European Commission launches anonymous tool for whistleblowers

The Commission has launched a new tool which makes it possible for individuals to inform the Commission about cartels and other anti-competitive practices (such as vertical restrictions in supply and distribution relations or abuse of dominance) on an anonymous basis. They are invited to provide information on past, ongoing or planned anti-competitive practices, such as its circumstances and the individuals involved.

The whistleblowers’ anonymity is guaranteed through a specifically-designed encrypted messaging system that is run by an external service provider. The system allows two-way communication between the whistleblower and the Commission, which enables the Commission to seek clarifications from the whistleblower, and for the whistleblower to ask the Commission to reply to its messages.

In the wake of similar initiatives of the national competition authorities in Germany, the UK (which offers a reward of up to £100,000) and the Netherlands, this new tool is aimed at providing the Commission with a new source of information on anti-competitive practices.

The new anonymous system will coexist with the current system which allows individuals, who are willing to reveal their identity, to contact the Commission directly through a dedicated phone number and email address.

Whilst the whistleblowing tool complements the Commission’s leniency policy, it is not a substitute for it as the tool focuses on gaining information from individuals, whereas the leniency programme targets undertakings. The leniency programme offers companies involved in a cartel the opportunity to gain total immunity, or to reduce the amount of the fines which the Commission may impose upon them in exchange for self-reporting and handing over evidence regarding their cartel involvement. Until now, the Commission has detected most cartels through its leniency programme.

Although the leniency programme has proven to be a real success, there has recently been a fall in the number of leniency applications at the Commission. It appears that the increased threat of follow-on damages actions has made undertakings think twice before applying for leniency. Another disincentive for undertakings to apply for leniency might be the uncertainty regarding the authority which will deal with the case. As the benefit of a leniency application at the Commission will be lost if the case is ultimately pursued by the national competition authorities, companies might be less willing to use it. In order to address this issue, on 22 March 2017 the Commission published a proposal for a new directive which should help to ensure that a leniency system is available and applied in a similar way by the national competition authorities of the EU Member States. This will allow undertakings to benefit from leniency, whichever competition authority deals with the case.