As part of the anti-cartel enforcement regime, applicants who do not qualify for immunity will be dealt with by the ACCC pursuant to the Cooperation Policy.238
This policy sets out the conditions that will need to be fulfilled in order to secure a cooperation agreement, which can result in reduced penalties for those who cooperate with the ACCC. This policy only applies for civil breaches.239
Criminal cooperation is dealt with by the CDPP separately, pursuant to the Prosecution Policy.240
The Cooperation Policy received more attention by the interviewees then was anticipated. The responses were varied but centred upon the notions of certainty versus flexibility in the ACCC’s calculation of the penalty. The ACCC cannot ultimately decide the penalty, as this is a decision made by the court.241
Recent court decisions have overturned this position, which will impact upon the way the penalty was previously assessed.242
The interviewees were asked of their opinions in relation to cooperation prior to these cases and therefore their opinions reflect the position at the time of the interviews.
As a result of the policy’s operation, one interviewee stated that there can be a number of different outcomes for any given scenario in relation to cooperation and this largely depends upon the quality of evidence provided.243
The interviewee had experienced situations where an applicant has made it difficult for the ACCC to obtain information because they were not the first or second in. However, it was felt that the ACCC was ‘generally good’ at determining what they are willing to offer in
237 Interviewee 7 (Melbourne, 26th April 2013) 41.
238 This policy is now combined with the ACCC Immunity Policy: Australian Competition and
Consumer Commission, above n 27, s H. Full immunity may be pursuant to this section in rare and exceptional circumstances at the ACCC’s discretion [76].
239 For more see Chapter VIII: Subsequent Applications for Immunity: Lenient Treatment of ‘Second-
in’ Cartel Offenders - Australia, pg 277.
240 Commonwealth Department of Public Prosecutions, above n 100.
241 This position has been recently overturned by the court: See Chapter VIII, Subsequent
Applications for Immunity: Lenient Treatment of ‘Second-in’ Cartel Offenders - Australia, pg 277.
242 Ibid.
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exchange for cooperation. One interviewee reflected upon a positive experience in dealing with the ACCC: ‘[the] ACCC’s pretty good at giving recognition to cooperation and the court’s pretty good at accepting it, so I think the system’s working pretty well in terms of second order cooperation and discount on penalty.’244
Among those positive comments regarding the cooperation policy, many believed that the flexibility, by way of the ACCC’s discretion in determining the reduced penalty for cooperation, was an understandable part of the ACCC’s enforcement regime and that generally it was a ‘good system.’245
It was felt that there was a sufficient amount of negotiation that needed to take place in order to achieve this workability. Another strong point made by the interviewees was that there is a large amount of precedent relating to the Cooperation Policy and therefore this helps to reduce much of the uncertainty associated with the ACCC’s determination of penalty.246
It was conceded that in this situation, generally the clients of the interviewees do prefer certainty in terms of being able to know the potential penalty, before they apply for immunity.247
However, related to this was the acknowledgement that some degree of flexibility can be beneficial in these circumstances:
Interviewee: I suppose one of the issues with us, it could only ever be guidance as to what the ACCC would recommend because obviously in a lot of places overseas the regulator itself actually sets the penalty where here obviously the court does, so it’s up to the court to determine whether it’s appropriate in the circumstances, so it can only be guidance as to what the ACCC would be prepared to recommend to the court. But I think, you know, what you potentially lose from getting that certainty is the benefit of flexibility where in the particular circumstance of the case, you know, that level of discount may not be appropriate; it may be appropriate to go higher or it may be appropriate to go lower.248
Despite the positive comments made in relation to the inherent flexibility of the cooperation policy, many interviewees still believed that the policy could benefit from some ‘firming up’ in terms of listing a range of deductions and being more specific about the types of factors the ACCC will take into consideration and how
244 Ibid.
245 Ibid 17; Interviewee 5 (Sydney, 25th July 2013) 10-11.
246 Interviewee 5 (Sydney, 25th July 2013) 11; Interviewee 9 (Sydney, 15th July 2013) 17. 247 Interviewee 9 (Sydney, 15th July 2013) 17.
