The ACCC has reaffirmed its commitment to investigating and prosecuting cartel conduct with the release of an updated policy offering immunity from prosecution to whistleblowers who approach the Commission with evidence of cartel conduct.
The new policy restates and simplifies the ACCC's previous cartel immunity policy, with a few important changes.
In this eBulletin we provide an overview of the immunity process and explore some of the significant changes introduced by the new policy, including the abolition of the 'clear leader' disqualification for immunity applicants.
The immunity policy
Cartel conduct has for some time been a priority for the ACCC. By their very nature, many cartels are clandestine affairs that are difficult to investigate and prosecute. Recognising this fact, the ACCC actively encourages and incentivizes early cooperation and whistleblowing in relation to alleged cartels.
Immunity may be applied for either by corporate entities or individuals. Corporate applicants for immunity may also seek derivative immunity for their directors and staff involved in the cartel, and for their related bodies corporate.
In all instances, in order to be eligible for immunity the applicant must:
- be the first person or entity to have successfully applied for immunity in respect of the cartel in question; and
- make their application prior to the ACCC having received written legal advice that is has reasonable grounds to institute proceedings for at least one contravention of the Competition and Consumer Act in respect of the alleged cartel.
This latter requirement is arguably stricter than under the previous policy, which did not disentitle applicants from claiming immunity until such time as the ACCC had received written legal advice that it had "sufficient evidence to commence proceedings".
Another significant change from the previous policy is the abolition of the "clear leader" provisions. Previously, immunity was not available to any corporation or individual who was the clear leader of the alleged cartel. Under the new policy, the applicant need only show that they have not coerced others to participate in the cartel.
Corporations or individuals that have unilaterally attempted, without success, to get others to engage in cartel conduct are also ineligible for immunity under the new policy.
As was the case under the previous policy, immunity applicants must agree to fully co-operate with the ACCC in its investigation and subsequent prosecution of the alleged cartel and, at the time of application, must have either ceased or agreed to immediately cease their involvement in the cartel.
Applying for immunity
Consistent with the ACCC's aim of strongly incentivising early cooperation, immunity in respect of a particular cartel is only awarded to the first party to successfully apply. To encourage parties to come forward, the policy allows for early and anonymous requests to be made to determine whether any other party has yet applied for immunity in respect of a particular cartel.
A genuine applicant for immunity wishing to avail themselves of this right may contact the ACCC and request the placement of a 'marker' preserving, for a limited period of time, their place at the front of the line whilst they gather sufficient material to justify their claim for immunity. In response to such an enquiry, the ACCC will advise whether or not a marker is available, but will not otherwise disclose whether the alleged cartel is subject to investigation.
Following the placement of a marker, the immunity applicant must provide the ACCC a detailed description of the alleged cartel conduct. Except as required by law, the ACCC will not share confidential information provided by the immunity applicant, nor the identity of the applicant, with other regulators without the consent of the applicant. Such consent will however be sought as a matter of course, particularly for international matters.
Potential applicants for immunity should note that they and their legal representatives must keep strictly confidential the fact that they have applied for immunity, and any information that they have obtained through cooperating with the ACCC, unless the ACCC otherwise consents.
After the ACCC has had the opportunity to consider the information provided by the immunity applicant, it will inform the applicant whether they have met the conditions for immunity as specified in the policy. If the conditions are met, conditional immunity will be granted.
Any immunity will remain conditional, subject to that party's continued cooperation with the ACCC throughout the investigation and subsequent prosecution. Conditional immunity will only become final at the conclusion of any proceedings commenced by the ACCC in respect of the cartel, provided the immunity applicant has not breached any of the conditions of immunity.
If the matter involves allegations of potential criminal cartel conduct, the final decision on whether to grant immunity in respect of any criminal prosecution will rest with the Commonwealth Director of Public Prosecutions (DPP). In this situation, the initial application process to the ACCC is the same, however rather than providing a grant of conditional immunity, the ACCC will (if satisfied the conditions of the policy are met) make a recommendation to the DPP that criminal immunity be granted, subject to conditions. The DPP will exercise an independent discretion when considering applications for criminal immunity, but will give significant weight to the ACCC's recommendations.
If the DPP is satisfied, on a preliminary basis, that the applicant should be granted criminal immunity, they will initially provide a letter of comfort that the applicant meets the criteria of the Prosecution Policy of the Commonwealth. Prior to the commencement of any criminal prosecution, the DPP will then grant an undertaking under s9(6D) of the DPP Act, granting criminal immunity, subject to conditions including continued cooperation and full and frank disclosure.
Any parties who have failed to meet the "first successful applicant" requirement or are otherwise ineligible for immunity because they do not meet the conditions of the policy, may still receive more lenient treatment by cooperating with the ACCC. In rare and exceptional circumstances, the ACCC may even use its discretion to grant full immunity from ACCC-initiated civil proceedings to a cooperating party.