News on hybrid cartel proceedings: regulatory impartiality even after settlement negotiations have been terminated?


In its judgment of 1 February 2024 (C-251/22 P), the European Court of Justice (“ECJ”) clarified that the European Commission (“Commission”) does not have to conduct hybrid cartel proceedings with different case teams. The ECJ determined that the impartiality of the Commission is not automatically compromised. On the contrary, the principles of good administration and the handling of the administrative procedure within a reasonable period of time generally even require that hybrid cartel proceedings are conducted by the same case team responsible at the Commission.


In cartel investigations, the Commission has the option of proposing a settlement to the parties. If the parties agree to the settlement and meet the requirements outlined in the Settlement Notice, the Commission will reduce the amount of the fine to be imposed by 10 %. For the Commission, the added value of the settlement procedure lies in being able to “handle more cases with the same resources, thereby fostering the public interest in the Commission’s delivery of effective and timely punishment, while increasing overall deterrence” (Commission Notice on the conduct of settlement procedures). The purpose is therefore to reward the implementation of a simpler, shorter and more resource-efficient procedure.

The Commission will generally only engage in a settlement procedure if all parties have agreed to it. Hybrid cartel proceedings, which involve a settlement with some parties while others are subject to the standard investigation proceedings, are often complex and fail to achieve the desired efficiency gains in terms of time and effort. In such cases, the Commission is required to draft a more detailed statement of objections, provide broader access to the files, and, if requested by the parties not inclined to settle, conduct an oral hearing as well.

Hybrid proceedings therefore usually proceed only if every party initially shows a willingness to settle, and the Commission believes there is still sufficient added value in continuing the settlement procedure with the remaining parties despite one party withdrawing from negotiations.

If a party withdraws from the settlement negotiations in good time, it is no longer held to its previous settlement submissions. As a result, the Commission can no longer use these acknowledgements as evidence against that party and must perform an independent legal evaluation of the case, separate from the other parties’ settlement, and consider with impartiality all information and arguments presented.


The ECJ has, however, made it clear that it is not necessary to assign a new case team to deal with the case. The Commission’s approach does not infringe the presumption of innocence or the principle of impartiality, which must be distinguished from it and is part of the right to good administration. On the contrary, a change in the team responsible at the Commission “would even run counter to the principles of good administration and the handling of the administrative procedure within a reasonable period of time”. This applies even if the Commission staggers its decisions and first issues the settlement decision.

The Commission staff are therefore entrusted with disregarding any self-incriminating statements made by the parties during the settlement negotiations and continue to evaluate the case without bias.

Evaluation and Consequences in Practice

It is to be welcomed that hybrid cartel proceedings have not been made more difficult. If the Commission had to assign a new case team to take over where settlement negotiations have partially broken down, this could negate the efficiency benefits of continuing the settlement negotiations with the remaining parties. This could effectively give individual parties a veto right over the prospects of success of a settlement by the other parties.

Nevertheless, one can certainly be sceptical as to whether the same staff can actually make a completely neutral decision in the standard procedure after exposure to acknowledgments already made in settlement negotiations and submissions. Parties are therefore well advised to approach settlement negotiations with the Commission carefully and plan their cooperation strategy from the beginning. Should there be any clear signs of impartiality after the breakdown of settlement negotiations, these should be well documented.

It remains to be seen whether the legal certainty for the implementation of hybrid settlement proceedings resulting from the decision of the court of last instance will also have a positive effect on the EU leniency framework, which plays a central role for the Commission in the detection and prosecution of cartels. This is because the potential for an extra fine reduction through a settlement is likely to provide an additional incentive for companies to submit leniency applications. This applies at least when there is no certainty as to whether other cartel participants have already submitted applications, thus precluding the possibility of obtaining complete immunity from fines through a leniency application.

The comeback of dawn raids after the end of the coronavirus pandemic shows in any case that cartel investigations will remain a key enforcement priority for competition authorities in the European Union. If you have any questions about leniency applications or the benefits and risks of settlement proceedings or require further advice on cartel proceedings and related compliance issues, please do not hesitate to contact us.