Transcript Presentation title

ICN Cartels Working Group
Application of leniency to
individuals
Stephen Blake
Cartels and Criminal Enforcement Group
UK Office of Fair Trading
27 January 2013
1
Contents
• Essential ingredients for an effective leniency
policy
• Background – UK cartel regime and leniency
programme
• Meeting requirements for an effective policy
• Challenges
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Essential ingredients for an
effective leniency policy
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Leniency – essential ingredients
● Maximum ‘up-front’ certainty for applicants
- Especially for those blowing the whistle
● Trust in the authority
- Transparency – including published guidance
- Reputation for fairness, accessibility and
approachability
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● Incentives to maintain cooperation
● Record of robust enforcement
- Track record of successful cases and stiff penalties
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Background
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UK cartel regime
• Dual regime
- Civil (administrative) regime directed at ‘undertakings’
• Article 101 TFEU and/or Competition Act 1998
- Criminal regime directed at individuals
•
Enterprise Act 2002
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• Regimes complementary
- Enforcement action may be taken under both regimes
• Against undertakings AND individuals
• May include parallel UK criminal enforcement where Article
101 is being applied by the European Commission
- Or only under one regime
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UK Leniency programme - outline
• Scope of leniency programme
- Limited to cartel conduct (but including RPM)
• Corporate immunity or leniency
- Immunity from fines or fine reduction (civil)
• Individual immunity
- Immunity from prosecution (criminal)
- Immunity from director disqualification
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● Conditions
- Genuine intention to confess
- Evidential threshold – depends on whether there is a
prior OFT investigation
- Complete and continuous cooperation
- In the case of immunity, the applicant must not be a
coercer
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Criminal immunity for individuals
● Where undertakings apply – three types of
applicant
- Type A – ‘First in’ and no pre-existing investigation:
automatic immunity (not available for coercer)
- Type B – ‘First in’ but pre-existing investigation:
discretionary immunity or leniency
- Type C - Not ‘first in’ and pre-existing investigation:
reduction in fine up to 50%
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● Availability of individual immunity where
undertakings apply
- Automatic ‘blanket’ criminal immunity for cooperating
employees in Type A cases
- No automatic ‘blanket’ criminal immunity in Type B
cases – may be available on a discretionary basis
- No automatic criminal immunity in Type C cases but
scope for individual immunity
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● Where there is no guarantee of individual
immunity
- Availability of confidential guidance
• Whether the case is being or likely to be investigated
criminally
• Whether individual immunity may be available
● Individuals may apply in their own right
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Director disqualification
● Immunity from director disqualification
- For all cooperating current and former directors
- Irrespective of whether applicant is Type A, B or C
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Meeting requirements for an
effective leniency policy
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Maximum ‘up-front’ certainty
● Clear guidance on evidential thresholds and
other conditions
- Including when individuals will be required to admit
participation in cartel offence, including dishonesty
- Narrow definition of when an undertaking or individual
will be considered a ‘coercer’
- OFT in the process of revising its leniency guidance to
make the process as clear and accessible as possible
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● Maximum certainty on interaction between the
regimes for undertakings and individuals
- Including in Type A cases guaranteed immunity for all
cooperating current and former employees and
directors
- Even if an undertaking is found to be a coercer,
individuals within the undertaking who did not play
coercing role will not be denied criminal immunity
● Availability of informal ‘no names’ guidance
● Availability of markers
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● Scope for anonymity when exploring
availability of immunity
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Trust in the authority
● Transparency
- Detailed published guidance
- Separate ‘quick guide’ to leniency for individuals
currently being drafted
● Accessibility and approachability
- Informal ‘no names’ guidance available
- Leniency contact persons named on OFT website
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● Fairness
- Commitment to erring in favour of the applicant where
there is genuinely a ‘close call’
- Stated aim of achieving reputation for fairness in
application of published guidance
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Incentives to maintain cooperation
● Clarity regarding scope of requirements
- Must be genuinely to assist the agency in efficiently
and effectively detecting, investigating and taking
enforcement action against the cartel
● Clarity regarding consequences of failure to
maintain cooperation
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● Timing of leniency agreement/no action letter
- Shortly prior to issue of SO or charging with cartel
offence
● OFT considering requirement for a senior
representative of the applicant to sign a
written commitment to cooperate at marker
stage
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Robust enforcement record
● Civil enforcement against undertakings
-
Examples of recent fines:
•
BA fined £58.5 million in Airline fuel surcharges case
•
RBS fined £28.5 million in Loans for professional services
firms case
● Criminal enforcement against individuals
-
Two prosecutions to date
Convictions in Marine hose cartel – prison sentences of between
2 ½ and 3 years
Further cases in pipeline
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● Director disqualification
- Between 5 and 7 years in Marine Hose case as part of
criminal proceedings
- No standalone director disqualification cases to date
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Challenges
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Challenges
● Non-alignment of incentives – individuals vs
undertakings
- Current requirement of ‘dishonesty’ for criminal
offence
- Absence of ‘plea bargaining’ for Type C cases
- Obtaining cooperation from former employees, in
particular if they are now employed by a competitor
not covered by leniency
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● Maintaining integrity of evidence
- Electronic evidence
- Witness evidence
● Reliance on accomplice evidence – credibility
● Creating an enforcement record
- ‘Chicken and egg’
- Avoiding sole reliance on leniency
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ICN Cartels Working Group
Application of leniency to
individuals
Stephen Blake
Cartels and Criminal Enforcement Group
UK Office of Fair Trading
27 January 2013
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