Plenary I: Overview of Anti-Cartel Enforcement Manual Chapters Compilation of best practices
Cartel Case Initiation
Main issues raised in the UNCTAD Cartel Detection and
Investigation Manual made for the “Komisi Pengawas
Persaingan Usaha” (KPPU) of Indonesia
Pierre M. Horna
Officer in charge of the COMPAL Programme
Competition and Consumer Policies Branch
ICN Cartel Workshop, Panama City, 2 October 2012
Content of the presentation:
1. Generalities
2. Cartel Case Initiation
3. Challenges
Generalities
• KPPU undertook a Peer Review in UNCTAD in 2009.
• One of the recommendations was the need for capacity building to better
deal with cartels.
• The UNCTAD Cartel Detection and Investigation Manual for KPPU was
drafted taking into account the special circumstances and challenges of the
Agency, particularly in accordance to the limited powers for searches,
inspections (dawn raids) of the competition Law.
• Focus on use of indirect evidence
• Among other international sources, ICN Anti-Cartel Enforcement Manual
chapters (4,5,6 and 8) were relevant for providing the structure of the
report adapted to Law #5 on Competition Policy.
Generalities (cont’)
• Each chapter of the Manual contains techniques and suggestions on how to
successfully use information to achieve better enforcement results. The manual
includes hypothetical cartel scenarios, questions designed to encourage
investigators to think about techniques and approaches that might be used to
uncover and investigate cartels.
• It incorporates checklists and workbook-style questions in order to encourage
readers to think about practical examples of how to structure an investigation
and practice their skills.
• The manual is divided into four sections: Section I. Methods for Detecting
Cartels; Section II. Investigation Strategy; Section III. Investigative
Techniques and Section IV, Techniques and Tools for the Future. The central
focus of all of them is the same: information.
Generalities (cont’)
• It is noted that the final section of the manual discusses methods to detect
and investigate cartels that are not presently available to the KPPU, but
which are anticipated and might be available to the KPPU in the future. In
addition, these methods have been already tested in other jurisdictions
under the COMPAL Programme. This experience might be also relevant
to draw comparisons.
• The manual was tested and validated during two national workshops:
– Jakarta, October 2011; and
– Bandung, September 2012.
2. Cartel Case Initiation
• The ICN Manual addresses the chapter on Cartel Case Initiation has five
sections whereby two (Methods of detecting cartel and Pre-investigatory phase
of cartel allegations) inspired the drafting of the UNCTAD tailor-made manual
for KPPU (Dec 2011). In this process of compiling best practices, the UNCTAD
Manual not only addressed the same section on "Methods of detecting cartel"
(reactive & proactive methods), but also included a comprehensive analysis of
substantive provisions of the relevant competition law of the recipient country
and including the classic approach of structural-behavioral analysis for assessing
the local dynamics of domestic markets at stake.
• Methods of Detecting Cartel:
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Cartels can be detected by using “reactive” methods:
Receipt of a complaint:
from a disgruntled member of the cartel/ prisoners dilemma;
Have a system/process in place to receive complaints;
Identification of priority sectors (specific sectors targeted for enforcement focus;
Protect the identity of the complainant.
2. Cartel Case Initiation (cont’)
• Receipt of information from informant or
whistleblower:
– from an employee or ex-employee, of a member of the
cartel, government;
– Keep the identity of the informant confidential. They may
use intermediates like lawyers or send information
anonymously;
– Seek evidence that can corroborate the information received
from an informant;
– Such information may be used to conduct a raid.
2. Cartel Case Initiation (cont’)
• Cartels can also be detected by using “proactive” methods:
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Education and outreach;
CA’s website, press releases, newsletters, workshop;
Cooperation with other agencies (local and international);
Analysis of previous cartel cases;
Analysis of other competition work;
Monitoring of industry activity;
Monitoring of the media & internet;
Attendance and other contact with industry representatives;
Use of economic analysis;
Information obtained from interviewing witnesses & respondents;
Use of intelligence;
Depending on the information obtained through the above methods, the CA may
consider initiating a complaint;
3. Challenges
What are the challenges in conducting the investigation?
• The reported parties sometime do not cooperate with KPPU. When they are
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summoned to come to the offices, they do not show up. The KPPU does not
have the power to make them force. Last year, the police began to assist
KPPU after the 3rd summon was issued by the KPPU.
When the witnesses provides the statement, they sometime refuse to sign it.
KPPU do not have the power to make them do so.
Internal: Lack of capacity of the personnel (personnel is not equipped with
sufficient capacity and authority to obtain evidences)
Very limited data on which to base analysis of the complaints and have a
better understanding of the market participants. The reason is that they do not
have the budget to acquire data and other institutions do not cooperate fully
with the KPPU.
Plenary I: Overview of Anti-Cartel Enforcement Manual Chapters Compilation of best practices
Thank you for your attention
Pierre.Horna@unctad.org
ICN Cartel Workshop, Panama City, 2 October 2012