Leniency Fundamentals
How to Design an Effective Leniency Program
Christopher Ries
Trial Attorney
Antitrust Division, U.S. Department of Justice
March 14-15, 2013
The views expressed in this presentation are not purported to represent those of the U.S. Department of Justice.
Leniency: Most Important Tool for
Uncovering Price-Fixing Cartels
• Gives full immunity to first qualifying cartel
member to confess and cooperate – no
penalties or punishment of corporation or its
executives
• Powerful tool for detecting cartels
– Creates race to report
– Creates distrust in cartels
– Creates incentives to defect from cartels
• Most large U.S. cartel cases involve leniency
applications
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Cornerstones of an Effective
Leniency Program
•
Threat of Severe Sanctions
•
Heightened Fear of Detection
•
Transparent Application of Program
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Threat of Severe Sanctions
• U.S.
–
–
–
Prison Terms for Executives
Criminal Fines
Treble Damages in Private Civil Actions
• Others - No Prison - Heavier Fines
• Risks Must outweigh Rewards of Crime
–
US Model – Fear of Individual Culpability
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Threat of Severe Sanctions
• Full immunity only available to the first
company to self report and meet the
conditions of the program
• The second company – even if second by
only a matter or minutes or hours – and
those that follow, as well as their
executives, face severe sanctions
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Fear of Detection
•
•
No Fear of Detection = No Incentive to Report
Tools to Increase Risk of Detection
– Corporate and Individual Leniency Policies
– Cartel profiling
• Proactive effort to investigate suspicious activity
in adjacent markets or in markets involving one
or more players from other cartels
• “Omnibus” question- Are you aware of cartel
activity in any other market/industry?
– Amnesty Plus
– Penalty Plus Policy
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Transparency
•
Explicitly Stated Standards and Policies
–
–
Models and Papers
Speeches
•
Consistency vs. Prosecutorial Discretion
•
20-fold increase in U.S. applications after we
revised our program to make it more
transparent and predictable
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U.S. Leniency Program: Leniency Steps
1. Applicant seeks leniency by approaching Division
2. Division confirms leniency is available
3. “Marker” given to secure place at front of line
4. Applicant “perfects” marker. Conditional leniency is
granted and conditional leniency letter provided to
applicant.
5. Investigation and prosecution of co-conspirators continues
6. Final leniency granted
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U.S. Leniency Program: Confidentiality Policy
• Division will treat as confidential the identity of leniency
applicants and any information obtained from the applicant.
• Division will not disclose a leniency applicant’s identity,
absent prior disclosure by or agreement with the applicant,
unless authorized by court order.
• Division will not disclose to foreign authorities information
obtained from a leniency application unless the leniency
applicant agrees to the disclosure.
– Division routinely obtains waivers to share information
with another jurisdiction in cases where the applicant
has sought and obtained leniency from that jurisdiction.
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