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Beaton-Wells, C --- "Forks in the Road: Challenges Facing the ACCC's Immunity Policy for Cartel Conduct (Part 2)" [2008] UMelbLRS 8

Last Updated: 28 September 2009

Forks in the road: Challenges facing the
ACCC’s immunity policy for cartel conduct:

Part 2*

Caron Beaton-Wells†

For the ACCC there are ‘forks in the road’ in deciding how to deal with the
interaction between its highly acclaimed Immunity Policy for Cartel
Conduct and (1) the criminalisation of serious cartel conduct; (2) the rise in
private enforcement and damages claims in relation to cartel conduct; (3) the
increased significance of cartel case settlement or, in the criminal context,
plea negotiation; and (4) the potential strategy of offering alternative financial
rewards for cartel information. In relation to each of these, this article
(published in two parts) explores the issues involved; the ACCC’s current
proposals for dealing with them (to the extent any such proposals exist);
overseas models for tackling the issues; and the way forward in meeting the
challenges and/or harnessing the opportunities presented. Part 1 published
in the previous issue, dealt with criminalisation and private enforcement.
Part 2 of the article deals with settlements and alternative rewards.

4 Immunity policy and settlement

Settlement of cartel cases (or plea bargaining or negotiation, as it is generally
referred to in the criminal context) is another ‘hot topic’ currently amongst
antitrust enforcers. There have been reports on the subject issued by both the
Organisation for Economic Cooperation and Development (OECD) and the
International Competition Network (ICN),1 as well as by the regulatory
authorities in the European Community and Canada in just the last two years.2
While an immunity policy that offers full immunity to the first-in applicant

* This is Part 2 of an article, Part 1 of which was published as ‘Forks in the Road: Challenges
facing the ACCC’s immunity policy for cartel conduct: Part 1’ (2008) 16 CCLJ 71.
† Director of Studies, Competition Law, Melbourne Law School, University of Melbourne
Law School. This article is based on a paper delivered at the Competition Law Conference,
Sydney, Australia, May 2008. The author is grateful to Brent Fisse for comments on an
earlier draft and Christopher Tran for research assistance in preparing this article. The usual
disclaimers apply.
1 Organisation for Economic Cooperation and Development (OECD), Directorate for
Financial and Enterprise Affairs Competition Committee, Plea Bargaining/Settlement of
Cartel Cases, DAF/COMP(2007)38, at <http://www.oecd.org/dataoecd/
12/36/40080239.pdf> (accessed 8 May 2008); International Competition Network, Cartels
Working Group, Subgroup 1 — General Legal Framework, ‘Cartel Settlements’, Report to
the ICN Annual Conference, April 2008, at <http://www.icn-kyoto.org/
documents/materials/Cartel_WG_1.pdf> (accessed 8 May 2008).
2 See the reports of the European Commission, at <http://www.ec.
europa.eu/comm/competition/cartels/legislation/settlements.html> and the Canadian
Competition Bureau, at <http://www.competitionbureau.gc.ca/epic/site/cbbc.
nsf/en/02663e.html> (accessed 12 May 2008). For a useful summary of the European
Community proposals, and comparison with the US system of plea-bargaining, see V Turner
and S Rab, ‘Settlement in Cartel Cases: An Overview of the Proposed New EU Procedure’,
Paper presented at the International Cartel Workshop held by the American Bar Association
Section of Antitrust Law, 30 January–1 February 2008.
continues to be regarded as the most potent method of detecting and
prosecuting cartel activity, competition agencies are increasingly interested in
identifying the most effective system by which to attract disclosure and
cooperation from the conspirators who miss out on first prize. Such a system
is seen as having considerable value for enforcers in enabling them to secure
timely outcomes, allocate their resources more efficiently and increase their
enforcement activities overall, thereby achieving greater deterrence.3 It is
further recognised as offering substantial benefits to settling cartel
participants: not only do they obtain penalty reductions, but they also have a
greater sense of being involved in the disposition of a case than otherwise
would be possible, while enjoying certainty and finality through the
expeditious resolution of the allegations against them.4

Cartel settlements do have drawbacks or trade-offs. Perhaps one of the most
significant is the potential for a settlement policy to detract from the efficacy
of a jurisdiction’s immunity program. Specifically, the option of settlement has
the capacity to undermine the incentives for cartel participants to seek the
protection offered by an immunity policy or to be motivated to do so as rapidly
as possible for fear of losing the ‘race to the confessional’ to a co-conspirator.5
At the same time, such issues are increasingly regarded as manageable
through the proper design and implementation of a settlement system, rather
than as a reason for not having such a system.

4.1 The issues

There is significant divergence in the approach taken to and degree of
experience with the process of settling cartel cases across the globe. For
example, some jurisdictions, such as the European Community and the United
Kingdom, have expanded immunity programs that cover full immunity for the
first-in applicant as well as penalty reductions for those that follow and satisfy
specified conditions. Such reductions are expressed either in terms of a fixed
percentage reduction or in terms of a reduction range. Other jurisdictions, such
as Australia, the United States and Canada, reserve the immunity policy for
the first successful applicant and any leniency for subsequent parties to come
forward and cooperate is dealt with under a separate policy or program.
The variations also arise out of differences in legal, constitutional and
institutional framework — for example, as between countries that have an
agency with integrated investigatory and prosecutorial powers and functions

3 OECD, Plea Bargaining/Settlement of Cartel Cases, above n 1, p 9.
4 Ibid, p 9.
5 For reference to some of the other drawbacks of cartel settlements, see International
Competition Network, above n 1, pp 17–18, including the consequence that the agency has
to settle for something less than might have been achieved had the case not been settled; the
difficulty in achieving parity in penalties as between cartel participants under a settlement
system; the potential for a perception on the part of the public and/or the courts that
settlements involve compromising justice; lesser publicity and hence lesser opportunity for
public education than would be available in a litigated trial; the lack of precedents set for
future cases; encroachment upon the domain of the courts; and the potential for undermining
the rights of defendants, such as the right against self-incrimination and the presumption of
innocence. See also the general discussion of settlements in the European Community in
W Wils, ‘The Use of Settlements in Public Antitrust Enforcement: Objectives and
Principles’ (2008) 31(3) World Competition Law and Economics Review 335.
(as in the United States) versus those that have a bifurcated enforcement
model (as in Australia, Canada and the United Kingdom); as well as between
those countries in which the administrative agency imposes penalties
relegating the role of the courts to one of review (as in the United Kingdom
and the European Community, for example) versus those in which it is the
exclusive province of the judiciary to impose penalties, civil or criminal (as in
Australia and Canada, for example). Amongst those in which the imposition
of penalties is reserved for the courts there is a further difference between
jurisdictions in which judicial discretion is circumscribed by a prescriptive set
of sentencing guidelines (as in the United States),6 as compared with those in
which the exercise of such discretion is guided predominantly by general
statutory statements and judge-made principles (as in Australia).7
The experience in using a settlement system in relation to cartel conduct
also varies markedly between jurisdictions. At one end of the spectrum is the
United States where the Department of Justice (DOJ) has negotiated hundreds
of plea agreements and where over 90% of the corporate defendants charged
with an antitrust offence have entered into such agreements.8 At the other end
of the spectrum, stand the United Kingdom where, as at 2006, only one cartel
investigation had been settled,9 and the European Community, where the
introduction of a settlement system is currently under consideration. In the
middle lie countries such as Australia and Canada in which the enforcement
agencies settle a considerable proportion of cartel cases but do not yet have the
same structured system or process for settlement as in the United States.10
Notwithstanding these differences, there is a range of substantive and
procedural issues or considerations common to all jurisdictions administering
or contemplating a system for cartel settlement.
The common substantive issues are: the factual basis on which a settlement
may proceed including whether an admission of guilt is required; the degree
of penalty reduction available; the basis for its calculation and the extent to
which the agency can assure the settling party that the negotiated penalty will
be the penalty ultimately imposed; the nature and extent of the disclosure and
cooperation required of the settling party; and the nature and extent of the
non-prosecution protection offered by the settlement.11 These issues are more
complex in a jurisdiction in which there is potentially both civil and criminal
liability for cartel behaviour and where, in the case of each, different agencies
are responsible for the final decision as to whether to proceed to trial or settle,

6 See US Sentencing Guidelines Manual (2004) 2R1.1, cmt N.3. For a useful summary of
these guidelines, see R Hauberg, R Hauberg Jr and P Taylor (Eds), Sentencing Guidelines in
Antitrust: A Practitioner’s Handbook, American Bar Association, Chicago, 1999.
7 For a list of the relevant factors to guide penalty assessments, see s 76(1) of the Trade
Practices Act 1974 (Cth) and Trade Practices Commission v CSR Ltd (1997) ATPR 41-076
at 52,152; NW Frozen Foods Pty Ltd v ACCC (1996) ATPR 41-515 at 42,444–5;
BC9603867.
8 OECD, Plea Bargaining/Settlement of Cartel Cases, above n 1, p 149.
9 Ibid, p 140.
10 Ibid, p 79 (in relation to Australia), p 83 (in relation to Canada). For a detailed description
of the plea bargaining system in the United States, see American Bar Association, Section of
Antitrust Law, Criminal Antitrust Litigation Antitrust Handbook, 2nd ed, American Bar
Association, 2006, Ch V.
11 OECD, Plea Bargaining/Settlement of Cartel Cases, above n 1, pp 20–5.
or negotiate a plea, as the case may be.

The procedural issues involved in the design of a settlement system include:
the timing and process for initiation of cartel settlement; enumeration and
waiver of rights; liaison between investigatory and prosecutorial agencies; the
process involving the courts in reviewing or approving the settlement terms;
confidentiality of cartel settlement discussions and information; withdrawal
from a settlement agreement; and consequences for breach of a settlement
agreement.12

In determining the best approach to dealing with these issues, an
overarching question is how to strike the right balance between sufficient
transparency, predictability and certainty on the one hand,13 while maintaining
adequate flexibility and discretion to deal with the requirements of each case
on the other.14 Again, this question is likely to be influenced to a significant
extent by the legal and institutional framework within which the system has
to work. A high degree of certainty and predictability is more likely to be
achievable, for example, in a jurisdiction such as the United States where there
is a single agency with responsibility for settlement or plea negotiation and
decision-making and a detailed prescriptive set of guidelines structuring and
confining judicial discretion in sentencing.15 The conditions in Australia are
very different.

4.2 The background

The Australian Competition and Consumer Commission (ACCC) has a formal
policy regarding settlement of enforcement matters generally.16 That policy
and its relationship with the ACCC Immunity Policy (as well as the ACCC’s
former leniency policy for such conduct) are outlined below. Upon
introduction of the new criminal regime, it will be the Commonwealth
Director of Public Prosecutions (DPP) that is responsible for negotiating the
‘deal’ with defendants who do not seek to contest the criminal charges against
them — hence, the DPP’s approach to plea negotiations must also be
considered. As in relation to the immunity policy (see Part 1 above), the two
agencies should liaise closely on such matters. Surprisingly, the Draft

12 Ibid, pp 26–32.
13 As emphasised in US DOJ’s statements on the best approach to negotiated plea agreements:
see, eg, S Hammond, ‘The US Model of Negotiated Plea Agreements: A Good Deal With
Benefits for All’, Address to OECD Competition Committee Working Party No 3,
17 October 2006, at <http://www.justice.gov/atr/public/speeches/219332.pdf> (accessed
8 May 2008).
14 As emphasised in the ACCC’s Cooperation Policy itself: ACCC, Cooperation Policy for
Enforcement Matters, July 2002, at <http://www.accc.gov.au/content/item.phtml?
itemId=459482&nodeId=e8e554f0fed6c4139e99fb67c9f75eae&fn=ACCC%20cooperation
%20policy%20July%202002.pdf> (accessed 7 May 2008).
15 See US Sentencing Guidelines Manual, above n 6. While the effect of US v Booker 543 US
220 (2005) was to render the guidelines advisory, rather than binding in nature, there is
evidence to suggest that judges are still sentencing antitrust defendants in conformance with
the guidelines’ parameters: see J Jacobovitz and B Neff, ‘Antitrust Sentencing Post-Booker:
What we Know So Far’ (2006) Antitrust Source 1, at <http://www.
schiffhardin.com/binary/jacobovitz_neff_070106.pdf> (accessed 13 May 2008).
16 ACCC, Cooperation Policy for Enforcement Matters, above n 14.
Memorandum of Understanding between the ACCC and DPP (Draft MOU)
makes no reference to the need for any such liaison.17

4.2.1 The ACCC’s approach to settlement

In 2002 the ACCC published its Cooperation Policy for Enforcement
Matters.18 The policy is expressed in general terms and applies to corporations
and individuals in relation to all potential contraventions of the Trade
Practices Act 1974 (Cth) (TPA).19 The nature and extent of the leniency,
including ‘complete or partial immunity from action by the commission,
submissions to the court for a reduction in penalty or even administrative
settlement in lieu of litigation’,20 is assessed on a case-by-case basis having
regard to the requirements set out in the policy. For an individual those
requirements are:

