Eberhard Temme Kuala Lumpur 2

www.bundeskartellamt.de 09.04.23

Eberhard Temme

BundeskartellamtDirector of 3rd Decision

Division

Competition: Engine For Prosperity

EU-Cartel Prosecution

Kuala LumpurOctober 12th, 2011


Overview

Power of the Bundeskartellamt (FCO) Hard core cartels Discovering of hard core cartels Dawn raids and seizure Setting fines Leniency Programme Mutual settlements Private damage claims

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Merger control Hard core cartels Control of abuse of dominant position Public procurement

Power of FCO


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Art 1 ARC: „Agreements between undertakings, decisions by associations of undertakings and concerted practices, which have as their object or effect the prevention, restriction or distortion of competition, shall be prohibited.“

Hard core cartels are of specific importance aiming at prices, aereas, quotas and buyers

Administrative offence Art. 81 sec. 1 and 2 ARC Criminal offence in case of bid rigging (Art 298

CC)

Cartel agreements


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Leniency programme Hints from buyers Hints from company environment

(former) employees,personal environment of employees

Economic study/analysis? Sector inquirery Court procedures or other administrative

procedures

Uncovering of cartel agreements


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Year Total Undertaking Individuals

2002 4.6 Mio. € 4.3 Mio. € o.3 Mio. €

2003 717 Mio. € 714 Mio. € 3.3 Mio. €

2004 59 Mio. € 55 Mio. € 3.4 Mio. €

2005 164 Mio. € 161 Mio. € 3.1 Mio. €

2006 4.8 Mio. € 3.8 Mio. € 1.0 Mio. €

2007 435 Mio. € 433 Mio. € 1.8 Mio. €

2008 314 Mio. € 311 Mio. € 2.7 Mio. €

2009 297 Mio. € 296 Mio. € 1.5 Mio. €

2010 267 Mio. € 265 Mio. € 2.0 Mio. €

Total 2.261 Mio. € 2.242 Mio. € 19 Mio. €

Facts :FCO‘s Fines


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FCO has the same power as a Public Prosecutor (Art. 46 sec. 2 AFA)

Dawn raid, seizure, interview of witnesses Dawn raid on basis of a search warrent,

in case of imminent danger: by order of FCO Search covers business premises, private homes ,

persons and objects At a suspect: it is likely to find proofs of evidence At third parties: it is likely to find proofs in the

rooms to be searched

Dawn raids


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Non voluntary delivery Seizure on the premises by officials of the FCO

because of imminent danger or by court order Interdiction of confiscation, esp. legal privilige of

lawyer and defence lawyer not applicable on in-house lawyer covers correspondance between defense lawyer and client covers documents which were produced by the aggrieved

party with view of his defence covers documents which are found in the premises

Legal privilege of Europ. law is not applicable on seraches under German law

Seizure


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German Law (Art. 81 sec. 4 ARC) Decision is taken by the FCO, appeal to court Undertakings and natural persons Slight infringements up to 100.000.- €, severe

infringements up to 1 Mio. € Undertakings my be fined up to 10% of its annual

worldwide turnover of the precedent year Turnover of affiliated undertakings is taken into

account, but liability of mother companies only in cases of direct involvement (Sec. 14 AFA) or of violation of their duty of supervision (Sec. 130 AFA)

Setting fines


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European Law: Fines may not be imposed on individuals Up to 10% of the worldwide turnover of the

economic entity

Setting fines


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Guidelines of the FCO Follows the ratio of European law Calculation of the basic amount

basis amount = turnover of relevant product or service in Germany during the timeframe in question

corresponding to the severity of the offence, the calculation basis may be up to 30% of the relevant turnover

Hard-core cartels: 20% - 30% of the basic amount Reduction of 50% in cases of negligence Estimation of relevant turnover is possible

Calculation of fines


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Adjustment factors

Deterrence factor (limited to 100% increase) Aggravating factors:

eg. particularly active role, high degree of organisation Repetition less important in comparison to EU-cases:

it can only be taken into account if a previous fining decision/ruling dates back no longer than 5 years

Obstruction is no aggravating factor (in general)


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Adjustment factors

Mitigating factors:• Cooperation• Termination of infringement after intervention• No market effect• Passive role• Voluntary contributions to victims• Encouragement by public authorities

Negligence is no mitigating factor!


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Leniency

What is leniency?• Immunity: 100 % reduction for a company that self reports its

participation in a cartel activity (only horizontal cartels)• Reduction in fines • Timely application of the key witness is most important,

therefore information of the offence given with the “marker” are limited


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Leniency

Why leniency?• Hardcore cartels are secret by nature• Leniency program helps to uncover secret cartels• Leniency program destabilizes existing cartels• Existence of leniency program can act as a deterrent to enter

in a cartel


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Leniency

Three prerequisites for an effective leniency programme:

• Antitrust laws must provide severe sanctions for those who participate in hardcore cartel activity and fail to self-report

• High risk of detection by antitrust authorities if they do not self-report

• Transparency and predictability throughout the leniency programme


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Year Individuals Undertaking

Total Case

2001 5 5 10 2

2002 4 17 21 4

2003 15 1 16 2

2004 1 6 7 5

2005 51 18 69 13

2006 2 4 6 6

2007 8 33 41 12

2008 2 37 39 25

2009 4 19 23

2010 2 42 44

Total 94 183 277

Facts: FCO‘s leniency cases


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Full immunity ( no discretion): The first applicant delivers information and evidence

which enables the FCO to obtain a search warrant or If a search warrant could be obtained, the applicant is

the first to deliver information to prove the offence

Leniency


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Reduction up to 50% (discretion): applicant makes considerable contribution to proving

the offence

Full and continuous cooperation termination of participance, presentation of all

documents, confidentiality etc.

Under European law the sole ringleader is eligible for leniency!

Leniency


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7 procedures were settled in 2007/08 Settlement talks start, when outline of the

offence and evidences is possible No dependance on leniency application, but

confession of the facts Fines are calculated in accordance to the

guidelines Confession = mitigating factor Early confession = high reduction Max. reduction up to 10% (plus „fringe benifits“) Short formal decision

Direct Settlement


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Private damage claims are increasing Legal basis Art. 33 sec. 3 ARC Civil courts are bound to fact statements of

cartel authorities in Europe Extent of access to records of third parties is

cloudy at the moment (presentation to European High Court)

Plus interest since occurrance of damage

Private Damage Claims

EU-Cartel Prosecution

Thank you very much for your attention!

Eberhard Temme

Federal Cartel Office

[email protected]

09.04.23www.bundeskartellamt.de

Competition: Engine For Prosperity22

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Eberhard Temme Kuala Lumpur 2