ACCC Chairman Graeme Samuel has stated that after 24 July 2009, serious cartel conduct will be viewed by the ACCC as criminal and will expose company executives to jail terms of up to 10 years.
The introduction of new criminal cartel laws by the Trade Practices Amendment (Cartel Conduct and other Measures) Act 2009 (Cth) (as discussed in our June 2009 edition1) raises questions regarding what type of cartel conduct the ACCC will view as ‘serious cartel conduct’ and refer to the Commonwealth Director of Public Prosecutions (CDPP) for criminal prosecution, and the extent to which individuals will be able to gain immunity from criminal prosecution by taking a ‘whistleblower’ role.
The ACCC has moved to answer these questions by releasing guidelines on its ‘Approach to Cartel Investigations’ and a revised Immunity policy for cartel conduct. These are discussed below.
Guidelines on enforcement of new cartel laws
The ACCC has released guidelines setting out its approach to cartel investigation. The guidelines outline the ACCC’s policy on what cartel conduct it will refer to the CDPP. According to the ACCC, when deciding whether to refer a case for prosecution, it will distinguish between ‘serious cartel conduct’ and conduct that is ‘less serious in nature, including relatively minor conduct’.
Relevant matters in distinguishing between ‘serious’ and ‘less serious’ cartel conduct (which are also set out in a Memorandum of Understanding between the ACCC and the CDPP) include:
- whether the conduct was longstanding or had a significant impact on the relevant market
- whether the conduct caused significant detriment to the public, or significant loss or damage to one or more customers of the alleged participants
- whether the alleged participants have a history of cartel conduct, and
- whether the value of the affected commerce exceeded $1 million within a 12-month period.
The guidelines also set out the ACCC’s wide investigative powers. These include the power to issue notices to require production of documents and information, and the power to apply for search warrants. Where the cartel may be subject to criminal prosecution the ACCC may involve the Australian Federal Police to assist with gathering evidence through the use of surveillance devices and telephone taps.
Immunity policy for cartel whistleblowers
The ACCC has also released its revised immunity policy (and associated interpretation guidelines) for cartel participants who blow the whistle on the activities of other cartel participants.
The policy and guidelines set out the conditions under which the ACCC will grant immunity from civil proceedings. For criminal prosecutions, the CDPP, following a recommendation from the ACCC, will decide whether to grant immunity from prosecution by applying the same criteria as in the ACCC’s immunity policy.
Under the policy, immunity will be granted where certain conditions are met, including that the person seeking immunity is the first to apply, was not the ‘clear leader’ in the cartel, and undertakes to provide full disclosure and cooperation. Where a corporation qualifies for immunity, all current and former directors, officers and employees of the corporation who admit their involvement in the cartel and provide full disclosure and cooperation will be eligible for ‘derivative immunity’ in the same form as the corporation. To obtain derivative immunity, the corporation must list all the individuals seeking derivative immunity at the time of making an application for corporate immunity. All forms of immunity are conditional on the relevant corporation or individual providing ongoing disclosure and cooperation. Final immunity is granted after the resolution of any proceedings against the other cartel participants.