• coming forward with valuable and important evidence of a contravention of

which the ACCC is either otherwise unaware or has insufficient evidence to

initiate proceedings;

• providing the ACCC with full and frank disclosure of the activity and

relevant documentary and other evidence available to them;

• undertaking to cooperate throughout the commission’s investigation and

complying with that undertaking;

• agreeing not to use the same legal representation as the firm by which they

are employed;

• not having compelled or induced any other person or corporation to take part

in the conduct or having been a ringleader or originator of the activity.21

For corporations, additional requirements are:

• taking prompt and effective action to terminate its part in any activity;

• being prepared to make restitution where appropriate;

• being prepared to take immediate steps to rectify the situation and ensuring

that it does not happen again; and

• not having had a prior record of TPA or related offences.22

In practice, many negotiated settlements and joint submissions to the court on
penalties flow from the operation of the Cooperation Policy.23 The policy
states that the ACCC is prepared to make such submissions ‘if it is satisfied
that a corporation or individual, which has not been granted an immunity, has

17 C Beaton-Wells and B Fisse, ‘Criminalising serious cartel conduct: Issues of law and policy’
(2008) 36(3) ABLR 166 at 208.
18 This succeeded a guideline dealing with cooperation and leniency in enforcement that had
been in place since 1998 (referred to in ACCC, Review of the ACCC’s Leniency Policy for
Cartel Conduct, Discussion Paper, 24 November 2004, p 3 [2.1], at
<http://www.accc.gov.au/content/item.phtml?itemId=566510&nodeId=a280cf4f0d5d9e53
b6e1d0b6427ef39f&fn=Leniency%20Discussion%20Paper.pdf> (accessed 7 May 2008).
However, the practice of reaching penalty agreements had begun as early as 1981: see Trade
Practices Commission v Allied Mills Industries Pty Ltd [1981] FCA 142; (1981) ATPR 40-241 at 43,142; 37
ALR 256;.
19 ACCC, Review of the ACCC’s Leniency Policy for Cartel Conduct, above n 18.
20 ACCC, Cooperation Policy for Enforcement Matters, above n 14.
21 Ibid.
22 Ibid.
23 OECD, Plea Bargaining/Settlement of Cartel Cases, above n 1, p 79.
cooperated with it in a substantive way’.24 In deciding whether to reach an
agreement on penalties and what the agreement should be, the policy sets out
the factors that the ACCC takes into account as follows:

• whether the corporation or individual has cooperated with the commission;

• whether the contravention arose out of the conduct of senior management or

at a lower level;

• whether the company has a corporate culture conducive to compliance with

the law;

• the nature and extent of the contravening conduct;

• whether the conduct has ceased;

• the amount of loss or damage caused;

• the circumstances in which the conduct took place;

• the size and power of the company; and

• whether the contravention was deliberate and the period over which it

extended.25

Other than this list of relevant factors, the Cooperation Policy provides no
specific guidance on how a penalty discount is to be calculated under the
policy. In particular, as compared with the US and Canadian approach
(discussed further below), it gives no indication as to how the extent of any
harm caused by the conduct is likely to be assessed (for example, through a
volume of affected commerce proxy).

Notwithstanding any agreement reached between the ACCC and an
applicant under the Cooperation Policy, it remains the role and responsibility
of the court to decide independently on appropriate penalties for breaches of
the Act.26 There are no externally imposed sentencing guidelines constraining
these assessments. However, there is now a well-established set of principles
and factors, derived from the statutory provisions and the case law, that are
applied by judges in assessing penalty submissions and quantifying
penalties.27 Despite some criticisms,28 the benefits derived from the ACCC’s
practice of reaching penalty agreements have been judicially recognised, and
such submissions are accorded a substantial degree of weight.29 Nevertheless,
as was reiterated in 2004, in Minister for Industry, Tourism & Resources v
Mobil Oil Australia Pty Ltd,30 joint submissions will be scrutinised closely

24 ACCC, Cooperation Policy for Enforcement Matters, above n 14.
25 Ibid.
26 Albeit relatively rare, there have been occasions on which courts have imposed penalties
exceeding those agreed by the parties (see ACCC v FFE Building Services (2004) Aust
Contract R 90-179; [2003] FCA 1542; BC200307944), as well as cases in which the court
has directed that the parties provide supplementary information and submissions in support
of their proposed penalty (see ACCC v Roche Vitamins Australia Pty Ltd [2001] ATPR
41-809; [2001] FCA 150; BC200100527).
27 For a summary, see C Beaton-Wells, ‘Recent corporate penalty assessments under the Trade
Practices Act and the rise of general deterrence’ (2006) 14 CCLJ 65.
28 See, eg, ACCC v Colgate-Palmolive Pty Ltd (2002) ATPR 41-880; [2002] FCA 619;
BC200202382; ACCC v FFE Building Services [2003] FCA 1542; (2004) Aust Contract R 90-179 at 92-530;
[2003] FCA 1542; BC200307944; ACCC v ABB Transmission and Distribution Ltd (2001)
ATPR 41-815; [2001] FCA 383; BC200101480 at [6]; Schneider Electric (Australia) Pty Ltd
v ACCC [2003] FCAFC 2; (2003) 127 FCR 170; 196 ALR 611 at [61].
29 See generally NW Frozen Foods Pty Ltd v ACCC [1996] FCA 1134; (1996) 71 FCR 285; 141 ALR 640.
30 (2004) ATPR 41-993; [2004] FCAFC 72; BC200401455. For a case note explaining further
the background to the case and setting out the Full Court’s reasoning and the implications
and a court will not act merely as a ‘rubber stamp’. In particular, a court may
consider the appropriate penalty range independently of the parties’ agreed
figure and then, having made that assessment, determine whether the proposed
penalty falls within the range. Thus, the court is not bound to start its
examination with the proposed penalty and confine its analysis to the question
whether or not it is within an appropriate range.31 The Full Court also made
it clear that, while preparation of an agreed statement of facts is an acceptable
practice, judges will be entitled to seek further information from the parties
and, in particular, may require a detailed explanation from the ACCC as to
why a discounted penalty is justified.32 Notwithstanding these statements, in
the vast majority of cases the court endorses the penalties proposed by the
ACCC.33

In terms of the procedure for applying for leniency, the Cooperation Policy
is very brief, indicating that the applicant should approach the appropriate
contact officer and the commission will then determine the application on a
case-by-case basis. The commission is open to discussion of hypothetical
scenarios about involvement in conduct that might contravene the Act and,
while not able to provide definitive answers, the ACCC will provide guidance
as to the probable course of action it would take.34 The policy contains no
provision for ‘paperless’ applications, confidentiality, or revocation. It has not
been amended since its introduction in 2002.

In June 2003 the ACCC launched its Leniency Policy for Cartel Conduct,35
the aim of which was to ‘provide greater certainty and incentive for
disclosure’ for cartel participants.36 The Leniency Policy provided two levels
of protection (Part A— immunity from prosecution, and Part B — immunity
from penalty) based on whether or not the ACCC was aware of the cartel at
the time the application was received. Meanwhile, the Cooperation Policy
remained available as a policy under which the ACCC was able to grant
immunity from prosecution and penalty to persons who did not qualify for
Part A or Part B immunity under the Leniency Policy. In a review of the
Leniency Policy in 2005, the ACCC recognised that the interaction between
the policy and the Cooperation Policy was critical to ensuring that the right

thereof in greater detail, see C Beaton-Wells, ‘Judicial scrutiny of penalty agreements to
increase: Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd (2004)
ATPR 41-993’ (2005) 13 TPLJ 59.
31 (2004) ATPR 41-993; [2004] FCAFC 72; BC200401455 at [54]–[60].
32 Cases in which the principles in Mobil Oil have been applied include ACCC v ABB Power
Transmission Pty Ltd (2004) ATPR 42-011; [2004] FCA 819; BC200404376 at [50]–[56];
ACCC v Chaste Corporation Pty Ltd [2004] FCA 398; BC200401656 at [11]; ACCC v
Midland Brick Co Pty Ltd [2004] FCA 693; (2004) 207 ALR 329; ATPR 42-008 at [17]; ACCC v D M
Faulkner Pty Ltd [2004] FCA 1666; BC200406522 at [54]–[65]; ACCC v McMahon
Services Pty Ltd [No 1) (2004) ATPR 42-022; [2004] FCA 1171; BC200406682
at [14]–[16]; ACCC v Liquorland (Australia) Pty Ltd (2005)ATPR 42-070; [2005] FCA 683;
BC200503547 at [64].
33 OECD, Plea Bargaining/Settlement of Cartel Cases, above n 1, p 80.
34 ACCC, Cooperation Policy for Enforcement Matters, above n 14.
35 ACCC, Leniency Policy for Cartel Conduct, June 2003, at <http://www.accc.
gov.au/content/item.phtml?itemId=459479&nodeId=28b212a839a7678d30f72fdb97ee62
fb&fn=ACCC%20leniency%20policy%20for%20cartel%20conduct%20June%202003.pdf>
(accessed 7 May 2008).
36 ACCC, Review of the ACCC’s Leniency Policy for Cartel Conduct, above n 18, p 3.
kind and level of incentives existed to attract cartelists to make disclosure to
and cooperate with the ACCC.37 The ACCC saw the various options for
dealing with this as follows:

The ACCC could maintain the status quo (with or without indicating that primacy

would be given to application of the leniency policy in relation to cartel conduct).

Alternatively, the ACCC could decide that in relation to cartels, the leniency policy

will apply to the exclusion of the cooperation policy. A third option would be to

abolish Part B and rely upon the cooperation policy if the ACCC is aware of the

cartel at the time an application is made.38
Following a process of consultation, the ACCC took the position that it would
‘maintain the status quo’ and that the existing Cooperation Policy would
continue to operate in conjunction with the new immunity policy, issued
consequent upon the results of the review.39 The Interpretation Guidelines to
that policy, subsequently released in August 2005, make it clear that the grant
of immunity is available only to the person first to approach the ACCC
requesting immunity, provided that they meet the requirements of the policy
—second or subsequent applicants may only be granted immunity if an earlier
applicant has withdrawn their application or is ineligible for immunity or has
had immunity revoked.40 As to the relationship between the Immunity Policy
and the Cooperation Policy, the Guidelines state:

65. If a person who is not eligible for immunity wishes to cooperate with the

ACCC, they may still receive credit for the cooperation under the cooperation

policy.

66. Nothing in the immunity policy is intended to alter the application of the

general principle, recognised by the Federal Court and the ACCC, that more lenient

treatment will be afforded to those persons who cooperate with the ACCC in its

investigations and court proceedings. The ACCC recognises this through its

cooperation policy.

67. The ACCC’s use of the cooperation policy will directly affect the applicants’

perceived benefit of the immunity policy — using the cooperation policy to achieve

the same outcome as the immunity policy, in circumstances where the conditions for

immunity are not met, has the potential to reduce the immunity policy’s efficacy in

destabilising cartels and creating a ‘race to the ACCC’s door’. Conversely,

restricting the use of the cooperation policy would reduce the avenues by which

cartel members can seek lenient treatment from the ACCC in exchange for

cooperation and assisting the ACCC obtain appropriate redress.

68. The cooperation policy provides valuable flexibility and can be utilised to

enhance the ACCC’s enforcement effort without reducing the efficiency of the

immunity policy. In particular, the cooperation policy allows the ACCC to obtain

further cooperation and assistance (not limited to that which the immunity applicant

can provide). This will both assist the ACCC to gather additional evidence that may

37 Ibid, p 8.
38 Ibid, p 8.
39 Ibid, p 8.
40 ACCC, ACCC Immunity Policy Interpretation Guidelines, 2005, p 7 [3.1] para 52, at
<http://www.accc.gov.au/content/item.phtml?itemId=708758&nodeId=f061bd4781fc0fc3e
638c68b36ffc0de&fn=Immunity%20policy%20interpretation%20guidelines.pdf> (accessed
12 May 2008).

help in the prosecution of cartel participants and allow the ACCC to negotiate an

agreed penalty for recommendation to the court and thus avoid the need for

contested litigation.

69. In general, a person will not be given full immunity under the cooperation

policy. However, there are circumstances in which the ACCC may use its discretion

under the cooperation policy to grant full immunity. For instance, if an individual

qualifies for conditional immunity, the ACCC may, in its absolute discretion, offer

the first subsequent corporate immunity applicant full immunity under the

cooperation policy. Whether or not full immunity is granted in these circumstances

will depend on whether the corporate application is timely and provides information

and evidence additional to that available from the individual immunity applicant.

