Settlement procedures were introduced to speed up cartel enforcement. They allow the Commission to resolve straightforward cases quickly, reduce litigation, and reallocate resources to more complex investigations. For companies, they offer predictability and a reduced fine in exchange for cooperation and admission of guilt. It’s a pragmatic trade-off and, in principle, a useful one.
But problems emerge when not everyone settles. Hybrid proceedings, in which some parties settle and others don’t, introduce tension into the system. There are two types: parallel hybrids, where the decisions for settling and non-settling parties are adopted simultaneously, and staggered hybrids, where the settlement decision comes first, often months or years before the final decision.
The parallel model, while not ideal, at least preserves procedural simultaneity. The Commission can calibrate its language and avoid prejudging the outcome for non-settling parties. But staggered hybrids are different. The settlement decision comes early, often with detailed findings and public statements, while the rest of the case drags on. The risk? That findings directed at settling parties are later reused against those still presumed innocent.
This risk constitutes a fundamental rights problem. The presumption of innocence, guaranteed under Article 48 of the Charter of Fundamental Rights and Article 6(2) ECHR, applies even in administrative procedures with punitive outcomes. When one party’s admission becomes another’s accusation, that presumption starts to erode.
In staggered hybrid proceedings, procedural imbalance appears early. Once the Commission adopts a settlement decision, it often defines the cartel as a “single and continuous infringement” and describes the underlying facts in detail, including the roles played by non-settling undertakings. Although these companies have not admitted liability and are still entitled to defend themselves, they are, nevertheless, identified in the decision and associated with the infringement from the outset.
This is not limited to technical documentation. Commission press releases frequently reference the overall scope of the cartel, listing companies that are still under investigation. The reputational harm can be immediate, even before the final decision is adopted. More critically, when the Commission issues the full decision, the reasoning often mirrors the settlement. This practice effectively locks in the narrative before those parties have been properly heard.
This procedural flaw was central to Pometon. Although the company was not part of the initial settlement, the settlement decision described its conduct as if liability had already been established. The General Court ruled that this breached Pometon’s right under Article 48 of the Charter. A similar issue arose in Icap, where the Commission included reasoning in the settlement decision that clearly implied wrongdoing by Icap, despite its pending case. The Court again found that this undermined procedural fairness. In Scania, the Commission issued a settlement decision in 2016 but waited four years before adopting the full decision.
These examples illustrate a structural issue: in staggered hybrid proceedings, the Commission proceeds against one group while pre-judging the other. The non-settling undertakings are forced to defend themselves in a process where key findings may already have been published, accepted, and cited.
For the Commission, staggered hybrid proceedings represent not a procedural weakness, but a means of achieving early enforcement wins and public visibility. Settlement decisions allow it to close part of a case swiftly, impose fines, and demonstrate progress. This supports its deterrence agenda and frees up administrative capacity.
But this logic clashes with the procedural safeguards owed to non-settling parties. Public communications reinforce the impression of a completed case, even though full liability has not yet been established.
There’s also a strategic advantage. Once the narrative is set through the settlement decision, the Commission can rely on it to support its case against the remaining undertakings. It becomes harder for non-settling parties to contest facts already published and accepted in the public domain.
This model serves enforcement goals, at the cost of fairness. For a procedure that carries quasi-criminal consequences, that trade-off is increasingly hard to justify.
The courts have made it clear: staggered hybrid proceedings are not unlawful per se. In Pometon, the General Court emphasised that procedural fairness must be preserved, but it stopped short of prohibiting staggered hybrids altogether. That leaves the Commission with discretion – and a responsibility.
If banning staggered hybrid proceedings is not possible, the alternative is to impose stricter procedural safeguards and shift the default. The Commission should make parallel hybrid proceedings the procedural norm, and limit staggered hybrids to exceptional cases, subject to clear justification. There is no legal obligation to proceed in parallel, but as a matter of fairness, it should be the rule.
Where staggered proceedings remain necessary, the Commission must ensure that settlement decisions do not include findings or language that implicate non-settling parties. Factual references, narrative framing, and press releases should preserve neutrality. The reasoning in the final infringement decision must be developed independently, not reproduced from the earlier settlement.
In order to ensure this, the Commission could adopt a policy commitment. This would increase transparency and help restore trust in the hybrid model as procedurally fair.
Finally, judicial oversight must remain active. Courts have intervened when procedural boundaries were overstepped, but they have so far left the structure of staggered hybrids untouched. If the Commission continues to test those limits, the courts may need to revisit whether the current framework remains compatible with Article 48 of the Charter.
Until then, the Commission must recognize that efficiency cannot override rights. Hybrid proceedings will continue, but if the presumption of innocence is to mean anything, how they continue must change.
Co(E)mpetition Procedure 