On 3 June 2021, the European Court of Justice (“ECJ”) in case C-563/19 P Recylex v Commission dismissed Recylex’ appeal both to adjust its ranking in the leniency process and to receive partial immunity for parts of its participation in the Car Battery Recycling cartel.  The judgment, on appeal against the judgment of the General Court (“GC”) of 23 May 2019, provides guidance to companies considering a leniency application when there is already an ongoing European Commission (“Commission”) investigation.

Applying for leniency enables cartel participants to obtain reduced or annulled fines.  The 2006 Commission Notice on Immunity from fines and reduction of fines in cartel cases  (“Leniency Notice”) sets out the key principles:

  • the first company providing the Commission with sufficient evidence for an investigation will be granted full immunity;
  • subsequent applicants can receive fine reductions of 30-50%, 20-30% or 20% depending on the timing of their submission; and
  • companies can receive partial immunity for providing the Commission with details expanding the scope of the infringement.

Background

In 2017, the Commission fined four companies for their participation in the Car Battery Recycling cartel.  Each of the companies applied for leniency, with Recylex having submitted its application within a month after the Commission dawn raid.  As the third leniency applicant, Recylex’ fine was reduced by 30%.

On appeal to the GC, Recylex submitted the following grounds of appeal:

  • It had provided information regarding additional aspects of the cartel which gave the Commission a more thorough understanding of the timeline of the cartel. The GC had rejected the appeal on this point since the Commission was already aware of the meeting regarding which Recylex had submitted information, and the details had merely strengthened the Commission’s case.
  • Recylex argued that the first leniency applicant Eco-Bat had not cooperated adequately with the Commission investigation, and should have been removed from the leniency ranking. According to Recylex, it should therefore take Eco-Bat’s position in the ranking and qualify for a higher 30-50% reduction in fine.

Judgment

Regarding the scope of the infringement and partial immunity, the ECJ notes that the Leniency Notice aims to dismantle cartels quickly and efficiently; it seeks to encourage companies to cooperate with the Commission.  Partial immunity exists to motivate infringing parties to quickly share incriminating evidence with the reassurance that such disclosure will not result in a larger fine.  Granting merely a fine reduction would incentivise companies to weigh whether such reduction would compensate for the higher basic amount that would result from the increased gravity of the infringement.

Any additional information expanding the infringement’s duration, geographic or material scope qualifies an applicant for partial immunity.  The ECJ finds that Recylex had merely provided information that strengthened a pre-existing body of evidence, rather than expanded the scope of the infringement.  It would not have been appropriate therefore to grant partial immunity, because the information provided did not increase the gravity of the infringement and no compensation for an increased basic amount of the fine was necessary.

Regarding the ranking of leniency applicants, and in line with previous case-law, the ECJ held that Eco-Bat not meeting its cooperation requirements would not qualify Recylex for a higher position in the leniency ranking.  Such an approach is neither supported by the wording of the Leniency Notice nor would it be consistent with the objective of the Leniency Notice which is to create a ‘climate of uncertainty within cartels’.

Takeaways

The ECJ confirms that, barring exceptional circumstances, full immunity is not available to companies who are already under investigation by the Commission.  Their leniency application may however result in a substantial reduction of the fine, with the percentage of the reduction being determined by the ranking and the timing of their application.

The judgment confirms that in order to obtain partial immunity the leniency application will have to provide the Commission with evidence that clearly and significantly expands the scope of the infringement.  Providing evidence strengthening information that the Commission already has will only allow for a higher percentage of fine reduction, but not for partial immunity.

Further, the judgment confirms that the leniency ranking is set and there is little scope for companies to strategically withhold leniency applications on account of potential subsequent changes in the ranking.  Any failure to comply with cooperation requirements by a leniency applicant would not qualify the subsequent applicant to take a higher position in the ranking.

Photo of Johan Ysewyn Johan Ysewyn

Johan Ysewyn is widely recognised as one of Europe’s leading competition lawyers. As co-Chair of Covington’s Global Competition/Antitrust Practice, Johan brings over three decades of experience advising global corporates and financial institutions on their most complex and high-stakes competition and regulatory matters.

Clients…

Johan Ysewyn is widely recognised as one of Europe’s leading competition lawyers. As co-Chair of Covington’s Global Competition/Antitrust Practice, Johan brings over three decades of experience advising global corporates and financial institutions on their most complex and high-stakes competition and regulatory matters.

Clients turn to Johan for clear, strategic guidance on merger control, cartel and monopolisation investigations, and other antitrust enforcement actions. His approach is pragmatic and solution-driven, combining deep legal insight with a commercial understanding of his clients’ business.

Leading directories consistently highlight Johan’s exceptional skill and client service: Chambers Global describes him as “an exceptional lawyer who is solution-oriented, has a remarkable ability to rapidly understand our business and has excellent reactivity.” Who’s Who Legal praises his “energy and insight into cartel proceedings,” while Legal 500 calls him “one of the best European competition lawyers” with “a unique understanding of the EC and a very helpful network of connections across Brussels.”

Johan represents clients before competition authorities and courts around the world, leveraging his in-depth knowledge of regulatory processes and strong working relationships with key decision-makers, particularly within the European Commission’s DG COMP, who designated him as one of their Non-Governmental Advisors to the International Competition Network. His advisory practice spans the evolving intersections of competition law with ESG, digital markets, and strategic compliance.  His experience covers a wide range of sectors, including telecommunications, technology, media, financial services, healthcare, consumer goods, retail, energy, and transport.

Johan has extensive experience in global merger control, having advised on numerous complex, cross-border transactions requiring coordination across multiple jurisdictions. His recent merger work includes representing Discovery in its landmark acquisition of Warner Bros. and advising Illumina on its acquisition of Grail—both recognised as award-winning deals in the competition community. Johan’s merger practice spans a wide range of sectors, from media and technology to healthcare and energy, and he is known for navigating the most challenging regulatory reviews with strategic foresight and precision.

Renowned for his expertise in global cartel enforcement, Johan has represented immunity applicants and defendants in major cases involving industries such as financial services, consumer goods, pharmaceuticals, chemicals, and energy. He also advised the European Payments Council in the first European Commission investigation into standardisation agreements in the e-payments sector. A recognised thought leader, Johan co-authors the European Cartel Digest and lectures on cartel law and economics at the Brussels School of Competition.

In addition, Johan is one of Europe’s foremost practitioners in EU State aid law, advising both governments and beneficiaries. His experience includes landmark cases involving leading banks and airlines such as Fortis, KBC, Dexia, Arco, Citadele, airBaltic, and Riga Airport.