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Immunity and leniency
Immunity and leniency programmes
Is an immunity and leniency programme available for companies? If so, how does it operate?
The Australian Competition and Consumer Commission (ACCC) is responsible for granting civil immunity. This is available to the first eligible party to disclose the cartel conduct. The ‘first eligible party’ is the first to apply for immunity in respect of the cartel under the ACCC immunity policy.
Other criteria for eligibility include:
- the ACCC has received no legal advice that it has reasonable grounds to institute proceedings in relation to at least one contravention of the Competition and Consumer Act arising from the cartel conduct;
- the applicant has not coerced others to participate in the cartel;
- the applicant admits that its conduct may constitute a contravention of the Competition and Consumer Act; and
- the applicant either has ceased or indicates that it will cease its involvement in the cartel.
If the ACCC grants conditional immunity, the applicant must provide full, frank and truthful disclosure and cooperate fully and expeditiously on a continuing basis throughout the ACCC's investigation and any ensuing court proceedings. Conditional civil immunity will become final immunity after the resolution of any ensuing proceedings against the remaining cartel participants.
Can the enforcement authority decline or withdraw leniency? If so, on what basis?
Yes. The ACCC can decline immunity on the basis that the party is not 'first in' or does not meet the criteria for immunity. The ACCC can also revoke immunity where the applicant has breached the conditions of immunity (eg, where the applicant has not cooperated sufficiently with the ACCC's investigation).
Are there benefits for cooperators that do not qualify for immunity? If so, how are these benefits determined?
Cooperation with the ACCC may result in lower penalties. However, the ultimate decision as to the appropriate penalty or fine rests with the court.
In civil matters, the ACCC will make submissions to the court identifying the extent and value of any cooperation provided by a party to the proceedings. In certain circumstances, the ACCC and other parties may propose an agreed civil penalty to the court. However, the appropriate penalty is ultimately a matter for the court to determine. In doing so, the court will consider the extent to which the respondent has cooperated with the ACCC.
If a party cooperates with the ACCC during a criminal investigation, the ACCC may make a recommendation to the Office of the Commonwealth Director of Public Prosecutions (CDPP) regarding penalty discounts. Further, the CDPP may give concessions in exchange for a party's testimony in certain circumstances.
When determining the sentence, a court must take into account mitigating factors, including:
- contrition (eg, reparations);
- a guilty plea; and
- the level of cooperation.
What benefits (if any) are available for employees and former employees of a company that seeks leniency?
If a corporation qualifies for conditional immunity, it may seek derivative immunity for present and former directors, officers and employees who were involved in the cartel conduct.
At the time of applying for immunity, the corporation must list all former directors, officers and employees seeking derivative immunity who are known at that time to have been involved in the cartel conduct.
To be eligible for derivative immunity, the individual must be a present director, officer or employee of the corporation that qualifies for conditional immunity or have been a director, officer or employee of the corporation during the relevant period of cartel conduct. The employee must also satisfy the general requirements for eligibility, including providing full, frank and truthful disclosure.
Is an immunity or leniency programme specifically available for individuals? If so, how does it operate?
Yes. Immunity is available for individuals who are the first to disclose cartel conduct to the ACCC. The criteria for eligibility is the same as for employees. To maintain conditional immunity once granted, the individual must provide full, frank and truthful disclosure and cooperate fully and expeditiously on a continuing basis throughout the ACCC’s investigation and any ensuing court proceedings.
Have there been any notable recent cases in which a leniency application was the subject of adjudication?
Many of the cartel investigations that the ACCC conducts are initiated by an immunity application from one of the cartel participants. To remain eligible for immunity, the applicant must continue to fully cooperate during any ensuing court proceedings.
Recent completed proceedings initiated by the ACCC in which there has been an immunity applicant include:
- Prysmian Cavi E Sistemi SRL v ACCC  FCAFC 30;
- ACCC v v Yazaki Corporation  FCAFC 73; and
- CDPP v Nippon Yusen Kabushiki Kaisha  FCA 876.
Unilever was the immunity applicant in 2016 proceedings against Cussons, Woolworths and Colgate, and proceedings against the latter two parties were completed in that year (ACCC v Colgate-Palmolive Pty Ltd (No 3)  FCA 676 and ACCC v Colgate-Palmolive Pty Ltd (No 2)  FCA 528).
The Federal Court dismissed the proceedings against Cussons in 2017 (ACCC v Colgate-Palmolive Pty Ltd (No 4)  FCA 1590), but an appeal against that decision by the ACCC is ongoing at the time of writing.
Additionally, the CDPP's criminal proceedings against ANZ, Deutsche Bank, Citigroup and others are on foot at the time of writing, and JP Morgan is reportedly the immunity applicant.
