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CJEU: national competition authorities are not bound by EU whistleblower programme

National competition authorities are free to set their own rules on leniency and immunity programmes for whistleblowers and are not bound by the EU-level programme, Europe's highest court has said.21 Jan 2016

The Court of Justice of the European Union (CJEU)  was asked to rule on a decision by Italy's competition authority regarding a cartel in the Italian road freight-forwarding industry.

Several shipping companies including DHL, Schenker and Agility Logistics had participated in this cartel, and all three 'blew the whistle' and applied for leniency to both the European Commission and to the Italian competition authority. The Italian authority chose to give leniency only to Schenker as it was the first to apply for it under the national programme.

DHL contested this in an Italian court, saying that it had been first to notify the EU. The Italian court asked the CJEU to rule on how the two programmes should be weighted in a decision of this sort.  

There is no connection between the European Commission's programme and those of national authorities, and member states do not have to take applications to the EU into account when making decisions, the CJEU said.

The CJEU also said that organisations cannot expect full immunity on anti-competitiveness charges if they are not the first to report anticompetitive practices.

However, it is possible that an organisation that was not the first to inform the Commission of a cartel could be the first to inform the national competition authority.

If Commission does not then pursue its own investigation, that organisation could be granted full immunity as the first to whistle-blow under the national leniency programme, the CJEU said.

Leniency programmes "are useful tools if efforts to uncover and bring to an end infringements of competition rules are to be effective", the CJEU said.

The "underlying purpose and spirit" of the system is to "promote the uncovering of conduct … by encouraging participants in cartels to report them", it said.

Competition expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com said: "The judgment confirms the need for businesses contemplating applying for leniency and immunity to identify all legal jurisdictions in which the anti-competitive behaviour may have occurred and consciously to consider whether applications should be made to national competition authorities in addition to the European Commission."

In practice, doing so can be hard to achieve, Lougher said.

"National leniency and immunity programmes can differ markedly in terms of scope and procedures. Vertical resale pricing is covered by some but not all national programmes, for example, and procedures vary in terms of when an application can be made, the procedure to be followed and even in terms of obligations to translate documentation into local languages. Applying for immunity or leniency is also often a race against the clock, to pre-empt other potential applicants. Managing all of these different considerations can be very hard to achieve where several jurisdictions are affected," he said.