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Competition regulator moves to up the battle against cartels

The competition regulator has made its first significant move to hinder price fixing and cartel activity in 14 years.

Until now, the Competition and Consumer Protection Commission’s Cartel Immunity Programme — which was established in 2001 — has only been open to hearing from whistleblowers not directly involved with cartel activity.

It has now been broadened to come into line with European norms and will now allow for the actual instigators and leaders of cartels to own up and to those who facilitate, even though they may not be directly involved in such activity.

In return for information on the cartel’s activities and full compliance with the commission, as well as offering themselves as a prosecuting witness should the case reach criminal trial, whistleblowers will be immune to the potential punishment such crimes can attract here.

While, to date, a relatively low level of punishment has been meted out to offenders, Ireland ranks only second (to Canada) in terms of severity of consequence for the guilty. Offenders can be fined €5m, jailed for 10 years, and their company can be fined 10% of its annual turnover.

However, since 2002, when cartel activity became an arrestable offence in Ireland, there have been 33 convictions on indictment, €629,000 in fines have been imposed, and nine people have been handed prison sentences totalling a combined 11 years (ranging from three months to two years), all of which were suspended.

According to commission member Patrick Kenny, the immunity programme has been setting the bar “too high” until now and will now be more “fit for purpose and capable of delivering more positive outcomes”.

Currently, the commission’s programme has around six cases in play at any one time.

Mr Kenny said its broadening should see more applications being made, leading to more investigations being undertaken and, ultimately, an improved deterrence in overall cartel activity.

Approximately half of the commission’s cartel investigations surround ‘bid-rigging’ instances, where small groups of large bidders for State and private tenders team together to essentially rotate winning bids on agreed terms. Half of serious cases come from a whistle-blower participating in the immunity programme.

Mr Kenny said the immunity programme will be constantly monitored and updated when necessary.

“We have to raise the stakes, as we do believe there are cartels practicing out there,” he said.

“We won’t leave it so long [to alter] again.”

Article Source: http://tinyurl.com/kbwqb42

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