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Cooperation imageImmunity and cooperation policies

 

About immunity and cooperation

Note on updated policy

The ACCC consulted on its immunity policy from 30 September 2013 to 28 October 2013. On 9 April 2014 it released a draft of its new Immunity and Cooperation Policy for Cartel Conduct. On 10 September 2014 the new policy was published.


Detection of cartels (in particular) is a key to deterrence and it is increasingly recognised that leniency or immunity policies provide a valuable detection mechanism for conduct that is otherwise highly secretive. 

The ACCC and has developed a policy to encourage cooperation and, in the case of cartels, an immunity policy to encourage whistleblowers.

See also MOU between CDPP and ACCC (CDDP website version (dated 2008) (includes Annex to Prosecution Policy and MOU))

The ACCC has set up a hotline for parties wishing to apply for or enquire about immunity:

+61 292303894

 

Immunity policy for cartel conduct

The current immunity policy for cartel conduct is designed to provide incentives for applicants to disclose cartel conduct by making a corporation or individual eligible for conditional immunity from ACCC proceedings (not from private actions)  in specified circumstances.  The key requirements for obtaining immunity are:

For corporations

The corporation applies for immunity under the policy and satisfies the following critieria:

  • the corporation is (or was) a party to the cartel;
  • admits its contraventions;
  • is the first to apply;
  • has not coerced others to participate in the cartel;
  • has ceased involvement or has indicated it will;
  • the admissions are a ‘corporate’ not merely an individual act;
  • the corporation has provided 'full, frank and truthful disclosure, and has cooperated fully and expeditiously while making the application, and undertakes to continue to do so, throughout the ACCC's invesetigation and any ensuing court proceedings'; and

the ACCC has not already received written legal advice that it has sufficient evidence to commence proceedings in relation to the cartel.

For individuals

The individual applies for immunity under the policy and satisfies the following critieria:

  • is or was a director, officer or employee of a corporation that is (or was) a party to the cartel;
  • admits to participating in the contravening conduct;
  • is the first to apply;
  • has not coerced others to participate in the cartel;
  • has ceased involvement or has indicated he/she will;
  • the individual has provided 'full, frank and truthful disclosure, and has cooperated fully and expeditiously while making the application, and undertakes to continue to do so, throughout the ACCC's invesetigation and any ensuing court proceedings'; and

the ACCC has not already received written legal advice that it has sufficient evidence to commence proceedings in relation to the cartel.

Criminal cartels

The ACCC does not have the power to provide immunity for criminal cartel conduct.  However, the CDPP has amended its prosecution policy to provide for the possibility of immunity in criminal cartel cases; it will receive advice from the ACCC and use the same criteria in determining whether immunity should be granted.

Where the CDPP considers the relevant criteria for immunity are met then, as a first step, it will 'ordinarily provide a letter of comfort to the applicant' (para 34), normally at the same time the ACCC grants conditional civil immunity (para 36).

Prior to instituting a prosecution against a participant in the cartel who does not hae immunity, the Director will provide to the applicant a written undertaking pursuant to section 9(6D) of the DPP Act. This undertaking grants criminal immunity subject to fulfilment of on-going obligations and conditions. Once these conditions are fulfilled by the immunity applicant, the immunity becomes final.

Where party does not qualify for immunity

Where a party does not qualify for the immunity policy it is still possible to obtain partial immunity or a reduced penalty under the ACCC’s cooperation policy.

 

Cooperation policy

The ACCC, Cooperation Policy for Enforcement Matters (July 2002) sets out the ACCC's position regarding immunity or leniency following cooperation in enforcement matters. The guidelines are expressed to be 'flexible and intended only as an indication of the factors the Commission will consider relevant when considering leniency'. Recognition of cooperation can take the form of complete or partial immunity, reduction in penalty or administrative settlement in lieu of litigation. It applies to all civil matters under the Act.