71. Similarly, the ACCC may wish to immunise individuals not eligible for

derivative immunity. For instance, where an employee, or former employee, who

could normally be expected to qualify for derivative immunity, is specifically

excluded from his or her employer’s application because of the existence of an

employment related dispute. In these circumstances, the ACCC may, under the

cooperation policy, grant protection from prosecution and penalty in a form similar

to that available under the immunity policy’.41

4.2.2 The DPP’s approach to plea discussions

Most criminal charges in Australia are resolved without a trial, usually by a
guilty plea.42 Guilty pleas are the result of an agreement between
representatives of the prosecution and the defence following out-of-court
discussions regarding charges, facts and likely sentence.43 In Australia, the
preferred terminology to reflect this process is ‘plea discussions’ or ‘plea
negotiations’. The phrase, ‘plea bargaining’, as used in the United States, to
reflect an exchange of concessions leading to an outcome based on bargaining
rather than the merits, is disliked in Australia.44 Furthermore, in the United
States, discussions between the prosecution and defence often involve the
judge and judges rarely reject the prosecutor’s recommendations as to
sentence. In Australia, by contrast, plea discussions are described as ‘an
informal, semi-adversarial, semi-co-operative process which attempts, in a
situation of uncertainty, to identify the facts which can be proved beyond a
reasonable doubt and the charge which most appropriately reflects the facts, to
the satisfaction of both the prosecution and defence’.45 There is no judicial
involvement in the content of plea discussions in Australia and the judge is not
bound in any way to accept counsel’s recommendations as to sentence.46

In the Prosecution Policy, plea discussions are dealt with in the context of
what is referred to as ‘charge bargaining’.47 This is said to involve
‘negotiations between the defence and the prosecution in relation to the

41 Ibid, p 10 [4.2].
42 K Mack and S Roach Anleu, Pleading Guilty: Issues and Practices, Australian Institute of
Judicial Administration, Carlton South, Vic, 1995, p 4.
43 Ibid, p 5.
44 P Sallmann, Report on Criminal Trials: Shorter Trials Committee, Australian Institute of
Judicial Administration, Melbourne, 1989, p 74.
45 Mack and Roach Anleu, above n 42, p 6.
46 Ibid, p 5.
47 See Commonwealth Director of Public Prosecutions, Prosecution Policy of the
Commonwealth, 1992, pp 21–3 [5.12]–[5.18], at <http://www.DPP.gov.au/
Publications/ProsecutionPolicy/> (accessed 6 February 2008). The Prosecution Policy does
not use the terms ‘plea discussions’, ‘plea negotiations’, or ‘plea bargaining’. Note also that
charges to be proceeded with’.48 Such negotiations ‘may result in the
defendant pleading guilty to fewer than all of the charges he or she is facing,
or to a lesser charge or charges, with the remaining charges either not being
proceeded with or taken into account without proceeding to conviction’.49 The
Prosecution Policy makes it clear that charge-bargaining ‘is to be
distinguished from consultations with the trial judge as to the sentence’ likely
to imposed in the event of a guilty plea — such consultations are to be
‘studiously avoided’.50

The Prosecution Policy places the following constraints on the process of
charge-bargaining:

(a) a charge-bargaining proposal should not be initiated by the prosecution; and

(b) such a proposal should not be entertained by the prosecution unless:

(i) the charges to be proceeded with bear a reasonable relationship to the

nature of the criminal conduct of the accused;

(ii) those charges provide an adequate basis for an appropriate sentence in

all the circumstances of the case; and

(iii) there is evidence to support the charges.51

Any decision by the prosecution whether or not to agree to a proposal
advanced by the defence, or to put a counter-proposal to the defence, must
take into account all the circumstances of the case and other relevant
considerations set out in the policy, including:

(a) whether the defendant is willing to cooperate in the investigation or

prosecution of others, or the extent to which the defendant has done so;

(b) whether the sentence that is likely to be imposed if the charges are varied as

proposed (taking into account such matters as whether the defendant is

already serving a term of imprisonment) would be appropriate for the

criminal conduct involved;

(c) the desirability of prompt and certain dispatch of the case;

(d) the defendant’s antecedents;

(e) the strength of the prosecution case;

(f) the likelihood of adverse consequences to witnesses;

(g) in cases where there has been a financial loss to the Commonwealth or any

person, whether the defendant has made restitution or arrangements for

restitution;

(h) the need to avoid delay in the dispatch of other pending cases;

(i) the time and expense involved in a trial and any appeal proceedings; and

(j) the views of the referring department or agency.52
The prosecution is not to entertain a charge-bargaining proposal initiated by
the defence if the defendant maintains his or her innocence with respect to a

the policy provides for the prosecution to decline to proceed further with a prosecution after
commitment if, for example, that is regarded the appropriate course upon reassessment of
the evidence arising out of the committal proceedings or upon an application by the defence
that the charge is a relatively minor one not warranting the time and expense involved in a
trial: pp 23–4 [5.19]–[5.24].
48 Ibid, p 21 [5.12].
49 Ibid, p 21 [5.12].
50 Ibid, p 21 [5.13], citing the Supreme Court of Victoria in R v Marshall [1981] VicRp 69; [1981] VR 725
at 732.
51 Ibid, p 21 [5.13].
52 Ibid, p 21 [5.15].
Forks in the road: Part 2 255
charge or charges to which the defendant has offered to plead guilty.53

A proposal by the defence that a plea be accepted to a lesser number of
charges or a lesser charge or charges may include a request that the
prosecution not oppose a defence submission to the court at sentencing that
the penalty fall within a nominated range. Alternatively, the defence may
indicate that the defendant will plead guilty to an existing charge or charges
if the prosecution will not oppose such a submission. It will not be
objectionable for the prosecution to agree to such a request provided the
penalty or range of sentence nominated is considered to be within acceptable
limits to a proper exercise of the sentencing discretion.54

There have been calls to formalise the process of plea discussions in
Australia, at state and federal levels, in the interests of greater transparency,
predictability and certainty as well as the need to avoid abuses.55 However, to
date, such calls have been rejected, the apparent consensus being that the
current form of prosecutorial guidelines (of which the Prosecution Policy is
largely representative) are sufficient; that to formalise the discussions would
risk discouraging them and would be too bureaucratic and inflexible; and that
professional ethics and the potential for appeals are adequate controls.56

The opaque and discretionary nature of the process raises real questions,
however, for the effectiveness of a cartel leniency program, just as the DPP’s
approach to immunity does for the effectiveness of the ACCC Immunity
Policy (as discussed in Part 1 of the article). Furthermore, in terms of the
transparency and predictability of a likely sentence, there is very little
information that a prospective leniency applicant will be able to glean from
the law and practice in relation to federal sentencing, as it currently stands, in
Australia.57 In relation to the impact of plea agreements on sentencing
outcomes, Pt IB of the Crimes Act 1914 (Cth), which deals with the
sentencing of federal offenders, provides for a guilty plea and the degree to
which an offender has cooperated with law enforcement agencies to be taken
into account in sentencing.58 However, contrary to the legislation and practice
in several states and territories, the provisions do not expressly allow for a
sentencing discount on account of a plea or cooperation, nor do they indicate
how such a discount might be quantified, the types of factors that might be

53 Ibid, p 22 [5.16].
54 Ibid, p 23 [5.18].
55 Mack and Roach Anleu, above n 42, pp 176–7; Judge John Sulan, District Court of South
Australia, ‘Defence and Legal Aid’, Paper presented at Criminal Trial Reform Conference,
Session 3 — Paper 2, 2000, pp 5–6, at <http://www.aija.org.au/ctr/Sulan.htm> (accessed
4 May 2008).
56 Standing Committee of Attorneys-General, Deliberative Forum on Criminal Trial Reform:
Report, June 2000, p 60, at <http://www.ag.gov.au/www/agd/rwpattach.nsf/VAP/(CFD
7369FCAE9B8F32F341DBE097801FF)~xxforumreport.pdf/$file/xxforumreport.pdf>
(accessed 7 May 2008); S Roach Anleu and K Mack, ‘Pleading Guilty and Professional
Relations in Australia’ (2001) 22 Justice System Jnl 155 at 170.
57 Cf the importance of transparency in fine-setting in cartel cases emphasised recently in
International Competition Network, ‘Cartels Working Group Subgroup 1 — General
Framework, Setting of Fines for Cartels in ICN Jurisdictions’, Report to the 7th Annual ICN
Conference, Kyoto, Japan, April 2008, pp 12–15, at <http://www.icnkyoto.
org/documents/materials/Fines%20report%20-%20FINAL.pdf> (accessed 12 May
2008).
58 See s 16A(2)(g), (h) of the Crimes Act 1914 (Cth).
relevant to such an assessment (for example, the timeliness of the plea) or
require the court to give reasons for not reducing a sentence if there has been
a guilty plea.59

In its recent report on federal sentencing, the Australian Law Reform
Commission (ALRC) rejected the idea that there should be legislative
prescription of the quantum of a discount, whether by way of a fixed
percentage, maximum percentage or range of percentages, on account of
concern that such a system would unduly fetter judicial discretion.60 However,
it did recommend that there be new federal sentencing legislation that
provides for judicial specification of a discount given for a plea or
cooperation.61 Moreover, it recommended that there be legislative prescription
of the factors that a court must consider in determining the extent of the
discount — in the case of a plea, such factors were the degree to which the
plea facilitates the administration of justice and its timeliness.62 In the case of
cooperation, such factors were the significance and usefulness of the
cooperation; the truthfulness, completeness and reliability of evidence
provided; the nature and extent of the defendant’s assistance; its timeliness;
any benefits that the defendant has gained or may gain by reason of the
assistance and any detriment that the defendant or his or her family may suffer
by reason of the assistance.63

The ALRC also canvassed the debate surrounding the introduction of
sentencing indication schemes in Australia. A sentence indication scheme
involves a judicial officer, prior to the commencement of trial, advising the
defendant of the sentence, or type or range of sentences, that the defendant is
likely to receive if he or she pleads guilty to the offence. There are different
models of such schemes, some of which have been or are being trialled in
Australia, with varying accounts of success.64 The ALRC expressed its
support for a sentence indication scheme for federal defendants and
recommended that federal sentencing legislation make provision for such a
scheme, to be governed by Rules of Court or Practice Directions.65 While

59 ALRC, Same Crime, Same Time: Sentencing of Federal Offenders, Report No 103, April
2006, pp 308–9. For discussion of the approach to sentencing in cartel cases, including the
issue of discounts for cooperation, see C Beaton-Wells and B Fisse, ‘Criminal Cartels:
Individual Liability and Sentencing’, Paper presented at 6th Annual University of South
Australia, Trade Practices Workshop, 17–18 October 2008 (copy on file with authors).
60 Ibid, p 314 [11.40].
61 Ibid, p 315 Recommendation 11-1.
62 Ibid, p 318 Recommendation 11-2.
63 Ibid, p 320 Recommendation 11-3.
64 Ibid, pp 411–12. In 2007, the Victorian Sentencing Advisory Council proposed a pilot
sentence indication scheme in Victoria. Although the scheme received legislative support,
the pilot scheme is not yet in place at the time of writing. See Sentencing Advisory Council,
‘Sentence Indication and Specified Sentence Discounts: Final Report’, September 2007, at
<http://www.sentencingcouncil.vic.gov.au/wps/wcm/connect/Sentencing+Council/
resources/file/eb4d0346652c558/Sentence_Indication_Final_Report.pdf> (accessed 7 May
2008).
65 Ibid, pp 428–9 Recommendation 15-1. The essential elements of such a scheme, as proposed
by the ALRC, would be as follows: (a) an indication should be given only at the defendant’s
request, with judicial discretion to refuse an indication; (b) the timing of a sentence
indication should be flexible, and Rules of Court or Practice Directions should specify the
earliest point at which an indication can be sought; (c) the defendant should be entitled to
there appears to be general in-principle support by the new government for
federal sentencing reform, the ALRC’s recommendations are yet to be
implemented.66

