Settlements Wouter Wils * BIICL, 15 May 2008 * All views expressed are strictly personal.

Wouter WilsBIICL, 15 May Definition: settlement = disposal by a competition authority of a case of suspected antitrust infringement through a specific procedure, or in application of a policy, under which some benefit is granted to the defendant in recognition of the defendant’s admission or non-contestation of the infringement and/or offer or acceptance of remedies and/or penalties

Wouter WilsBIICL, 15 May Definition (II): settlement =  distinct from leniency (remission or reduction of a penalty in recognition of the defendant’s voluntary provision of intelligence and evidence of the infringement)  US plea-bargaining = combination of leniency (for not-first-in) and settlement

Wouter WilsBIICL, 15 May European Commission experience with settlements  exemption decisions with conditions and obligations Article 8(1) of Regulation 17  informal settlements e.g. IBM case 1984  commitment decisions Article 9 of Regulation 1/2003  proposed new settlement procedure in cartel cases public consultation Oct.-Dec. 2007

Wouter WilsBIICL, 15 May proposed new settlement procedure in cartel cases proposed new Article 10a of Regulation 773/2004 and Notice on settlement procedure in cartel cases optional alternative procedure leading to (stream-lined) decision based on Articles 7 and 23 of Regulation 1/2003 (finding of infringement and imposition of fine)

Wouter WilsBIICL, 15 May proposed new settlement procedure in cartel cases (II) no negotiation on question of the existence of the infringement and the appropriate fine but defendants are heard on the potential objections and on the range of likely fines (in the light of the Guidelines on fines and Leniency Notice) during settlement discussions (exercise of rights of defence)

Wouter WilsBIICL, 15 May proposed new settlement procedure in cartel cases (III) defendants must acknowledge the infringement and their liability, accept the likely fines and waive some procedural rights (further access to the file and oral hearing after the statement of objections, separate counsel for companies within same undertaking, language), but not the right to appeal to the EU Courts fixed percentage reduction of the fine (below the normal fine under the Guidelines on fines and Leniency Notice)

Wouter WilsBIICL, 15 May balance of enforcement gains and losses if fines are reduced by 10 % (33 %), and all cases are settled, deterrence increases if (and only if) the increase in the number of cartels detected and fined, resulting from the saved resources, exceeds 11 % (50 %)

Wouter WilsBIICL, 15 May settlements and fundamental rights of the defence question: are the self-incrimination and waiver of procedural rights by settlement candidates, and the encouragement thereof through settlement rewards compatible with the privilege against self-incrimination and other fundamental rights of the defence ?

Wouter WilsBIICL, 15 May settlements and fundamental rights of the defence (II) answer: yes, if the self-incrimination and waiver of procedural rights are voluntary, implying both adequate knowledge and absence of improper compulsion

Wouter WilsBIICL, 15 May settlements and fundamental rights of the defence (III)  a settlement does not become involuntary merely because a penalty reduction below the normal penalty level is offered, provided that the reduction is not too large cf. European Court of Human Rights, Borghi v Italy (20 June 2002) & Deweer v Belgium (27 Febr. 1980)

Wouter WilsBIICL, 15 May more in writing … paper « The Use of Settlements in Public Antitrust Enforcement: Objectives and Principles » soon available at bsByAuth.cfm?per_id=456087