 

Articles and commentary

 

Videos (Immunity/Leniency Videos)

Leniency policies have led to the creation of some great videos/advertisements by competition agencies

In late August 2012 the ACCC released its cartel video, THE MARKER. Although this relates to the previous policy it remains relevant to the current policy.

See also:

Netherlands Competition Authority’s Leniency in Cartel Cases

Poland - Office of Competition and Consumer Protection

Singapore - Competition Commission - Cartels (WMV)

Sweden - Swedish Competition Authority 'Be the First to Tell' Video

 

Reports and reviews

In 2013 the ACCC undertook public consultation on its immunity policy (from 30 September 2013 to 28 October 2013). On 9 April 2014 it released a draft of its new Immunity and Cooperation Policy for Cartel Conduct. On 10 September 2014 the new policy was published.

 

Cases

Cadbury Schweppes Pty Ltd v Amcor Limited [2008] FCA 88
Justice Gordon
Discussion of legal professional privilege attaching o documents created in connection with ACCC proceedings.

[para 2] An interlocutory dispute has arisen in the damages proceedings. The Australian Competition and Consumer Commission ("ACCC") makes a claim for legal professional privilege and public interest immunity privilege in relation to specified documents created in connection with the ACCC proceeding. Amcor and Visy have discovered the documents in the damages proceedings, but the ACCC seeks to prevent them from producing those documents to Cadbury on discovery.

[para 46] ... The ACCC’s submissions and the evidence from its witnesses demonstrated a concern that the increasing threat of private suits for damages brought by cartel victims will interfere with the ACCC’s ability to obtain the cooperation from cartel participants necessary for it to bring and prosecute penalty actions. The interference was said to arise because potential cooperators will be deterred from coming forward, notwithstanding offers of leniency, by the prospect of having essentially given away the store in the inevitable damages actions. In other words, in considering whether to confess, the potential costs in damages may be seen by a cartel player to outweigh the potential savings in penalties. Distilling the point still further, one can see that the real concern of the ACCC - that is, the real deterrent to cooperation faced by the Amcors of the world - is damages exposure itself. In my view, the confidentiality and free-rider arguments ostensibly advanced here by the ACCC are, at best, a proxy for that concern, and at worst a smokescreen obscuring it. To be fair, the appropriate total level of private civil liability (ie, penalties plus damages) an actor should face for cartel conduct is a valid issue, and one which was long ago recognized by authorities and commentators in the United States in the context of cooperation and leniency: ...

[para 47] But to acknowledge the ACCC’s concern is not to approve of its proposed method for resolving that concern. On the contrary, the ACCC’s attempt to use common law privilege doctrine to protect cooperators when they are faced with private suits for damages, albeit partially successful here, appears to me to be misguided. Whether cartel whistleblowers such as Amcor or those who cooperate with the regulators after the commencement of penalty proceedings (either by settling like Visy or in some other manner) should be rewarded or encouraged by reduced exposure or enhanced protection in damages proceedings is a broad question of policy that should be addressed by the legislature, not by ad hoc judicial tinkering through the backdoor of privilege.

Cadbury Schweppes Pty Ltd v Amcor Limited (No 3) [2008] FCA 1668
Justice Gordon

[para 12] "I cannot accept that the ACCC itself was particularly concerned with immunity. The ACCC does not interview witnesses for the dominant or even secondary purpose of offering immunity. Its goal is to investigate and prosecute violations of the Trade Practices Act 1974 (Cth). If it could further that goal without having to offer anyone immunity, no doubt it would be quite happy to do so. The problem of course is that many witnesses potentially implicated in wrongdoing would be unwilling to assist without such immunity, and thus the ACCC offers immunity as a means to an end. "

 

Useful links

The Australian Competition and Consumer Commission Enforcement and Compliance Project

The Cartel Project
Launched April 2009 this is the home page for an "interdisciplinary empirical research project [which] will investigate how and why criminalisation of serious cartel conduct has become bipartisan policy in Australia."