On December 11, 2008, the Office of Fair Trading (“OFT”) published revised guidance on leniency applications made under the UK Competition Act 1998, and no action applications made in relation to the cartel offence under the Enterprise Act 2002. This final guidance expands on a draft guidance which was published in 2006 and provides background to the type of information required to perfect a “marker” in leniency/immunity applications when the applicant is the first to make an application and there is already a pre-existing civil/criminal investigation. The guidance also examines the circumstances in which the OFT might consider initiating a criminal investigation. In particular, it states that the OFT will only consider criminal investigations if there is likely to be evidence that an individual acted dishonestly to the detriment of the consumer. The guidance looks at a range of procedural issues, including use of information provided by leniency applicants, the conduct of internal investigations by companies, disclosure and transfer of information, and the consequences of a leniency applicant acting in bad faith.
In particular, the guidance distinguishes between four types of immunity/ leniency:
- Type A immunity, where a company is granted automatic civil immunity and all of its current and former employees and directors who cooperate with the OFT are granted automatic criminal immunity for cartel activity. This type of immunity is available when the company is the first to apply and there is no existing civil and/ or criminal investigation.
- Type B immunity, where a company is granted discretionary civil immunity, and all of its current and former employees and directors who cooperate with the OFT are granted discretionary criminal immunity for cartel activity. This type of immunity will be available when the undertaking is the first to apply, but there was already a pre-existing civil and/or criminal investigation.
- Type B leniency, where a company is granted a reduction of, but not immunity from, a financial penalty imposed under the Competition Act. This type of leniency is available where the undertaking was the first to apply, but there was already a pre-existing civil and/or criminal investigation into the relevant cartel activity.
- Type C leniency, where a company is granted a reduction of up to 50 percent of the level of a financial penalty imposed under the Competition Act. This type of leniency is available where the undertaking was not the first to apply, whether or not there was already a pre-existing civil and/or criminal investigation into the relevant cartel activity.
The guidance confirms that informal guidance is available on an anonymous basis when requested in “hypothetical” cases. Legal advisers are also able to determine what type of immunity or leniency is available for their client before the client’s identity is revealed to the OFT. The guidance also confirms that oral applications for immunity/leniency can be made when it is considered appropriate. The annex to the guidance contains a pro-forma corporate leniency agreement and a pro-forma individual no-action letter.