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Brussels, 18 July 2001

Commission launches debate on draft new leniency rules in cartel probes

The European Commission has adopted new draft rules aimed at better detection and eradication of price-fixing and other cartels. These are the most damaging violation of antitrust rules, causing clear damage to customers and consumers alike. The proposed rules, which will replace the so-called Leniency Notice of 1996, provide for complete immunity from fines for the first company that comes forward with information on undetected cartels which is sufficient to launch a spot inspection.

Secret cartels are among the most serious restrictions of competition as they result in increased prices and reduced choice for the consumer. Such practices also harm European industry by making raw materials and components more expensive. In the long term, secret cartels lead to a loss of competitiveness and reduced employment opportunities. The identification, prohibition and fining of hard-core cartels is therefore one of the highest priorities of the Commission in the field of competition policy.

The challenge in attacking hard-core cartels is to penetrate their cloak of secrecy, which is all the greater when the profits and the risk of stiff penalties are significant. The means employed by certain companies to conceal these cartels are sometimes very sophisticated. One of the instruments at the disposal of competition law enforcers to carry out this objective is an effective leniency programme. Leniency means that no fine ("immunity" from fines) or a reduced fine is imposed on a party that co-operates in the prosecution of a cartel.

Competition Commissioner Mario Monti said:

"The Leniency Notice has played an instrumental role in uncovering and punishing secret cartels. Five years after its adoption it appears, however, that this fight can produce better results if companies are given a greater incentive to denounce this kind of collusion ».

But Commissioner Monti warned : « This draft Notice does not in any way entail a more lenient approach in the fight against price-fixing and other anti-competitive practices. On the contrary, the increased likelihood of cartels being detected and the Commission's determination to impose fines that hurt should deter companies from entering into collusive behaviour in the first place ».

The existing Leniency Notice was adopted in 1996 and can be found at ( The Commission agreed at the time that it would review whether any changes were required five years later.

Experience gathered to date shows that the effectiveness of the notice would be improved by an increase in the transparency and certainty of the conditions on which any reduction of fines is to be granted. It would also benefit from a closer alignment between the level of reduction of fines and the value of a company's contribution to establishing the infringement.

Main aspects of the proposed revision

  • Complete immunity from fines would be granted to the first firm to inform the Commission of an undetected cartel. In order to qualify for immunity, the company will have to provide sufficient information to allow the Commission to launch a surprise inspection (a so-called "dawn-raid"). This would give a maximum incentive to firms to inform the Commission of undetected cartels. - A company fulfilling the conditions for immunity would promptly receive a letter from the Commission confirming that immunity will be granted to the company if the conditions set out in the Notice are observed.

  • The policy on reduction of fines would be modified to enable the Commission to give adequate rewards to companies which, following the immunity applicant and/or any inspections, provide 'added value' evidence to the Commission.

In the proposed Notice, the amount of any reduction depends on the time at which evidence is provided and the quality of the evidence provided. A system of bands is proposed for each category of reduction beneficiary.

The first company fulfilling the conditions for leniency would get a reduction of 30-50% of the fine which would otherwise have been imposed, the second successful applicant 20-30% and subsequent successful applicants would receive a reduction of up to 20%. Successful applicants for reduction of fines will also be provided with a letter indicating the band to which they will in principle be entitled. This letter will be sent no later than the day the Statement of Objections is sent. This would not only increase the legal certainty provided to companies but would also enhance the overall transparency and credibility of the system.


Since the Leniency Notice was adopted, companies have cooperated with Commission investigations in over 20 cartel cases. Decisions already taken include the lysine cartel in 2000 in which Archer Daniels Midland and three other companies were fined a total of €110 million.

Since mid 1998, the Commission has imposed fines totalling over one billion euros (€ 1,081.039 million) in the antitrust field cartels and abuses of dominant positions, both banned under articles 81 and 82 of the EC treaty . This compares with €162.5 million in the previous three-year period.

The Commission is not alone in having adopted leniency rules in cartel cases. World-wide, various competition authorities, have developed rules on leniency which are considered to be a major instrument in the fight against cartels. The new proposed EU leniency rules will similar to US antitrust practice of « zero dollars in fines » for companies that provide information leading to the uncovering of cartels.

Public consultation on the draft Notice

The draft Notice on immunity from fines and reduction of fines in cartel cases will be published in the Official Journal of the European Communities and will also be available on the internet at the following address:

The Commission invites all interested parties to submit their written observations on the draft Notice before 21 September 2001. The final version of the new Notice should be adopted before the end of the year.

Comments should be sent to the following address :

European Commission

Directorate General for Competition

Unit A-1

J 70 - 5/065

Rue de la Loi 200

1049 Brussels

Internet address:

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