Swedish leniency applications: the essentials

Let’s be frank. To take the decision to “blow the whistle” on your own organization, is not an easy thing to do. However, once you have made that crucial decision, you are in a unique position to positively alter the way your company carries out its business and how it’s perceived by the market and ultimately your customers. During the following weeks, it will be vital to stay committed and adhere to procedural requirements as well as effectively safe guard your rights in the process. This paper will pinpoint and highlight the essentials of Swedish leniency applications under national competition law. In short, it will tell you what you really need to know in order to plan and execute your own application – irrespectively of whether infringing activities are the result of general corporate practice or individual intent or carelessness.

Both horizontal and vertical practices are covered
First of all, it is important to underline that the Swedish Competition Authority (“SCA”) recognizes both horizontal and vertical practices in relation to leniency applications. In other words, you may not only “blow the whistle” on illegal practices pertaining to competitors but also in relation to your own contractual practices with e.g. distributors, agents, franchisees and licensees.

What’s in it for you?
As with any voluntary application, the risks and benefits will be more or less the same. Subject to a well-documented application and complete openness and willingness to provide requested information, the SCA should be in a good position to grant you leniency, in particular if the submitted practice was unknown to the SCA prior to application. Of course, there are no guarantees, or whether your leniency application will result in full immunity or even a partly reduction of fines.
The immediate benefits will be closure of future uncertainty and the ability to greatly influence the level of economic harm you may suffer as a result of fines and follow-on claims. In addition, the likelihood of dawn raids will be greatly reduced.

The legal stuff: prerequisites
In order to qualify for leniency and receive full immunity from fines, the following criteria must be met:

• the SCA does not already have enough information in order to carry out a dawn raid against you or anyone else involved
• you are the first to apply for leniency
• you supply all information pertaining to the infringement
• you cooperate fully and efficiently
• you do not destroy evidence or hinder the investigation, and
• you cease the infringement immediately

Should the SCA already have enough information in order to carry out a dawn raid, criteria (a) and (b) do not apply (but the others do), and instead you must be the first party to clarify that the infringement has taken place. In other words, you must fully disclose the infringing activity and show that it really did happen or still is ongoing. However, should you not qualify for full immunity, you can still benefit from a reduction if the evidence submitted represent “significant added value” – an expression that undoubtedly leaves room for interpretation. In addition, you must of course fully cooperate during the investigation and terminate the infringing practice. A reduction can at most amount to 50 % of the total issued fine.

The practical stuff: procedure
In short, you must submit a complete application. This means following a set of instructions issued by the SCA that details the infringement, its geographical scope, products etc. Once a complete application has been submitted and confirmed, you are given your place in the leniency queue. In other words, the SCA does not (yet) apply a ticket system whereby whoever contacts the SCA first will get first in line for potential immunity once that ticket holder submits a full application. However, this is about to change and we expect a ticket system to be introduced in August 2014.

Nordic competition authorities in close cooperation
The Nordic competition authorities in Sweden, Norway, Denmark and Finland regularly exchange information regarding ongoing national investigations. Regular meetings ensure that each authority has at least a general knowledge of what key investigations are underway in neighbouring jurisdictions. Our own experience show that contacts are often made cross-border and should therefore be carefully considered by investigated parties when addressing Nordic competition authorities – including when filing for leniency or if you suspect that other companies are about to blow the whistle in a Nordic country.

Remember

• Make sure, as far as possible, that you are the first applicant in line – talk to the SCA on a no-name basis; enquire about specific sectors relevant for your case
• Extensive confidentiality applies. Applications will not show in public records
• It is common practice and very productive to have an introductory meeting with the SCA and a second one later on focusing on the application itself
• No ticket system (yet)! Only a complete application counts towards the clock
• It normally takes the SCA 1-2 weeks after receiving a complete application to issue a decision on whether the applicant is subject to full immunity
• Full immunity = no legal proceedings = no fines
• No full immunity = legal proceedings may be initiated by SCA = potential fines (although reductions of up to 50 % could still apply)
• Total maximum fines = 10 % of turnover