CJEU gives guidance on self-cleaning in relation to competition law infringements
In a recent judgement of 24 October 2018 (n° C-124/17, Vossloh Laeis GmbH v. Stadtwerke München GmbH), the European Court of Justice (CJEU) answers two important questions relating to optional exclusions in the context of a public procurement procedure. The procurement rules allow a tenderer that falls under an exclusion ground to rely on a self-cleaning defence. However, there are very practical questions on the compatibility of the self-cleaning defence if the tenderer benefits from a leniency programme for competition law infringements.
The public procurement rules contain a number of optional exclusion grounds on the basis of which a contracting authority may exclude a tenderer. Some of these grounds relate to competition law infringements by the tenderer. However, the rules also provide the possibility for a tenderer to demonstrate its reliability despite the existence of such ground for exclusion (the so-called self-cleaning defence).
In order to rely on this self-cleaning defence, a tenderer must prove that:
1. it has compensated any damages related to the infringement;
2. it has sufficiently clarified the facts and circumstances by actively collaborating with the investigating authorities; and
3. it has taken concrete technical, organisational and personnel measures in order to prevent any further infringements.
The contracting authority must evaluate the risk taking into account the gravity and circumstances of the infringement.
In the case at hand, uncertainty had arisen in relation to the second condition. The German Act against restrictions on competition had implemented the second condition of the EU Directive by referring not only to active collaboration with the investigating authorities, but also to collaboration with the contracting authority.
A German contracting authority had on that basis asked full transparency from a tenderer on the leniency decision of the German competition authority. The tenderer had refused to provide a copy of the decision, arguing that it had already cooperated fully with the competition authority, and that the cooperation with the contracting authority went beyond the requirements of the EU Directive.
The CJEU found that the German law requirement of cooperation with the contracting authority is not against EU law. The requirement of cooperation must be limited to what is strictly necessary for the examination of the tenderer’s reliability. However, the contracting authority may ask any evidence demonstrating that the measures taken by the tenderer are sufficient for the purpose of its admission to the procurement procedure. Such evidence may therefore include the leniency decision of the competition authority.
In the same judgment, the CJEU also clarified the starting date for the applicability period of the exclusion grounds. The relevant date is the day of the decision by the competition authority, and not, as the tenderer had argued, the day after the relevant event was terminated.
Both answers by the CJEU illustrate that entities involved in leniency programmes may need to think twice on how to address these issues in the framework of their participation in public procurement procedures.
Our public and competition law specialists would be happy to assist you with your questions in relation to self-cleaning in the framework of leniency programmes. Do not hesitate to reach out!