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OFT consultation on leniency in cartel cases

170/06    30 November 2006

The OFT has issued for consultation, final guidance on how it will give lenient treatment to companies and individuals who confess to cartel conduct. This guidance updates an interim note on the subject published by the OFT in 2005.

Download the draft final guidance note (pdf 312 kb).

Under the Competition Act 1998 and the EC Treaty, companies engaging in cartel conduct face financial penalties of up to 10 per cent of their worldwide turnover. Since the introduction of the Enterprise Act 2002, in June 2003, individuals engaging in cartel activities risk up to five years imprisonment and/or an unlimited fine. The OFT believes that it is sometimes in the public interest to offer lenient treatment to companies and individuals whose cartel conduct exposes them to these sanctions. In return for confessing to cartel involvement and helping the OFT to break cartels and punish other participants, the OFT can offer companies immunity from, or a reduction of, civil fines and to individuals it can offer 'no-action' i.e. immunity from criminal sanction.

In June 2005, the OFT held a Leniency Conference at which it sought views on its approach to offering lenient treatment in cartel cases. As a result, an interim note was published, designed to make the process of applying for lenient treatment more attractive and more transparent to would-be applicants. The OFT has now published a draft final guidance note, which reflects its experience in handling applications since July 2005. The deadline for consultation on this document is 31 January 2007.

The OFT believes that its approach is working well overall, but to improve the policy on lenient treatment further, the draft final guidance now contains additional clarification and new guidance on certain issues such as the interaction of the OFT's policies on lenient treatment with those of the European Commission. The draft final guidance also includes pro-forma versions of the OFT standard agreements for lenient treatment.

Simon Williams, OFT Director of Cartels, said:

'The OFT wishes to continue its policy of encouraging companies and individuals to confess their cartel behaviour in exchange for lenient treatment. We welcome people's views as to whether the proposed guidance succeeds in offering an attractive policy which is clear and helpful to would-be applicants in this increasingly important field.'

NOTES

1. The guidance provided by the OFT on its handling of  leniency and no-action applications in the July 2005 and November 2006 notes does not affect the framework principles of the OFT's leniency policy as set out in the OFT's guidance as to the appropriate amount of a penalty from December 2004 (pdf 146 kb) or (subject to minor changes) the OFT's no-action letter policy set out in its guidance on The cartel offence: guidance on the issue of no-action letters for individuals from April 2003 (pdf 126 kb). These minor changes to the OFT's no-action policy are expressly referred to in the draft final guidance.

2. The OFT took a leading role in the development of the ECN Model Leniency Programme; see the OFT press release 141/06 of 29 September 2006. The OFT's past leniency policy and practice was already in line with the provisions of the ECN Model Leniency Programme and no substantive adjustments were therefore required. However, the draft final guidance now makes express reference to the ECN Model Leniency Programme, in particular in relation to the possibility of making short form (or summary) leniency applications in relation to certain European cross-border cartel cases.
 
3. Companies or individuals wishing to apply for lenient treatment should contact Simon Williams, OFT Director of Cartels or Philipp Girardet, OFT Deputy Director of Cartels on 020 7211 8827 or by email at simon.williams@oft.gsi.gov.uk or philipp.girardet@oft.gsi.gov.uk. Approaches for confidential guidance on a no-names and 'hypothetical' basis should also be made directly to Simon Williams or Philipp Girardet.

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