- Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
- Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
- What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
- Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
- Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
- Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
- Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
- Are there legal developments on the horizon in relation to CCPs?
jurisdiction
1. Has your national competition authority published guidelines on competition compliance programmes (“CCPs”)? If so, what are the key components of an effective CCP?
In 2021, the German NCA (Bundeskartellamt) published guidelines on the setting of fines and its leniency programme in response to legislation enacted earlier that year. The German legislator created a provision according to which antitrust compliance measures in cartel proceedings are to be considered when setting fines. Section 81d, paragraph 1, sentence 2, nos. 4 and 5 of the German Competition Act (GWB) states that appropriate and effective measures taken prior to the infringement to prevent and detect infringements, the efforts made by the company to detect the infringement and to compensate for the damage, as well as measures taken after the infringement to prevent and detect infringements are to be taken into account in the assessment of fines.
The following key components of effective CCPs can be deduced from the German NCA guidelines 2021:
- The company must take all objectively necessary precautions to effectively prevent cartel infringements. This can be considered effective if the precautions taken have led to the discovery and immediate reporting of the violation.
- A leniency application is a special form of compliance. The leniency applicant is obliged to immediately cease the infringing conduct, unless the German NCA requests temporary continuation. The leader of a cartel can also be a leniency applicant, provided that the applicant has never tried to coerce other cartel members to join or remain in the cartel.
- With regard to so-called post-infringement compliance, the company's compliance measures must be convincingly demonstrated, with a clear commitment to act in accordance with the law.
- A company's active cooperation in the investigation of an infringement and its efforts to remedy the damage will be of great importance to the German NCA in the assessment of serious compliance.
2. Are there any recent cases in your jurisdiction where the NCA/competent courts have discussed the impact of CCPs?
In its decision VK 2 – 31/15, the German NCA clarified that the establishment of a compliance system and effective cooperation with the investigating authorities do not constitute sufficient self-cleaning measures if the company retains the managers under suspicion despite this.
In other fine proceedings (e.g. B1-40/06; B1-110/0) it was made clear that “mere sales training does not constitute an effective compliance programme and therefore cannot be taken into account for the reduction of the fine”.
In other decisions the German NCA does not comment at all on the role of compliance measures (e.g. VK 1 – 75/18, p. 15).
3. What arguments have been taken into account in relation to a CCP? Has the fact that a company has a CCP been assessed in terms of the effort made or the results achieved, i.e. the efficiency of the programme? Is the focus on future changes in CCPs or on existing programmes?
The German NCA's guidelines recognise that compliance measures taken before and/or after the infringement of competition law may be a mitigating factor in the assessment of a fine.
A mitigating factor may be whether, at the time of the infringement, the company had already taken all objectively necessary precautions to effectively prevent and detect antitrust violations. The nature and extent of the compliance required will depend on the individual case and, in particular, on the nature, size and organisation of the company, the rules to be observed and the risk of violation.
Generally, compliance can be assumed to be effective if the precautions taken have led to the discovery and prompt reporting of the infringement. Furthermore, the effectiveness of compliance is not compromised if the precautions taken did not lead to the detection and reporting solely because a person acted in an extraordinary manner and deliberately deceived his or her superiors to gain personal advantage.
However, compliance measures will not be considered if a person responsible for the management of the company was involved in the infringement. This is usually the case for managing directors or board members of the co-offenders themselves or of other companies that are above the co-offenders in the corporate hierarchy.
Precautions taken after the infringement to effectively prevent and detect similar infringements (post-infringement compliance) may be considered in an overall assessment of the positive behaviour after the infringement. In particular, the German NCA will consider a reduction of the fine if the company convincingly demonstrates the measures it has taken to effectively prevent similar infringements in the future and if there is clear commitment to act in accordance with the law. An important indication of the seriousness of a company's efforts to comply with the law after an infringement has been committed is its active cooperation in the investigation of the infringement. Efforts to repair the damage also play a role in this assessment of seriousness. Active cooperation in the investigation and efforts to mend the damage are also to be assessed independently as aspects of positive post-infringement behaviour (dual function).
4. Has the role of the management and/or employees of the company been assessed with respect to preventing, participating in, detecting and reporting violations, or remediating violations? Is there a link between the role of the company's management and/or employees and an effective CCP?
The effectiveness of compliance will not be compromised if the precautions taken did not lead to detection and reporting solely because the person acted in an extraordinary manner and deliberately deceived his or her superiors to gain personal advantage and thus violated the Company's Compliance Code.
Compliance measures are not considered if a person responsible for the management of the company was involved in the violation. This is usually the case for managing directors or board members of the co-offenders themselves or of other upstream companies.
5. Has the fact that an undertaking has a CCP been helpful in reducing a fine for an infringement of competition law? What facts, arguments or commitments were used to justify the reduction and what is the maximum reduction that can be granted? If a reduction is not granted, why not?
So far, we are not aware of any decision by the German NCA referring to CCPs as a factor for reducing a fine. The existing decisions are stricter than the guidelines. This may be because the German NCA's guidelines on fines and leniency were only issued at the end of 2021. Since then, no fine decisions have been published in which CCPs have been mentioned. However, in a criminal case for bribery against a managing director, in April 2022 the Federal Court of Justice ruled that the implementation of a compliance programme and a whistleblower system after the infringement should be taken into account as a mitigating factor when assessing the fine.
6. Are CCPs (their adoption or updating) used as evidence for "self-cleaning" measures when an economic operator risks being excluded from a public procurement procedure for collusive behaviour?
Yes, CCPs can be used as evidence for a self-cleansing request. This is governed by Section 125 of the GWB and the German NCA has developed guidelines. Companies must prove that (i) they have paid or agreed to pay compensation for any (apparent or not apparent) damage caused by a crime or misconduct, (ii) they have fully clarified the facts and circumstances related to the crime or misconduct and the damage caused by it by actively cooperating with the investigating authorities, and (iii) they have taken specific technical, organisational and personnel related measures that are suitable to prevent further crimes or misconduct. Incorrect or misleading statements and the concealment of relevant circumstances during the process generally preclude successful self-cleaning.
Technical and organisational measures may include risk analysis, implementation of a standardised compliance management system, adjustments to the supervisory structure, careful selection and training of employees, adequate competencies of responsible persons, incentives to follow compliance policies and implementation of punitive measures, or evaluation and adjustment of measures.
Personnel related measures require evidence of an appropriate response to each individual case, which may include raising the awareness of uninvolved employees. If the company decides not to take personnel related measures, it must justify its decision.
7. Please indicate any additional considerations / rules, trends that are important in your country in relation to CCPs.
Given the increasingly far-reaching liability exposure for subsidiaries and affiliates (e.g. ECJ in Sumal, C-882/19), it should be borne in mind that CCPs should also have a far-reaching scope and should become increasingly relevant across the company group, especially if the ECJ continues its current jurisprudence and further expands its interpretation of economic unity in future cases.
8. Are there legal developments on the horizon in relation to CCPs?
To the best of our knowledge, such developments are not expected at this point in time.
