Reed Smith Client Alerts

If leniency was not enough, disgruntled employees and former colleagues will soon have the possibility to anonymously alert the Commission of the existence of secret cartels, without the benefit of immunity from fines that the leniency program offered.

On 16 March 2017, the European Commission (Commission) introduced its new tool allowing individuals to anonymously alert the Commission about secret anticompetitive practices.

This new tool allows individuals to give information to the Commission regarding the existence or functioning of a cartel or other types of antitrust violations.

In addition to direct contact details provided by the Commission for individuals willing to disclose their identity, a tool is set up to protect whistleblowers’ anonymity.

This tool allows for the whistleblower’s identity to be protected from the parties to the alleged practices, but also from the Commission or its staff. Communications will be provided by means of an encrypted messaging system enabling two-way communication, managed by a specialized outside service provider acting as an intermediary, and which will relay only the content of the received without transmitting the metadata, which could be used to identify the person providing the information. The information provided will, nonetheless, need to be precise and reliable enough to enable the Commission to investigate the claims.

Further tool in the fight against cartels

The Commission hopes that this new anonymous whistleblower tool will increase the likelihood of detection of cartels.

This tool will be used in addition to the Commission’s leniency program, which allows companies to expose cartels to the Commission by confessing their participation in the cartel. Leniency applicants may obtain total immunity from fines, so long as that applicant is the first one to inform the Commission of an undetected cartel by providing sufficient information to expose the cartel conduct.

The leniency program is currently the Commission’s greatest tool of detection of secret cartels. Programs such as leniency and the new whistleblowing tool destabilize cartels by incentivizing denunciation.

How can Reed Smith help you

Reed Smith’s Antitrust & Competition practice in Europe has extensive experience with anticompetitive investigations and litigation before competition authorities and courts, especially in cartel cases. We can help you assess and review your commercial practices and their compliance with competition law. We can also provide training so that your employees are made aware of antitrust issues and the risks to business and to themselves.

Reed Smith can also assist companies applying for leniency, notably in assessing the information at your disposal and its relevance, and assisting in the proceedings before the authorities and courts.

Client Alert 2017-085