Following a public consultation, the European Commission has adopted a revised Informal Guidance Notice for novel or unresolved questions in antitrust cases.

This updated guidance increases flexibility and is intended to breathe life back into an under-utilised tool. As discussed in our earlier post however, some of these changes include potential pitfalls when it comes to encouraging businesses to seek guidance. 

Linklaters’ submission to the EC seems to have been taken into account in the final iteration with some notable (and helpful) changes introduced to address potential concerns. In this post, we take a look at the key changes to the Notice, particularly with respect to: (i) the strengthened weight of comfort letters; (ii) changes to the application process itself; and (iii) where some of the pitfalls remain. 

Key changes in the Notice framework

A high-level outline of the changes is captured in the below table. 

Strengthened weight of comfort letters

Where the EC decides to issue informal guidance, the guidance is non-binding and does not create legal rights. This is unchanged from both the original Notice and the initial draft of the proposed revisions.

However, in an effort to make this process more attractive (and likely in response to submissions made on the initial draft), the final Notice now makes two key changes to strengthen the evidentiary nature of informal guidance, namely:

• No fines when applicant relies on guidance letter in “good faith”. Where the EC issues a guidance letter, and the applicant relies on it, the EC will not impose any fines on the applicant with respect to any actions taken relying in “good faith” on that guidance letter. This welcome change increases the value and weight of guidance letters and is likely to encourage businesses to seek guidance.   
• Evidentiary weight of letters vis a vis NCAs and national courts. The EC has now removed from the initial draft the express prohibition on a guidance letter prejudging the assessment of a national court or competition authority. This is helpful as it does not expressly undermine the evidentiary weight of the letter and the EC’s importance in competition law assessment.

Opening the door to collaboration and more communication with applicants

The final Notice includes several changes to make the application process more collaborative, and to open the door to informal communication with applicants, namely:

• Informal pre-application communication. The final Notice now expressly provides for undertakings to contact the EC prior to making a formal submission. This helps reduce the back-and-forth between the EC and applicants, ensuring that applicants provide complete applications, and reduces the need for the EC to request more information from applicants. 
• Requirement that applicants conduct their own preliminary assessment. The new requirement that applicants submit a preliminary assessment on the application of Articles 101 and 102 TFEU is now caveated. Recognising the difficulty of carrying out such an assessment when existing precedent does not provide sufficient clarity on the legal position, this preliminary assessment must now only be carried out “to the best of an applicant’s abilities”. 
• Timing of decision. Also in response to submissions, the final Notice now clarifies that any decision will be given within a “reasonable time”. While a hard stop date would have been welcome, this addition at least imposes an expectation of timeliness on the EC.
• Information EC considers when processing requests. The EC can now consider an expanded range of information when processing a request for guidance. The EC can do this by looking at previous case law, decision-making practice and EC-level guidance letters and – importantly – reaching out to third parties in exceptional cases. While there are potential pitfalls with discussing applications with third parties (as noted in our earlier post and again below), the increased scope for fact-finding by the EC is welcome as it reduces the burden on applicants to include all the necessary information in their request and opens the door for a more collaborative process.

Improvements in final Notice… but pitfalls remain

While some of the pitfalls we identified in our earlier post have been resolved, others remain, namely:

• Lack of procedural guidelines when contacting third parties. The EC’s ability to contact third parties – and the limited procedural guidelines for when third parties are contacted – is the most potentially problematic issue. While the final Notice now expressly recognises the importance of safeguarding confidential information and following personal data rules, this is still likely to give rise to concerns by applicants about the protection of their confidential information, particularly when third parties are customers, competitors or suppliers. 
• Informal guidance process provides no protection against self-incrimination. Despite concerns raised in the earlier draft, the final Notice expressly states that the EC has the power to open proceedings based on applicant information. This means – in a notable difference from the US approach – the EC’s informal guidance process provides no protection against self-incrimination, and parties bear this risk when deciding to seek guidance. 

These remaining pitfalls mean that applicants may still hesitate to engage with the EC on issues where there is a real interest in providing guidance, thereby dampening the EC’s clear efforts. After the pandemic, and in the ever-unstable geopolitical climate, the EC understandably encourages parties seeking to weather these events through horizontal or vertical cooperation to reach out. Whether parties ultimately do so will depend on their assessment of the risks mentioned above, balanced against the potential value and protection offered by a guidance letter.