Putting the Settlement Procedure into Putting the Settlement Procedure into Practice: the DRAMs Decision Practice: the DRAMs Decision Kris Dekeyser Kris Dekeyser Head of Unit Head of Unit DG Comp, Cartels, G6 DG Comp, Cartels, G6 - - Settlements Settlements 1
Settlement Procedure Settlement Procedure • • A reliable legal framework was set up to increase the A reliable legal framework was set up to increase the overall efficiency of cartel enforcement in the EU : the overall efficiency of cartel enforcement in the EU : the settlement package (amendments of the procedural settlement package (amendments of the procedural Regulation and publication of a Settlement Notice). Regulation and publication of a Settlement Notice). • Objective: Simplification of administrative procedure • Objective: Simplification of administrative procedure leading to adoption of cartel decision; enable the leading to adoption of cartel decision; enable the Commission to handle faster and more efficiently Commission to handle faster and more efficiently cartel cases. Savings of litigation costs. cartel cases. Savings of litigation costs. • • It comes with reduction of fines for the companies and It comes with reduction of fines for the companies and allows for early awareness of likely liability. allows for early awareness of likely liability. 2
Settlement: the basics Settlement: the basics • Applies only to cartel cases • Applies only to cartel cases • If Commission offers settlement, it is the parties' free choice • If Commission offers settlement, it is the parties' free choice whether they want to settle or not whether they want to settle or not The The Commission Commission can can only only formally formally open open settlement settlement discussions discussions or settle or or settle or settle upon settle upon upon parties’ upon parties’ parties’ explicit parties’ explicit explicit request explicit request request request • Ordinary procedure remains in place and will apply by default • Ordinary procedure remains in place and will apply by default (i.e. if settlement is not explored or not reached) (i.e. if settlement is not explored or not reached) • • An alternative course in appropriate cases: a legal framework to An alternative course in appropriate cases: a legal framework to channel legitimate choices to obtain efficiencies channel legitimate choices to obtain efficiencies • • Complementary to leniency programme Complementary to leniency programme - - fine reductions from fine reductions from leniency and settlement are cumulative leniency and settlement are cumulative 3
Objectives and benefits Objectives and benefits For Commission For Commission For Companies For Companies • • Efficiency gains Efficiency gains • • Direct financial benefits Direct financial benefits – Drafting and Translations – Drafting and Translations – – Fine reduction (10%) cumulative Fine reduction (10%) cumulative with leniency with leniency – Access to file – Access to file – Savings in litigation/defence – Savings in litigation/defence – – Savings in litigation/defence Savings in litigation/defence – Oral hearing and interpretation – – Oral hearing and interpretation – Oral hearing and interpretation Oral hearing and interpretation • • Benefit of finality Benefit of finality – – Less appeals Less appeals – – Shorter procedure: provides early Shorter procedure: provides early • • Reinforcing effectiveness / Reinforcing effectiveness / “exit” route (corporate “exit” route (corporate deterrence deterrence governance) governance) – More decisions – More decisions – – Early awareness of likely liability Early awareness of likely liability – Higher risk of detection – Higher risk of detection • • Free choice Free choice – – Complement to leniency & fines Complement to leniency & fines 4
EU settlements in a nutshell EU settlements in a nutshell • • Bilateral Bilateral discussions discussions including including hearing hearing the the parties parties on on the the potential potential objections, objections, on on the the evidence evidence supporting supporting them them and and on on liability liability and and fines fines before before the the adoption adoption of of the the SO SO. . • • If If settlement settlement discussions discussions lead lead to to a a common common view view between between the the parties the the parties parties and parties and and the and the the Commission, the Commission, Commission, the Commission, the the parties the parties parties introduce parties introduce introduce a introduce a a a “settlement “ “settlement “ settlement submission settlement submission submission” submission” ” and ” and and the and the the SO the SO SO and SO and and Decision and Decision Decision reach Decision reach reach the reach the the the equivalent equivalent conclusions conclusions. . • The • The administrative administrative procedure procedure is is considerably considerably streamlined streamlined from from the the presentation presentation of of the the settlement settlement submission submission to to the the adoption adoption of of the the Decision Decision. . Litigation Litigation is is less less likely likely. . • • In In view view of of its its objectives, objectives, the the settlement settlement procedure procedure is is not not appropriate appropriate in in all all cases cases. . 5
Suitable cases Suitable cases • • To achieve the objectives sought: To achieve the objectives sought: – – Likelihood of reaching a settlement Likelihood of reaching a settlement – – Procedural efficiencies Procedural efficiencies • • Internal operational screening before exploring settlements, e.g.: Internal operational screening before exploring settlements, e.g.: – – Number of parties concerned / Parties’ spontaneous interest to – – Number of parties concerned / Parties’ spontaneous interest to Number of parties concerned / Parties’ spontaneous interest to Number of parties concerned / Parties’ spontaneous interest to settle settle – – Number of successful leniency applicants Number of successful leniency applicants – – Expected degree of contestation Expected degree of contestation – – Impact of aggravating circumstances Impact of aggravating circumstances – Parties’ foreseeable conflicting positions – Parties’ foreseeable conflicting positions – – EU/EEA cases or cases already decided in other jurisdictions EU/EEA cases or cases already decided in other jurisdictions – – Novel legal issues Novel legal issues – – … … 6
Putting EU settlements into practice Putting EU settlements into practice Transitional phase / initial cases Transitional phase / initial cases • • Settlement discussions are taking place in pending cases. Confidentiality. Settlement discussions are taking place in pending cases. Confidentiality. • • In the initial phase, eligible also cases with an “ordinary” draft SO ready In the initial phase, eligible also cases with an “ordinary” draft SO ready and/or the full file screened for confidentiality. and/or the full file screened for confidentiality. – – No delay if settlement not reached No delay if settlement not reached • • • • Settlements are not an end in and of itself. The ordinary procedure will Settlements are not an end in and of itself. The ordinary procedure will Settlements are not an end in and of itself. The ordinary procedure will Settlements are not an end in and of itself. The ordinary procedure will apply: apply: – – by default (if settlements are not explored) by default (if settlements are not explored) – – as fall as fall- -back option (if settlement not reached) back option (if settlement not reached) • • DRAMs decision of 19 May 2010: first pure settlement case DRAMs decision of 19 May 2010: first pure settlement case 7
Summary of the DRAMs Cartel Summary of the DRAMs Cartel • 10 undertakings / 24 companies: Micron, Samsung, Hynix, Infineon, NEC, Hitachi, Elpida, Toshiba, Mitsubishi and Nanya; • were involved in a scheme and/or network of contacts and secret information sharing by which they coordinated their secret information sharing by which they coordinated their conduct on general pricing level and quotations to major PC/server Original Equipment Manufactuers (OEMs) , ultimately amounting to price coordination to such clients; • on the market for DRAMs (Dynamic Random Access Memory), i.e. memory chips used in computers and servers ; covering the EEA • The overall cartel lasted from 1 July 1998 until 15 June 2002. 8
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