Germany: New Immunity Guidelines for Cartels in Germany

Last Updated: 4 July 2006
Article by Carsten T. Gromotke and Johannes Zöttl

Whistleblowing has never been more attractive in Germany. On March 15, 2006, the Federal Cartel Office ("FCO") published new guidelines for immunity and leniency in cartel matters ("2006 Guidelines"). The 2006 Guidelines amend and restate the conditions under which the FCO grants immunity (no imposition of fines) or extends leniency (reduction of fines), provided cartel members admit their involvement in the conduct at issue and cooperate with the agency’s investigation.

The FCO introduced its first immunity program in 2000, but the incentive to come forward was limited. By contrast, the 2006 Guidelines actively pave the way for immunity applicants. Most notably, the FCO now automatically grants immunity to the first member of a cartel to self-report. Moreover, applicants may submit markers, which secure the rank of the applicant but may be perfected later. Furthermore, the FCO commits itself to confidentiality in order to protect immunity applicants against private litigation.

The antitrust infringements covered by the 2006 Guidelines include, for example, collusive agreements on prices, the allocation of markets, and bid rigging. The seventh amendment to the German Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, or "GWB") has upped the ante, effective July 1, 2005. Antitrust offenders are now liable for administrative fines of up to €1 million. Above that ceiling, businesses and associations of businesses that participate in a cartel risk administrative fines of up to 10 percent of their total revenues in the preceding year.

In April 2006, for instance, the FCO imposed total fines of €2.4 million on six moving and storage contractors for price fixing regarding removal services for U.S. soldiers, following dawn raids carried out simultaneously with U.S. authorities. The FCO significantly reduced the fines for three businesses that cooperated with the enforcer.


The 2006 Guidelines introduce a two-tier system of immunity for individuals, businesses, and associations of businesses:

  • Automatic immunity is available to the applicant: (i) before the FCO has sufficient evidence to obtain search warrants; and (ii) provided the applicant is the first to put the FCO in a position to move forward with its investigation.
  • Discretionary immunity is available to the applicant if: (i) the FCO could have obtained search warrants but cannot yet prove the existence of a cartel; and (ii) the applicant is the first to put the FCO in a position to move forward with its investigation.
  • Automatic and discretionary immunity are mutually exclusive, with automatic immunity prevailing.

In either immunity scenario (and as in U.S. practice), the applicant cannot obtain immunity if he: (i) acted as the sole ringleader of the cartel; or (ii) forced others to participate in it. It follows that even the instigator qualifies for immunity unless he led the cartel alone or forced others to participate in it. If there were several ringleaders, any one of them may qualify for immunity, provided the applicant did not coerce others to participate in the cartel. Unfortunately, however, the FCO missed the opportunity to delete the "sole ringleader" standard as the European Community did in 2002, having recognized the ambiguity of this standard.

If the applicant meets the criteria for automatic immunity, the FCO immediately confirms in writing that it will not impose a fine, provided the applicant continues to cooperate throughout the proceedings. This corrects two fundamental flaws in the previous guidelines. The FCO used to decide on immunity only at the end of its investigation, which could be years after the immunity application had been submitted. In addition, there is no longer room for prosecutorial discretion. Competition officials in the U.S. and elsewhere have attributed the success of their leniency programs to this very point.

By contrast, the FCO decides on discretionary immunity only after it has reviewed and analyzed the information and evidence obtained. It will concede that the application proves the existence of a cartel if it anticipates that an infringement decision will be upheld by the courts on appeal. However, businesses often cannot produce "smoking gun" documentary evidence. Therefore, the 2006 Guidelines require information (such as a witness statement) in the first place and do not require evidence (in the form of documents) where evidence is not available.


The 2006 Guidelines define "leniency" as any reduction of a fine, with 50 percent being the ceiling. Unfortunately, the FCO no longer guarantees specific reductions. The European Community, by contrast, offers a reduction of 30 to 50 percent for the first leniency applicant, 20 to 30 percent for the second applicant, and up to 20 percent for each subsequent applicant.

The FCO will reduce the fine only if the information or evidence submitted substantially contributes to proving the infringement. The amount of the reduction depends on the timing of the application—the higher its ranking, the greater the discount—and on how useful the information and evidence submitted by the applicant turn out to be for the FCO’s investigation. As with discretionary immunity, the FCO decides on leniency only after its assessment of the information and evidence obtained.


The 2006 Guidelines introduce a marker system. In the past, prospective applicants felt discouraged from contacting the FCO until they had collected all relevant information. While the discussions with the FCO continued, other applicants may have come forward with more extensive information, thus jumping the queue.

In sharp contrast to the leniency system of the European Community, the applicant now has to provide only a minimum level of information to the FCO—the type and duration of the infringement, the product and geographic markets affected, and the identity of further cartel participants. In addition, the applicant must inform the FCO of additional authorities where it has requested or will request immunity or leniency. Markers may be submitted in English. The FCO immediately confirms its receipt of the marker, including the time and date.

