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Department
of Policy and Business Practices
Comments on Information Exchanges in International Cartel
Investigations
Prepared
by the Commission on Competition, 3 February 2004
for submission to the Working
Party on International Co-operation of the Competition Law and Policy
Committee of the OECD at its meeting on 11 February 2004.
Introduction
ICC wishes to contribute to the discussions within OECD Working Party
Three on exchange of information between antitrust enforcement agencies
in the context of international cartel investigations. We understand that
the OECD's aim is to work out a number of core principles to be incorporated
in treaties or inter-governmental agreements governing the exchange of
such information.
ICC agrees on the
need for an effective enforcement of antitrust rules against illegal international
cartels. ICC also agrees on the means to achieve such enforcement i.a.
the exchange of information between antitrust authorities allowing them
to detect, investigate and prosecute such cartels.
However, ICC is of
the view that the exchange of information must be subjected to adequate
safeguards to protect the legitimate interests of the enterprises involved.
ICC notes that there
are a number of bi-lateral agreements/treaties on competition rules and
bi-lateral agreements/treaties on mutual assistance which also cover antitrust
matters. Caution should be exercised when attempting to use clauses of
these agreements, relating to information exchange on cartels covering
the relevant jurisdictions and the underlying principles, as precedents
in elaborating principles for information exchange between other countries.
These agreements are entered into between countries that share basic concepts
embodied in their antitrust rules. As long as there are no - plurilateral
or multilateral - international substantive competition rules, the scope
for plurilateral agreements/treaties on information exchange or for that
matter for core principles that could be included in many bilateral agreements
is rather limited.
Scope
ICC understands that the work is limited to exchange of information relating
to hard core cartels as defined in the OECD Recommendation of 25 March
1998. ICC would prefer to define hard core cartels as arrangements by
which the parties directly or indirectly fix prices for the purposes of
market sharing, limit or prevent supplies, limit or prevent production,
divide between the parties the supply of a product or service to customers,
divide between the parties customers for the supply of a product or service,
or bid-rigging arrangements. Its comments deal exclusively with this topic.
The information to
be exchanged should relate to international hard core cartels i.e. cartel
activities that are occurring or having an effect in the territory of
the Requesting Party and are impermissible under its antitrust laws and
under the Requested Party's antitrust laws. The information to be exchanged
should be limited to "cartels" as opposed to broader anticompetitive
conduct.
Information
to be exchanged
According to the BIAC the information to be exchanged is "information,
testimony, statements, documents or copies thereof, or other things that
are obtained in anticipation of, or during the course of an investigation
or proceeding under the parties' respective antitrust laws, or pursuant
to the Parties Mutual Assistance Legislation". ICC understands that
the reference by BIAC to the latter legislation is meant to concern only
antitrust matters.
Any information or
evidence relating to conduct giving rise to criminal prosecution in the
jurisdiction of the Requesting Party, while such conduct does not qualify
as a criminal offense in the jurisdiction of the Requested Party, should
be excluded from the information to be exchanged
There are two types
of information whose exchange raises concern: on the one hand, business
confidential information and, on the other, information collected by competition
authorities whose disclosure would expose enterprises to criminal or other
sanctions in the Requesting party's jurisdiction. Both types of information
are called hereinafter "qualified information".
Procedural
aspects
ICC agrees that in some respects clauses on Requests for Assistance under
the US/Australia IAEEA provide a good model: they require an explanation
from the Requesting Party of the links between the subject matter of the
request, a possible violation of the antitrust laws of the Requesting
Party and the investigation, as well as a description of the procedural
or evidentiary requirements bearing on the manner in which the Requesting
Party desires the request to be executed.
In addition, the request
should describe how such information will be protected by the Requesting
Party.
Moreover, the Requesting
Party should only request the information if it has exhausted all reasonable
possibilities to o
btain the information by its own means and should demonstrate
this to the Requested Party.