One of the primary purposes of a sentencing indication scheme is to assist
defendants engaged in plea discussions to make an informed judgment about
the likely sentence to be imposed in the event of a guilty plea. Such
information and assistance would also be available to a far greater extent than
is currently the case were judges to be guided in their decisions by sentencing
guidelines, as is the case in the United States.67 In the context of canvassing
possible options for promoting better sentencing, the ALRC considered the
possibility of such guidelines — in particular, the legislative prescription of a
grid sentencing system, under which presumptive sentences or sentencing
ranges are prescribed according to particular offence or offender

one sentence indication only; (d) the court should issue standard advice before any
indication is given, to the effect that the indication does not derogate from the defendant’s
right to require the prosecution to prove its case beyond reasonable doubt; (e) the indication
should occur in the presence of the defendant and in open court, but if the indicated sentence
is not accepted those proceedings must not be reported until the conclusion of the matter;
(f) the proceedings of the sentence indication hearing must be transcribed or otherwise
placed on the court record; (g) the indication must be based on the same purposes, principles
and factors relevant to sentencing and the same factors relevant to the administration of the
criminal justice system that would apply to the passing of sentence; (h) the indication should
be limited to the choice of sentencing option and a general indication of severity or
sentencing range; (i) the indication should be given only if there is adequate information
before the court, and should not be given if the choice of sentencing option is likely to be
materially affected by the contents of a pre-sentence report; (j) in giving the indication, the
court must take into account but must not specify the quantum of any discount that would
be given to the defendant for pleading guilty at that stage of the proceedings; (k) the
defendant should be given a reasonable opportunity to consult with his or her legal
representative before deciding whether to enter a guilty plea on the basis of the indicative
sentence; (l) where the defendant accepts the indicative sentence, the judicial officer who
gave the indication should be the one who passes sentence; (m) where the defendant rejects
the indicative sentence, the matter should be set for hearing or trial before another judicial
officer, who should have no regard to the indicative sentence in passing any subsequent
sentence; and (n) the sentence indication should not be the subject of appeal but the rights
of the prosecution and the defence to appeal against sentence, if one is imposed, should be
retained.
66 See the statement on the ALRC’s website, at <http://www.alrc.gov.au/
inquiries/title/alrc103/index.html>. The current Minister for Home Affairs, in an
introductory speech at the Sentencing Conference 2008, said:
Drawing on the Australian Law Reform Commission’s 2006 report Same Crime, Same
Time, I am keen to see federal sentencing law made clearer and easier to apply. The
existing law has been criticised for being unnecessarily complex and confusing . . . I am
keen to see a more coherent and comprehensive set of principles applied in sentencing
federal offenders.
See Minister for Home Affairs, Speech given to the Sentencing Conference 2008, 9 February
2008, at [33]–[34], at <http://www.ministerhomeaffairs.gov.au/www/ministers/
ministerdebus.nsf/Page/Speeches_2008_9February2008-SentencingConference2008>
(accessed 8 May 2008). The official government response at the time of the report is on file
with the Commonwealth Director of Public Prosecutions, see
<http://www.cdpp.gov.au/AboutUs/FileLists/200607-200612.aspx> (accessed 8 May 2008)
and does not appear available for public viewing.
67 See US Sentencing Guidelines Manual, above n 6. For a useful summary of these
Guidelines, see Hauberg, Hauberg Jr and Taylor, above n 6.
characteristics.68 There are currently no such schemes in Australia.
Submissions to the ALRC generally opposed their introduction and the ALRC
ultimately expressed the view that a grid sentencing scheme for federal
offenders was undesirable given the risk that it would mean sentencing
consistency was prioritised over individualised justice and that discretion
would be shifted to an inappropriate extent from judges to prosecutors.69

4.3 Overseas models

Given the divergence in the conditions applicable and approach taken to cartel
settlement or plea bargaining across jurisdictions, few overseas models offer
a useful guide for reforms in Australia. However, the model adopted (or at
least as currently proposed to be adopted) in Canada, is highly instructive. As
is apparent from the discussion of enforcement practice in Canada in
section 2.4.2 in Part 1 of this article, Canada has criminal and civil corporate
and individual liability for cartel conduct and different agencies have
investigatory and prosecutorial functions the Competition Bureau ((the
bureau) and the Canadian DPP). Moreover, it has had an immunity policy in
place for about the same period of time as Australia and deals with leniency
or settlements separately. Penalties are imposed by the courts and in the
absence of US-style sentencing guidelines, courts assess penalties having
regard to general statutory sentencing objectives and judge-made principles.70

4.3.1 Canada

In 2000 the bureau published its first formal immunity policy.71 In 2006 it
instigated a wide-ranging review,72 which led to a substantially amended and
strengthened policy published in October 2007.73 One of the issues on which
the bureau sought comment as part of that review was whether it should adopt
a formal settlement program to replace its ‘case-driven, largely ad hoc
approach to leniency’.74 Stakeholders recommended in favour, advancing the
view that a more formalised approach to leniency:
will support case resolution if it provides substantial incentives for cartel
participants who, though not first-in, are able to secure consideration from the

68 ALRC, above n 59, p 533 [21.41].
69 Ibid, p 535 [21.52]–[21.53].
70 Competition Bureau, ‘Draft Information Bulletin on Sentencing and Leniency in Cartel
Cases’, 28 April 2008, p 5, at <http://www.competitionbureau.gc.ca/epic/site/cb-bc.nsf/
en/02663e.html> (accessed 13 May 2008).
71 Competition Bureau, ‘Information Bulletin: Immunity program under the Competition Act’,
September 2000, at <http://www.competitionbureau.gc.ca/internet/index.cfm?itemID
=1752"=e> (accessed 3 May 2008).
72 Competition Bureau, Immunity program review — Consultation Paper, February 2006, at
<http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=2022"+e> (accessed
3 May 2008).
73 Competition Bureau, ‘Information Bulletin, Immunity Program under the Competition Act’,
October 2007, at <http://www.competitionbureau.gc.ca/epic/site/cb-bc.nsf/vwapj/
immunitye.pdf/$file/immunitye.pdf> (accessed 25 April 2008).
74 D MacKenzie, Senior Deputy Commissioner, Criminal Matters Branch, Competition
Bureau, ‘The Bureau’s Immunity Program: Fine Tuning or Overhaul’, Paper presented at the
Canadian Bar Association Annual Conference, 28–29 September 2006, Quebec, p 14 (copy
on file with author).
bureau and Attorney-General in respect of reduced sentencing exposure in return for
a guilty plea and a high level of cooperation with the investigation and prosecution
of the cartel.75

The bureau indicated in its response to the submissions received that it was
committed to developing a formal leniency policy, the rationale for which it
articulated as follows:
The rationale for leniency is straightforward; a more transparent and predictable
approach will support effective, cost-efficient enforcement of the Act, consistent
with the public interest. It is rare that an immunity applicant can provide sufficient
information to enable an enforcement agency to break the back of a cartel so as to
prompt other participants to forego costly and protracted litigation in lieu of
settlement. Cooperation provided to the bureau by a second or even third-in
applicant for leniency can provide investigations with sufficient evidence to bring all
participants to the settlement table. Transparent and predictable leniency rules
should assist in securing this vital cooperation.76

On 28 April 2008 the bureau released for public comment a Draft Information
Bulletin on Sentencing and Leniency in Cartel Cases.77 The bulletin will
establish the Leniency Program of the bureau for cartel cases and, more
particularly, encapsulate the policy of the bureau in developing leniency and
sentencing recommendations to the DPP.78 Part A sets out the respective roles
of the bureau, the DPP and the courts in the investigation, prosecution and
sentencing phases of a cartel case. It makes it clear that the bureau may only
make recommendations to the DPP concerning sentencing and leniency and
that the DPP retains independent discretion to accept or reject such
recommendations, while the courts are ultimately responsible for sentencing
upon conviction.79 Nevertheless it is also evident that, as in relation to the
application of the immunity policy (discussed in section 2.4.2 in Part 1 of this
article), the bureau works very closely with the DPP on the approach to
leniency and sentencing.80 Thus, the policy states that referrals to the DPP
‘include the bureau’s view as to an appropriate sentence in light of the
circumstances of the case’ and that while the DPP has independent carriage of
the matter thereafter, ‘the bureau remains an active partner in supporting the
prosecution (including at the plea and sentencing discussions)’.81 The policy
governing the DPP’s approach to such discussions is set out in the FPS
Deskbook (the equivalent to the Prosecution Policy). However, the deskbook:

75 Ibid, p 14.
76 Ibid, p 15.
77 Competition Bureau, ‘Draft Information Bulletin on Sentencing and Leniency in Cartel
Cases’, above n 70, Preface, p 1.
78 Ibid, pp 2–5.
79 Ibid, p 3.
80 As was pointed out recently by a Canadian antitrust defence lawyer: ‘In practice,
negotiations regarding criminal matters are conducted on behalf of the prosecution by
representatives of both the Competition Bureau and the DPP’: K Kay, ‘Canadian Criminal
Competition Cases: A Defence Lawyer’s Lament’, Paper presented at the 2008 ABA/IBA
International Cartel Workshop, San Francisco.
81 Competition Bureau, ‘Draft Information Bulletin on Sentencing and Leniency in Cartel
Cases’, above n 70, p 4. See similarly the statement at p 4 that: ‘The DPP has sole authority
to engage in plea and sentencing discussions with counsel for an accused, although the
bureau is at the table.’

recognizes the importance of consultations with the investigating agency in the plea

and sentencing process. Indeed, there is a significant degree of cooperation between

the bureau and the DPP, not only at the plea and sentencing stages, but also

throughout the enforcement process. Bureau staff are responsible for briefing Crown

counsel on the results of their investigation, have in-depth knowledge of the facts,

and are ideally placed to support and advise Crown counsel in plea and sentencing

discussions with counsel for the accused. For this reason, the bureau’s

recommendations on sentencing are an important factor to be considered by the DPP.

Recommendations by the bureau do not bind the DPP or, indeed, the courts.82

Part B of the bulletin sets out the general principles of sentencing that the
bureau considers in making sentencing recommendations to the DPP and that
the courts use in sentencing. It refers to the fundamental principles and
objectives of sentencing, as well as the factors that will be considered
aggravating or mitigating, derived from the Canadian Criminal Code and
associated case law.83 These are much the same as the objectives and factors
relevant to penalty assessments currently in the civil context under the TPA,84
as well as the general provisions governing sentencing of federal crimes under
Pt IB of the Crimes Act 1914 (Cth). In relation to each such factor, the bureau
indicates how it will be viewed in the context of leniency and sentencing
recommendations in cartel cases.85

Although the bulletin points out that sentencing recommendations are not
binding on courts, it is interesting to note that Canadian appellate courts have
strongly cautioned sentencing judges to give ‘serious consideration’ to joint
sentencing recommendations and to refrain from departing from them unless
they are contrary to the public interest or would bring the administration of
justice into disrepute.86 This is to be compared with the Australian approach
in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd,87
referred to above. Furthermore, in a manner akin to a sentencing indication
scheme, procedures exist whereby the parties can obtain feedback from a
superior court judge on their proposed positions as to sentence in a pre-hearing
conference.88

In addition, the bulletin sets out the approach that will be taken in relation
to the issue of economic harm, making it clear that ‘the bureau’s
recommendation for fines in cartel cases begins with an assessment of the

82 Ibid, pp 5-6.
83 Ibid, pp 6–7 [21]–[24], 9 [35]–[36].
84 See above n 27 and accompanying text.
85 Competition Bureau, ‘Draft Information Bulletin on Sentencing and Leniency in Cartel
Cases’, above n 70, pp 10–12 [37]–[49]. For example, in relation to ‘High Level of Senior
Officer Involvement’, the bulletin states at p 12 [45]:
Senior officers of a business organization have a duty to ensure that the business
organization and its employees respect the law. It is considered to be an aggravating
circumstance where senior officers of a business organization organize, lead, or actively
participate in a cartel. Cultivating a culture of complacency or wilful blindness to the
illegal activities of colleagues and subordinates also qualifies as an aggravating element.
86 G Reynolds QC, ‘The Top Ten Criminal Law Practice Points to Know Before Negotiating
a Canadian Antitrust Deal’, Paper presented at the 2008 ABA/IBA International Cartel
Workshop, San Francisco, p 13.
87 (2004) ATPR 41-993; [2004] FCAFC 72; BC200401455. See above n 30 and accompanying
text.
88 Reynolds, above n 86, p 14.
magnitude of this economic harm’.89 Similarly to the approach taken in the US
Sentencing Guidelines,90 given the difficulty in quantifying and establishing
(to the criminal standard) the actual economic harm resulting from cartel
behaviour, the bureau will typically use the volume of commerce in Canada
affected by the cartel multiplied by an ‘overcharge’ factor as a proxy.91 The
affected volume of commerce in Canada is calculated for each cartel
participant by aggregating the value of their sales of the product that was the
object of the anti-competitive agreement over the time period that they
participated in the offence. Other factual circumstances such as the size of
each participant, their usual role in the market and historic market share
figures will also be considered to arrive at an amount representative of the
economic harm caused by the participant in question.92 Taking account of the
full range of direct and indirect effects of the cartel, the bureau stipulates 20%
of the affected commerce as the overcharge taken as the proxy for the
economic harm and the basis for the assessment of the appropriate fine.93

Part B of the bulletin also identifies considerations particular to sentencing
business organisations and individuals that the bureau takes into account in
making sentencing recommendations to the DPP. For example, in the case of
the former, the bureau will generally recommend a range of fines as well as a
prohibition order (the equivalent to an injunction),94 whereas for individuals
the bulletin states that it will only recommend imprisonment where one or
more of the aggravating factors is present, for example where the individual
instigated the cartel; used coercion to ensure that others complied; obstructed
the investigation; personally benefitted from the cartel; or is a recidivist.95

