Caring when sharing – the limits of leniency application disclosure

From cartel files to criminal dockets

It started with – quite literally – concrete collusion. Austria’s construction sector became the backdrop for a cartel case in which companies were accused of fixing prices, sharing markets, and manipulating tenders for public works. The Federal Competition Authority (Bundeswettbewerbsbehörde – BWB) pursued the antitrust side of the affair, while criminal prosecutors opened a parallel investigation for corruption and bid-rigging.

One company filed a leniency application in July 2019 and the BWB rewarded that confession with a reduced fine two years later. But the story did not just end in the competition file. At the request of the public prosecutor, the Vienna Higher Regional Court transmitted the case record – including the leniency and settlement documents – to aid its criminal investigation.

That administrative hand-off triggered an important legal question: once leniency materials move from an antitrust case to a prosecutor’s file, do they still enjoy their EU-law protection? The companies argued that such transfer risked undermining the very incentives that make whistleblowing work. Prosecutors, in turn, maintained that transparency was essential for effective criminal enforcement.

Caught between these competing imperatives, the Austrian court pressed pause. It referred the dispute to Luxembourg, asking whether EU competition law grants leniency materials absolute immunity – even against other branches of the state.

Absolution from fines, but no absolute protection

In fact, three questions submitted by the national court distilled the tension between leniency confidentiality and judicial transparency.

1. Could leniency statements and settlement submissions be added to the file in criminal proceedings at all – or are they protected in the absolute, barring competition officials from any such exchanges with prosecutors?
2. If that protection existed, did it also extend to all supporting documents or evidence provided to flesh out a leniency application?
3. Who, if anyone, could later access those documents – other defendants, injured parties, or neither?

The yardstick of effectiveness

Starting with the basics, the Court ruled that the Damages Directive (2014/104/EU) was irrelevant. Its scope, confined to private actions for damages arising from competition infringements, does not stretch to criminal proceedings – nor does it regulate the transfer of files between public bodies. As the Court put it, “the material scope […] is limited solely to actions for damages […] and, therefore, does not extend to other types of action” (para. 45). The ECN+ Directive (2019/1/EU) – the legislative backbone of national leniency frameworks – was more pertinent (see below) but not for the first, central question submitted by the Austrian court. It, too, does not dictate how competition authorities cooperate with prosecutors outside the competition context (para. 48).

What primarily matters, the Court held, is that any administrative assistance mechanism must preserve the effectiveness of Article 101 TFEU (para. 65). And that effectiveness hinges on trust: if leniency applicants must fear their statements may later be widely disseminated, they will stop coming forward. To prevent that chilling effect, Member States must design cooperation channels that keep leniency’s protective promise intact; otherwise they would jeopardize the effective application of Article 101 TFEU (para. 62). Thus, Article 101 does not categorically preclude transmitting leniency files to prosecutors – but requires that national system ensure that such sharing does not erode leniency’s function as an enforcement catalyst. Put differently: share, yes – but carefully.

Closure or disclosure?

When applying that care, however, the Court makes a point of stressing that not all leniency-adjacent documents are equal. Making that argument, it turns to Article 31(3) of the ECN+ Directive – the so-called blacklist of protected materials. While that provision shields “leniency statements” and “settlement submissions” from disclosure, this protection does not apply to pre-existing information, i.e., any evidence that exists irrespective of the enforcement proceedings.

In that regard the ECJ recalls its Evonik Degussa v Commission (C-162/15 P) case law, where it held that while “publication, in the form of verbatim quotations, of a leniency statement is not permitted in any circumstances, the publication of information from documents provided by an undertaking in support of such a statement is authorised, subject to compliance with the protection owed, in particular, to business secrets, professional secrecy and other confidential information” (para. 75).

The ECJ then extends this rationale to the case at hand, meaning there is now a dividing line between “confession” and “corroboration” also in cases where a competition file is sent off to a prosecutor. While the “protection owed” mentioned in the Evonik Degussa case is an important limiting factor, in particular with regards to a company maintaining the right to shield its business secrets, the strict protection offered by EU law for leniency statements and settlement submissions is limited to those documents only. In contrast, it “does not cover documents and information provided in order to explain, specify in detail and prove the content of those statements or submissions” (para. 77).

To be fair…

The underlying reason for that distinction is that confidentiality cannot eclipse fairness, specifically the possibilities of third parties to litigate their interests – which can be impeded if secrecy entrenches information asymmetries between parties (see also para. 74).

And that tension between the different interests of different parties is also central for the ECJ’s third ruling point. Here, the Court anchors its reasoning in Articles 47 and 48 of the Charter and draws on the European Court of Human Rights’ case law. Criminal authorities must, in principle, grant accused persons access to all relevant evidence – both incriminating and exculpatory. While that right is not unlimited (yielding where disclosure would endanger the rights of others or the public interest), only the restrictions that are strictly necessary are permissible. In particular, access cannot be refused “solely on the basis of the nature” of leniency or settlement documents (paras. 84, 86).

Applying this principle, the ECJ held that accused persons who were not the authors of leniency statements or settlement submissions may nevertheless access them – but solely to exercise their rights of defense in the related proceedings (here: the criminal investigation in question. This, again, reflects the formula of Article 31(3) of the ECN+ Directive which requires Member States to make sure that “access to leniency statements or settlement submissions is only granted to parties subject to the relevant proceedings and only for the purposes of exercising their rights of defence”. In contrast, access cannot be granted to other parties – “in particular, persons harmed […] who seek compensation” (para. 90). In other words: Member States must take care that claimants seeking compensation for damages have no way of accessing leniency statements or settlement submissions regardless of the nature of the authority’s file which they have become part of.

Again, however, that two-tier distinction between “eligible” and “non-eligible” parties only applies to the actual leniency statements and settlement submissions, not pre-existing information that is annexed to them.

What it means

The Court’s ruling, which follows Advocate General Szpunar’s opinion published last year, may not rewrite the rules of leniency, but redraws the margins with precision. It confirms that leniency remains the Commission’s and national authorities’ most trusted ally in exposing cartels. As such, it must be treated with institutional care.

• For competition authorities, the ruling confirms that inter-agency collaboration need not violate EU law, provided it preserves the confidentiality of leniency statements and settlement submissions. Administrative assistance mechanisms must be calibrated to share only what is necessary and to protect what makes leniency effective – the assurance that a whistleblower’s confession will not become a public exhibit.
• For prosecutors and criminal courts, the case establishes a workable boundary. They may request and use leniency materials where relevant to criminal investigations, but only under systems that preserve their confidentiality vis-à-vis third parties – in line with the courts requirements around the protection of business secrets and the distinction between those subject to the criminal procedure on the hand and third parties on the other.
• For leniency applicants, the decision brings cautious reassurance. Their statements remain shielded from private claimants, whose access to the cartel confession remains firmly barred regardless of circumstance. Yet the ECJ builds on its case law and reiterates that such protection is not absolute. Supporting documents can still circulate, particularly within public prosecutor investigations, if they merely contain evidence that exists irrespective of the proceedings run by the competition authority.

Ultimately, the judgment reaffirms leniency’s enduring role in EU competition enforcement while adapting it to a more interconnected enforcement environment. The Court does not close the door on sharing – but it reminds everyone that there is a door to begin with.

Authored by Florian von Schreitter.