Navigating hybrid EU cartel settlements: the Scania ruling

What is a hybrid cartel case and how does it work?

The Commission introduced its settlement procedure in 2008, offering a 10% reduction in fines for parties that admit their involvement in a cartel and cooperate with the Commission. The procedure aims to streamline and accelerate case resolution while enabling the Commission to allocate resources to other cases. However, participation in the settlement procedure is voluntary, and parties may opt out for various reasons.

In such cases, the Commission may decide to take a hybrid approach, whereby it adopts a decision against some parties under the settlement procedure and adopts another decision against non-settling parties under the standard administrative procedure. Depending on the circumstances of the case, this may raise a number of issues for the Commission, including how to:

• maintain the presumption of innocence and the rights of defence of the non-settling parties, especially when the settlement decision contains information and admissions about their involvement in the conduct;
• avoid a risk of bias by the Commission, when the same team of investigators is involved in both the settlement decision and the non-settlement decision; and
• deal with different timelines and procedural stages of the settlement decision and the non-settlement decision, as well as the potential divergences in the factual and legal findings between the two decisions.

The Scania judgment

The Scania case concerns anti-competitive conduct in the trucks sector, with respect to which the Commission fined six truck manufacturers. Five parties settled with the Commission in 2016. Scania, however, did not settle and the Commission adopted a non-settlement decision addressed to Scania in 2017.

Scania appealed the Commission’s decision before the EU General Court, arguing that the Commission had infringed its right to good administration, its presumption of innocence, and its rights of defence, among other grounds. The General Court dismissed Scania’s appeal in 2022, upholding the Commission’s decision and fine. Scania then appealed the General Court’s judgment to the European Court of Justice.

The Court of Justice dismissed Scania’s appeal in its entirety. In particular, the ruling rejected the argument that by adopting the settlement decision and continuing its investigation against Scania without allocating the file to a separate team, the Commission had infringed the right to good administration.

In light of the Scania case and other recent case law, the EU Courts have provided further clarity concerning the Commission’s approach to hybrid settlements. In particular, the EU Courts have found that the Commission:

• may adopt a hybrid procedure without infringing the principle of impartiality, provided it respects the rights of defence and conducts a full and impartial examination of the facts and evidence concerning the non-settling parties. The mere involvement of the same case team in both the settlement decision and the non-settlement decision does not constitute a breach of impartiality, without additional objective evidence;
• may issue a settlement decision before completing the investigation of the non-settling parties, without prejudging the outcome of the latter. Nevertheless, the presumption of innocence must be maintained, meaning that the Commission must prove the infringement and allow the non-settling parties to contest the allegations and evidence against them;
• must ensure that the settlement decision does not contain information that could be prejudicial to the non-settling parties. The Commission must also avoid making public statements that could imply the guilt or responsibility of the non-settling parties, before concluding the investigation;
• may use the same evidence and findings for both the settlement decision and the final decision, provided they are consistent and coherent. The Commission may also rely on the admissions of the settling parties, as long as they are corroborated by other evidence and do not contradict the rights of defence of the non-settling parties; and
• may impose different fines on the settling and non-settling parties, taking into account the specific circumstances of each case and the applicable legal criteria. The Commission may also apply different methods of adjustment of the fines, provided they are justified and proportionate.

The Scania judgment is the latest case to address hybrid settlements and supplements the developing body of case law on the potentially complex procedural and substantive issues which may arise in these types of cases.