Guidelines on Enhancing Cross-Border Leniency Cooperation

Blake, Cassels & Graydon LLP

On June 28, 2020, the International Competition Network (ICN) published guidelines on cooperation and coordination among competition agencies during multi-jurisdictional cartel investigations (Guidelines). The Guidelines are meant to harmonize the practices of competition agencies with a view to increasing the effectiveness of global cartel enforcement efforts and reducing disincentives for leniency applicants. While the ICN’s members are not required to implement the Guidelines, past experience suggests that they will view them as an important source for best practices. The key recommendations from the Guidelines include:

  1. Whether or not a confidentiality waiver is required for communications between different agencies, each agency should request a waiver for all jurisdictions where the applicant has submitted a leniency application in connection with the same conduct.
  2. At the outset of any cooperation, the cooperating jurisdictions should discuss, at a minimum: (i) possible differences in each jurisdiction’s legal framework, (ii) the scope of the conduct and the participants and (iii) the stage of their respective investigations.
  3. Agencies should keep in regular contact and proactively notify their foreign counterparts when key milestones occur, including when a defendant is arrested or charged, court proceedings are instituted, an administrative or judicial hearing occurs, an investigation is discontinued or a decision/judgment is made and/or sanctions are imposed.
  4. Agencies dealing with a common leniency applicant should coordinate on their investigations, notably with respect to the timing of dawn raids, statutory notices, judicial orders and the destruction of evidence; views on the type of evidence and the interpretation of such evidence; and information requests to focus on the harm caused in their respective jurisdictions and to avoid duplication.

While the Guidelines are presented by the ICN as a positive step towards ensuring consistent treatment of leniency applicants among various agencies, it is clear that in submitting leniency applications in multiple jurisdictions, parties can now expect to provide confidentiality waivers in each jurisdiction and that information submitted to one agency may be shared more broadly than has been the case. Prospective leniency applicants should carefully consider the potential risks—including class action risk—associated with the cross-border coordination and cooperation contemplated by the ICN’s Guidelines, ensuring that they develop both a global and jurisdiction-specific strategy. While increased cross-border cooperation may have the benefits for leniency applicants envisaged by the ICN, leniency applicants may face increased difficulty in protecting their confidential information, as well as managing the differences in cartel laws and the leniency applicant’s conduct in the relevant jurisdictions with such cooperation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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