Cartels in South Africa

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Pieter Steyn

Trends and climate

Trends

Have there been any recent changes to the cartel regime? If so, have they had a significant impact on enforcement activity?

The most significant recent change is the criminalisation of hardcore cartel conduct as of May 1 2016. Directors and managers now face fines of up to R500,000 and up to 10 year’s imprisonment. Although there have not yet been any prosecutions, this is likely in the near future. One problem is that the Competition Commission cannot offer immunity from prosecution to the directors and managers of a successful leniency applicant as this falls within the powers of the National Prosecuting Authority (NPA). The NPA is not bound by the Competition Commission’s recommendations and its attitude is unclear. There are concerns that criminalisation may have a ‘chilling effect’ on applications under the commission’s cartel leniency policy until the NPA clarifies its approach in this regard.

Are there any proposals to reform or amend the existing cartel regime?

There are no proposals for reform, but in July 2017 the Competition Commission issued draft guidelines on information exchange for public comment. The guidelines clarify the commission’s approach on this issue. Although information exchange between competitors is not automatically prohibited by the Competition Act, it can be evidence of a cartel contravention and is generally viewed with suspicion by the commission.

Have there been any recent key cases?

In 2016 two cartel settlements included behavioural conditions which indicate a more imaginative approach by the Competition Commission to cartel prosecution rather than simply relying on penalties. The settlement with Sime Darby Hudson and Knight included, in addition to a penalty of R35 million, a requirement to:

  • invest R135 million in a new packaging and warehousing facility;
  • use the services of a Black Economic Empowerment distributor for some of its distribution requirements (with a specified minimum fee for the first year); and
  • assist such a distributor to become a viable business.

The settlement with ArcelorMittal South Africa included:

  • a penalty of R1.5 billion, which is the largest single cartel penalty ever; and
  • an undertaking by ArcelorMittal to:
    • cap its earnings before interest and tax on flat steel to 10%; and
    • incur capital expenditure of R4.64 billion for the next five years.

The robust zero tolerance approach of both the Competition Commission and the Competition Appeal Court to cartels was illustrated by the recent Competition Appeal Court judgment involving bicycle retailers in which the court agreed with the commission that silence at a meeting of competitors where cartel conduct is proposed is not in itself a sufficient defence. A firm must distance itself and make it clear that it disagrees and will not proceed with the proposed conduct.

Although most successful cartel prosecutions have resulted from leniency applications, the Competition Commission is increasingly making use of so called ‘dawn raids’. Four raids were conducted in 2014/15 and five in 2015/16 with seven having been conducted since March 31 2016. This development has been mirrored in other African countries (eg, Kenya, Botswana, Zambia and Malawi) and indicates increasing confidence and experience on the part of the competition authorities. It is important that firms prepare and train their staff on how to deal with raids.

Legal framework

Legislation

Which legislation applies to cartels and what are the relevant substantive provisions?

Section 4 of the Competition Act applies to cartels. Fixing prices and trading conditions, collusive tendering and dividing markets by allocating customers, suppliers, territories, goods or services are absolutely or per se prohibited and hardcore cartel conduct has also been criminalised. Other agreements, practices or arrangements between actual or potential competitors are prohibited (but not criminalised) if they have the effect of substantially preventing or lessening competition, unless such effect is outweighed by an efficiency, technological or other pre-competitive gain.

Institutions

Which bodies are the relevant regulatory and prosecutory authorities and what are their specific roles?

The Competition Commission investigates and prosecutes cartels – including granting immunity from penalties in terms of its leniency policy and concluding settlement agreements. However, the commission is not empowered to impose penalties. This power is vested with the Competition Tribunal. The tribunal is an administrative body which decides cartel prosecutions and approves cartel settlements. Tribunal decisions may be appealed to or reviewed by the Competition Appeal Court whose members are high court judges.

Are there any sectoral regulators with concurrent powers?