ICC also considers
that the request should be disclosable to the enterprises concerned to
enable them to form a view on the legitimacy of the request, account being
taken of the procedure suggested below with regard to the protection of
qualified information.
Requested
Party's obligation
The Requested Party should not be bound to provide information to the
Requesting Party if disclosure of that information is prohibited by the
laws of the Requested Party or would adversely affect legitimate and other
important interests of the Requested Party. Moreover, many countries'
laws prohibit the communication to another country of information or evidence
relating to conduct giving rise to criminal prosecution in the latter
country, while such conduct does not qualify as a criminal offense in
the former country: according to ICC, there should be no departure from
such rules.
The Requested Party
may deny a request if complying with it would exceed the relevant antitrust
authority's reasonably available resources. In this connection, it should
be made clear that the Requested Party would not be legally bound to seek
the information and to amend its legislation or change its policies where
the investigation is limited to potential violations of its own antitrust
rules.
Protection
of qualified information
Rules on the protection of information collected in the course of an antitrust
investigation and their enforcement differ among countries. This requires
that additional safeguards be introduced.
First, the enterprise concerned should be informed in advance about a
contemplated information exchange ('advance warning') and have the opportunity
to challenge ex-ante the information exchange in a court of the domicile
of the party where information is sought. ICC recognizes that this may
hamper an investigation. A derogation from the need to provide advance
warning to the enterprise concerned could be provided but it would have
to be demonstrated first in a court of the domicile of the party where
information is sought that such advance warning would seriously hamper
an investigation. In addition, rules should be established under which
advance warning is deemed to seriously hamper the investigation
Second, the conditions
of protection to which the information exchanged is subjected in the Requesting
Party should be substantially equivalent to those applying in the Requested
Party. The Requesting Party should undertake to maintain the protection
of the information exchanged.
Third, measures should
be in place to ensure that the information exchanged be only used for
the purpose or procedure for which it was requested. This means i.a. that
the information will not be disclosed to other branches of the government
except for the purpose of enforcing antitrust rules and will not be used
by the Requesting Party for any purpose or procedure other than the one
specified in the information request. The Requesti
ng Party should permit
enterprises to resist the use of information disclosed to it, where that
information was obtained by the Requested Party by compulsion in circumstances
that would not be permitted under the law of the Requesting Party.
Fourth, the enterprise
concerned should have the possibility to challenge ex-post the information
exchange in a court of law of the domicile of the party where the information
was sought without advance warning to it. In addition, it should have
the possibility to challenge an uncontrolled use of the information exchanged.
Fifth, information
obtained by a Requesting Party should not be provided to another Requesting
Party without the consent of the original Requested Party. In addition,
the same procedural safeguards in relation to the protection of the qualified
information which are otherwise available to the enterprise concerned
should apply.
Information
supplied under "immunity" or "leniency" programs
In practice it is often difficult for enterprises to apply for "immunity"
or "leniency" simultaneously to all antitrust authorities that
have jurisdiction over a conduct that such authorities are likely to qualify
as an international hard core cartel. Information exchange in cases where
simultaneous "immunity" or "leniency" applications
are impossible or not feasible has to be addressed.
Unless there is a
commitment, either of the Requested Party not to exchange information
disclosed under "immunity"/"leniency" programs, or
of the Requesting Party not to use such information (for the purpose of
an investigation or for imposing sanctions and not to provide it to third
parties for the purposes of litigation), many enterprises will hesitate
to apply for "immunity" or "leniency".
Protection
of Legal Privilege
It should be made clear that:
- the Requested
Party has no duty to compel a person to provide the information in violation
of any legal privilege under its own laws and may resist or decline
such a request based on this principle; and,
- the Requesting
Party may not use the information that would be subject to legal privilege
under its own laws.
Return
of exchanged information
There should be provisions on the return of exchanged information.
Document n°
225/604 Rev.
3 February 2004
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