Comparative Guides

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4. Results: Answers
Cartels
5.
Leniency
5.1
Is a leniency programme in place in your jurisdiction? If so, how does this function?
United States

Answer ... The Antitrust Division of the Department of Justice (DOJ) has had a leniency programme since 1978. The programme provides incentives for companies and individuals to self-report cartel conduct in exchange for amnesty or reduced liability. The leniency programme provides for two types of leniency. Type A leniency is available to companies and individuals that voluntarily provide information about cartel activity before the DOJ has begun an investigation. Type B leniency may be available to companies that provide information about cartel conduct after the DOJ has already become aware of the conduct through other sources.

In order to receive amnesty, the applicant must admit that it engaged in a criminal violation of the antitrust laws and must terminate its participation in the illegal conduct. The amnesty applicant must also report the conduct with candour and completeness, and provide full and complete cooperation in the DOJ investigation until the investigation has been completed. This cooperation generally includes attorney proffers describing the conduct, production of documents and making employees available for interviews.

The DOJ also has an ‘amnesty plus’ programme. Under this programme, a company subject to a cartel investigation can obtain more lenient treatment by disclosing evidence of a second, unrelated conspiracy. Amnesty plus recipients receive amnesty in the newly identified conspiracy ‘plus’ a discount on the fine in the first conspiracy.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
5.2
What are the benefits of applying for leniency, both for the first mover and for subsequent applicants?
United States

Answer ... The primary benefit, available to the first company to self-report a cartel, is immunity from prosecution for the company and its current employees. The successful amnesty applicant thus avoids criminal penalties for itself, as well as incarceration and monetary penalties for its employees. In order to qualify for these benefits, the individuals must also cooperate in the DOJ investigation. The DOJ may also forgo prosecution of former employees.

The amnesty applicant is also eligible for reduced damages in follow-on civil litigation. More specifically, if it fulfils certain conditions, the amnesty applicant’s civil liability is limited to damages caused by its own conduct. The amnesty applicant can thus avoid joint and several liability and triple damages normally available against defendants in civil lawsuits.

Subsequent applicants will not receive amnesty, but may negotiate reduced fines based on the timeliness and value of their cooperation.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
5.3
What steps does a leniency application involve? What timeframe do these typically follow?
United States

Answer ... A leniency application is initiated by communication with the DOJ regarding the company’s involvement in potential cartel conduct. As part of this process, the DOJ can issue a marker to hold the company’s place as the first in line. The marker provides 30 days for the company to conduct an internal investigation and report on the related findings to the DOJ, although the DOJ will often extend this marker to provide additional time. Once the marker expires, the company may either withdraw its marker (if the internal investigation reveals no unlawful conduct) or perfect the marker by admitting the violation and cooperating with the DOJ investigation.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
5.4
What are the rights and obligations of the applicant during the leniency application and over the course of its cooperation with the enforcement authorities?
United States

Answer ... The applicant must report the wrongdoing with candour and completeness, and provide full, continuing and complete cooperation. The amnesty applicant effectively waives the right to challenge the existence of a criminal antitrust violation if it wants to maintain the benefits of amnesty, since it is required to admit that it engaged in such a violation. Nevertheless, the applicant reserves the right to withdraw its application and challenge a finding of a violation if it concludes during the course of the investigation that the conduct at issue did not in fact violate the antitrust laws.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
5.5
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?
United States

Answer ... The DOJ’s leniency programme is available to both companies and individuals. While leniency is generally sought by companies, individuals may seek leniency independently of the company and without the company’s knowledge. There is no antitrust-specific whistleblower statute in the United States. However, where a potential antitrust violation involves government contracts, whistleblowers may obtain a monetary award under the False Claims Act, up to as much as 25% of any resulting recovery by the federal government.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
5.6
Can leniency be denied or revoked? If so, on what grounds?
United States

Answer ... The DOJ can revoke leniency if the leniency applicant fails to satisfy the obligations described above.

For more information about this answer please contact: Djordje Petkoski from Shearman & Sterling LLP
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Cartels