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this will affect the ACCC’s recommendation of penalty to the court, prior to the recent court decisions.249
When asked about the cooperation policy’s current operation, the ACCC indicated that prior to the Barbaro decision, they could only make a recommendation to the court and that it was at the court’s discretion as to the final determination of the penalty. The ACCC indicated that it cannot be tied to a certain percentage discount for cooperation, as is the case in some overseas jurisdictions.250 The ACCC
felt that the spirit of the cooperation policy is ‘more principle based than law based’ and acknowledged that this lack of clarity may lead to uncertainty for future immunity applicants.251
However, the ACCC also recognised the possibility of applicants ‘playing the policy’ if they were able to determine upfront what their potential discount would be.252
It was said that in this context, flexibility is of paramount importance and that they wished to uphold the current structure of the cooperation policy, in terms of not setting out penalty discount percentages.253
There was also a more radical suggestion by one interviewee that the cooperation policy should replace the Immunity Policy.254
The interviewee felt that the certainty that is associated with the upfront guarantee of the first-in immunity application leads to people ‘playing the policy’ and that this is an undesirable consequence.255
Instead, by adopting a cooperation policy as the primary enforcement tool, the interviewee believed this would be more akin to ‘responsive regulation’ as ‘you want it to be a system where it’s the spirit and substance of the rules that are important, not the black and white of the rules.’256 The interviewee acknowledged that this view
may be against those currently held by the legal profession but felt that the status quo was preferred by many lawyers as they can more easily manipulate the outcome for their client as a result:
249 Interviewee 5 (Sydney, 25th July 2013) 13; Interviewee 9 (Sydney, 15th July 2013) 17-18. See
Chapter VIII, Subsequent Applications for Immunity: Lenient Treatment of ‘Second-in’ Cartel Offenders - Australia, pg 277.
250 Interviewee 12 (Sydney, 19th August 2013) 43; Ibid. 251 Interviewee 11 (Sydney, 19th August 2013) 42. 252 Ibid 43.
253 These options are not possible following the Barbaro decision, see Chapter VIII, Subsequent
Applications for Immunity: Lenient Treatment of ‘Second-in’ Cartel Offenders - Australia, pg 277.
254 Interviewee 1 (Sydney, 9th July 2013) 9-10. 255 Ibid 10.
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Interviewee: It’s all about the rules. I mean that’s what lawyers are interested in, the more rules there are, you know, and they’ll talk about it as certainty but really it’s about having more rule to play with so that they can bend them to do what their clients wants, it’s very rude, but that’s what I think, yeah. Whereas if you want to be interested in the substance then you worry about principles and you become less predictable but you have to bring your heart and soul to it…257
The interviewee was of the strong opinion that having a cooperation policy instead of an immunity policy would encourage the regulatory enforcement agency to ‘do more work’ rather than simply putting out an immunity policy and ‘thinking everybody’s going to come running to them with the evidence.’258
Several interviewees expressed the view that certainty is paramount in the context of the cooperation policy, and the current design of the policy was ‘not working very well.’259
Given the general nature of the cooperation policy, some interviewees felt that this increases the likelihood that potential immunity applicants will take a ‘wait and see’ approach, which would reduce the very race that the ACCC is seeking to create:
Interviewee: So one of the huge advertised benefits of the immunity policy is up front certainty, right, so when I’m advising a client and the client says to me, should I go in? Then you weigh up the pros and cons of doing so. The pros and cons of immunity first in calculation are easier because the certainty is higher. Pros and cons on a second or later application are very hard because the certainty is much lower and so that lack of certainty acts as a disincentive and you’re much more likely to say well - we’ll just wait and see what happens, see if anyone else goes in, see how much the evidence is, see if we’re implicated, see how bad it gets.260
Those who believed that the current cooperation policy does not offer ‘any’ level of certainty asserted that there was a strong need for more transparency about its operation. Whilst some interviewees acknowledged it would be too difficult to implement a system that is as accurate as those in other jurisdictions, such as the European Union and Japan, there was a call for more guidance surrounding the
257 Ibid 11. 258 Ibid 12.
259 See, eg, Interviewee 4 (Sydney, 17th June) 20. 260 Ibid 21.
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calculation of the penalty to be recommended to the court.261
According to one interviewee, this is particularly important ‘because it is a dramatically different experience if you’re second in to what it is if you’re first in terms of the clarity of outcome.’262
These comments are largely redundant following the recent court decisions that will be discussed in Chapter VIII.
