GERMANY Law and Practice Contributed by: Christina Malz and Sebastian Gröss, SZA Schilling, Zutt & Anschütz
5.2 Plea Bargaining/Settlement The FCO′s cartel proceedings are often termi - nated by settlements, which require the under - taking to admit the wrongdoing and all neces - sary facts for a fine to be imposed in a settlement statement. There is no formal legal procedure for settlements but an established practice of the authority. The FCO follows its own best prac - tices laid down in an internal explanatory note. A settlement procedure usually involves several talks with the authority and only occurs later in the investigation, often after the statement of objections has been issued. The FCO has an incentive to settle cases because settlements provide a faster and more efficient way to remedy the competition concerns. It also usually prevents lengthy legal action against a fining decision even tough a waiver of the right to appeal is not required (and would be uncon - stitutional). Undertakings that engage in settlements are rewarded with a reduced fine (up to 10%) and the issuance of a shorter and less detailed fining decision ( Kurzbescheid ) that can be beneficial in the defence against follow-on damage actions. For the undertaking concerned, another incen - tive for settlements is the Higher Regional Court of Düsseldorf′s possibility and willingness of issuing even higher fines than the FCO. This gives the FCO a strong (albeit questionable) leverage in settlement discussions. 5.3 Effect of Liability Being Established The establishment of an undertaking’s cartel infringement by a competition authority has severe effects on potential follow-on damage claims. If the defendant in a damage claim is the formal addressee of a competition authority′s final decision, the factual findings of this deci - sion are binding on the court in the damage pro -
ceedings and can no longer be rebutted (Section 33b of the ARC). In practice, this binding effect goes even further. Even if a defendant is not the addressee of a competition authority′s decision but is men - tioned in the decision addressed to another car - tel member, it will be very difficult – if not impos - sible – for the defendant to rebut the facts stated in the decision. In addition, cartel infringements can lead to exclusion from public procurement. Final fining decisions will be published in the competition register that was opened for the registration of public entities in April 2021. This will allow for data exchange between public entities for their public procurement activities. 5.4 Sanctions and Penalties in Criminal Proceedings Current German criminal law only applies to indi - viduals and not to companies. If an individual has committed a crime from within or to the ben - efit of a company, the company itself can only be sanctioned by means of an administrative fine. As regards the individual, cartel behaviour is not a criminal offence per se. Concluding contracts on the basis of cartels can, in theory, be classi - fied as fraud (Section 263 of the Criminal Code); however, in practice, it is very difficult to estab - lish all of the relevant elements. By contrast, the specific case of bid rigging amounts to a criminal offence in itself (Section 298 of the Criminal Code). It can entail a criminal fine or imprisonment for up to five years. 5.5 History of Criminal Sanctions The highest individual fine against a single com - pany was imposed in 2020 in the Quarto Plate
111 CHAMBERS.COM
Powered by FlippingBook