Part C deals with leniency considerations in sentencing recommendations.
The bulletin makes it clear that the bureau’s immunity policy applies only to
the first successful applicant for immunity and that for others who provide
timely and valuable cooperation, leniency in sentencing recommendations
may be available in accordance with the policy set out in the bulletin.96 In
terms of conditions for eligibility, the bureau will make a lenient treatment

89 Competition Bureau, ‘Draft Information Bulletin on Sentencing and Leniency in Cartel
Cases’, above n 70, p 7 [25].
90 US Sentencing Guidelines Manual, above n 6. There are other jurisdictions that also take a
similar approach: see International Competition Network, above n 57, pp 19–20.
91 Competition Bureau, ‘Draft Information Bulletin on Sentencing and Leniency in Cartel
Cases’, above n 70, p 7 [26], [28].
92 Ibid, pp 7–8 [29]–[30], [28].
93 Ibid, p 8 [32]. However, where, in the bureau’s judgment, the proxy of 20% of the volume
of commerce affected would significantly either overstate, or not sufficiently capture, the
harm caused to the Canadian economy by the particular defendant, the bureau may apply an
adjusted percentage that more closely represents the amount of the overcharge. In principle,
though, the bureau will not submit a fine recommendation to the DPP that represents less
than 10% of the affected volume of commerce for a business organisation, unless it would
exceed the statutory $10 million maximum per count: p 10 [33]–[34]. In practice it has been
observed that there are ‘sometimes wild swings in percentage terms’ when comparing
negotiated fines on guilty pleas and the reported volume of commerce: Kay, above n 80,
p 10.
94 Competition Bureau, ‘Draft Information Bulletin on Sentencing and Leniency in Cartel
Cases’, above n 70, p 13 [53].
95 Ibid, pp 14–15 [55]–[59].
96 Ibid, p 15 [61].
recommendation to the DPP where the DPP has not yet filed charges against
a party in a cartel offence and where the party:

• has terminated its participation in the illegal activity;

• cooperates fully with the bureau’s investigation and any subsequent

prosecution by the DPP; and

• admits that it has engaged in the anti-competitive conduct which may

constitute an offence under the Act and agrees, if charged by the DPP,

to plead guilty and be sentenced for its participation in the illegal

activity.97

The bulletin then sets out in some detail each of the factors that the bureau
will consider in recommending that a party receive lenient treatment —
specifically, the timeliness of cooperation; the value of the evidence; and
whether the party provides evidence of other cartel activities so as to qualify
for Immunity Plus.98 Where the applicant meets the requirements articulated
in relation to each of these factors, the bureau may recommend to the DPP the
following reductions in sentence:

• for the first leniency applicant, up to 50% of the fine that would

otherwise have been recommended and where the applicant is a

business organisation, no separate charges against current directors,

officers or employees (except where there is evidence of coercion or

obstruction);

• for subsequent leniency applicants, reductions of up to 30% of the

fine that would otherwise have been recommended, and potentially

higher (up to 50%) where the first leniency applicant does not meet

all of the requirements set out in the bulletin or where the subsequent

applicant’s evidence is of ‘exceptional value’.99

The specific rate of reduction (within the parameters identified above) will
depend on the value of each party’s cooperation in a given case which will
depend in turn on its nature and timeliness in the context of the particular
investigation.100

The bulletin also provides detailed guidance on the leniency process, setting
out each of the steps to be taken to obtain leniency, including (1) contacting
the bureau; (2) the proffer; (3) conditional lenient treatment recommendation
to the DPP; (4) full and frank disclosure by the applicant; (5) repercussions
where the evidence disclosed is not consistent with the proffer or where
cooperation is not timely or consistent; (6) final sentencing recommendation
to the DPP.101

Part D of the bulletin deals with confidentiality stipulating the limited
circumstances in which the identity of and information provided by a leniency

97 Ibid, p 16 [62].
98 Ibid, pp 16–18 [63]–[70]. ‘Immunity Plus’ refers to the bureau’s Immunity Policy which
stipulates that a party that is not the first to disclose conduct to the bureau may nevertheless
qualify for immunity if it is first to disclose information relating to another offence.
99 Ibid, p 18 [71]. These proposals reflect the current practice in negotiations over fines on
guilty pleas: see Kay, above n 80, p 12.
100 Ibid, p 18 [72].
101 Ibid, pp 19–22, [75]–[87].
applicant will not be kept confidential.102 In relation to private actions the
bulletin makes it clear that information will only be provided in response to
a court order.103

4.4 The way forward

In light of the recent international focus on cartel settlement the ACCC should
revisit its Cooperation Policy to consider whether, in relation to cartel conduct
specifically, it strikes the right balance between transparency and certainty on
the one hand and flexibility and individualised treatment on the other.

Certainly, on one view, the approach taken in other jurisdictions suggests that
the ACCC’s policy could be strengthened considerably as a means of
incentivising applicants who do not qualify for full protection under the
Immunity Policy to come forward and cooperate. There is a good argument for
following the example in the European Community and Canada of developing
a settlement or leniency policy specific to cartel cases. Such a policy could
well extend beyond the Cooperation Policy in several significant ways,
namely:

• the specificity of the rewards available for cooperation (by way of

penalty reductions);

• eligibility criteria;

• conditions for lenient treatment; and

• the procedures for applying the policy, including provision for

confidentiality (and in that context, the approach taken to disclosure

of leniency information to private litigants).

The ACCC should also revisit the issue of leniency and settlement in light
of the forthcoming criminalisation of serious cartel conduct. As previously
noted, the Draft MOU makes no reference to this issue. This glaring omission
needs to be rectified. At a minimum, the manner in and extent to which the
ACCC will be involved in plea discussions between the DPP and defendants
charged with a cartel offence needs to be clarified.104 The draft Canadian
Bulletin provides an exemplary model. Once this aspect of the ACCC-DPP
relationship has been worked out, it should be reflected in any revisions to the
Cooperation Policy or as part of the formulation of a cartel-specific
leniency/settlement policy.

Taking the Canadian lead, such a policy would explain not only the roles of
the ACCC and DPP, but also the approach taken by the courts to penalty
assessments. Such an explanation should include the objectives and principles
underpinning such assessments, as well as aggravating and mitigating factors,
including specifically the approach to be taken to economic harm. Given that
US-style sentencing guidelines are out of favour in Australia (at least, it
seems, in the short-term having regard to the ALRC’s view on the matter),105

102 Ibid, p 22 [88].
103 Ibid, p 22 [89].
104 Given the likelihood of concurrent civil and criminal proceedings relating to a single cartel,
one would imagine also that the DPP would wish to be involved (or be kept informed, at the
very least) of leniency deals done by the ACCC with respondents in connection with civil
liability.
105 See above n 69 and accompanying text.
the ACCC could take the opportunity to stipulate a proxy for harm based on
an overcharge estimate, both as the basis for leniency in the civil context, and
also as a way of influencing DPP and judicial thinking about appropriate cartel
fines in the criminal context.

At the most recent ICN conference, there was discussion of a possible
global settlement system to deal with international cartel cases.106 In order to
participate in such a system, the ACCC needs first to ensure that its own
settlement policy is consistent with international best practice.

5 Immunity policy and alternative informant rewards

Notwithstanding the current popularity of immunity policy as the anti-cartel
enforcement weapon of choice, it would be a mistake to overlook the range of
additional methods of cartel detection undertaken or currently under
consideration by competition regulators around the world.107 Such methods
may be reactive in nature (as is an immunity policy), in the sense that they
seek to encourage, including through the possible offer of rewards, provision
of information from an external source which alerts the agency to potential
cartel activity of which it was previously unaware or of which it previously
had insufficient information to launch an investigation. Generally, such
sources fall into two categories: (1) complainants, ie competitors or
customers, who suspect the existence of a cartel; and (2) informants or
whistleblowers,108 ie, persons who have some ‘inside information’ relating to
a cartel typically by virtue of being involved in or connected with the cartel
members in some way (often, a current or former employee).109

Alternative methods of cartel detection might be proactive in the sense that
they are initiated within the agency and do not rely, at least not in the first
instance, on an external source of information.110 Such methods include:111
use of economic studies and modelling to identify industries and markets most

106 Referred to in S Scott, ‘Speaking Notes for Sheridan Scott, Commissioner of Competition,
Canada: Change and Redemption in Cartel Enforcement’, Speech at Canadian Bar
Association Spring Meeting, 29 April 2008, at <http://www.competition
bureau.gc.ca/epic/site/cb-bc.nsf/en/02667e.html> (accessed 7 May 2008).
107 As canvassed recently, for example, in International Competition Network, Anti-Cartel
Enforcement Manual, Cartel Enforcement, Subgroup 2 ICN Cartels Working Group, May
2007, Ch 4, Cartel Case Initiation, May 2007, at <http://www.international
competitionnetwork.org/media/library/conference_6th_moscow_2007/21Anti-Cartel
EnforcementManualChapter4onCartelCaseInitiation.pdf> (accessed 23 April 2008). See
also W Wils, ‘Leniency in Antitrust Enforcement: Theory and Practice’ (2007) 30 World
Competition: Law & Economics Review 25 at 41: ‘leniency is not a substitute but a
complement to the other methods of collecting intelligence and evidence of antitrust
violations.’
108 Sometimes more colourfully referred to as ‘moles’ or ‘agents provocateurs’: see, eg,
I Forrester, ‘Searching Beneath the Cherry Tree in the Garden: European Thoughts on How
to Enhance the Task of Uncovering and Thereby Deterring Cartels’ in C-D Ehlermann and
I Atanasiu (Eds), European Competition Law Annual 2006: Enforcement of Prohibition of
Cartels, Hart Publishing, Oxford and Portland, Oregon, 2007, p 187.
109 International Competition Network, above n 107, pp 3–6.
110 For present purposes these exclude proactive strategies contained within a leniency policy,
for example, Amnesty Plus, Penalty Plus and the omnibus question: see G Spratling,
‘Detection and Deterrence: Rewarding Informants for Reporting Violations’ (2001) 69
George Washington L Rev 798 at 817–20.
111 This list is derived from International Competition Network, above n 107, pp 6–14.
likely to exhibit collusion;112 fresh examination of information gathered in
previous cartel cases (whether successful or not); analysis of information
available from non-cartel work (for example, in relation to mergers or vertical
restraints); monitoring of activities in particular industries (for example, by
attending industry meetings and reviewing industry publications);113 tracking
of individuals previously known or found to be involved in cartel activity;
liaison with other domestic regulatory or enforcement agencies (for example,
in the corporate or tax arenas); liaison with other competition agencies
overseas, either bilaterally114 or multilaterally (for example, through
participation in fora such as the ICN);115 and education and outreach
programs.

The ACCC is known to use several of these alternative strategies to enhance
its prospects of detecting cartel conduct.116 For example, the commission:

112 See, eg, J Harrington Jr, ‘Behavioural Screening and the Detection of Cartels’ in Ehlermann
and Atanasiu, above n 108, pp 51–68; P Rey, ‘On the Use of Economic Analysis in Cartel
Detection’ in Ehlermann and Atanasiu, above n 108, pp 69–82; P Grout and S Sonderegger,
‘Structural Approaches to Cartel Detection’ in Ehlermann and Atanasiu, above n 108,
pp 83–104; R Whish, ‘Oligopoly Theory and Economic Evidence’ in Ehlermann and
Atanasiu, above n 108, pp 105–18; R Allendesalazar, P Martı´nez-Lage and R Vallina,
‘Oligopolies, Conscious Parallelism and Concertation’ in Ehlermann and Atanasiu, above
n 108, pp 119–38; J Harrington Jr, ‘Corporate Leniency Programs and the Role of the
Antitrust Authority in Detecting Collusion’, 31 January 2006, Paper presented at the
International Symposium on Towards an Effective Implementation of New Competition
Policy, pp 32–40 (discussing structural and behavioural industry screening for cartels), at
<http://www.econ.jhu.edu/People/Harrington/CPRC-1.06.pdf> (accessed 13 May 2008).
113 See, eg, the reference to the United States DOJ’s activities in this regard in Spratling, above
n 110, at 820–2 and the description of industry targeting in J Seon Hur, ‘Cartel Detection
Techniques of the KFTC’, Paper presented at ICN Cartels Workshop, Cracking Cartels
Conference, Sydney, November 2004, pp 14–15, at <http://www.accc.gov.au/
content/item.phtml?itemId=566510&nodeId=62b0e4c14a0fb7a216e37d54eb297da4&fn
=Session%203%20-%20Joseph%20Seon%20Hur%20-%20KFTC.rtf> (accessed 8 May
2008).
114 There is considerable bilateral liaison between jurisdictions in combating anti-competitive
conduct. See, eg, the United States DOJ Antitrust Division’s cooperation agreements, at
<http://www.usdoj.gov/atr/public/international/int_arrangements.htm> (accessed 8 May
2008). See also the comments of R Hewitt Pate that ‘[w]e have the building blocks in place
for an international network of enforcement agencies using the tools of coordination,
information sharing, and amnesty programs to crack difficult cartel cases’: R Hewitt Pate,
‘Antitrust in a Transatlantic Context — From the Cicada’s Perspective’, Paper presented at
the Antitrust in a Transatlantic Context Conference, Brussels, Belgium, 7 June 2004, p 5, at
<http://www.usdoj.gov/atr/public/speeches/203973.pdf> (accessed 8 May 2008). See further
R Hewitt Pate, ‘International Anti-Cartel Enforcement’, Paper presented at ICN Cartels
Workshop, Cracking Cartels Conference, Sydney, November 2004, pp 4–5, at
<http://www.usdoj.gov/atr/public/speeches/206428.pdf> (accessed 8 May 2008).
115 See the work to date by the ICN’s Cartels Working Group at
<http://www.internationalcompetitionnetwork.org/index.php/en/working-groups/cartels> (accessed 13 May 2008).
116 See generally the description of sources from which the ACCC gathers information and its
modes of analysis in ACCC, Submission to the Productivity Commission inquiry into
Australia’s Consumer Policy Framework, June 2007, p 35, at <http://www.accc.
gov.au/content/item.phtml?itemId=788437&nodeId=9b211b532eb1d5595f22c95bfd3a417d
&fn=ACCC%submission%20to%20PC%> (accessed 12 May 1008).

