Key Points:

While the concepts overall, and the ACCC's approach to these concepts, have not changed significantly, the draft Cartel Immunity Policy is clearer for non-lawyers.

The ACCC has released for public comment a draft of its new Immunity and Cooperation Policy for Cartel Conduct, accompanied by some Frequently Asked Questions (FAQs) – and it's apparent that the ACCC has followed through on its proposals put forward in 2013.

Comments on the draft Policy are due by 7 May 2014.

The October 2013 proposals for changes to the Immunity Policy for Cartel Conduct

Following its review of its policy, the ACCC put forward proposed changes to its Immunity Policy for Cartel Conduct, most importantly:

  • better co-ordination of the "dual track" processes in Australia for the granting of both civil and criminal immunity, by the Commonwealth Director of Public Prosecutions (DPP) moving to offer conditional immunity through a letter of comfort in a similar way to the ACCC's practice;
  • removing the requirement that an immunity applicant must not be the "clear leader" of the cartel;
  • confirming that in Australia, unlike some other jurisdictions, there would be no published level of discounts or guidelines for the size of recommended penalty reductions for "second in" and later immunity applicants; and
  • confirming there would be some benefits available from reporting a second unrelated cartel, for a second in party – the so-called "amnesty plus" policy.

The main changes in the draft Immunity and Cooperation Policy for Cartel Conduct 

The ACCC has: 

  • drafted the Policy in plain English; 
  • attempted to provide practical guidance;
  • reduced the Policy to a single document that incorporates the ACCC's position on leniency for co-operation (available to second in and subsequent cartel participants) and "amnesty-plus";
  • set out a clear statement of the process for an applicant seeking both civil and criminal immunity, including provision for a letter of comfort from the CDPP to be "generally" provided to the applicant around the same time as the ACCC grants conditional civil immunity;
  • set out a diagrammatic process chart that explains the dual pathways for applications for civil and criminal immunity, and leniency;
  • removed the "clear leader" condition, as proposed; and
  • explained an application for immunity in a set of seven simple steps.

No set discount rate for co-operation in busting cartels

The Policy does not incorporate any published level of discounts on penalties for leniency applicants in line with the ACCC's stated view at the time of the review in 2013, that penalties for such applicants should be assessed on a case-by-case basis by reference to the amount of co-operation provided to the ACCC. 

This means that the Policy stands in contrast to similar policies used in other jurisdictions, such as the European Union, which expressly state percentage discounts. Second in, or other leniency applicants in Australia, will continue to be uncertain at the time of approaching the ACCC, about the level of discount they can expect on any penalty for cartel conduct. This is not surprising, as the Federal Court imposes penalties in Australia, not the ACCC, and it will exercise its independent discretion in these matters, even if the ACCC recommends a particular level of penalty or discount from penalty.

However, incorporation of the ACCC's position on leniency for co-operation and amnesty-plus into the Policy is a sensible step, as is the clarity in drafting. 

In particular, alignment of the processes for applications for civil and criminal immunity is important for clients who wish to make applications for both, and need certainty that both will be provided. Previously it had been possible to receive a grant of conditional civil immunity, while the grant of conditional criminal immunity remained unresolved or outstanding. Encouraging the CDPP to provide a letter of comfort, rather than requiring an undertaking not to prosecute, should help to rectify that anomaly.

 FAQs a useful addition to the Cartel Policy 

The FAQs which now accompany the Policy, replacing the previously published guidelines to the Policy, are an innovative idea, as they place some practical context around the application of the Policy. 

The questions are arranged by reference to the seven process steps set out in the Policy.Questions in the FAQs include basic matters such as: "what is a marker?" and "why it is important to be the first person to apply for immunity?", but also address more sophisticated issues, such as "under what circumstances can the ACCC use the information I provide (after conditional immunity is granted) in civil or criminal proceedings against me?" 

The FAQs also include examples that assist in explaining the ACCC processes in a useful way. 

A focus on clear explanation, not legalese 

It is clear from the way in which the Policy and FAQs have been drafted that the ACCC is attempting to explain the Policy and processes broadly, and its focus is on members of the public who may not have sought legal advice.  While the concepts overall, and the ACCC's approach to these concepts, have not changed significantly, a reduction of the Policy to simple terms, and the inclusion of examples, are welcome.