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2015 ICN Annual Conference, Sydney
Cartel Working Group, Breakout Session 2
Detecting Cartels and
Gathering Information for
Investigations
Hiroshi Nakazato
Director of Information Analysis Office
Investigation Bureau
Japan Fair Trade Commission
April 30, 2015
1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
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1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
3
Good practice from
Anti-Cartel Enforcement Manual Ⅰ
Reactive Methods of Detecting Cartels
“It is good practice for agencies to have a formal
complaint system in place for receiving, handling and
responding to complaints.”
(Chapter4, Cartel Case Initiation p9)
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Investigation Proceedings
Beginning of Cases
- Report of Violation by the Public
- Detection of Violation by the JFTC’s own discretion
- Leniency application
Investigation
- Dawn Raids (On-the-spot Inspections)
- Orders to Report
- Interviews of Suspects
Decision of Measures
- Cease and Desist Order
- Surcharge Payment Order
- Criminal Accusation
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Beginning of Cases
Report of Violation by the Public
The JFTC, upon receipt of such a report, shall make
necessary investigations with respect to the case.
(Sec.45(2))
• Generally, the JFTC conducts supplementary research
in these cases.
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Form of complaints
• Legal requirements for filing a complaint do not exist.
(anonymous oral reporting is also possible)
• Where any submitted report specifies facts in writing in
accordance with the JFTC’s Rules, and when the JFTC
decides to take, or not to take, appropriate measures with
respect to the case referred to in the report, the JFTC shall
promptly notify that effect to the person who made the
report. (Sec.45(3) )
Next Slide: Requirements of the Rules
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Sec.33(1) of Rules on Investigations of JFTC:
A notice shall be given, where a report was made by a
document stating the matters indicated as follows:
(i) Name or title and address of a reporting person
(ii) Name or title of a person who commits or has
committed a violation
(iii) Details of the activity, time, place and other facts of a
violation
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Number of Reports of Violation
including Cartel Cases by the Public
(Excluding Reports from Procurement Agencies)
3000
2794
2500
2094
2000
1657
1646
1500
1277
1000
Number
Of Reports
500
0
2009
2010
2011
2012
2013
Fiscal Year
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1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
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Good practice from
Anti-Cartel Enforcement Manual Ⅱ
“Where possible, it may be necessary to protect the
identity of a complainant throughout the lifetime of a
case to avoid the possibility of reprisals ”
(Chapter4, Cartel Case Initiation 3.2, p8)
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Available Information from Complainants
Consumer
Competitor
Employee
Customer
[Cartel Case]
1. Parties participating in the cartel
agreement
2. Geographical region targeted by the
price-fixing
3. Duration of implementation of the
price-fixing
[Bid-rigging Case]
1. Parties participating in the bid-rigging
2. Details of rules for selecting an
expected bid winner
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Keep Confidential and Anonymous
• The JFTC keeps all reports confidential, and treats the
information in a full deliberate manner.
• Nevertheless, complainants often make reports anonymously.
• In order to share information and keep anonymity, the JFTC
accepts complaints including the following tools:
(1) Reporting by E-mail
(2) Using the Electric Reporting System on the JFTC’s
website
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Confidentiality is guaranteed to Leniency Applicants
• The JFTC does not proactively disclose the identity of a
leniency applicant or information concerning the applicant.
• However, in such cases where the leniency applicant
request to disclose, the identity of them and the fact about
the grant of leniency or reduction rate on surcharge, the
JFTC will make them publish on the its own website.
cf. general rules of tender system in Japan
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Point of discussion
• In your agency, how is the identity of informants or
whistleblowers protected from disclosure?
• Protected legally, or practically?
• If protected practically, what kinds of measures are
taken concretely? In particular, under criminal
procedures, how does your agency respond in cases
where respondents require your agency to disclose
information about informants or whistleblowers?
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1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
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Good practice from
Anti-Cartel Enforcement Manual Ⅲ‐1
“It is good practice for agencies to use a variety of
techniques and methods to detect cartels, including a
mix of both reactive and proactive methods that will
increase the opportunities for detecting cartels and
help demonstrate a particular agency’s enforcement
capacity.”
(Chapter4, Cartel Case Initiation p7)
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Good practice from
Anti-Cartel Enforcement Manual Ⅲ‐2
“It is good practice for agencies to develop good
working relationships with … international
counterparts and to have regular contact in order to
promote cooperation and the sharing of information
as far as permitted by applicable laws, treaties and/or
cooperation agreements.”
(Chapter4, Cartel Case Initiation p14)
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Framework for International Cooperation (Japan)
• Bilateral Antimonopoly Cooperation Agreement
Canada (2005), EU (2003), USA (1999)
• Economic Partnership Agreements - EPA
(competition chapter only)
Australia (2014), Chile (2007), Vietnam (2008),
Indonesia (2007), Thailand (2007), Singapore (2002)…
• MOU on Cooperation
KFTC: Korea (2014), CADE: Brazil (2014),
VCA: Vietnam (2013), DOJ: Philippines (2013)
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International Cartel Case (Japan)
• Case against Marine Hose Manufacturers
(2008)
• Case against Manufacturers of Cathode Ray
Tubes for Televisions (2009)
• Case against Bearing Manufacturers (2013)
• Case against International Ocean Shipping
Companies (2014)
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Proposal for Establishing the ICN Framework
for Promotion of Sharing Non-Confidential
Information for Cartel Enforcement (1)
-
Participating agencies register liaison officer(s)
Case team of agencies requests other participating agencies through liaison
officer to provide information on specific cartel cases
Requested agency provides the requested information at its discretion
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Proposal for Establishing the ICN Framework
for Promotion of Sharing Non-Confidential
Information for Cartel Enforcement (2)
 Merits of the framework
-
Participating agencies can seek information about
investigation of other agencies earlier and more easily.
Younger and smaller agencies may receive support from
experienced agencies which provide information about
actual cases and experience actual enforcement cooperation.
 Expected effect
Through the framework, CWG could foster
“Pick up the phone relationship”
for improved cooperation for effective cartel enforcement.
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Point of discussion
• What kind of merits would international
cooperation bring to your agency?
• How can we strengthen the international
cooperation relationship?
• How can ICN help its member agencies to
enhance their capacity to detect cartels?
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Conclusion
Report of violation by the public and detection of
violation by agency’s own authority are...
1. The methods of detecting cartels that will continue to
work complementary with leniency programs.
Especially, those methods could facilitate employees
and customers to provide information, which leniency
programs could not cover.
2. very important tools of detecting cartels for agencies
with little experience.
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If you have any questions or comments,
please contact me via email at
“[email protected]”