• has a formal complaints system in place for receiving, handling and

responding to complaints from the general public;117

• as discussed in Part 4, has a broad-based settlement policy that is

independent of its immunity policy for cartels aimed at encouraging

corporations and individuals with valuable and important evidence of

a contravention to come forward and cooperate;118

• has undertaken a series of educative initiatives aimed at increasing

awareness of the illegality of cartel conduct amongst the general

public, consumers, government agencies and various sectors in the

business community;119 and

• has bilateral information-sharing and cooperation agreements with

several overseas competition regulators,120 and also is an active

participant in multilateral fora such as the OECD and ICN.121

It may be that the ACCC uses additional strategies such as economic

modelling of markets or monitoring of industries or individuals that, for

obvious reasons, are not public knowledge.122 However, the ACCC has not

117 General complaints and inquiries from the public can be made via a dedicated phone service
or via the internet. This service is able to explain rights and obligations, as well as suggest
how the ACCC will possibly react to certain business practices: at
<http://www.accc.gov.au/content/index.phtml/itemId/54217> (accessed 8 May 2008). The
ACCC has also published a Referral Guide directed at claimants who are disadvantaged or
vulnerable consumers: at <http://www.accc.gov.au/content/item.phtml?itemId
=386270&nodeId=1ca4e0d15f58d0d789c24a19460433ba&fn=ACCC%20referral
%20guide.pdf> (accessed 8 May 2008).
118 ACCC, Cooperation Policy for Enforcement Matters, above n 14.
119 See ACCC, Cartels: A guide for consumers on cartel conduct, 16 March 2006, at
<http://www.accc.gov.au/content/item.phtml?itemId=727610&nodeId=c4a02dee116a879db
1588433ca493af1&fn=Cartelsa%20guide%20for%20consumers%20on%20cartel%20
conduct.pdf> (accessed 13 May 2008); ACCC, Cartels: what small business need to know,
22 February 2006, at <http://www.accc.gov.au/content/item.phtml?itemId=725303&
nodeId=23e00bef69d987580ebffeaa3b1af9e5&fn=What%20small%20businesses%20need%
20to%20know.pdf> (accessed 13 May 2008); ACCC, Price-fixing — news for business,
1 January 2007, at <http://www.accc.gov.au/content/item.phtml?itemId=
716949&nodeId=6744d253c6d765ba2a33a5ceac30049a%fn=News%20for%20business
-price%20fixing_Jan07.pdf> (accessed 13 May 2008); ACCC, Cartel conduct — how it
affects you and your business, at <http://www.accc.gov.au/content/item.phtml?itemId=
784765&nodeId=64cea2b39a31a5bf3f1a9feaaf513fcd&fn=Cartel%20conduct.pdf>
(accessed 13 May 2008).
120 See the list of these agreements at <http://www.accc.
gov.au/content/index.phtml/itemId/564911> (accessed 11 May 2008).
121 The ACCC participates regularly in discussions of the OECD’s Competition Committee, its
associated working groups, and the Joint Group on Trade and Competition: see
<http://www.accc.gov.au/content/index.phtml/itemId/304796#h3_22> (accessed 11 May
2008). The ACCC was a founding member of the ICN in 2001: at
<http://www.accc.gov.au/content/index.phtml/itemId/304796#h3_22> (accessed 11 May
2008) and its personnel are also regular members of the ICN’s working groups. For example,
between 2003–2005 Mark Pearson, the ACCC’s Executive General Manager, Enforcement
& Compliance Division was Co-chair of ICN Subgroup 2 on Enforcement Techniques. In
2004 the ACCC hosted the ICN’s Cartel and Leniency workshops in Sydney: at
<http://www.accc.gov.au/content/index.phtml/itemId/572851/fromItemId/623367> (accessed 11 May 2008). For a general description of the ACCC’s approach to international
links, including participation in international fora: see ACCC, Submission to the Productivity
Commission Inquiry into Australia’s Consumer Policy Framework, above n 116, pp 66–7.
122 Cf the recent public inquiries held by the ACCC into the petrol and grocery industries, the
announced any plan to consider the introduction of an informant reward
system.123 The remainder of this Part examines the possibility of adopting
such a strategy in Australia, taking the view that, carefully designed and
implemented, as a complement to the immunity policy, it has the capacity to
strengthen detection, investigation and prosecution of cartel activity, while
saving on enforcement costs and promoting deterrence, if not voluntary
compliance with the law.

5.1 The issues

In considering the possible adoption of a policy for rewarding inside
information on cartel activity independently of immunity or leniency
programs, two principal issues arise — the first concerns the rationale or
justification for such a policy and the second concerns its design and
parameters. As to both issues there is a wealth of literature and empirical
research from law, regulation, economics, sociology and psychology that
delves into the phenomenon of whistleblowing.124 It is not intended to canvas
any of that literature here. Nor is it proposed to canvas whistleblowing
generally in the Australian context,125 most of the commentaries on which

terms of reference of which were sufficiently broad to encompass possible collusion between
the major participants in these industries: see, on the petrol inquiry: at <http://www.accc.
gov.au/content/index.phtml/itemId/790921> (accessed 11 May 2008); and on the grocery
inquiry at <http://www.accc.gov.au/content/index.phtml/itemId/809228> (accessed 11 May
2008).
123 See the comments in M Pearson, ACCC Executive General Manager, Enforcement and
Compliance Division, ‘Criminalisation of Cartels’, Speech at meeting of American Bar
Association Section of Antitrust Law, January 2008 (copy on file with author).
124 See, eg, F Alford, Whistleblowers: Broken Lives and Organizational Power, Cornell Press,
Ithaca, 2002; M Glazer and P Glazer, The Whistleblowers: Exposing Corruption in
Government, Basic Books, New York, 1991; T Dworkin and J Near, ‘A Better Statutory
Approach to Whistleblowing’ (1997) 7 Business Ethics Quarterly 1; R Howse and
R Daniels, ‘Rewarding Whistleblowers: Costs and Benefits of an Incentive-Based
Compliance Strategy’ in R Daniels and R Morck (Eds), Corporate Decision-making in
Canada, University of Calgary Press, Calgary, 1995; F Koffman and L Jacques,
‘A Prisoner’s Dilemma Model of Collusion Deterrence’ (1996) 59 Jnl of Public Economics
117; P Grabosky, ‘Regulation by Reward: On the use of incentives as regulatory
instruments’ (1995) 17 Law and Policy 257.
125 See, eg, J Harders, ‘Whistleblowing: Counting the Cost’ (1991) 66 Canberra Bulletin of
Public Administration 29; P Grabosky, ‘Citizen Co-production in Fraud Control’ (1988) 56
Canberra Bulletin of Public Administration 124; J McMillan, ‘Blowing the Whistle on
Fraud in Government’ (1988) 56 Canberra Bulletin of Public Administration 118; W De
Maria, ‘Whistleblowing’ (1995) 20 AltLJ 270; H Whitton, ‘Ethics and principled dissent in
the Queensland public sector: a response to the Queensland whistleblower study’ (1995) 54
Aust Jnl of Public Administration 455; R Fox, ‘Protecting the Whistleblower’ (1993) 15
Adelaide L Rev 137; Electoral and Administrative Review Commission, Report on
Protection of Whistleblowers, Queensland Government Printer, Brisbane, 1991; D Solomon,
‘Whistleblowers, and governments, need more protection’ Democratic Audit of Australia —
February 2006, at <http://democratic.audit.anu.edu.au/papers/20060208_
solomon_whistleblowers.pdf> (accessed 1 May 2008). As far as the author is aware, there
has been only one scholarly consideration of whistleblowing in the cartel context: see
B Chapman and R Denniss, ‘Using rewards to catch white-collar criminals’, November
2003, at <http://www.tai.org.au/documents/downloads/WP50.pdf> (accessed 1 May 2008),
and published as B Chapman and R Denniss, ‘Using Financial Incentives and Income
Contingent Penalties to Detect and Punish Collusion and Insider Trading’ (2005) 37 ANZ Jnl
of Criminology 122.
focus on measures taken to facilitate whistleblowing in relation to public
sector (including police) misconduct and corruption.126 Rather the discussion
below draws primarily on the small but growing body of writing that examines
the topic in the context of cartel detection specifically.127 In particular, it relies
substantially on the work of William Kovacic, the current Chairman of the
Federal Trade Commission, a leading proponent of a reward (or bounty, as it
is sometimes called) system for cartel informants,128 and a strong advocate of
greater private participation in antitrust law enforcement generally.129

Kovacic’s work in turn draws by analogy upon the qui tam model provided
for by the United States Civil False Claims Act (CFC Act) which offers
substantial financial rewards for individuals who inform the DOJ of fraudulent
conduct by government contractors and others.130 If the DOJ successfully
prosecutes the alleged misconduct, the whistleblower is entitled to 15–25% of
all sums recovered by the government, plus reasonable legal fees, costs and
expenses. If the DOJ chooses not to prosecute, the informer may proceed with

126 There is whistleblowing legislation in most jurisdictions in Australia: see Corruption and
Crime Commission Act 2003 (WA) s 156; Whistleblowers Protection Act 1993 (SA); Public
Interest Disclosure Act 1994 (ACT); Protected Disclosures Act 1994 (NSW);
Whistleblowers Protection Act 1994 (Qld); Whistleblowers Protection Act 2001 (Vic);
Public Service Act 1999 (Cth) s 16. Notably, the existing Australian models of
whistleblowing legislation do not provide for rewards for whistleblowers, but rather focus
on providing protection from reprisals (and implicitly seem to assume that people will be
incentivised to blow the whistle by a sense of moral obligation or public spiritedness). There
is currently research underway into the effectiveness of these models. The first phase of the
research, led by Griffith University, was reported on in A J Brown (Ed), ‘Whistleblowing in
the Australian Public Sector: First Report’, Paper presented at the Australian Public Sector
Anti-Corruption Conference 2007, 24 October 2007, at <http://www.apsacc.com.au/
papers07/day1_24oct07/StreamD2/WhistleblowingInAustPublicSector_AJBrown.pdf>
(accessed 8 May 2008). Further information is available from the Project’s homepage, at
<http://www.griffith.edu.au/centre/slrc/whistleblowing/> (accessed 8 May 2008).
127 In addition to the work of Kovacic (cited immediately below), see G Spagnolo, ‘Optimal
Leniency Programs’, FEEM Nota di Lavoro No 42.00, Fondazione ENI ‘Enrico Mattei’,
Milano, at <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=235092#PaperDownload> (accessed 8 May 2008); G Spagnolo, ‘Leniency and Whistleblowers in Antitrust’,
Discussion Paper Series, No 5794, Centre for Economic Policy research, August 2006, at
<http://www.cepr.org/pubs/dps/DP5764.aspm> (accessed 23 April 2008); P Rey, ‘Towards a
Theory of Competition Policy’ in M Dewatripont, L P Hansen and S Turnovsky (Eds),
Advances in Economics and Econometrics: Theory and Applications: Eighth World
Congress, Cambridge University Press, Cambridge, 2003, Ch 3; C Leslie, ‘Cartels, Agency
Costs and Finding Virtue in Faithless Agents’ (2008) 49 William and Mary L Rev 1622
at 1668–9.
128 See C Aubert, P Rey andWKovacic, ‘The impact of leniency and whistle-blowing programs
on cartels’ (2006) 24 International Jnl of Industrial Organization 1241; W Kovacic,
‘Bounties as Inducements to Identify Cartels’ in Ehlermann and Atanasiu, above n 108,
pp 587–95; W Kovacic, ‘Private Monitoring and Antitrust Enforcement: Paying Informants
to Reveal Cartels’ (2001) 69 George Washington L Rev 766; W Kovacic, ‘The Identification
and Proof of Horizontal Agreements under the Antitrust Laws’ (1993) 38 Antitrust Bulletin
81; W Kovacic, ‘Antitrust Policy Horizontal Collusion in the 21st Century’ (1997) 9 Loyola
Consumer Law Reporter 97 at 104–7.
129 See, eg, W Kovacic, ‘Private participation in the enforcement of public competition laws’ in
MAndenas, M Hutchings and P Marsden (Eds), Current Competition Law II, British Insitute
of International and Comparative Law, London, 2004, p 167.
130 31 USC, § 3729(a) (1994). The words qui tam come from ‘Qui tam pro domino rege quam
pro se ipso’ which means ‘he who brings an action on behalf of the King, as well as for
himself’: H Black, Black’s Law Dictionary, 7th ed, St Paul, MN: West Group, 1999, p 1262.
his or her own suit in which case the reward recoverable is 25–30% of the
funds recovered. Recoveries by persons who participated in the fraudulent
conduct are curtailed131 and protections are provided for employees whose
employment is placed at risk by their informing.132 In the period 1986–2000
the US government recovered $US3.5 billion and informers received
$US500 million under the CFC Act.133

