Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

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4. Results: Answers
Is a leniency programme in place in your jurisdiction? If so, how does this function?

Answer ... Yes. Part 3 of the Office of Fair Trading’s (OFT) September 2012 “Guidance as to appropriate amount of penalty for substantive infringements of competition law” (which the Competition and Markets Authority (CMA) applies) outlines the corporate leniency policy applied in the United Kingdom. A more detailed explanation of the CMA’s leniency policy is outlined in the OFT’s July 2013 “Guidance on applications for leniency and no-action in cartel cases”.

The three types of leniency are as follows:

  • Type A: The applicant must be the first applicant and there must not be a pre-existing investigation by the CMA. The information provided must be enough for the CMA to take forward a credible investigation; and the company/individuals involved must provide all relevant information, accept participation in the cartel, cooperate with the CMA and cease participation in the cartel. The applicant should identify a “concrete basis for the suspicion” of a cartel and have a “genuine intention to confess”. If the CMA confirms availability, the undertaking must make an immediate application and provide details of its identity.
  • Type B: The applicant must be the first in a pre-existing investigation. Information provided must add significant value to the investigation and the applicant must comply with the other conditions for Type A above.
  • Type C: This is available for applicants that are coercers and/or not the first to apply, regardless of whether there is a pre-existing investigation. Information must add significant value to the investigation.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
What are the benefits of applying for leniency, both for the first mover and for subsequent applicants?

Answer ... Type A: Applicants that successfully meet this threshold will receive corporate immunity (no fine), blanket immunity from criminal prosecution for cooperating current or former individual employees/officers, and director disqualification protection. If the applicant coerced other undertakings to participate in the cartel, Type A immunity will not be available.

Type B: Applicants will benefit from discretionary corporate immunity from financial penalties or percentage fine reductions. Cooperating current or former individual employees and directors could benefit from discretionary immunity from criminal prosecution (‘blanket’ immunity or otherwise). Directors could benefit from protection against disqualification, provided that corporate immunity or a leniency reduction is granted. If the applicant coerced other undertakings to participate in the cartel, Type B leniency/immunity will not be available.

Type C: Applicants will benefit from a discretionary reduction in fines of up to 50% and discretionary immunity from criminal prosecution for specific individuals, to be agreed with the CMA. Director disqualification protection is available if a corporate leniency reduction is granted.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
What steps does a leniency application involve? What timeframe do these typically follow?

Answer ... In November 2017 the CMA issued an information note clarifying the process behind handling leniency applications across regulated sectors. The note confirms that the CMA should always be approached first, so that parties secure their place in the leniency ‘queue’ – this position will then determine corresponding positions with other regulators, without the need to submit concurrent leniency applications.

The CMA and regulators will then cooperate closely throughout the application process, with the CMA having responsibility for all initial inquiries and other regulators to which the case is eventually assigned having responsibility for confirming any markers/leniency applications. The CMA remains solely responsible for assessing criminal immunity applications.

There is no set timeframe between an applicant beginning the leniency application process and the CMA confirming its leniency status and accepting its application.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
What are the rights and obligations of the applicant during the leniency application and over the course of its cooperation with the enforcement authorities?

Answer ... In its initial application for leniency, a party must disclose its identity and submit information concerning:

  • the nature of the arrangement;
  • the timeframe of the arrangement;
  • the product and geographical markets within the scope of the arrangement;
  • any evidence held by the party; and
  • the names and locations of all other parties to the arrangement.

Prior to confirmation of its leniency status, the party will also need to submit:

  • a statement confirming (or amending where necessary) the information previously submitted, whether orally or in writing;
  • all relevant documentary evidence held; and
  • the identity of all employees and directors who may give evidence.

Complete cooperation is required of applicants on an ongoing basis while the CMA completes its investigation and during any subsequent proceedings.

During the leniency application process, the party’s identity is typically withheld from the other parties until a statement of objections has been distributed. In addition, submissions and statements made in relation to a leniency application are protected from disclosure under the EU Damages Directive.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
Is the leniency programme open to individuals? Can employees or former employees benefit from a leniency application filed by their employer? Do the authorities operate a programme for individual whistleblowers separate to the leniency programme?

Answer ... The CMA runs a whistleblower programme, allowing individuals who are aware of the existence of, but not actively involved in, a cartel to receive up to £100,000 for providing significant ‘inside information’ about such cartel. In February 2018 the CMA reported that this mechanism had resulted in a 30% rise in the number of cartel tip-offs and introduced a new “Be Safe, Not Sorry” campaign reinforcing the availability of the whistleblower regime. Individuals who actively participated in the cartel are not entitled to any financial remuneration when blowing the whistle, but will instead benefit from immunity from prosecution by submitting a leniency application.

A ‘no-action’ letter may also be granted where an individual whose employer has taken part in cartel activity is the first to report cartel conduct directly to the CMA in return for immunity from prosecution and/or director disqualification. In such instances, the relevant company may lose the chance to apply for Type A or B immunity.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP
Can leniency be denied or revoked? If so, on what grounds?

Answer ... Once the statement of objections has been issued, leniency applications will no longer be accepted. Similarly, applications will not be considered from individuals once they have been charged with a cartel offence.

The CMA exercises discretion as to whether a party may qualify for leniency. Where the applicant provides the CMA with details and evidence of activities for which it previously lacked grounds to investigate, a party will usually be denied leniency only where it is found to have coerced others into participating in the cartel.

With regard to applications relating to activities which are already the subject of a CMA investigation, the CMA has discretion as to whether it will accept any further applications. The CMA will weigh the potential benefits of granting leniency against the resources already expended in the investigation, taking into account the overall level of cooperation offered.

As discussed in question 5.4, the grant of leniency carries with it obligations as to the ongoing cooperation of the applicant. At any time before conclusion of the case, the CMA may withdraw a grant of leniency and take enforcement action against the applicant if it concludes that the party has breached such obligations. The CMA will notify the party first of the alleged non-compliance and of the intention to withdraw leniency, giving the party reasonable opportunity to remedy such breach where appropriate.

For more information about this answer please contact: Matthew Readings from Shearman & Sterling LLP