General downturn in immunity and leniency cases continues
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Overall, the number of immunity/leniency cases decided in 2022 (18) was lower than both 2021 (32) and 2020 (31), driven largely by a downtick in the Americas.
The costs and uncertainty associated with seeking leniency – including increasingly the prospect of follow-on private litigation and exposure to liability in other jurisdictions – has greatly reduced the leniency pipeline across many jurisdictions globally.
In contrast to the widely reported worldwide decline in leniency applications over recent years, however, in January 2023, a senior European Commission (EC) enforcer reported that the number of cartel leniency applications received by the EC in 2022 was in fact twice the number in 2021 and three times as many as 2020.
The costs and uncertainty associated with seeking leniency – including increasingly the prospect of follow-on private litigation and exposure to liability in other jurisdictions – has greatly reduced the leniency pipeline across many jurisdictions globally.
Mode of initiation of cartel cases, 2022
Regulators focus on attracting leniency submissions
The role of leniency programmes as a tool to boost cartel detection remained a topic of discussion among regulators across the globe, and antitrust authorities have sought to increase the attractiveness of their whistleblower policies. The debate (primarily in the EU) as to whether first-in leniency applicants should be granted full immunity from follow-on damages claims rumbled on in 2022 – but the jury is still out.
In October 2022, the EC published revised guidance on its leniency policy that aims to facilitate leniency applications. The document signals the EC’s intention to discuss potential leniency applications on a “no-names” basis, without the need to disclose the sector, the parties involved or any other details identifying the potential cartel, which the EC predicts will assist parties involved in novel conduct. In addition, the EC has identified “Leniency Officers” that can be contacted for informal advice.
The EC has also reportedly seen an increase in activity under its whistleblower programme. This tool encourages individuals (anonymously if they prefer) to approach the EC with information on business practices they suspect are anti-competitive. In January 2023, the EC announced that its whistleblower tool would be expanded to include merger infringements and state aid violations.
In the U.S., the Department of Justice (DOJ) Antitrust Division has sought to revitalise its leniency programme by revising its policy and, in April 2022, issuing updated guidance in the form of FAQs. Key changes include adjustments to the application process, the introduction of an obligation to “promptly report” illegal activity, and clarification on the DOJ’s approach to restitution, remediation and compliance.
While antitrust authorities are open to cooperation with the parties in cartel cases, the experience in Hungary serves as a stark reminder that its leniency policy does not guarantee certainty of avoiding antitrust penalties. Of the five applications for immunity from fines in 2022, only one was successful, and some were rejected even though the Hungarian Competition Authority (GVH) had initially issued a conditional immunity or leniency decision in favour of the undertaking concerned. The reasons for refusal were varied, including alleged lack of cooperation in the discovery of evidence or reluctance to accept the GVH’s wider qualification of the infringement.