The Competition Commission has concurrent jurisdiction with other sectoral regulators and has concluded agreements with several of them in this regard, including:

  • the International Trade Administration;
  • the Department of Agriculture, Forestry and Fisheries;
  • the Postal Regulator;
  • the National Gambling Board;
  • the Independent Communications Authority;
  • the National Electricity Regulator; and
  • the Council for Medical Schemes.

Application

Does the legislation apply to both formal agreements and informal practices?

Yes.

Does the legislation apply to individuals, companies or both?

It applies to both.

Does the legislation subject companies to civil liability, criminal liability or both?

Companies that contravene the Competition Act are subject to penalties and civil liability in the form of damages claims by third parties in the civil courts. Companies do not attract criminal liability for cartel conduct, but the act provides that it is a criminal offence to:

  • contravene or fail to comply with an order of the Competition Tribunal or the Competition Appeal Court;
  • hinder or obstruct the administration of the act; or
  • try to improperly influence or act in contempt of the tribunal or the Competition Commission.

Does the legislation subject individuals to civil liability, criminal liability or both?

Directors and managers are subject to criminal liability if they cause a firm to engage in hardcore cartel conduct or knowingly acquiesce to such conduct. In addition to the criminal offences referred to above, it is a criminal offence to:

  • fail to comply with a Competition Commission summons;
  • fail to answer a Competition Commission question; or
  • knowingly provide false evidence to the Competition Commission.

Individuals may also – depending on the circumstances – incur civil liability and be subject to disciplinary proceedings in accordance with their employment contracts.

Where cartel conduct is punishable by both civil and criminal penalties, can the enforcement authority pursue both types of penalty? How does the authority decide which penalties to seek?

The Competition Commission does not have criminal jurisdiction and cannot initiate criminal prosecutions, this falls under the jurisdiction of the National Prosecuting Authority (NPA). The  commission may report the criminal offence to the NPA. The commission also cannot impose penalties (this falls under the jurisdiction of the Competition Tribunal) and damages claims must be initiated by the relevant third party in the High Court. In opposed cartel cases, the Competition Commission applies to the Competition Tribunal for the imposition of a penalty. In cartel settlement cases, the commission and the relevant third party agree on a penalty and then submit the settlement agreement to the tribunal for approval.

Are there any sector-specific offences or exemptions?

No.

To what extent, if any, does the legislation apply to extraterritorial conduct?

Under the Competition Act, the Competition Commission has jurisdiction over all economic activity within or having an effect in South Africa. Extraterritorial conduct having any effect in South Africa is accordingly subject to regulation under the Competition Act.

Investigations

Initiating an investigation

Who can initiate an investigation of potential cartel conduct?

The Competition Commission may initiate an investigation either on its own initiative or following a complaint by a third party or receipt of information from a whistleblower. However, the Competition Act provides that an investigation may not be initiated after the expiry of three years from the date on which the conduct ceased – there remains a debate about whether cessation only occurs once the effect of the conduct ceases and no case has definitively resolved this issue.

If an investigation is initiated by complainants or third parties, what rights (if any) do they have?

If the Competition Commission investigates a third-party complaint and decides not to refer it to the Competition Tribunal or prosecute, the third party may refer the complaint to the tribunal and privately prosecute the case in place of the commission and at the third party’s cost.

What obligations does a company have on learning that an investigation has commenced?

No obligations arise automatically on learning of an investigation. However, a company should immediately assess the risks arising from the investigation.

What obligations does a company have if it believes that an investigation is likely?

No obligations arise automatically. However, a company should immediately assess the risks arising from the investigation.

What are the potential consequences of failing to act or delaying action?

Immunity from penalties is available only to the firm which is ‘first to the door’. As such, delays may result if another member of the cartel applies for and receives immunity. The risk of individual criminal prosecution is now an important factor to be taken into consideration, especially regarding the decision of whether to apply for leniency. Directors and managers are likely to appoint their own legal advisers to protect their rights. It is important to carefully assess the evidence of a cartel contravention so that a fully informed decision may be taken on whether to apply for leniency.

