CMA, SFO, MOU, ACCC, CDPP… in the context of recent UK and Australian cartel reforms and clarifications, these are the authorities involved in deciding whether you will face criminal proceedings for cartel conduct.

We have been posting recently about the ACCC’s consultation in relation to its drafts of the Australian immunity and cooperation policy for cartel conduct.  The UK has also been busy with reforms in the cartel space (see one of ourprevious blog posts).  Most recently, the Serious Fraud Office and the Competition and Markets Authority (CMA) have signed a memorandum of understanding (MOU) about cooperation in respect of the criminal cartel offence in the UK.

By way of background, the CMA became fully operational on 1 April 2014, bringing together the UK Competition Commission and the competition and certain consumer functions of the UK Office of Fair Trading (see our recentblog post).  The SFO is the UK’s government department responsible for investigating and prosecuting serious or complex fraud, bribery and corruption.

Clearly, when it comes to cartels, the remit of the CMA and SFO could overlap.  The recent MOU records the basis on which the two UK authorities will cooperate to investigate and/or prosecute individuals for the criminal cartel offence, established by section 188 of the UK Enterprise Act 2002, where serious or complex fraud is suspected.

The MOU is publically available.  There are some key differences between the UK processes as set out in the MOU, and the draft ACCC immunity and cooperation policy for cartel conduct, including:

  • Who investigates criminal proceedings:
    • In Australia, the investigation of an alleged cartel offence is carried out by the ACCC, as the Office of the Commonwealth Director of Public Prosecutions (CDPP) is not an investigative agency.
    • In the UK, the CMA undertakes the initial criminal enquiries (if appropriate) but may refer the matter to the SFO if the CMA considers that the investigation would be more appropriately dealt with by the SFO.
  • Who institutes criminal proceedings:
    • In Australia, the CDPP, not the ACCC, is responsible for the prosecution of offences relating to cartel conduct.
    • In the UK, both the CMA and the Director of the SFO can institute proceedings for the criminal cartel offence.
  • Who grants immunity from criminal proceedings:
    • In Australia, if the ACCC considers that an immunity applicant is eligible for civil immunity, it will, where relevant, make a recommendation to the CDPP to grant criminal immunity.  However, the CDPP is responsible for granting criminal immunity and exercises an independent discretion when considering the ACCC’s recommendation.  While this technically gives rise to a risk that the CDPP may not accept a recommendation from the ACCC, it is generally recognised that there would be material failings in Australia’s immunity policy if there was not a high degree of certainty that criminal immunity will also be granted.
    • In the UK, decisions in respect of leniency and no-action letters rest with the CMA (in consultation with the SFO if the CMA’s decision could impact the outcome of an existing cartel investigation or prosecution of the SFO).  Moreover, if the CMA has given a person a no-action letter, the SFO may not attempt to prosecute that individual for the cartel conduct using another offence (such as conspiracy to defraud).

The fact that Australia and the UK are making reforms to fine tune cartel investigations and prosecutions highlights the continuing emphasis placed by regulators on the enforcement of these prohibitions.

Submissions in relation to the Australian draft immunity and cooperation policy and FAQs closed on 7 May 2014.  We’ll keep you updated on the release of the finalised policy.