Canadian COMPETITION LAW

January 4, 2014

Strategies for discouraging and enforcement against competition law cartels (e.g., price-fixing, market allocation, bid-rigging and other illegal agreements between competitors) have ranged from promoting compliance programs to competition agency immunity and leniency programs to increasing cartel penalties to deter anti-competitive agreements that interrupt the natural operation of markets.  Price-fixing and other cartel agreements however, it seems from recent enforcement agency statistics both in Canada and elsewhere, continue to flourish despite such strategies. Addressing this issue, this interesting new article by Constantine Cannon (entitled Bring in the Whistleblowers and Pay Them) queries whether paying corporate whistleblowers for disclosing illegal cartel activities makes more sense than, for example, incentivizing parties to report and cooperate with authorities with the promise of  immunity or leniency. Abstract:

“Corporate leniency. It is for most countries these days the key foundation to cartel enforcement. Encouraging the wrongdoers to come forward, confess their antitrust transgressions, expose their co-conspirators, and receive absolution or some form of leniency in return. By most accounts, these programs have worked fairly well. Some would argue they have been a game-changer in the fight against cartels. Just look at the record number of enforcement successes across the globe. Most spawned from a leniency application. It is hard to argue that corporate leniency has not led to real results.

But you have to wonder, is trying to team up with the antitrust offenders really the best way to go about uncovering, and ultimately discouraging, cartels? Based on the unremitting flow of cartel activity that still exists, it seems apparent it is not or, at the very least, could use a serious boost. What is more, there are several problems inherent in an enforcement model that relies on and essentially rewards the very offenders that should be punished. We are well past the time to taking a step back from our unwavering devotion to corporate leniency and focusing on other equally, if not more, effective enforcement tools. Top of the list-a full-fledged, all-encompassing antitrust whistleblower system.”

For the full article see: Bring in the Whistleblowers and Pay Them – The Next Logical Step in Advancing Antitrust Enforcement.

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