A second specialized investigative tool in cartel cases is the leniency programme.

This case is a good example of the use of a leniency programme when dealing with cartel cases.

In conclusion, the representatives of the JFTC enquired whether a competition authority could successfully pursue cartel investigations without a leniency programme.

Only then will there be sufficient incentive for cartel operators to break ranks and cooperate with the authorities under a leniency programme.

The representative of the United States Federal Trade Commission commented that, although a leniency programme had proved the most effective investigatory tool in cartel prosecution, the United States had prosecuted cartels successfully before it introduced a leniency programme.

A leniency programme can be a powerful anti cartel weapon, but, as is discussed below, experience has shown that it is seldom effective right away.

Some would say that no other cartel member should receive any leniency, in order to create the greatest possible incentive to be the first in the door .

Certainly some countries new to anti cartel enforcement do not yet have a formal leniency programme in place but, for the reasons discussed above, it seems that even those that do are unlikely to benefit immediately.

Apparently, few resulted from a leniency programme.

Evaluation of the effectiveness of leniency programmes

Cartel operators, especially unsophisticated ones, may make public statements that betray cartel activity.

Leniency Programmes to Fight Hard Core Cartels (2001)

After the investigation, prompted by news reports of the price increase, was underway, a fifth airline applied to the Commission for leniency under the Commission's Corporate Leniency Policy.

The GVH has applied its leniency policy to the matter.

Begin to establish a leniency programme. The word begin is important.

When this credibility is established, properly structured leniency programme will succeed.

Hungary Cartel in the fertilizer industry

Lessons for the future how to improve anti cartel enforcement in developing countries and other countries beginning an anti cartel effort

In recent years, a key obstacle to enhanced cooperation on enforcement against international cartels area has arisen from the confidentiality that is accorded under national leniency programmes to information from leniency applications.

A properly structured leniency programme should have at least the following elements

The infringement, carried out as part of an international cartel, was the longest operating cartel in Hungary, lasting from 1991 until 2003.

Hungary Cartel in the fertilizer industry 8

Complainants usually do not possess enough evidence to prove that a cartel exists, but without their initiative, many cartel prosecutions would never begin.

For most countries there is one most effective tool available to the cartel prosecutor the dawn raid, or unannounced visit to the offices of suspected cartel operators for the purpose of seizing documentary or electronic evidence of a cartel agreement.

Argentina Cartel in the medical oxygen supply market

As a result of the cartel, hospitals and consumers were charged high prices for the medical oxygen and the cartel members enjoyed illegally acquired high profits.

Begin to impose strong sanctions against cartel conduct. As was noted above, an indispensable element of a successful anti cartel programme is an aggressive sanctioning policy.

Argentina Cartel in the medical oxygen supply market 4

Previously, a cement cartel had been fined EUR 10,000,000.

A critical component of any successful leniency programme is the credible threat of severe sanctions.

The Impact of Leniency Programs on Cartels. www.wz berlin.de mp conf pastconfs io04 papers rey.pdf

Cartel cases are much more persuasive if they contain direct evidence of agreement involving the cartel participants, and evidence that the participants knew that their conduct was unlawful.

Brazil has sharply increased its anti cartel enforcement in recent years.

Recently there has been some increase in anti cartel activity, however.

How does a robust competition culture support successful anti cartel enforcement?

A dawn raid and the cooperation of one conspirator through a leniency programme produced the incriminating evidence.

One cannot expect the mere creation of a leniency programme to produce immediate results for the agency.

Once any illegal activities are found, they shall be severely dealt with according to law without any leniency.

Once the credibility of the authority had been established, a leniency programme could be a very effective tool.

In such a programme, the first cartel member offering to cooperate with a cartel investigation and providing evidence implicating the other members is promised forgiveness from prosecution or, in some cases, reduced sanctions.

The primary purpose of sanctions in the cartel context is as a deterrent.

The harm caused by the cartel should be emphasized, and quantified, if possible.

Cartel Overcharges Survey and Meta Analysis (draft). www.encore.nl documents Connor_MetaAnalysis3 10 05.pdf

The competition agency should maintain strict confidentiality regarding the fact of a leniency application and the identity of the applicant.

The optimal fine for this purpose is a multiple of the actual gain, because not every cartel is discovered and prosecuted, a factor that businesspeople take into account in deciding whether to engage in a cartel.