7. Articles 101 and 102: public enforcement by the European Commission and national competition authorities under Regulation 1/2003

This chapter explains the public enforcement of Articles 101 and 102 by European Commission and the national competition authorities under Regulation 1/2003. It begins by describing the Commission’s powers of investigation and enforcement, including its power to accept commitments, its leniency programme, the cartel settlement procedure, and its power to impose financial penalties. It then discusses the operation of Regulation 1/2003 in practice, with particular reference to the European Competition Network (‘the ECN’) that brings together the Commission and the national competition authorities of the Member States (‘the NCAs’) and the ECN+ Directive that strengthens the powers of the NCAs. The chapter concludes by providing a brief account of judicial review of the Commission’s decisions.

The Failure of Leniency as a Regulatory Transplant in Hungary

While leniency has become the main pillar of EU cartel enforcement, its expediency can be questioned, particularly if we consider that the vast majority of leniency applications arrive after the first dawn raids or failed cartels. Leniency can be criticized not only for uncovering only cartels that are already doomed, but also for its cartel-inducing effect, where periodic whistle blowing or the mutual threat of disclosure stabilizes anti-competitive agreements. The effectiveness of leniency policy is strongly influenced by the regulatory mix of incentives (immunity from or reduction in fines, anonymity), sanctions (criminal sentences, disqualification from public procurement), and compensatory measures (private enforcement) introduced in the given jurisdiction. However, certain extra-legal factors may also play a key role: the success of leniency policies differs across company size, whistle-blowing cultures, and awareness of leniency throughout the Member States. In our paper, we analyse Hungarian leniency policy as a legal transplant, describing its design and comparing it to the ECN Model Leniency Programme. We arrive at the conclusion that its failure in Hungary can be explained by extra-legal factors, such as market structure, leniency awareness, company culture, and ingrained attitudes towards competitors and the state.

Kartellrechtliche Leniency Programmes und Ad-hoc-Publizität nach MAR

Antitrust leniency programmes expect applicants to not disclose the fact of cooperating with the authorities. This may cause problems for companies if, as issuers on the capital market, they are obliged to publish insider information as soon as possible (Art. 17 MAR). Ultimately offering a solution to the initial problem based on the findings, the thesis provides a profound analysis of two areas of law which are relevant in practice and are deeply rooted in EU law. A thorough and critical examination is carried out considering numerous aspects of the obligation of disclosure as well as of the newly created German statutory leniency programme (§§ 81h ff. GWB), which implements the “ECN”-Directive and replaces the previous “Bonusregelung”.

THE CONCEPT OF LENIENCY IN REPUBLIC OF NORTH MACEDONIA

The concept of "leniency" in competition law, or better known as the "leniency programme", has proven to be an extremely important instrument in fighting unfair competition. In the Republic of Northern Macedonia (hereinafter RNM), this concept of suppressing or reducing unfair competition, more or less, exists solely as a law conception. Nowadays, when the EU discusses the impact of the global crisis and the Coronavirus pandemic on the level of utilization of ”leniency programme", this concept is still unknown or not a well-known concept for business sector in RNM. The main focus of this article is “leniency programme” in RNM. The key questions that we aim to answer here, are: whether and to what extent this instrument is predicted in Macedonian competition law? Is it predicted only as a law category, or it has practical implications too? Although this research refers to RNM, we strongly believe that a thorough study of “leniency” requires exploration of European conception of “leniency” too. For that purpose, we use relevant EU legislation, as well as practice. Thus, our main goal is to consider the position of RNM towards “leniency” and bring into relation to the Macedonian competition law. We base our hypothetical framework on the assumption that the applicability of “leniency programme” in RNM is at the lowest level. Furthermore, that the undertakings are not interested in applying “leniency”. This situation is partly due to the lack of information, the complexity of the application procedure, as well as other factors that are related not only to the attitude of the executive of undertakings, but more to the general economic circumstances, economic development, the market size of goods and services, etc. Using the analytical-descriptive method, the comparative method, and the method of analysis and synthesis, we’ll elaborate the situation in RNM regarding this issue, and we will present our views considering the questions: whether certain measures should be taken regarding „leniency program“, and what should be done to boost the use of this program in the Macedonian business sector.

Enhancing leniency programme in public markets

The article focuses on the leniency programme, the key mechanism to strengthen the public enforcement of competition law, and its compatibility with the debarment mechanism and self-cleaning measures, which are both procurement remedies. As the article will show, procurement remedies interfere with cartel enforcement and the debarment mechanism undermines leniency in public procurement. The fact that firms may be banned from bidding, where there are plausible indications for their participation in agreements aiming at distorting competition, discourages infringing companies from coming forward and self-reporting. Even the self-cleaning measures under the current procurement Directive 2014/24/EU, which aim to help debarred firms to avoid exclusion or minimize its risk, undermine leniency in public procurement. This is particularly true after the recent judgment of the European Court of Justice in c-124/17 Vossloh Laeis GmbH v Stadtwerke München GmbH case. In this case, it was held that a contracting authority must be able to ask a leniency applicant to provide the decision of the competition authority concerning it. This must apply even if there is a pending private action for damages for breach of competition law by the contracting authority against that leniency applicant. In view of the above conflicting policy objectives, a number of proposals are discussed in order to better align leniency programmes with the mechanism of debarment and self-cleaning policy in public procurement. In this way, the article contributes to the optimal design of enforcement policies.

The Use of Leniency Programme in Detecting Cartels in Malaysia

The cartel is regarded as a desease that inflicts on the open market economy. Whilst its presence is detrimental to the public, the most serious issue is its secrecy, which has posed a major problem to competition authorities all over the world. To address this, many countries including Malaysia have introduced a leniency programme for the detection of cartels by persuading their members to approach the authorities to admit involvement in the cartel activities and assist the authorities to expose other cartel participants. The objective of this paper is to conduct a study on the legal framework of the cartel and Malaysia’s leniency programme. The paper contains a detailed analysis of the Competition Act 2010 (Act 712) (CA 2010), the Guidelines on Leniency Regime (Leniency Guidelines) by the Malaysian Competition Commission (MyCC) and academic research in this area. The findings show that while the leniency programme is available under the Leniency Guidelines, data on leniency applications made to date are not available on the MyCC’s website. In addition, the MyCC’s decisions published on its website revealed that of six cartels that were found to have committed infringement, none had been first detected through the leniency programme. Therefore, the effectiveness of the programme has yet to be proven.

The Polish Leniency Programme and the Implementation of the ECN+ Directive Leniency-related Standards in Poland

This publication discusses the current state of the Polish leniency programme and the amendments required in order to implement the ECN+ Directive (in particular in the area of specific conditions for leniency, individual sanctions, protection of leniency statements or leniency plus) as well as harmonisation flaws (primarily lack of one-stop-shop, universal language, failure to lay down rules regulating the reduction of fines or fully coordinating rules on immunity from individual sanctions, lack of harmonisation regarding applications in non-cartel cases). The a uthor’s view is that the Polish system in broad terms corresponds to the majority of the harmonised standards owing to soft harmonisation based on the Model Leniency Programme and the EU leniency programme. Further, the implementation will not bring about revolutionary changes, unless combined with de lege ferenda improvements and enhancements in the general level of anti-cartel enforcement.