s leniency regime would have been open to criticism in this respect until the amendment of the 1996 Leniency Notice in 2002: the Commission had previously granted immunities from fines too generously. Under the new system, leniency can only be granted if the Commission itself has not yet gathered the necessary evidence, in which case the information provided is not relevant to the investigation. In addition, the amount of the fines has increased.

The thesis explains that from 2002 onwards, the Leniency Notice made applications for immunity almost automatic. Ringleaders can now be granted immunity. These changes have created a kind of "ringleader" status in cartel cases, although what is usually meant by "ringleaders" does not include participants in the practice being denounced.

The problem that arises with the application of the leniency regime with regard to the respect of fundamental rights, and which the applicable regulation would not resolve, relates to the access of applicants to actions for damages for infringement of competition law (private enforcement - see on this subject Folkert Wilman, Private Enforcement of EU Law Before National Courts: The EU Legislative Framework, Edward Elgar, 2015, a work strangely absent from the bibliography of the thesis) to leniency applications. If such access is granted, the plaintiffs in damages actions would be likely to sue the beneficiaries of immunity first, bringing into play joint and several liability, which puts the latter at a distinct disadvantage. The consequence of such a disadvantage would be a reluctance to admit participation in a cartel. Case law would not resolve this dilemma, contrary to Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing damages actions under national law for violations of the provisions of competition law of the Member States and of the European Union. Article 11(5) of this Directive provides that Member States shall ensure that an infringer may recover from any other infringer a contribution, the amount of which shall be determined having regard to their relative liability for the damage caused by the infringement of competition law. The amount of the contribution of an infringer to whom immunity from fines has been granted under a leniency programme shall not exceed the amount of the damage caused by that infringement to its own direct or indirect purchasers or suppliers.

The right not to contribute to one’s own criminalisation is presented as being less protected under Union law than under conventional European law, but as has been said, the possible ethical problems posed by the leniency regime are not addressed.

The book is written in a clear and pedagogical style. It will not fail to interest academics (a thesis on a very similar subject is moreover being finalised at the University of Luxembourg), practitioners and law students who are discovering cartel law. It is to be regretted that no reference in French appears in the bibliography.

PDF Version



Athanase Popov, The EU Leniency Policy. Reconciling Effectiveness and Fairness, Baskaran BALASINGHAM, February 2018, Concurrences N° 1-2018, Art. N° 86304, pp. 243-244

Publisher Wolters Kluwer

Date 10 October 2017

Number of pages 296

Visites 225

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