5.1.1 Rationale for an informant reward system

Kovacic argues that public enforcement provides offenders with incentives ‘to
take precautions to avoid creating observable evidence of misconduct’.134
Thus they may use subtle, covert measures that government agencies find
difficult to detect. ‘As the participants’ skill in concealing misconduct
increases, the likelihood of being prosecuted and punished for violations
fades.’135 Private monitoring, Kovacic points out, can be ‘an antidote to such
concealment’.136 Its key strength is that it ‘gives the monitoring tasks to the
individuals closest to the relevant information’,137 thus enabling the
monitoring to be carried out more effectively and at lower cost than by
external government monitors.

Furthermore, in addition to increasing the prospects and speed of detection,
private monitoring may pose a more potent deterrent to public monitoring.
The likelihood of detection ‘influences a party’s decision to obey or violate the
law . . . by increasing the likelihood of detection, private monitoring can
decrease the expected payoff from violating the law and boost the incentive to
obey’.138 Private monitoring can be destabilising particularly where the
success of an illegal practice requires covert collective action. This is because
adherence to a common scheme may be harder to achieve if each participant
recognises that employees entrusted with the scheme’s tasks, or employees

131 31 USC, § 3730(d)(3) (1994).
132 31 USC, § 3730(h) (1994).
133 S Schiffer, Deputy Assistant Attorney-General, Civil Division, Department of Justice,
‘Statement before the Subcommittee on Energy and Mineral Resources of the United States
House Committee on Resources Concerning Oil Royalty Overpayment False Claims Act
Litigation’, 18 May 2000, at <http://www.usdoj.gov/civil/speeches/schiffer051800.htm> (accessed 25 April 2008). In 2003, $1.5 billion was recovered, the highest annual level of
recovery in a single year (see G Spagnolo, ‘Leniency and Whistleblowers in Antitrust’,
Discussion Paper Series, No 5794, Centre for Economic Policy research, August 2006,
pp 39–40, at <http://www.cepr.org/pubs/dps/DP5764.aspm> (accessed 23 April 2008).
Moreover, this recovery was achieved in a comparatively low level of qui tam cases filed —
334, with total relators’ awards of about $350 million and an average relator award above
$1 million, which is over 20% of recoveries. There have been calls for a similar system to
be adopted in the United States to promote whistleblowing in relation to corporate and
securities fraud: see G Rapp, ‘Beyond Protection: Invigorating Incentives for Sarbane-Oxley
Corporate and Securities Fraud Whistleblowers’ (2007) 87 Boston Uni L Rev 91, and tax
fraud: see D Ventry Jr, ‘Whistleblowers and Qui Tam for Tax’, Research Paper No, 2008-23,
Washington College of Law, at <http://www.ssrn.com/abstract+1020182> (accessed 25
April 2008).
134 Kovacic, ‘Bounties as Inducements to Identify Cartels’, above n 128, p 577.
135 Ibid, pp 577–8.
136 Ibid, p 578.
137 Ibid, p 578.
138 Ibid, p 578.
who simply happen to learn of the scheme’s existence, may act as a private
monitor.139

Applying these general principles to cartel conduct, Kovacic argues in
favour of an informant rewards system in relation to this conduct and explains
its relationship with an immunity or leniency policy:

With a system of bounties, each company insider who becomes aware of the cartel

is a potential informant. The firm’s managers not only must worry about the possible

moves of their cartel partners, but about the actions of each employee who is enlisted

to assist in the illegal plan or who learns about the plan inadvertently. Each meeting

or conversation or act in furtherance of the cartel is beset with doubt about whether

each knowledgeable individual can be trusted to remain faithful to the illegal

enterprise, or whether employees who merely observe irregular activities will keep

their suspicions to themselves.

Compared to leniency, a bounty system denies the managers of the cartel firms

control over the timing of when to reveal their illegal operations to prosecutors. The

choice of when to inform no longer is governed simply by conjectures about whether

other cartel members will seek leniency. With bounty hunting, the managers of the

cartel participants confront the possibility that any employee of any cartel member

with knowledge of the cartel will reveal the illegal arrangements to prosecutors. In

any event, bounty hunting and leniency can be viewed as complements rather than

substitutes. Because it gives each employee the capacity to inform, a bounty hunting

system may accelerate recourse by cartel members to leniency.140

Notwithstanding the intuitive appeal of these arguments, there are also
arguments against an informant reward system for cartel conduct. As Kovacic
acknowledges, there is a risk that informants may not be seen as credible
witnesses, but he counters that: (a) this has not been an issue in the United
States in other contexts; and (b) an informant can facilitate successful
enforcement without ever having to appear in court (for example, through
providing a blueprint for the investigation and assisting in covert surveillance
of prospective defendants).141 Relatedly, there may be seen to be ethical issues
associated with paying informants, particularly where the informant was
involved or connected in some way with the illegal conduct. Again, however,
the same issues would arise, even more acutely, in connection with an
immunity policy and, in any event, the informant reward program can have
eligibility criteria that exclude cartel participants. Finally, there is an economic
argument that points to the potentially adverse effects of a bounty system on
the relationship between senior executives and shareholders. In particular, it
has been argued that the prospect of a bounty might give managers an
incentive to collude with a view to subsequently reporting the collusion and
collecting the reward, such behaviour being in conflict with the wishes of the
shareholders in favour of competition. This argument has been seen as having
limited validity in the case of cartels, however, as collusion can only occur if
managers of other firms in the market participate, and they may have the same
incentives in equilibrium as the manager contemplating the transitory
collusion.142

139 Ibid, p 578.
140 Ibid, p 588.
141 Ibid, p 579.
142 See the discussion in C Aubert, ‘Instruments for Cartel Deterrence, and Conflicts of
5.1.2 Design of an informant reward system

In designing a whistleblower or informant reward program, it has been
emphasised by Kovacic and others that the rewards must be very high
(a significant percentage of the penalties recovered) and that the safeguards or
protections offered to informants, in anticipation of reprisals, very strong.143
Sociological and empirical research shows that whistleblowers tend to face
harsh sanctions from employers, fellow employees and the business
community generally, as well as potentially from family and friends. Such
sanctions might include prosecution of the whistleblower (for example, in
relation to the disclosure of confidential information), social exclusion and
even physical harassment, and might last for several years (at least as long as
it takes to prosecute the conduct on which the whistleblower has informed).144

The specific operational elements of an informant reward system for cartel
conduct need to make provision for:

• defining the universe of eligible private monitors, typically having regard to

criteria that include employment status, nature of and proximity to the harm

or wrongdoing, participation or acquiescence in the unlawful conduct (and in

relation to the latter, the eligibility of the informant to seek immunity or

leniency);

• determining the types and quality of information the provision of which will

be encouraged and rewarded under the policy;

• calculating the reward, including determining when it is to be assessed and

whether it is to be calculated as a percentage of the penalties ultimately

recovered or according to some other formula, as well as determining

whether informants will be entitled to recover their own legal fees and other

expenses, and how multiple informants are to be handled;

• administering the reward system, including determining how and to whom

informants should make their initial approach and the procedures for

communicating with informants thereafter and managing expectations about

outcomes;

• creating safeguards against retaliation against informants, including

protecting against disclosure of the informant’s identity or where such

disclosure proves necessary, ensuring that there are prohibitions on and

sanctions against retaliation by employers against informant employees; and

• duration, in particular whether the system should be run initially for a trial

period.145

Interests’ in V Ghosal and J Stennek (Eds), The Political Economy of Antitrust, Elsevier,
Amsterdam, 2007, Ch 5. See also the economic analysis of the limitations of whistleblowing
generally in B Depoorter and J De Mot, ‘Whistle Blowing: An Economic Analysis of the
False Claims Act’ (2006) 14 Supreme Court Economic Review 135.
143 Spagnolo, above n 133, p 38.
144 See, eg, Alford, above n 124, and the references cited therein. For recent examples of the
‘persecution’ of whistleblowers in Australia, see C Merritt, ‘Pardon this whistleblower’, The
Australian, 25 April 2008 (concerning the legal proceedings brought against a former
customs officer who leaked details of lax security at Australian airports); N Robinson,
‘Whistleblower loses job’, The Australian, 19 April 2008 (concerning the repercussions
suffered by a teacher in the Northern Territory after going public regarding the poor
conditions in remote schools).
145 Kovacic, ‘Bounties as Inducements to Identify Cartels’, above n 128, pp 592, 594–5.
5.2 Overseas models

To date only two jurisdictions appear to have adopted a formal policy of
offering financial rewards for cartel-related information. They are Korea and
the United Kingdom. There are some basic similarities but also certain
significant differences in the approach taken in these two jurisdictions.

5.2.1 Korea

In 2002, Korea became the first jurisdiction in the world to create an informant
reward program to enhance cartel detection.146 The reward system encourages
informants to provide crucial information to the Korean Fair Trade
Commission (KFTC) relating to the existence of cartel behaviour in return for
a substantial reward. The system is seen as promoting ‘constant monitoring by
the market participants, including present and former employees of cartel
member companies, those harmed by the cartel activity, market agents in both
upstream and downstream markets, and [the] general public’.147 Informants
may include persons who are ‘indirectly related’ to the cartel activity.148 The
system is regarded by the KFTC as a cost effective mechanism on the grounds
that it will save investigative costs and induce voluntary compliance by
business.149

Under Art 64(2) of the Korean Monopoly Regulation and Fair Trade Act
1981, the authorities ‘may pay the compensation within the limit of the budget
for the person who informs the KFTC of the violation of this Act and provides
the evidence that proves this violation’. If more than one person reports or
informs the same violation, the reward will go to the first person to submit the
relevant evidence.150 Rewards are not paid where the reported behaviour is
found to be legitimate or when the evidence submitted is found to be
insufficient.151 A Reward Review Committee has been established to ensure a
fair and transparent process for determining reward eligibility. The
identification of informants is kept confidential and ‘anonymous informants
can receive reward money if they apply for the payment within six months
after the date of the [K]FTC’s ruling’.152
The level of reward is based on the level of sanction and the quality of

