Frese, Michael J. --- "The Negative Interplay between National Custodial Sanctions and Leniency" [2006] ELECD 456; in Cseres, J. Katalin; Schinkel, Pieter Maarten; Vogelaar, O.W. Floris (eds), "Criminalization of Competition Law Enforcement" (Edward Elgar Publishing, 2006)

Book Title: Criminalization of Competition Law Enforcement

Editor(s): Cseres, J. Katalin; Schinkel, Pieter Maarten; Vogelaar, O.W. Floris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845426088

Section: Chapter 10

Section Title: The Negative Interplay between National Custodial Sanctions and Leniency

Author(s): Frese, Michael J.

Number of pages: 19

Extract:

10. The negative interplay between
national custodial sanctions and
leniency
Michael J. Frese

1 INTRODUCTION

By institutionalizing its policy to grant lenient treatment1 and its method
of setting fines,2 the European Commission has considerably curtailed
its discretionary powers ­ delegated by Regulation 1/20033 ­ to sanction
infringements of Article 81 EC. Moreover, it has given undertakings the
possibility to calculate the costs of collusion and the benefits of applying
for leniency when the Commission enforces against a cartel. If the costs of
possibly being fined are sufficiently high and transparent, and the benefits
of leniency are considerable and certain, early whistleblowing will be
stimulated.4 The Commission's leniency policy has already proven to be
an effective tool for the destabilization of cartels.5
However, in the Community's current decentralized enforcement system,
cartels will be increasingly pursued by National Competition Authorities
(`NCAs') pursuant to national procedures, which may differ greatly. As
different sanctioning procedures imply different leniency policies, several
national leniency schemes are operative parallel to the Commission's
Leniency Notice.6 It is questionable whether these diverging sanctioning
procedures can effectively contribute to the destabilization of cartels.
When the Commission does not enforce against a cartel, for example, due
to lack of competence or prioritization,7 colluding undertakings could
be prosecuted and sanctioned by NCAs under their respective national
sanctioning schemes.8 Collaborating undertakings will then be `forced'
to file multiple leniency applications. Multiple leniency schemes consist
of different, possibly conflicting criteria that will inevitably hamper
transparency and ...