Where behavior is investigated in parallel by the Austrian competition authorities and the Public Prosecutor’s Office (PPO), the latter usually requests the competition authorities to provide it with copies of their files, including leniency statements and settlement submissions that have been filed with the Federal Competition Authority (FCA), and adds (parts of) these documents to its own file. Victims of competition law infringements can thus indirectly get access to leniency statements and settlement submissions through an inspection of the PPO’s file. This practice risks weakening the effectiveness of the Austrian leniency program and settlement procedure as it may deter undertakings from cooperating with the FCA.
The Higher Regional Court of Vienna has recently referred questions which aim to clarify whether the described practice is in line with EU law for a preliminary ruling to the Court of Justice of the European Union (CJEU). We expect the CJEU to decide on the matter by the middle of next year.
Background on Relevant EU Law
Directive 2014/104/EU (Damages Directive) aims to promote the private enforcement of competition rules through actions for damages. Amongst others, it provides for rules under which national courts are able to order the disclosure of evidence. However, according to the Damages Directive, national courts cannot at any time order the disclosure of leniency statements and settlement submissions. Furthermore, Directive (EU) 2019/1 (ECN+ Directive) requires member states to ensure that access to leniency statements and settlement submissions is only granted to parties subject to the relevant proceedings and only for the purposes of exercising their rights of defense.
Risk of Indirect Access to Leniency Statements and Settlement Submissions
Some competition law investigations have revealed that victims of competition law infringements may indirectly get access to leniency statements and settlement submissions in Austria. This risk exists where the same fact pattern is investigated by the Austrian competition authorities under competition law and the PPO under criminal law (e.g., in the case of bid-rigging practices). In criminal proceedings, the PPO is obliged to pursue every initial suspicion and clarify it by taking appropriate investigative steps. Other public authorities, including competition authorities, are required to provide mutual assistance to the PPO. The PPO may request the Austrian competition authorities to provide it with a copy of their files related to a parallel investigation under competition law, including leniency statements and settlement submissions. Victims of a criminal offense have the right to inspect the PPO’s file if it is necessary to protect their interests related to the claim asserted. Consequently, where the PPO has added leniency statements and settlement submissions that had been filed with the FCA to its file, victims may indirectly get access to these documents.
Do Leniency Statements and Settlement Submissions Enjoy Protection in Criminal Proceedings?
This practice raises the question of whether the protection of leniency statements and settlement submissions laid down in the Damages Directive and the ECN+ Directive has an absolute effect, i.e., whether it also applies to the PPO and criminal courts so that leniency statements and settlement submissions may not be added to the file in criminal proceedings or at least not be inspected by victims. This tension between the protection of leniency statements and settlement submissions and the rules on access to the file in criminal proceedings recently came up in a procedure related to parallel investigations of a construction cartel by the Austrian competition authorities and the PPO. Two companies that had applied for leniency with the FCA requested the PPO not to add leniency statements and settlement submissions to its file and in any case, to permanently exclude them from inspection. The PPO did not comply with this request but provisionally excluded the leniency statements and settlement submissions from inspection.
The companies lodged an objection against the PPO’s decision which is currently pending with the Higher Regional Court of Vienna, which decided to stay the proceedings and to refer questions for a preliminary ruling to the CJEU to clarify whether the protection of leniency statements and settlement submissions also needs to be observed by public prosecutors and criminal courts.
Outlook
The reference made by the Higher Regional Court of Vienna is highly welcome as a clarification of this question by the CJEU is of paramount importance for undertakings and their legal advisors in Austria. We believe that the better arguments support the view that the PPO may not add leniency statements and settlement submissions to its file. A different view may jeopardize the attractiveness of the Austrian leniency program and settlement procedure.
By Robert Wagner, Partner, Wolf Theiss
This article was originally published in Issue 10.6 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
