Special Issues in Planning for Global Antitrust and Competition Law Compliance

• Pages: 161-171

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CHAPTER 15

SPECIAL ISSUES IN PLANNING FOR GLOBAL ANTITRUST

AND COMPETITION LAW COMPLIANCE

The competition and antitrust laws are implicated in a huge range of business activity—

merger control, unilateral conduct by potentially dominant players, and cartels. While a

comprehensive international compliance program will seek to cover all three areas, special focus

is appropriately given to preventing and detecting cartel behavior, since that is the area where

companies and individuals can face criminal sanctions, crippling fines, resource-draining civil

litigation and long-term reputational damage.

Even since the first edition of this book was prepared, several jurisdictions have begun, and

some have completed, the process of criminalizing cartel behavior and developing the

infrastructure to pursue these prosecutions. Until not very long ago the US was the only

competition law regime that criminalized cartels. Now, cartels are criminal in Australia, Austria,

Belgium, Brazil, Canada, Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Israel,

Italy, Japan, Macedonia, Nigeria, Norway, Poland, Romania, Russia, Slovenia, South Africa,

South Korea, Taipei, Turkey, and the UK.1 The Netherlands and New Zealand have pending

legislation that would criminalize cartels. Even many regimes without criminal cartel laws have

stepped up cartel enforcement, either via use of new laws or new investigating powers.

A. Leniency and Compliance Programs

New laws and investigatory powers have brought with them new efforts by authorities to

encourage self-reporting by companies who have participated in cartels. Authorities provide

incentives for such self-reporting through leniency programs, which have proliferated as the

various cartel enforcers have come to find that these programs are the single most effective

generator of cartel cases.

Many leniency programs are modeled, at least loosely, upon the U.S. program which was the

first, and was introduced in its current form in the 1990s. The common elements of these

leniency programs bear keeping in mind in developing a compliance program. In the event that a

company detects cartel behavior, one of the main objectives of the company response should be

preserving the availability of participation in the relevant leniency programs.

Typically, leniency is available only if an applicant is, inter alia, a) the first company to

approach the authority about the cartel; b) is not the ringleader of the cartel; c) takes steps to

terminate its involvement in the cartel; and d) provides full cooperation with the authorities in

the investigation of the cartel.

Therefore, since the maximum benefits of most leniency programs are reserved for the

company who reports first, companies will want to design a compliance program that a)

1. These countries criminalize cartels under their antitrust legislation or under general criminal laws

covering fraud or bid-rigging offenses. Penalties range from imprisonment to fines only, or both.