Formal stages of investigation

What are the formal stages of and approximate timeframe for investigations?

There are no formal stages and it is for the Competition Commission to decide how to conduct its investigation. Under the Competition Act, the commission has one year from the date of the submission of a third-party complaint to investigate and decide whether to refer the matter to or prosecute it before the Competition Tribunal. This one-year period may be extended by agreement with the complainant (if any) or with the approval of the tribunal. There is no such time limit for investigations initiated by the Competition Commission.

Investigative powers

What investigative powers do the authorities have?

The Competition Commission has the right to:

  • summons witnesses;
  • require the delivery of documents; and
  • enter and search premises and seize documents and other property on the premises (so called ‘dawn raids’).

What is the geographic reach of public enforcement actions?

The Competition Commission’s enforcement actions are, practically speaking, limited to South Africa. However, in principle, Competition Tribunal orders and Competition Appeal Court judgments can be enforced outside South Africa – subject to compliance with relevant local laws – although, to date, such extraterritorial enforcement has not been sought.

When is court approval required to invoke these powers?

Court approval is required for a warrant to conduct a dawn raid, although a Competition Commission inspector may enter and search premises – other than residential premises – without a warrant, with the permission of the owner or person in control of the premises or if he or she has reasonable grounds to believe that a warrant would be issued, but that the delay would defeat the object or purpose of the entry and search.

Are searches of business and personal premises authorised? If so, which bodies carry out searches and will they wait for legal advisers to arrive?

Yes – see above. The searches are carried out by Competition Commission inspectors and police officers. They are not obliged to wait for legal advisers to arrive.

What level of cooperation with the authorities is required and what are the consequences for failing to cooperate?

Compliance with a warrant is legally required. It is a criminal offence to hinder, oppose, obstruct or unduly influence a Competition Commission inspector in performing his or her duties, which may incur a fine of up to R2,000 and a six-month jail term.

Is in-house legal advice or attorney work product protected by the law of privilege? Does this extend to the advice of in-house counsel?

Yes, but the communication must have been made in confidence for the purpose of obtaining legal advice and in a professional legal capacity. The Competition Act specifically allows the right to refuse the inspection or removal of privileged documents or articles. In such circumstances, the registrar or sheriff of the High Court may be requested to attach and remove them for safe custody until a court determines whether the information is privileged.

Are any other limitations imposed on investigatory powers in order to safeguard the rights of those under investigation?

Competition Commission inspectors cannot exceed the provisions of the warrant issued for an entry and search or enter and search premises without a warrant without complying with the requirements outlined above. To do so is a criminal offence, which may incur a fine of up to R2,000 and a six-month jail term.

The Competition Act sets out requirements for the conduct of an entry and search, including:

  • having strict regard for decency and order and each person’s right to dignity, freedom, security and privacy;
  • advising and allowing a person to exercise his or her right to be advised by an attorney before being questioned;
  • issuing receipts for any articles removed from the premises; and
  • using only reasonable force to overcome resistance to the entry and search.

A person summonsed by the Competition Commission is not obliged to answer any question if it is self-incriminating and any self-incriminating answer is not admissible in criminal proceedings against that person, except in cases of perjury or certain offences under the Competition Act relating to providing false information and failing to answer questions truthfully or fully.

What is the process for objecting to an authority’s exercise of its claimed powers?

One must apply to the courts or the Competition Tribunal for an order reviewing the Competition Commission’s conduct. One could also – depending on the circumstances – apply to the court, to set aside a warrant authorising an entry and search.

Publicity and confidentiality

What information about investigations will be made publicly available and at which stage(s) of the process?

The Competition Act allows the protection of confidential information and a leniency application under the Competition Commission’s leniency policy is undertaken on a confidential basis (although the commission is entitled to use such information, including in Competition Tribunal proceedings).

