The Belgian Competition Authority brings out new leniency guidelines

In a previous article, we have treated the Auditorat’s first settlement decision rendered on 22 June 2015, whereby it imposed fines on 18 major companies in the supermarket sector and suppliers of perfume and hygiene products, totalling EUR 174,000,000. Between 2002 and 2007, these companies had participated in coordinated increases of the retail price of household products, perfumes and hygiene products.

Among these companies, some had benefited from a full or partial immunity for their contribution in the denunciation of the practice.

This immunity is provided for in a leniency programme, which has been the subject of precisions further to the coming into force of new leniency guidelines on 22 March 2016.

In a first phase, we briefly present the conditions to be fulfilled to benefit from leniency. In a second phase, we approach the main innovation of the guidelines: the immunity from prosecution for natural persons. Finally, we mention some procedural details.

1. Conditions to be fulfilled to benefit from the full or partial immunity

To qualify for full or partial immunity, the applicant for immunity must comply with an obligation to cooperate. 

Partial immunity from prosecution by contributing in the denunciation

It implies, inter alia, that the applicant cannot eliminate or falsify any piece of evidence, that he must keep secret its application and that he must end, subject to exception, its participation to the alleged cartel. He must also collaborate, at any time, fully and in good faith, with the Belgian Competition Authority (hereinafter “BCA”).

The BCA grants the full immunity from fines to the applicant for leniency (Type 1A) who is the first to provide information and pieces of evidence which enable the BCA to conduct specific searches in relation to the alleged cartel, and to the extent that the BCA does not have enough data, at the time of the application for immunity, to justify a search concerning the alleged cartel.  

The BCA grants the full immunity from fines to the applicant for leniency (Type 1B) who is the first to provide information and pieces of evidence which enable the BCA to establish an infringement in relation to the alleged cartel, and to the extent that the BCA does not have enough data, at the time of the application for immunity, to establish an infringement concerning the alleged cartel, and to the extent that no company or association of companies has been granted with a full immunity of Type 1A. 

To benefit from a partial immunity from fines, the applicant for leniency must provide pieces of evidence of the alleged cartel, which bring a significant added value compared to the pieces of evidences already in the BCA’s possession at the time of the application. The immunity corresponds to a percentage decrease of the fine, according to applicant’s place.

Thus, the first applicant may hope a decrease of the fine ranged from 30 to 50% while this percentage ranges from 20 to 40% for the second application and from 10 to 30% for the third applicant.

Any immunity implies therefore that the company that wishes to benefit from it, takes the initiative as soon as possible.

2. Immunity from prosecution for natural persons

It is the main innovation of the guidelines. A natural person may only be prosecuted by the BCA when it has negotiated, in the name and on behalf of a company or an association of companies, with competitors or has agreed with them to set the selling prices of products or services to third parties, to limit the production or the selling of products or services, or to award contracts.

In other words, natural persons may only be prosecuted and condemned for such infringements to competition law when a company or an association of companies is also prosecuted and condemned for the same facts.

The person must contribute to prove the existence of the forbidden practice(s) by recognising its existence or by providing the BCA with new information.

Unlike companies that apply for leniency, natural persons can benefit from immunity irrespective of their place.

The fact that a natural person applied for immunity does not prevent that a company or an association of companies can still benefit from a full or partial immunity from fines.

3. Procedure

It is always good practice, in a first place, to contact the Auditorat, possibly with the assistance of a lawyer, to ask for information and details about the steps to be followed. However, only a lawyer is allowed to ask the general Auditor if the full immunity from fines is still possible.

To submit an application for immunity, the applicant must make an appointment with the general Auditor by e-mail or by phone, and must provide information such as the identity of participants, the product and the geographic area affected, the nature and the estimated duration of the alleged cartel. The same is requested for a natural person’s application.

The application for leniency includes a written declaration of leniency containing information about the applicant and the companies involved, a detailed description of the cartel and pieces of evidence that support the application. In some cases and under certain conditions, the application may be oral or summary. It is also possible to ask a “marker” to get a reserved place in the order of reception of applications, what leaves time to collect the required information.

The leniency programme enables to avoid or to limit heavy sanctions for companies that took part in cartels

If the Competition Commission rejects the application, after examination of the application by a member of the Auditorat and submission of a draft decision by the general Auditor, the BCA will not be authorised to use as pieces of evidence the information received as part of the application. This does not apply if the applicant did not comply with the conditions set in the leniency notice written by the general Auditor. Indeed, the applicant will lose the benefit of immunity and will run the risk that the information be used against him. 

After the auditor’s investigations about the alleged cartel, the Competition Commission can grant a full or partial immunity, or immunity from prosecution, to the extent that the conditions of the leniency notice have been respected. The same applies in case of conclusion of a transaction, with the particularity that the immunity from prosecution must be recorded in a distinct decision.

4. Conclusion

The leniency programme enables to avoid or to limit heavy sanctions for companies that took part in cartels. It implies however a proactive attitude and an advanced collaboration with the BCA.

It appears from the guidelines that the sooner a company takes the initiative, the more interesting the immunity will be. Besides, the assistance of a lawyer is highly recommended, considering the procedure to be followed and the different duties to be accomplished.

It is worth reminding that in case of doubt on the legality of a practice, it is recommended to have recourse to a lawyer whose intervention will enable to avoid or to limit the damage. Given the amount of financial sanctions, it may be primordial.