The CCPC has recently launched a consultation on the proposed new Irish Administrative Leniency Policy, which once finalised, is expected to materially change the way in which leniency and immunity is sought in Ireland. We explore the intersection between the new leniency policy and the existing Criminal Immunity Programme and suggest five essential tips for seeking leniency.
The Competition (Amendment) Bill 2022 is expected to come into force later this year. The Bill aims to implement the ECN+ Directive (Directive 2019/1) and make a number of other substantial changes to Ireland’s existing competition laws. Following the enactment of the Bill, the Competition and Consumer Protection Commission (CCPC) will, for the first time, have the power to impose administrative financial sanctions on parties that have participated in a competition law infringement since 4 February 2021. In particular, the CCPC will have the power to impose fines on cartel participants, including individuals and undertakings, of up to €10 million or 10% of the total worldwide turnover, whichever is greater, subject to court approval. This represents an alternative enforcement route to criminal prosecution in the courts.
The Bill requires the CCPC to put in place a leniency programme to allow it to grant immunity from, or a reduction of, the administrative sanction in instances where the parties or undertakings are willing to disclose their participation in the cartel and cooperate with CCPC. Against this backdrop, the CCPC developed the Administrative Leniency Policy (ALP).
The CCPC opened a consultation process for interested third parties to make submissions on the ALP. Submissions were also welcomed on the other supplemental guidance notes, including the Guidance Note on the interaction between the Cartel Immunity Programme (CIP), and the Guidance Note on the CCPC’s Choice of Enforcement Regime for Breaches of Competition Law. Therefore, the ALP and guidance notes may be subject to change.
Overview of the ALP
Under the ALP, immunity from administrative financial sanctions is available to the first participant in a cartel that successfully applies for leniency. This is referred to as “Type 1 Leniency”. Any subsequent application from participants of the same cartel may benefit from of a reduction of up to 50% of the fine. This is referred to as “Type 2 Leniency”.
The ALP outlines the CCPC’s policy in considering applications for leniency and establishes the requirements that applicants must meet to obtain leniency. The framework for cooperation under the ALP is very similar to the framework under the existing CIP. It is based on the joint policy of the CCPC and the Director of Public Prosecutions (DPP) in considering applications for immunity from prosecution for criminal cartel offences.
Indeed, the ALP is intended to work in conjunction with the CIP. Under the Competition Act 2002 (as amended), certain infringements of the relevant competition laws may amount to a criminal offence. The Bill proposes to significantly increase the level of criminal financial sanctions that may be imposed on undertakings that are guilty of a cartel offence under the 2002 Act. Under the Bill, the Central Criminal Court may impose fines of up to €50 million (up from €10 million) or 20% (up from 10%) of annual turnover on an undertaking or individual, and/or up to 10 years in prison for individuals.
The CCPC has full discretion to pursue either a criminal or an administrative enforcement route for a cartel infringement. The CCPC, therefore, expects that, in the majority of cases, undertakings may seek to make a simultaneous application for immunity both under the ALP and the CIP. Receiving immunity under one leniency programme does not grant immunity under the other leniency programme if the CCPC decides to change the enforcement route, i.e., from criminal to civil or vice-versa.
The decision to submit an application under one or both leniency programmes is at the discretion of the undertaking. However, since the timing of the application under both the ALP and the CIP is highly important, it is generally advisable to submit simultaneous applications at the earliest possible opportunity. This is particularly the case with a CIP application, where timing is potentially determinative. This is because the CIP programme generally only offers immunity to the first applicant. Except for in exceptional circumstances, it does not offer a mechanism for providing immunity or a reduction in fines for subsequent applicants.
5 practical considerations for clients
The ALP and the guidance notes are not in force yet and may be subject to change following the submissions from third parties as part of the consultation. Indeed, the Bill has yet to come into force and may change prior to enactment. Nonetheless, here are five important preliminary practical considerations for clients when contemplating a leniency application under the ALP and/or the CIP:
- The process for applying for a “marker” under the ALP is the same as under the CIP. This should be done by approaching the CCPC through the Cartels Hotline. Companies that wish to make a simultaneous application under the ALP and the CIP should consider doing so at the marker stage. An applicant who holds a marker under both the CIP and the ALP, and which continues to comply with the requirements of both policies, will enjoy protection even if the enforcement route changes during the investigation.
- Where an application is made under both leniency procedures these will be dealt with concurrently by the CCPC, as far as practicable. Undertakings making a simultaneous application will be required to perfect both markers in accordance with the requirements of the two policies. That said, the information required to perfect a marker and the procedural steps are similar under both the ALP and the CIP.
- It appears that the format of the leniency applications will differ between the CIP and the ALP procedures. Based on the current draft of the ALP guidelines, ALP applicants are required to provide information for the purposes of perfecting a marker in writing. However, the CCPC may, upon the undertaking’s request, allow some or all of the information to be provided orally. By contrast, CIP applicants may provide all information for the purposes of perfecting a marker orally. It is not yet clear how simultaneous applications will operate in practice given the different submission requirements specified by the CCPC under the ALP and the CIP. It is also possible this may change following the CCPC’s consultation process.
- When a simultaneous application is made and a ‘marker’ is not available under either the CIP or the ALP, the other application can continue independently. For example, where immunity under the CIP is not available because the applicant is not the first to apply, the application may continue under the ALP, either for immunity or for a reduction in fine (if s/he is also not the first applicant under the ALP), where the CCPC ultimately chooses to pursue administrative penalties.
- Self-incriminatory evidence submitted by an applicant to which leniency was not granted will not be relied on by the CCPC against that undertaking in any subsequent administrative or criminal enforcement proceedings relating to that infringement. This is unless the evidence could have been obtained through public sources, is of a purely factual nature, it relates to another alleged cartel that was not disclosed by the applicant, or the applicant fails to comply with the requirements of the leniency programme.
We recommend seeking expert legal advice before attempting to navigate the intersection between the new Irish Administrative Leniency Policy and the existing Criminal Immunity Programme. For more information on seeking leniency from administrative financial sanctions or immunity from criminal prosecution, contact a member of our Competition & Antitrust team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.