The Competition Commission’s media releases and other publications will not include information which is subject to confidentiality claims. The commission’s decision to investigate a cartel and refer or prosecute a cartel – as well as settlement agreements and Competition Tribunal judgments, in both cases excluding confidential information, (if any) – are made public.

Is any information automatically confidential and is confidentiality available on request?

Confidentiality must be claimed over information. The Competition Commission is bound by the confidentiality claim unless the Competition Tribunal determines otherwise on application by the commission or an interested third party.

International cooperation

Do the authorities in your jurisdiction cooperate with authorities in other jurisdictions?

The Competition Commission is an active member of the International Competition Network. The commission is increasingly focusing on regional as well as international cooperation. In 2016 10 Southern African authorities signed a cooperation agreement and the Competition Commission has signed bilateral cooperation agreements with the Kenyan, Mauritian, Brazilian, Russian, Indian, Chinese and European authorities and regional authorities (eg, the Common Market for Eastern and Southern Africa).

Do the relevant enforcement authorities request waivers so as to allow for increased cooperation with authorities in other jurisdictions? What are the consequences of declining to grant a waiver?

Waivers are occasionally requested. In practice, the Competition Commission generally does not take action against a firm which declines to grant a waiver, although one of the conditions of leniency, as well as in settlement agreements, is an obligation to cooperate fully with the commission. There have been no cases where leniency or immunity has been revoked, or a settlement agreement has been alleged to have been breached, as a result of a refusal to grant a waiver.

Decisions

How is a cartel investigation resolved? Are settlements, plea bargains or other negotiated resolutions available?

Cartels investigations are resolved either by a referral by the Competition Commission to the Competition Tribunal or a settlement agreement between the commission and the relevant firm.

What is the process for negotiating a settlement, plea bargain or other negotiated resolution? Do such resolutions require court or other approval?

There is no formal settlement process, but the Competition Commission is generally amenable to settlement negotiations on an ‘off the record’ basis and may offer discounts of between 10% and 50% off the penalty. Settlement agreements must be submitted to the Competition Tribunal for approval (the tribunal generally does not refuse such approval in practice). In a 2013 construction cartel matter, an innovative fast-track settlement process was used by the Competition Commission to incentivise firms to settle in return for reduced penalties.

If a settlement is not reached, what is the procedure for adjudicating a charge of cartel conduct?

The process is known as a referral to the Competition Tribunal and commences with a referral affidavit by the Competition Commission, to which the respondent firm must file an answering affidavit. The  commission may respond by filing a replying affidavit. The next stage is a discovery process with regard to relevant documents. There may be various interlocutory applications relating to points of law, the discovery process and other technical and procedural matters. A pre-hearing conference is usually convened before the tribunal to deal with matters relevant to the hearing. The tribunal may summons witnesses. Third parties with a material interest in the matter (eg, a complainant) may intervene in the proceedings with the tribunal’s consent.

Which party must prove its case? What is the relevant standard of proof?

The Competition Commission bears the primary onus of proving the respondent firm’s cartel conduct. The standard of proof is a balance of probabilities.

Is there a hearing? If so, what is the process for submitting evidence and testimony?

Yes, a formal hearing will be held before the Competition Tribunal. The tribunal hearing is generally public (in camera testimony must be approved by the tribunal on justifiable grounds) and is similar to court proceedings with each side able to cross examine the other’s witnesses. Witness statements are exchanged before the tribunal hearing.

What are the accused’s procedural rights?

The process is designed to give the respondent firm a fair and reasonable opportunity to defend itself. The respondent is entitled to:

  • have legal representation and raise points of law (eg, that the referral is time barred);
  • bring interlocutory applications (eg, for better discovery by the Competition Commission and further particulars on the matters set out in the commission’s referral affidavit); and
  • lead its own witnesses and experts and cross examine the Competition Commission’s witnesses and experts.

Appeal process

What is the appeal process?