Is immunity from criminal prosecution available? If so, how and under what conditions is immunity granted?
The CDPP is responsible for granting criminal immunity.
Although its decision will be based on a recommendation by the ACCC, the CDPP will exercise its own discretion when considering the recommendation.
The CDPP will grant criminal immunity where it considers that the applicant meets the criteria set out in Annexure B to the Prosecution Policy of the Commonwealth, which contains the CDPP immunity policy in relation to cartel conduct. This is the same criteria that the ACCC applies in civil cases when determining whether to grant civil immunity.
Before instituting criminal proceedings against the other cartel participants, the CDPP will provide to the applicant a letter of comfort and a written undertaking, granting immunity subject to fulfilment of ongoing obligations and conditions. Once these conditions have been fulfilled by the applicant, the immunity becomes final.
What is the procedure for a leniency application?
A corporation or individual may contact the Australian Competition and Consumer Commission (ACCC) and request a marker. This preserves, for a limited period, the applicant's 'first-in' status in seeking immunity.
The applicant will then prepare a proffer, which outlines the evidence that it can provide to the ACCC regarding the cartel.
If the ACCC is satisfied that the applicant has met the eligibility criteria, it will be granted conditional immunity. In criminal proceedings the ACCC will recommend to the Office of the Commonwealth Director of Public Prosecutions that the applicant be granted criminal immunity.
What is the typical timeframe for consideration of a leniency application?
The ACCC will inform an applicant if a marker is available as soon as possible after contact is made. The ACCC will generally grant an applicant around 28 days to make a proffer, although this period may be extended in certain circumstances. There is no guidance on the timeframe in which the ACCC will determine whether to grant conditional immunity based on the proffer. Once granted, the immunity will become final only after the resolution of any ensuing proceedings, which may take several years.
What information and evidence is required?
To obtain a marker, applicants must provide a description of the cartel conduct in sufficient detail to allow the ACCC to confirm that:
- no other corporation or individual has applied for immunity or obtained a marker in respect of the cartel; and
- it has received no written legal advice that it has reasonable grounds to institute proceedings in relation to the cartel conduct.
The proffer must disclose sufficient information to determine whether the applicant satisfies the criteria for conditional immunity. The ACCC may require an interview with one or more witnesses, or the production of certain documents to determine whether the applicant meets the conditions for immunity.
What information and evidence is disclosed to subjects of the investigation other than the leniency applicant?
The ACCC uses information provided in support of an immunity application to progress the application and take initial steps in its investigation against other cartel participants. If the ACCC commences proceedings, it will disclose to the subjects of the investigation all information and evidence that it is relying on to prove its case. Before proceedings are commenced, the ACCC need not disclose the information and evidence in its possession.
What level of cooperation is required from applicants?
Applicants must provide full, frank and truthful disclosure and cooperate fully and expeditiously on a continuing basis throughout the ACCC’s investigation and any ensuing court proceedings.
What confidentiality protection is offered to applicants?
While there are confidentiality measures in place, the circumstances in which the ACCC is entitled to disclose protected information (ie, information given to the ACCC in confidence, obtained under a Section 155 notice or given in confidence by a foreign government body) are broad. Such circumstances include where:
- the ACCC makes a disclosure in the performance of its duties or functions;
- the ACCC is required or permitted by law to make the disclosure (eg, when ordered by a court under subpoena, except in relation to protected cartel information (see below));
- disclosure is made to the minister, royal commission or designated government agencies to assist those agencies; and
- disclosure is made to a foreign government body or agency to perform or exercise its functions or powers.
Additional confidentiality measures are in place where the information relates to cartel conduct and is provided in confidence (referred to as 'protected cartel information'):
- If the ACCC is party to the proceedings, it is not required to produce protected cartel information to a court or tribunal, except with leave of a court or tribunal.
- If the ACCC is not a party to the proceedings (eg, a follow-on damages claim), it has discretion to disclose protected cartel information.
In exercising the discretion to disclose or order disclosure of protected cartel information, the court, tribunal or ACCC will have regard to:
- the need to avoid disruption to national and international law enforcement efforts;
- whether information was given by an informant;
- the protection or safety of the informant or associates;
- the fact that disclosure of the information may discourage informants from giving information in the future; and
- whether disclosure would be in the interests of justice or securing effective performance of the tribunal's functions.
Once proceedings are commenced, a party may apply to the court seeking a confidentiality order. The court has a wide discretion to grant confidentiality orders and these are generally granted in relation to documents that are commercially sensitive or prejudicial to the interests of certain parties.
Can the company apply for a marker? If so, under which conditions?
Yes. See above.
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