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European Law Monitor NewsAntitrust: Commission calls for comments on a draft legislative package to introduce settlement procedure for cartels

The European Commission has launched a public consultation on a package designed to allow for settlements of cartel cases where the parties not only acknowledge their involvement in the cartel and their liability for it but also agree to a faster and simplified procedure. The package consists of a draft Commission Notice and a draft Commission Regulation amending Regulation (EC) N º 773/2004. Settlements would aim to simplify the administrative proceedings and could reduce litigation in cartel cases, thereby freeing resources to pursue more cases. The draft proposal would allow the Commission to impose a lower fine on parties who agreed to the settlement procedure. This initiative complements the recent review of the Leniency Notice (see IP/06/1705) and the revised fines Guidelines (see IP/06/857) . Comments on the package of documents should be made by 21st December 2007). Following these comments a revised proposal will be prepared, in consultation with Member State competition authorities, for final adoption in 2008.

Competition Commissioner Neelie Kroes commented: "These proposals would ensure more effective decision making whilst safeguarding due process. Companies would benefit by drawing a line under their past illegal behaviour, the Commission would benefit by freeing up resources to pursue more cartels, and the European economy would benefit because more cartels would be punished more quickly".

In practice, the Commission's ability to fight cartels hinges on the evidence gathered during the investigation. Parties generally do not litigate to contest the existence of a cartel or their involvement in it, but rather to reduce or avoid liability. This is particularly so in cases driven by leniency.

A Commission Decision finding an infringement and imposing fines pursuant to Articles 7 and 23 of Regulation (EC) N º 1/2003 (which is not amended) will be adopted after a thorough investigation, irrespective of whether the standard or the settlement procedure applies.

Under the proposed settlement procedure, the Commission would neither negotiate nor bargain the use of evidence or the appropriate sanction, but could reward the parties´ cooperation to attain procedural economies. Such cooperation would be different from the voluntary production of evidence to trigger or advance the Commission's investigation, which is already covered by the Leniency Notice (see IP/06/1705) .

Parties would have neither the right nor the duty to settle, but in cases where companies were convinced that the Commission could prove their involvement in a cartel, a settlement could be reached with the parties on the scope and duration of the cartel, and their individual liability for it. To this end, parties would be made aware of the envisaged objections and the evidence supporting them, and would be allowed to state their views thereon in anticipation of the formal objections. If parties chose to introduce a settlement submission acknowledging them, a Commission's statement of objections (SO) endorsing the contents of the parties' settlement submission could be much shorter than a SO issued to face contradiction. Since parties would have been heard effectively in anticipation of the "settled" SO, other procedural steps could be simplified so that, following confirmation by the parties, the Commission could proceed swiftly to adopt a final decision after consulting Member States in the framework of the Advisory Committee.

The Commission would retain the possibility to depart from the parties' settlement submission until the final Decision, in which case the standard procedure would apply. Also, if no settlement was explored or reached, the standard procedure would apply by default and remain the fall-back option.

The suggested amendments to Commission Regulation (EC) n º 773/2004 would accommodate the settlement option within the existing framework. Changes would include:

* variants in the provisions on issues such as initiation of proceedings, access to file and oral hearings
* choice for a different sequence of procedural steps, advancing some before the adoption of the SO.

The draft settlements Notice sets out the specifics of the new procedure and provides guidance for the legal and business community. Companies would be able to:

* anticipate the kind and extent of cooperation expected from them in order to settle and
* estimate the individual benefits of settling.

The Commission will publish the drafts on 26th October 2007 in the Official Journal in all official languages, which are also already available at
Interested parties have until 21st December to submit their comments on the settlement package by e-mail to

or in writing to:

European Commission

Competition Directorate-General

Unit G5 • Cartels V

Settlements package

B-1049 Brussels

After the public consultation, Member States' views will be sought in the Advisory Committee, before final adoption of the Regulation and the Notice in 2008.