Competition Tribunal decisions may be appealed by either the Competition Commission or the respondent firm to the Competition Appeal Court. Cross appeals by the respondent in the appeal are also permitted. A notice of appeal, the appeal record and heads of argument must be lodged with the court.

To what extent can the appeal body review the agency’s findings of fact, legal assessment and penalties?

The Competition Appeal Court is empowered to confirm, amend or set aside a Competition Tribunal decision or remit a matter back to the tribunal for a further hearing.

Penalties

Penalties for companies

What are the potential penalties for companies involved in a cartel?

Under the Competition Act, penalties may be up to 10% of the firm’s South African turnover and its exports from South Africa during the preceding financial year. Penalties are imposed by the Competition Tribunal and not the Competition Commission in a useful separation of powers, which gives the respondent firm some recourse if it is unable to agree a penalty with the commission as part of a settlement.

Are there guidelines in place for penalties? If not, how are penalties normally calculated?

The Competition Commission’s penalty guidelines are helpful as they set out the commission’s general approach – which is based on case law to date – towards calculating penalties. The starting point is calculating the so called ‘affected’ turnover, which is the annual turnover of the firm in South Africa and its exports from South Africa based on sales of products or services affected by the contravention.

The so-called ‘base’ amount is then calculated on a scale from zero to 30% of the affected turnover. The base amount is then multiplied by the number of years of participation in the contravention. The penalty can be adjusted upwards or downwards with regard to various aggravating and mitigating factors, but is always subject to the statutory 10% cap based on the firm’s total annual turnover (ie, not just affected turnover) in the financial year preceding that in which the penalty is imposed.

The Competition Commission’s penalty guidelines controversially provide that it may impute a penalty to the holding company of a cartel member and calculate the penalty having regard to the South African turnover of the holding company, as opposed to that of the cartel member only. The commission’s approach is open to challenge as parental liability is not provided for in the Competition Act and there has not yet been a case on this point.

Do the authorities take into account any penalties imposed in other jurisdictions?

Under the Competition Act, the Competition Tribunal must consider the following factors when determining an appropriate penalty:

  • the nature, duration, gravity and extent of the contravention;
  • any loss or damage suffered;
  • the respondent’s behaviour;
  • market circumstances;
  • the level of profit derived;
  • the degree of the respondent’s cooperation with the authorities; and
  • previous contraventions of the act.

However, this list is not necessarily exhaustive and the Competition Tribunal may take other factors into account, including if the cartel was active worldwide and not just in South Africa. However, the fact that penalties have been imposed in other jurisdictions (and their amount) would generally not be seen as a mitigating or relevant factor, particularly as the South African penalty is based on South African turnover and exports.

How can a company mitigate its exposure to fines?

First, by being the first to be granted leniency by the Competition Commission, in which case 100% immunity from penalties can be obtained – subject to complying with the conditions for immunity. If leniency is not available, exposure to penalties may be mitigated by means of a settlement with the commission. The commission may offer a 10% to 50% discount off the penalty. The size of the discount depends on various factors, including:

  • the level of cooperation and assistance offered to prosecute other cartel members;
  • the timing of the settlement (the sooner the better); and
  • proactive and full disclosure of other anti-competitive conduct.

If a settlement with the Competition Commission is not achieved and the commission refers the firm to the Competition Tribunal, the firm may make representations to the tribunal regarding the size of the penalty and mitigating factors. The tribunal’s decision on a penalty may also be appealed to the Competition Appeal Court.

Penalties for individuals

What are the potential penalties for individuals involved in a cartel?

From May 1 2016, directors and managers face fines of up to R500,000 and up to 10 year’s imprisonment. Although there have not yet been any prosecutions, this is likely in the near future. The Competition Commission’s penalty guidelines controversially provide that the commission may impute a penalty to the holding company of a cartel member and this may have personal liability implications for the directors and managers of the holding company.

Where a defence to a cartel offence exists, a criminal prosecution may still be possible under South Africa’s wide-ranging anti-corruption laws, although there have been no such cases dealing with cartels to date.

