According to data disclosed under a Freedom of Information Act request, the Office of Fair Trading ('OFT') accepted every one of the 25 leniency applications it received in 2010 compared with only 13 of the 15 applications it received in 2009. The 25 whistleblowers are understood to have provided the OFT with information on 'cartel activities' under the OFT's corporate leniency programme.  For this purpose, cartel activities include hard-core cartel conduct such as horizontal price fixing and market sharing as well as vertical price fixing (such as resale price maintenance).

Under the leniency programme, a company will benefit from either full immunity from civil fines or reduced fines despite having infringed the prohibition against anticompetitive activity. Individuals may also benefit under the OFT's parallel 'no-action' policy if their current or former employer makes a successful leniency application and they cooperate with the OFT's investigation.  This may provide immunity from criminal prosecution from the UK cartel offence as well as protection from director disqualification and asset discovery orders.

Given that the OFT accepted 100% of the applications it received last year (compared with only 87% of applications in 2009), the quality of the information received by the OFT would appear to have improved. The OFT offers leniency only where a whistleblower is the first to come forward and reveal details of a cartel or 'adds significant value' to an existing OFT cartel investigation.

As cartel conduct is by its nature covert (with individuals involved often going to great lengths to conceal its existence) it can be notoriously difficult for competition authorities to detect and punish. The leniency programme is therefore an important policy tool in the OFT's enforcement toolkit.  It can enable the OFT to obtain substantial evidence from businesses prepared to blow the whistle in exchange for a reduced penalty. In return, the company will be expected to provide all pre-existing written evidence relating to the cartel and offer witnesses to be interviewed and provide witness statements.

While companies may qualify for immunity from the OFT, it does not protect them from subsequent third-party civil claims that may piggyback on a cartel decision of a competition authority.   Further, as the effects of cartels are often not limited to the UK, companies should also consider whether to approach competition authorities in other jurisdictions under their parallel leniency programmes.

Partly as a result of its leniency programme, the OFT said it was opening more investigations and opened 11 cases last year, compared with only 3 in 2009.

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