The applicant has up to eight weeks to perfect the marker. If the applicant satisfies the deadline set by the FCO, the date and time of the marker define its rank. If the applicant fails to meet the deadline or to continue to cooperate with the FCO, the business next in line automatically rises in rank. For complex cartels, however, the (maximum) deadline of eight weeks creates an overly tight schedule. There may be thousands of e-mails and documents that need to be reviewed; employees and senior personnel must be convinced to cooperate and to reveal the details of their contacts with the relevant competitors. Finally, the applicant must properly communicate all information gathered to the FCO, which may turn out to be an evolutionary process.

The 2006 Guidelines do not foresee—at least, not explicitly— that the FCO may extend the eight-week deadline. It can only be hoped that the FCO will handle deadline issues pragmatically. If it does not, applicants might potentially be worse off under the new marker system than they were pursuant to the earlier guidelines. Other than under the U.S. system, the FCO’s deadline for completing markers sets a definitive cut off date and thus places in the hands of the regulator a powerful tool for speeding up the proceedings.

The new marker system will, nonetheless, be particularly helpful for members of cross-border cartels in Europe. As with any other immunity system at Member State level, an application for immunity to the FCO has no effect under the immunity programs of the European Community (or the Member States with national immunity systems), and vice versa. Under the 2006 Guidelines, the FCO may free the applicant from the requirement to submit a complete application in Germany if: (i) the applicant sets a marker; (ii) the applicant cooperates, or intends to cooperate, with the European Commission; and (iii) the Commission is best placed to deal with the matter. The Commission believes it is best placed if the cartel affects competition in three or more Member States. The FCO may request a complete application only if and when the Commission does not initiate proceedings.

The FCO’s new marker system thus makes the most of the existence of parallel immunity regimes for the European Community and the Member States. Pending the introduction of a one-stop immunity program, it is hoped that other national competition authorities will follow suit.

Duty to Cooperate

The 2006 Guidelines underscore the necessity for the applicant to open up completely to the FCO. As the 2006 Guidelines state, the applicant for immunity or leniency must cooperate "continuously and unreservedly" throughout the proceedings. More specifically, the applicant must:

  • Upon request by the FCO, immediately discontinue his participation in the cartel (the implication being that the applicant must continue his participation unless the FCO instructs him otherwise).
  • Continue to furnish the FCO with all available information and evidence after submitting the application, not only in relation to whether a cartel exists, but also concerning the various factors that may be relevant for the FCO in determining the amount of fines.
  • Keep his cooperation with the FCO confidential.
  • omply with certain obligations in relation to employees, as discussed below.

The FCO’s sanction for an applicant who fails to cooperate is simple and effective. The applicant in default loses his rank, while subsequent applicants rise in rank.


Unlike many of its European counterparts, the FCO may impose fines on individuals (directors, executives, and employees). Except for cases of bid rigging, however, individuals do not face criminal prosecution. As a new rule under the 2006 Guidelines, if a corporation applies for immunity or leniency on its behalf, the submission counts for the corporation itself and all individuals who: (i) used to or still work for the corporation; and (ii) participated in the cartel. Accordingly, the business applying for immunity or leniency must name all—existing and former—employees who may be able to provide information and evidence to the FCO, and it must ensure that those employees also cooperate with the FCO. If they do, and if the business receives immunity or leniency, they equally qualify for immunity or leniency.

Private Enforcement

The seventh amendment to the GWB of 2005 was specifically designed to facilitate private enforcement, as the German Parliament supports the view that private enforcement is an efficient deterrent to illegal market behavior. As a result, the FCO’s immunity program is potentially unable to induce members of cartels to self-report if doing so increases the applicant’s exposure to private antitrust litigation. One of the key considerations concerns a plaintiff’s ability to access the FCO’s files. Pursuant to the 2006 Guidelines, as a rule, the FCO will not reveal the identity of the immunity applicant until a statement of objections is served. Furthermore, the FCO will not grant third parties access to its files as far as applications for immunity or leniency and the evidence submitted in this context are concerned. As for paperless applications, the FCO has de facto accepted them for years. The 2006 Guidelines confirm this practice.


The 2006 Guidelines demonstrate the FCO’s continuing focus on the prosecution of cartel activity in Germany. When the FCO published its new Guidelines, the European Commission had just gone public with proposals for its own immunity regime. While those proposals are largely limited to documentary issues raised by U.S. discovery, the FCO’s 2006 Guidelines reflect a major step forward in increasing the level of legal certainty. As Scott Hammond, U.S. Department of Justice, Antitrust Division, once put it, "Prospective amnesty applicants come forward in direct proportion to the predictability and certainty of whether they will be accepted into the program. […] Uncertainty in the qualification process will kill an amnesty program." The FCO’s practice will show whether it lives up to the new program’s potential, particularly in gray area cases where applicants produce facts on which the FCO finds it difficult to base prosecution.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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