Bargaining in the Shadow of the European Settlement Procedure for Cartels

• Published date: 01 June 2011
• Date: 01 June 2011
• DOI: http://doi.org/10.1177/0003603X1105600209
• Subject Matter: Article

Bargaining in the shadow

of the European settlement

procedure for cartels

BYMAARTEN PIETER SCHINKEL*

I. INTRODUCTION

European Commission (the Commission) officials have made perfectly

clear, since the release of the Commission’s “settlement package” in

the fall of 2007,1that the European settlement procedure for cartel

cases would not involve any bargaining. “The Commission does not

THE ANTITRUST BULLETIN:Vol. 56, No. 2/Summer 2011 :461

* University of Amsterdam and Amsterdam Center for Law and Eco-

nomics.

AUTHOR’S NOTE: I received appreciated comments to an earlier version of this arti-

cle from Rafique Bachour, Terry Calvani, Martijn Han, and Francesco Russo, yet I

alone remain responsible for its content.

1The settlement package was submitted for public consultation on

October 26, 2007. It consisted of a draft Settlement Notice that outlined the

procedure as the Commission envisioned it, and a proposal for a Regulation

to amend Commission Regulation No. 773/2004 to make implementation of

this procedure possible. The eventual two parts were published as Commis-

sion Notice on the Conduct of Settlement Procedures in View of the Adoption

of Decisions Pursuant to Article 7 and Article 23 of Council Regulation (EC)

No. 1/2003 in Cartel Cases, 2008 O.J. (C 167), 1–6 [hereinafter Notice], and

Commission Regulation (EC) No. 622/2008 of 30 June 2008 Amending Regu-

lation (EC) No. 773/2004 as Regards the Conduct of Settlement Procedures in

Cartel Cases, 2008 O.J. (L 171) 3–5.

© 2011 by Federal Legal Publications, Inc.

negotiate the appropriate sanction,” officials insisted in conferences—

a line also included in the published Notice.2Cartel members can get a

ten percent reduction of the ultimate fine in exchange for acknowledg-

ing their involvement and cooperation in the swift conclusion of their

case. That is a take-it-or-leave-it offer. Use of the term plea bargaining

for the procedure would be wholly inappropriate, as would be most

comparisons to U.S. antitrust law enforcement.3

The European Commission’s denial that negotiating conse-

quences must precede a settlement is remarkable. After all, settling is

all about parties finding common ground, which requires talking,

giving, and taking. Is the European Commission naïve? I think not.

Allegedly, the drafters of the Notice were concerned that it would be

socially unacceptable in Europe to plea bargain with cartels. Yet they

must also have realized that there are at least three other dimensions

open for bargaining in cartel cases. One is the determination of the

fine base to which the ten percent reduction is applied. A second is

the percentages of additional fine reductions that are awarded to sub-

sequent leniency applicants. A third is the eventual phrasing that the

Commission uses in its public communications about the case.

In fact, the Commission’s consistent denial of any negotiation

space may well be part of its bargaining strategy. It shut the door on

fine-discount discussions, channeling talks to the other bargaining

points. The Commission may prefer to negotiate those points because

they present more opportunities to reach, much less publicly, mutual

agreements and offer parties what they want in return for giving up

resistance. After all, on the fine base, leniency information, and the

Commission’s public presentation of the case, outside observers can

never really know what could have been had a full procedure been

followed—and so what the Commission gave up for settling. This has

better public relations effects and does not create binding precedents.

462 :THE ANTITRUST BULLETIN:Vol. 56, No. 2/Summer 2011

2See Notice, supra note 1, ¶ 2. See also, e.g., Kirtikumar Mehta & Maria

Luisa Tierno Centella, EU Settlement Procedure: Public Enforcement Perspective, in

EUROPEAN COMPETITION LAW ANNUAL 2008: ANTITRUST SETTLEMENTS UNDER EC

COMPETITION LAW 391–421 (Claus-Dieter Ehlermann & Mel Marquis eds., 2010).

3Andreas Stephan shows, however, that such a comparison can be

insightful. See Andreas Stephan, The Direct Settlement of EC Cartel Cases, 58

INT’L& COMP. L.Q. 627–54 (2009).