Do the authorities take into account any penalties imposed in other jurisdictions?

There have been no cases to date, but the imposition of penalties in other jurisdictions could be raised as a mitigating factor depending on the facts and circumstances of the particular case.

Is a company permitted to pay a penalty imposed on its employee?

Under the Companies Act, a company may not directly or indirectly pay any fine imposed on a director convicted of an offence. The term ‘director’ includes:

  • alternate directors;
  • former directors;
  • members of board or audit committees; and
  • certain company officers.

Is a company permitted to continue to employ an employee involved in cartel conduct?

Yes, it is for the company to decide whether to dismiss or take other disciplinary action against an employee involved in cartel conduct.

Private actions

Private damages actions

Can private actions for damages be brought in your jurisdiction? If so, who may assert such actions?

Yes, any person who has suffered loss or damage as a result of cartel conduct is entitled to bring a private damages claim in the civil courts. A certificate issued by the Competition Tribunal or Competition Appeal Court confirming that the cartel conduct contravened the Competition Act is conclusive proof of its contents and binding on the civil courts.

What relief may be awarded to successful claimants (eg, damages, costs, injunctive relief or attorneys’ fees)?

Direct, indirect and consequential losses and damages may be claimed. The civil courts usually award a costs order in favour of a successful litigant. However, such costs orders are usually awarded subject to a tariff, which in practice means that only a portion of the actual costs are recovered.

How are the amounts of any damages, costs or attorneys’ fees calculated?

The claimant must prove the actual losses and damages on a balance of probabilities.

Have there been any notable recent cases in which a private action was the subject of adjudication?

In practice, there have been few private enforcement actions. A class action in the 2010 bread cartel case is still pending. However, two significant damages claims have been brought against South African Airways (SAA) for abuse of its dominance by paying commissions to travel agents in order to incentivise them to divert customers to SAA flights. In February 2017 the High Court ordered SAA to pay Comair R1.16 billion. Most damages claims had previously been settled out of court (SAA had previously settled a claim by the liquidators of Nationwide Airlines for R325 million) and the Comair case was the first time that the High Court decided a damages case flowing from a competition contravention. Other cases relating to cartel conduct are in the pipeline (eg, Cape Town has instituted damages claims against certain construction firms which colluded with regard to the Cape Town stadium built for the 2010 FIFA World Cup).

Class actions

Can class actions be brought in your jurisdiction? If so, what is the procedure for such cases?

Yes, but there have been few cases to date (a class action in the 2010 bread cartel case is still pending). South Africa has no specific class action legislation and class actions are not recognised by South African common law. However, the Constitution permits class actions and the procedure for class actions has been developed by the Supreme Court of Appeal and the Constitutional Court. Certification of the class action by a court is the starting point and the matter then proceeds in accordance with the usual procedural rules of court.

Immunity and leniency

Immunity and leniency programmes

Is an immunity and leniency programme available for companies? If so, how does it operate?

Yes, the leniency policy has been very successful (most successful cartel prosecutions by the  Competition Commission have flowed from a leniency application). The successful applicant must be ‘first to the door’, (although, immunity was recently granted to a second applicant who was able to provide evidence that the first applicant could not supply) and make full disclosure of documents and information relating to the cartel and fully cooperate with the Competition Commission. Conditional immunity is initially granted until the case has been finally decided and the immunity becomes final. However, no exemption or immunity may be given to any cartel member, including the successful leniency applicant, with regard to possible civil damages claims by a third party.

Can the enforcement authority decline or withdraw leniency? If so, on what basis?

The leniency policy applies only with regard to hardcore cartel conduct:

  • of which the Competition Commission is unaware;
  • of which the Competition Commission is aware, but in relation to which it has insufficient information and has not yet initiated an investigation; and
  • in respect of which there is a pending or already initiated investigation, but where the Competition Commission is of the view that it lacks insufficient evidence to prosecute the cartel.