In summary, a majority of the interviewees exhibited a positive view of the Immunity Policy and its role in cartel enforcement detection. Many expressed serious doubts as to whether cartel conduct could be detected without the use of an Immunity Policy. From these discussions, it was apparent that most of the interviewees were strongly in favour of the aims and objectives of the Immunity Policy.
However, there was more divisive opinion when it came to discussion of the eligibility and cooperation requirements of the Immunity Policy. Whilst a majority of the interviewees were in favour of the removal of the ringleader exclusion, and many held a positive view of the new relationship between the ACCC and CDPP, there were stark differences in opinion in relation to whether a cartel recidivist should be eligible for immunity and how this would be achieved.
These divisions in opinion were also reflected in the discussions in relation to confidentiality, where opinion was split on whether the ACCC should refuse to disclose pertinent immunity information to third parties in their pursuit of cartel litigation as victims of the cartel. There was also strong opinion on both sides as to whether restitution should be reintroduced as a condition of Immunity.
The most controversial discussions were directed at whether cartel specific whistleblower protection should be introduced in Australia and whether a financial cartel informant system is a viable option to enhance cartel enforcement worldwide. There was also positive discussion in relation to the changes that need to be made to the ACCC Cooperation Policy.
Although no consensus was reached in relation to many issues, the interviews provided valuable empirical data and insight for further development, which was used to scaffold the remaining chapters in the thesis.
261 Interviewee 5 (Sydney, 25th July 2013) 13; Interviewee 9 (Sydney, 15th July 2013) 17-18. See
Chapter VIII, Subsequent Applications for Immunity: Lenient Treatment of ‘Second-in’ Cartel Offenders - Australia, pg 277.
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The remaining chapters will critically analyse the most controversial and important issues to emerge from the qualitative data in relation to eligibility and cooperation; issues of confidentiality and the impact on third parties; and alternatives to immunity.263
263 It is important to note that much of this discussion has changed given recent court decisions in
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VI ELIGIBILITY AND COOPERATION IN CARTEL IMMUNITY
This chapter will critically analyse the empirical findings of the eligibility and cooperation requirements of the Immunity Policy through a cross-comparative analysis of these aspects across the Canadian, United Kingdom and United States policies. It will conclude with a recommendation as to how the Immunity Policy should be adapted to these findings in accordance with the enhanced criteria of transparency, accountability, consistency and proportionality.
A Recidivism
As outlined in Chapter IV, the concept of introducing recidivism as an exclusionary provision in the Immunity Policy was the most controversial and divisive issue within the interviewee discussions.1 There were many arguments put forward in support of its introduction to the policy, but also discussion in relation to the challenges associated with the inclusion of recidivism as an automatic exclusion. This section will first explore the concept of recidivism generally, the difficulties associated with defining recidivism, and how recidivists are currently treated in criminal law before turning to how recidivists are treated within the context of cartel immunity, specifically in Australia, the United States, the United Kingdom and Canada.
This section will then critically analyse the prospect of introducing recidivism as an automatic exclusion for immunity, drawing on the experience of the European Union sentencing of recidivists in cartel matters and the South Korean policy relating to recidivism, giving due consideration to issues of transparency, accountability, consistency and proportionality. Based on this assessment, this section will conclude that recidivism is an important matter that should be included in the criteria for cartel immunity and, if not, what alternative measures should be taken instead.
1 See Chapter V, Cartel Recidivism, pg 134.
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