09 September 2019

Important Developments In The ACCC's Cartel Immunity Policy And Introduction Of Whistleblowing Tool

This article was written by Peta Stevenson and Jacqueline Ibrahim.

From 1 October 2019, the Australian Competition and Consumer Commission (ACCC) will apply an updated cartel immunity and cooperation policy, with the changes said to reflect the ACCC’s experiences from key criminal investigations undertaken to date. The changes include the requirement for a higher level of cooperation from immunity applicants, a narrower scope of matters which are covered by the policy and a clarification on those who may be eligible for immunity in cases of attempted cartel conduct.

The ACCC is also launching an online portal to allow whistleblowers to anonymously report alleged cartel conduct directly to the ACCC.

This Alert captures the essence of what you need to know about these significant developments.

Context

Under the ACCC’s immunity and cooperation policy, corporations or individuals may apply to the ACCC for immunity from civil proceedings by the ACCC and immunity from criminal prosecution by the Commonwealth Director of Public Prosecutions (CDPP) for cartel conduct, as defined by Australia’s Competition and Consumer Act 2010 (Cth) (CCA).

The ACCC’s immunity and co-operation policy has resulted in the overwhelming majority of the ACCC’s cartel cases.  It has been a powerful enforcement tool, based on game theory.

Key changes to the ACCC’s immunity and co-operation policy

The key changes to the immunity and co-operation policy will apply from 1 October 2019, and include:

  • Applicants for immunity will be required to enter into a cooperation agreement with the ACCC at the stage where the applicant is proffering oral and documentary evidence. The co-operation agreement will contain a detailed description of the cartel conduct.

    The co-operation agreement will set out the immunity applicant’s obligations to the ACCC, including their obligations to:
    • provide and preserve all evidence they possess about the cartel conduct, for the duration of any investigation and subsequent litigation;
    • procure the assistance of individuals to attend interviews conducted by the ACCC and providing written statements about their knowledge of the cartel conduct; and  
    • any other specific matters required by the ACCC on a case-by-case basis.

A template of the ACCC’s cooperation agreement is here.

  • Applicants for immunity will be required to certify, in writing, their compliance with their obligations to co-operate at the end of the ACCC’s evidence-gathering phase. This will include certifying they have conducted all reasonable searches, and made available all relevant witnesses, information and documents to the ACCC, to the extent that those matters are within their power, custody or control.

  • The scope of the policy has narrowed. It will only apply to cartel conduct - price-fixing, output restrictions, market sharing, customer allocation and bid-rigging.  It will expressly exclude other forms of anti-competitive arrangements, including concerted practices. As such, conditional immunity will not be granted if the ACCC forms a view that the immunity applicant’s conduct may be a concerted practice and is not cartel conduct. The applicant may, however, be able to obtain leniency for concerted practices pursuant to the ACCC’s cooperation policy for enforcement matters which has not been amended at this time.

  • Eligibility for immunity will not be available for unilateral attempts by corporations and/or individuals to engage in cartel conduct. However, individuals employed by a corporation which has unilaterally attempted to engage in cartel conduct will be eligible for immunity (where they blow the whistle on the corporation and subject to complying with conditions of immunity).

  • ACCC’s use of information provided by immunity applicant will be restricted. The ACCC has clarified that, where conditional immunity is granted, it will not use the information (including witness’ evidence) provided by the immunity applicant in civil proceedings against the applicant for possible breaches of another provision of the CCA.   Where immunity has been revoked, cancelled or otherwise withdrawn, the ACCC and/or the CDPP may use the information provided by an immunity applicant in any civil proceedings or criminal prosecutions relating to alleged breaches of the CCA.

  • Confidentiality has also been clarified.  The ACCC has indicated that if civil proceedings and/or criminal prosecutions are commenced for cartel conduct subject to a grant of immunity, the ACCC and/or the CDPP may be required to discover or otherwise disclose information provided to the ACCC under the immunity policy by the applicant – including the immunity applicant’s identity.

What are the key features of the whistleblower’s tool? 

Friday’s launch of an online portal for the anonymous reporting of potential cartel conduct stems from the ACCC’s desire to provide an avenue for persons to report possible cartel conduct without needing to disclose their identity to the ACCC or CDPP, presumably where those persons do not consider they need immunity or leniency for the cartel conduct they are reporting.

Key features of the portal include:

  • an encrypted platform for the safe reporting of anti-competitive wrongdoing to the ACCC.
  • an anonymous inbox, which allows persons to communicate with the ACCC, with the ability to obtain a password to log back into the portal for subsequent communication with ACCC investigators.
  • the removal of the IP address from which the report is made, to maintain anonymity of a whistleblower.

A specific portal for the anonymous reporting of conduct in the construction industry has been separately established.

These changes represent significant developments in the ACCC’s approach to the enforcement of Australia’s cartel laws, and a recognition of the need to engage with individuals involved in a way that preserves their confidentiality.

What remains unchanged?

In broad terms, the general process in which immunity applications are considered by the ACCC is largely unchanged and the detection, and prosecution, of corporations and individuals involved in serious criminal cartels will remain a key priority for the ACCC.

The ACCC will also remain responsible for granting civil immunity, with the CDPP responsible for granting criminal immunity.

All immunity applications received by the ACCC before 1 October 2019 will be assessed under the current policy, being the ACCC immunity & cooperation policy 2014.

A flowchart summarising the immunity process is set out below[1]:



For more information, please see the ACCC immunity & cooperation policy for cartel conduct - October 2019 or contact one of our expert partners in competition law and regulation.


[1] Extract from page 10, ACCC immunity & cooperation policy for cartel conduct - October 2019.

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