146 Korea Fair Trade Commission, ‘KFTC’s launch of reward system for informants’, Press
Release, at <http://www.ftc.go.kr/data/ hwp/rewardsystem.doc> (accessed 25 April 2008).
Notably, the system is not confined to cartels, but extends also to ‘undue supporting
behaviour; violations of notification on business practices relating to large retail store
business that includes department stores, discount stores and TV home shopping companies;
unfair transactions violating notification on newspaper selling; and prohibited activities of
enterprisers organization’.
147 KFTC, Recent Changes to Korea’s Cartel Enforcement Regime, 31 May 2005, pp 5–6
[24]–[26], at <http://www.ftc.go.kr/data/hwp/room_docu.doc> (accessed 25 April 2008).
148 KFTC, ‘A Reward of 66.87 million won paid to informant of welding rod cartel’, Press
Release, at <http://www.ftc.go.kr/data/hwp/informant_reward.doc> (accessed 25 April
2008).
149 KFTC, Recent Changes to Korea’s Cartel Enforcement Regime, above n 147, pp 5–6
[24]–[26].
150 KFTC, ‘KFTC’s launch of reward system for informants’, above n 146.
151 KFTC, Annual Report on Competition Policy Development in Korea (January 1, 2005 —
December 31, 2005), September 2006, p 7, at
<http://ftc.go.kr/data/hwp20070507_102224.doc> (accessed 1 May 2008).
152 KFTC, ‘KFTC’s launch of reward system for informants’, above n 146.
evidence provided.153 First, a standard amount is derived according to the
level of sanction. Where the surcharge in the price of the products due to the
cartel is less than KRW500 million, the standard amount is set at 5% of the
surcharge, with a minimum of KRW5 million; where the surcharge is between
KRW500 million and 50 billion, the standard amount is set at 1%; and where
the surcharge is over KRW50 billion, the standard amount is set at 0.5%. Once
the standard amount is calculated, the final amount will then depend on the
quality of evidence provided to the Authority. ‘Top grade evidence’ such as a
signed agreement will bring the reward to 80–100% of the standard amount.
‘Medium grade evidence’ such as the minutes of the meeting is worth 60–80%
of the standard amount. Finally, ‘low grade evidence’ includes supporting
information of cartel agreement and coordinated action and is worth 40–60%
of the standard amount.154

Initially the maximum award was set at KRW20 million ($US20,000;
EURO17,000), but because the policy did not attract many reports, the
maximum reward was raised to KRW100 million ($US100,00; EURO85,000)
in November 2003. After having had only five cases brought as a result of
information provided under the system following this increase, the reward was
raised further to KRW1 billion ($US1 million; EURO850,000) in 2005.155
A reward of 66.87 million won (about $US63,700) was paid in June 2005 to
a person who provided decisive evidence in a welding rod cartel case — the
largest reward so far to have been given. Until the informant provided this
evidence the KFTC had no evidence or decisive information about the cartel
and had not begun any investigations. As a result of its investigations,
penalties of KRW4.187 billion were imposed on six welding manufacturers.
The evidence submitted by the informant, whose identity was kept
confidential, included the names of the executives involved, the meeting place
of the conspirators and the details of the agreement. The KFTC ‘expects this
case will serve as a good example, encouraging outsiders like consumers,
retired executives and staff of cartel participants, [and also] companies doing
business with cartel participants to provide cartel evidence’.156

5.2.2 The United Kingdom

In February 2008 the OFT announced that it was introducing a system for
payment of financial rewards for information about cartel activity.157 Very
little was evident from the announcement, or for that matter from any other
source prior to or since the announcement, about the OFT’s thinking about this
initiative from a policy perspective. The trite explanation offered was to the

153 See OECD, Directorate for Financial and Enterprise Affairs, Competition Committee,
Annual Report on Competition Policy Reports in Korea 2004, DAF/COMP (2005)32/29,
11 October 2005, at <http://www.oecd.org/dataoecd/36/47/34720758.pdf> (accessed 13
May 2008).
154 KFTC, Recent Changes to Korea’s Cartel Enforcement Regime, above n 147, pp 5–6
[24]–[26].
155 Ibid, pp 5–6 [24]–[26].
156 KFTC, ‘A Reward of 66.87 million won paid to informant of welding rod cartel’, above n
148.
157 Office of Fair Trading, ‘OFT offers financial incentives for information regarding cartel
activity’, Press Release, 29 February 2008, at <http://www.oft.gov.uk/news/press/2008/31-
08> (accessed 25 April 2008).
effect that cartels are damaging and hard to detect and it was thought to be in
the ‘public interest to offer financial incentives in the hope that it will
encourage more people who have good information about the existence of
hard core cartel activity to come forward’.158 The policy is to run for a trial
period of 18 months, after which a decision will be made as to whether it
should be a permanent arrangement.159

As to the type of information for which rewards will be available under the
policy, the only indication given by the OFT is that it should be ‘accurate,
verifiable and proves to be useful in the OFT’s anti-cartel enforcement
work’.160 Potential informants are urged to approach the OFT before they have
obtained all of the information to which they might potentially have access.
This is said to have the two-fold purpose of enabling the OFT to advise the
informant on the risks involved in securing furthering information and also
enabling the OFT to indicate what information will be of most value to it.161
Informants are assured that their information will be treated in the strictest
confidence and that they will be dealt with by ‘specially trained officers,
mostly with a background elsewhere within the law enforcement community’
who ‘will operate systems which will ensure that any information given is
carefully safeguarded and handled with a view to protecting [the informant’s]
identity from disclosure’.162 Informants are entitled to deal initially with the
OFT on a no-names basis but once the OFT has determined that the
information being offered is of value then the informant will be required to
attend a meeting and disclose their identity as an ‘an essential part of [the
OFT] assessing [the informant’s] credibility and the likely reliability of the
information’.163 The OFT acknowledges in its policy that informants who are
employees of cartel members might be concerned about the consequences for
their employment of blowing the whistle on their bosses. As to this concern,
the OFT points out that, except in rare cases where the informant agree to be
a witness, the OFT will use the information provided as intelligence only and
hence will protect the informant’s identity from disclosure. Nonetheless, it is
against the law for an employer to dismiss or otherwise victimise an employee
for whistleblowing on illegal activity.164

In contrast to the Korean maximum of $US1 million, the maximum reward
available under the OFT policy is £100,000, and even that amount would be
granted ‘only in exceptional circumstances’.165 Rewards are granted at the
discretion of the OFT which means that it is entirely free to reject offers of
information and it does not have to give reasons for doing so.166 Furthermore,
where the OFT has agreed to accept some information from a person and the

158 Ibid, quoting Simon Williams, the OFT’s then Senior Director of Cartels and Criminal
Enforcement.
159 Ibid.
160 Ibid.
161 See the details of the policy provided on the OFT’s website at
<http://www.oft.gov.uk/advice_and_resources/resource_base/cartels/rewards> (accessed 25
April 2008).
162 Ibid.
163 Ibid.
164 Ibid.
165 Ibid.
166 Ibid.
information provides a credible basis for further investigation, the OFT is still
free to decide, on the basis of other more pressing priorities, that it will not use
the information given and will not therefore give a financial reward. Where a
reward is available, its amount will depend on a number of factors:167

• the value of the information in terms of what the OFT has been able

to achieve from it;

• the amount of harm to the economy and consumers that the OFT

believes the information has assisted in disclosing or ending;

• the effort the informant has had to make in order to give the OFT the

information; and

• the risk the informant has had to take in order to provide the

information.

The amount paid by way of reward is non-negotiable. It also will be
calculated and paid only at the end of an investigation. The OFT nevertheless
will try to give informants some idea early on as to the broad range within
which a possible financial reward amount might fall.168

As to eligibility, under the policy, those involved in the cartel are not
usually eligible for a financial reward and instead must apply for leniency,
unless their role was ‘relatively peripheral’.169 Furthermore, a financial reward
is more likely to be given, and the intention of the policy was to elicit, ‘inside’
information rather than information/complaints from potential victims.170

5.3 The way forward

Notwithstanding the view of some that an informant reward system is ‘the
natural extension of the criminalisation of cartel enforcement’,171 it is unlikely
to be embraced by a substantial proportion of jurisdictions, Australia included,
in the short-term. Even in the United States, where the DOJ has led the way
in the adoption of aggressive and innovative enforcement strategies, a
‘wait-and-see’ approach is being taken, the Antitrust Modernization
Commission having concluded that ‘[t]he recent statutory additions to the
leniency program [referring to the 2004 Act] should be given an opportunity
to work before being revisited. Only if the current approaches appear
unsuccessful should more radical approaches, such as a qui tam statute, be
considered.’172

As to whether the UK’s initiative is likely to be followed in Europe, either
at community or national level, the prediction has been made that, taking a
socio-cultural perspective, ‘[t]his is highly unlikely in the near future given

167 Ibid.
168 Ibid.
169 Ibid.
170 Ibid.
171 I Forrester, ‘Searching Beneath the Cherry Tree in the Garden: European Thoughts on How
to Enhance the Task of Uncovering and Thereby Deterring Cartels’ in Ehlermann and
Atanasiu, above n 108, p 187.
172 Memorandum from Antitrust Modernization Commission Criminal Procedure and Remedies
Working Group to All Commissioners, dated 21 December 2004, regarding ‘Criminal
Procedure and Remedies Issues Recommended for Commission Study’, p 8, at
<http://govinfo.library.unt.edu/amc/pdf/meetings/CriminalProcedure.pdf> (accessed 1 May
2008).
concerns over the acceptability of “informers” — particularly paid ones’.173
The concern regarding social acceptability may be even more accentuated in
Australia given the traditional cultural inhibition on ‘dobbing in one’s
mates’.174 Further in relation to Europe, it should be borne in mind that a few
European countries have not yet even introduced an immunity regime.175 It is
also reasonable to expect that policymakers would consider it sensible to see
the recommendations of the recent White Paper on damages claims for
antitrust breaches implemented and then allow for a period of time in which
to assess the impact on the levels of private enforcement and, in turn, the
effects on immunity and leniency policies, as well as deterrence generally.

Similarly, in Australia, the priority should be to ensure that the
criminalisation reforms are passed and implemented, with proper
arrangements made for the administration of the immunity policy, as
canvassed in Part 1 of this article. The next priorities should be to give careful
consideration to the issues that arise in connection with private competition
law enforcement in Australia, not least its relationship with the ACCC
Immunity Policy also discussed in Part 1, as well as to examine ways in which
to strengthen the approach taken to leniency and settlement (particularly in
light of criminalisation). Once these matters have been attended to and
depending on their outcome, which may take some time to evaluate, then the
ACCC could investigate the possibility of introducing an informant rewards
system.176 Up until that point, it would be naı¨ve to dismiss the idea that such
a system might be adopted in Australia as far-fetched. As Kovacic has aptly
observed:

The absorption of the qui tam technique into competition policy may be a slow
growth, but it is not inconceivable. Twenty years ago, one would not readily have
predicted that jurisdictions outside the United States would embrace the American
approach of treating cartel offences as crimes. Nor was it inevitable that most
competition policy systems would come to regard cartels as worthy of severe civil
sanctions. If nations are willing to use a reduction in punishment (leniency) to ‘pay’
cartel participants to reveal unlawful collusion, it is not a long conceptual step to
‘pay’ informers with cash to do the same.177

173 M Bloom, ‘Despite its Great Success, the European Community Leniency Program Faces
Great Challenges’ in in Ehlermann and Atanasiu, above n 108, pp 543, 568.
174 See the observations to this effect in R Douglas, Douglas and Jones’s Administrative Law,
4th ed, Federation Press, Annandale, 2002, p 176. That said, similar cultural inhibitions exist
in Korea and yet these have not deterred the regulator from implementing, apparently with
some success, an informant reward system: see the comments in Seon Hur, above n 113, p 9.
175 Bloom, above n 173, pp 543, 568.
176 By that stage, there will be an opportunity to assess how the system has fared in the United
Kingdom and it would be appropriate also at that point to examine the other legislative
models that deal with whistleblowing (predominantly in relation to public sector misconduct
and corruption) in Australia (see the list above n 126).
177 W Kovacic, ‘Private participation in the enforcement of public competition laws’ in
M Andenas, M Hutchings and P Marsden (Eds), Current Competition Law II, British
Institute of International and Comparative Law, London, 2004, p 167.
6 Conclusion

Criminalisation, private enforcement, settlement and alternative informant
rewards—while interrelated to some extent, each raise their own set of issues
and each is also somewhat different in terms of the time frame in which a
response to the issues is warranted.
In the case of criminalisation and the issues raised by giving the DPP a seat
at the immunity decision-making table, an adequate response to the concerns
that have been expressed since 2002 is long overdue.
In relation to private enforcement, while the proposed PCI scheme clearly
is regarded by the ACCC as a proper approach to reconciling the competing
interests involved, this article has argued that it is, at best, a partial response.
Given that all the signs suggest an increase in both private and ACCC-initiated
proceedings against cartels in coming years, a comprehensive consultative
process is needed to examine the conditions for and the role of private actions
in competition law enforcement in Australia generally.
Similarly, in the case of settlement, there is a good case for pressing the
ACCC to review its Cooperation Policy, and to ensure that it addresses at least
the major issues raised by criminalisation for dealing with cartel members
who do not qualify for immunity but seek leniency in return for disclosure and
cooperation.

Finally, while far less pressing, the ACCC should monitor the overseas
experiments with alternative financial informant rewards as a possible means
of supplementing its immunity and leniency policies in the future.
Whether characterised as challenges or opportunities or a combination of
both, each of the four topics examined in Parts 1 and 2 of this article place the
ACCC at a fork in the road, choosing between responses that may be narrow
or broad, short-sighted or far-sighted, inward- or outward-looking, reactive or
proactive. It should be self-evident which of these attributes will serve best the
objective of optimising cartel detection and deterrence in a world constantly
presenting new challenges and opportunities.