From 1 October 2019, the ACCC's updated Immunity and Cooperation Policy for Cartel Conduct (the Policy) will apply to those seeking immunity for their involvement in cartel conduct, the Policy clarifying the ACCC's expectations of immunity applicants and addressing key legislative changes since its last update in 2014.
What is the Policy?
The Policy applies to 'cartel conduct' in contravention of the Competition and Consumer Act 2010 (Cth) (the Act) and offers the first party to report a cartel the opportunity to cooperate with the ACCC and obtain immunity from civil action and criminal prosecution. The ACCC assesses the criteria contained in the Policy to determine whether an applicant is eligible for immunity.
Cartel conduct includes making a contract, arrangement or understanding containing a 'cartel provision', giving effect to such a provision or being involved in such conduct in an 'ancillary capacity.'
Essentially, the prohibition on cartel conduct makes it unlawful for competitors to agree to engage in price fixing, allocate customers to each other, engaging in bid rigging, or intentionally restricting their supply of products or services.
The ACCC uses the Policy as a tool to identify and break up cartels, as it provides an incentive for a party to a cartel to disclose the illegal behaviour.
What are some of the changes?
- The Policy has narrowed in scope, so that it no longer applies to some other forms of anti-competitive conduct. Therefore, if the ACCC does not consider that the reported conduct satisfies the threshold of a cartel, immunity may not be granted. Further, if the person or corporation coming forward unilaterally sought to induce others to engage in cartel conduct then they will not get the benefit of the immunity.
- Applicants are required to enter into a cooperation agreement with the ACCC in order to get the benefit of the immunity.
- What the applicant for immunity needs to bring to the table has changed. Previously if the ACCC had already received advice that it had reasonable grounds to bring a case then immunity would be denied. Now the applicant needs to provide significant evidence that was previously unknown or something that materially advances the ACCC's investigation.
- Previously, corporations could also seek immunity for parent or subsidiary companies, current and former directors, and employees. The Policy now extends this "derivative corporate immunity" to include other companies with a common parent company, therefore expanding the derivative corporate immunity.
- Individual employees or directors of a company that have attempted to induce others to participate in a cartel can now be eligible for immunity, if they provide material assistance in proceedings against another party, such as their employer.
- Applicants must certify that they have complied with their obligations under the Policy, which includes conducting reasonable searches and providing all information and documents to the ACCC within their power, custody or control.
- The Policy sets out the circumstances in which information provided by an applicant for immunity may be used by the ACCC, including their identity or confidential information, and in what circumstances it may be used.
The updated Policy clarifies the application process for parties seeking immunity for involvement in cartel conduct from 1 October 2019 and should be reviewed carefully by anyone who suspects they might want to seek immunity. The ACCC has advised that for applications made under former policies, the application process will continue to be subject to the policy under which it was made.
Directors and employees should review the Policy carefully if they suspect that their company is engaging in cartel conduct.
The Policy reflects the ACCC's continued commitment to pursuing cartel conduct and that enforcement of such conduct remains an enduring priority for the ACCC in 2019.