If the conduct disclosed falls outside these requirements or the applicant is not ‘first to the door’, the  commission could decline a leniency application.

Conditional immunity may be revoked if the applicant breaches the conditions – for example, by failing to cooperate fully with the Competition Commission or by providing false or misleading information. However, no such revocation has occurred to date.

Are there benefits for cooperators that do not qualify for immunity? If so, how are these benefits determined?

No, however, firms that do not qualify for immunity may seek to settle with the Competition Commission (see above).

What benefits (if any) are available for employees and former employees of a company that seeks leniency?

None, under the Competition Act, the Competition Commission may certify that a person is ‘deserving’ of leniency and make submissions to the National Prosecuting Authority (NPA) in support of leniency if such a person is prosecuted criminally for involvement in a cartel offence. However, the NPA is not bound by the Competition Commission’s certification or submissions.

Is an immunity or leniency programme specifically available for individuals? If so, how does it operate?

No, see above.

Have there been any notable recent cases in which a leniency application was the subject of adjudication?

No.

Criminal liability

Is immunity from criminal prosecution available? If so, how and under what conditions is immunity granted?

No, under the Competition Act, the Competition Commission may certify that a person is ‘deserving’ of leniency and make submissions to the NPA in support of leniency if such a person is prosecuted criminally for involvement in a cartel offence. However, the NPA is not bound by the Competition Commission’s certification or submissions.

Application procedure

What is the procedure for a leniency application?

A written application identifying the cartel conduct and its participants must be submitted. The identity of the applicant need not be disclosed at this stage. The Competition Commission then advises the applicant whether it is ‘first to the door’. If so, a so-called ‘first meeting’ is held. The applicant is required to reveal its full identity and allow the commission to inspect – but not make copies of – all relevant information, evidence and documents. If the commission decides the applicant qualifies for immunity, a second meeting is arranged with the commission to discuss and grant conditional immunity. A written conditional immunity agreement is concluded. A marker system is also available (see below).

What is the typical timeframe for consideration of a leniency application?

Timeframes are set out in the leniency policy. The Competition Commission must advise the applicant in writing or by phone within five days of or a reasonable period after receipt of the application if the applicant is not first to the door. The first meeting is usually arranged quite quickly and within a few weeks. The Competition Commission must advise the applicant in writing within five days of or a reasonable period after the first meeting as to whether the applicant qualifies for immunity. If so, the second meeting and signature of the conditional immunity agreement is usually arranged quite quickly and within a few weeks.

What information and evidence is required?

Full disclosure is required of all documents, information and other evidence (whether written or oral) relating to the cartel and in the applicant’s possession or under its control.

What information and evidence is disclosed to subjects of the investigation other than the leniency applicant?

Disclosure to other subjects of the investigation is made subject to the confidentiality provisions referred to below.

What level of cooperation is required from applicants?

Full cooperation is a condition of leniency. This includes full disclosure of all documents, information and other evidence and providing witnesses.

What confidentiality protection is offered to applicants?

The leniency process is undertaken on a confidential basis. Information provided by the applicant may be disclosed by the Competition Commission with the consent of the applicant, but such consent cannot be unreasonably withheld. However, the use of documents and information obtained from the applicant at the Competition Tribunal hearing does not amount to a breach of confidentiality. The Competition Act also provides protections for confidential information and it is prudent for an applicant to use these processes and not simply rely on the confidentiality provisions of the leniency policy.

Can the company apply for a marker? If so, under which conditions?

Yes, the marker application must be in writing and identify the applicant’s full name and address and the alleged cartel conduct and its participants and justify the need for a marker. The Competition Commission has discretion on whether to grant the marker. To perfect the marker, an immunity application (with all required information, evidence and documents) must be submitted within the timeframe decided by the Competition Commission. The time given to perfect a marker is determined by the commission on a case-by-case basis. Approximately 30 days is generally granted, but this can be extended on good cause shown.