European Commission adopts whistleblowing procedure in merger control and state aid cases

 

European Commission adopts whistleblowing procedure in merger control and state aid cases

Knowledge from insiders can be useful to regulators and investigators seeking to root out and prove unlawful practices. 

On 9 January 2023, the European Commission announced that it has extended its anonymous antitrust whistleblower tool to include mergers and state aid matters (see its Commission Daily News MEX/23/103).

The tool was originally introduced in 2017 to allow any person to make an anonymous report to the Commission about cartels and other antitrust infringements. The Commission finds that since its launch, the procedure has allowed it to detect unlawful practices earlier and it has contributed to the success of the Commission’s investigations. The Commission reports that it tends to receive about 100 messages a year through this tool.

The Commission believes that the expanded scope of the tool will bring synergies in its enforcement armoury.  The expanded scope covers merger-related infringements, such as "gun jumping" (implementation of a notifiable merger before clearance by the Commission) and unlawful state aid.

The tool provides a mechanism for persons with knowledge of competition law infringements to send an anonymous message to the Commission. The messaging system is specifically encrypted and will allow for the Commission to ask for clarifications. It is run through a third party service provider which acts as an intermediary between the disclosing party and the Commission.

Whistleblowers are protected in the EU by DIRECTIVE (EU) 2019/1937 of 23 October 2019 whereby a person may not be punished or lose protection for reporting their concerns directly to the Commission.

Some observers remain sceptical about the quality and reliability of the information that such a tool can provide. Concerns have been raised that disgruntled employees and competitors may use the tool to report matters where they have an ‘axe to grind’. These are all factors that the Commission will weigh in the balance when assessing the reliability of the information. For now, at least, this development represents another risk factor for businesses to consider when determining their risk of the authority finding out about business practices which might otherwise go undetected.

https://competition-policy.ec.europa.eu/cartels/whistle-blower_en