The OFT has published an extensive guidance paper on leniency and no-action applications with the aim of supplementing the existing arrangements in this area. It follows the publication of an earlier draft in July 2005 and the OFT seeks feedback on the proposed changes by the end of January.
It is worthwhile remembering the reasons for the leniency programme. It has been established as an incentive for those companies participating in cartels to co-operate with the competition authorities by providing information on the cartel. In return for the information and ongoing full co-operation, the company may receive immunity from fines. Furthermore individuals within the company may receive no-action guarantees, meaning they will not be prosecuted under the criminal provisions of the Enterprise Act for their dealings in the cartel.
The guidance expands on the OFT's position in a number of areas, including:
- Markers- the system whereby cartel participants may approach the OFT with a skeletal confession, pending fact gathering, and are given a guarantee that their position in the queue of whistle blowers will be saved for a period while they gather further information;
- No-names markers in limited cases where a company is simultaneously applying for leniency to the European Commission;
- The coercer test- the OFT has given further examples of situations amounting to undertakings coercing another market player to join a cartel and how this affects immunity applications by the coercing party; and
- Individual criminal liability under the enterprise Act and particularly situations where individual employees fail to co-operate with investigations.
As we reported in October's bulletin, the European Commission has also been reviewing its leniency regime to increase the predictability of the process and thus increase the incentive for offending parties to approach the Commission. The OFT's guidance deals with the interaction between the UK regime and the new Commission notice.
The European Competition Network also recently drafted a Model Leniency Notice with the aim of aligning leniency policies across Member States and relieving the burden of multi-jurisdictional filings. While the latter document is non-binding, its publication, along with the Commission and OFT's initiatives demonstrate that leniency is currently at the top of the competition agenda across Europe. For any company finding itself embroiled in a cartel, knowledge of how to benefit from the new leniency framework, both in the UK and in Brussels, could prove invaluable.