INTERNATIONAL CARTEL ENFORCEMENT
RC: To what extent have you seen an increase in international cartel enforcement in recent years? In what ways are governing bodies ramping up their efforts in this area?
Hammond: The landscape for international cartel enforcement has changed dramatically in recent years. The changes stem from a near universal consensus among competition enforcers that international cartels inflict substantial harm and that stronger sanctions are required to deter cartel activity. This has led many jurisdictions to amend their competition laws to replace administrative penalties with criminal sanctions for cartel offences or to raise existing maximum penalties for individual and corporate offenders. As a result, cartel members face the prospect of being simultaneously investigated by multiple jurisdictions seeking to impose ever-increasing, and sometimes overlapping, sanctions. The risk of detection has also risen in parallel with the rising penalties. Competition enforcers have made huge strides in their ability to detect and prosecute international cartel activity even when the cartel activity occurred outside of a jurisdiction’s national borders. Enforcers around the world are deploying a similar voluntary disclosure program to encourage companies to simultaneously report international cartel activity in exchange for immunity wherever they face exposure to sanctions. As a result, it is now no longer unusual for up to 10 or more jurisdictions to simultaneously launch investigations of cartel activity as a result of leads generated by a common immunity applicant. This has contributed to a network of enforcement among competition enforcers resulting in greater coordination and information sharing. The upshot being that the risks and costs associated with engaging in international cartel activity have never been greater.
Jul-Sep 2014 Issue
Gibson, Dunn & Crutcher LLP
Hogan Lovells International LLP
Norton Rose Fulbright South Africa
Shearman & Sterling LLP