Individual liability for competition law infringements Koen Platteau UIA - Firenze 31 October 2014

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 1 / L_LIVE_EMEA2: v1 Key issues Issues only at level of enforcement of national competition laws which provide for liability of individuals for competition law infringements –Growing number of countries Parallel investigations against an individual and against a company and possible interferences between these investigations –Same authority (competition authority) with jurisdiction over individuals and companies or parallel procedures in different fora –In case of different fora (e.g. criminal court): impact on procedure before competition authority ? In jurisdictions with sanctions for individuals: room for leniency for individuals ? –If so and individual gets in first: still room for company to get immunity ?

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 2 / L_LIVE_EMEA2: v1 Key issues Individual leniency application and labour law/loyalty duty of employee/director –Leniency application can have significant impact on the position of the company –Duty to inform company of intention to file leniency application ? –Not relevant for ex-employee/director Corporate leniency application –Duty to cooperate: extends to employees/directors –But: legitimate concern of employees/directors to protect own interest –Room for joint leniency statements or corporate leniency statements covering also the employees/directors ? –Duty of company to inform employees/directors concerned of leniency application

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 3 / L_LIVE_EMEA2: v1 Key issues Investigation of individuals vs. company –Same procedural standards ? –Privacy/data protection issues (social media) In addition to individual sanctions: potential damage claims –Exposure of individual for damage claims from third parties (e.g. customers)? –Damage claim from company against (ex) employee/director ? –Damage claim from (ex) employee/director against company ? –Acting on behalf of or under the instructions of the company

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 4 / L_LIVE_EMEA2: v1 Key issues Interests of individuals and company may diverge –Likely in the case of ex-employees –Possibly different fora (competition authority/courts) –Convergence possible (e.g. leniency applications covering both the company and the individuals) Always carefully consider potential conflict of interest –Representation of company/individuals

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 5 / L_LIVE_EMEA2: v1 The revised UK Cartel Offence

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 6 / L_LIVE_EMEA2: v1 Revised UK criminal cartel offence –Company directors / employees personally affected –“Hard core” direct or indirect anti-competitive agreements: –reciprocal price fixing –reciprocal output restrictions –market allocation –bid rigging –Maximum penalty of 5 years imprisonment and / or unlimited fine –Revisions in force from 01 April 2014 –Remove “dishonesty” test –Aim to facilitate prosecutions

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 7 / L_LIVE_EMEA2: v1 Revised cartel offence: I – exclusions introduced Two notification exclusions where relevant information given to : –customers before entering into an agreement to purchase a product or service –the person requesting bids when or before the bid is made A publication exclusion where: –details of the arrangements are published in the Gazette before being implemented A legal requirement exclusion

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 8 / L_LIVE_EMEA2: v1 Revised cartel offence: II – the defences introduced Three separate defences where: The defendant can show that he/she had no intention of concealing the nature of the arrangements from: 1.customers (at all times before they enter into a purchase agreement); or 2.the Competition and Markets Authority The defendant can show that before making the arrangements, he/she 3.took reasonable steps to ensure that the nature of the arrangements would be disclosed to professional legal advisers to obtain advice about them before they are made or implemented.

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 9 / L_LIVE_EMEA2: v1 Revised UK Criminal Cartel Offence: pitfalls? –Not intended to catch new situations –But: scope uncertain –Arrangements that are benign under Article 101, could be criminal – e.g. –Non-compete restrictions between two or more parties (parents setting up a JV that agree not to compete with the JV) –Agreements that are subject to assessment under the competition rules and certain types of standard commercial agreement – e.g. –Co-insurance and re-insurance agreements –Syndicated loan agreements

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 10 / L_LIVE_EMEA2: v1 Individual liability and leniency (UK)

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 11 / L_LIVE_EMEA2: v1 UK leniency programme Type A corporate immunity –First to apply, no pre-existing civil or criminal investigation –100% immunity + automatic “blanket” criminal immunity for current and former employees that co-operate Type B discretionary corporate immunity/leniency –First to apply after an investigation has begun but before the SO is issued –Up to 100% reduction + possible “blanket” criminal immunity for all current and former employees that cooperate, or for specific individuals Individual criminal immunity –Type A – guaranteed, Type B, discretionary (public interest test applies) and must add significant value to the investigation –Employer no longer eligible for Type A immunity, but if the first company to apply, Type B discretionary immunity/leniency could be granted

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 12 / L_LIVE_EMEA2: v1 Leniency II Type C corporate leniency –Applicant not the first to apply or a coercer –Discretionary reduction of up to 50% –Criminal immunity on a case by case subject to a public interest test All types of immunity/leniency subject to conditions

© Simmons & Simmons LLP Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities. 13 / L_LIVE_EMEA2: v1 simmons-simmons.com elexica.com Questions ?