THE COUNCIL ,
HAVING REGARD to Article 5 b) of the Convention on the Organisation for Economic Co-operation and Development of 14 December 1960;
HAVING REGARD to the Recommendation of the Council on Fighting Bid Rigging in Public Procurement [ OECD/LEGAL/0396 ] and the Recommendation of the Council on International Co-operation in Competition Investigations and Proceedings [ OECD/LEGAL/0408 ], which includes detailed guidance on all aspects of competition enforcement co-operation, including co-operation in hard core cartel cases;
HAVING REGARD to the developments in the enforcement of laws and policies against hard core cartels since the adoption of the Recommendation of the Council concerning Effective Action against Hard Core Cartels [ OECD/LEGAL/0294 ], which this Recommendation replaces;
RECOGNISING that hard core cartels are the most egregious violations of competition law;
CONSIDERING that in a globalised economy international cartels distort competition and have a detrimental effect on consumers and market participants;
CONSIDERING that Members and non-Members having adhered to this Recommendation (hereafter the “Adherents”) have a common interest in preventing hard core cartels and enforcing effectively their laws against them;
CONSIDERING that hard core cartels can only be stopped and prevented if laws, sanctions and enforcement procedures against them are effective, appropriate and have a deterrent effect;
RECOGNISING that action against hard core cartels is important from an international perspective and particularly dependent upon international co-operation among competition authorities;
On the proposal of the Competition Committee:
I. AGREES that, for the purposes of the present Recommendation, the following definitions are used:
● Hard core cartels refers to anticompetitive agreements, concerted practices or arrangements by actual or potential competitors to agree on prices, make rigged bids (collusive tenders), establish output restrictions or quotas, or share or divide markets by, for example, allocating customers, suppliers, territories, or lines of commerce. They do not include: (a) agreements, concerted practices, or arrangements that are reasonably related to a legitimate efficiency-enhancing integration of economic activity; (b) agreements, concerted practices or arrangements that might otherwise qualify as hard core cartels, which are directly or indirectly exempted from the coverage of Adherents’ competition laws or are mandated in accordance with Adherents’ laws.
● Leniency programmes refers to mechanisms offering the opportunity to cartel members to self-report their conduct, provide information and evidence and co-operate with an investigation, in exchange for immunity from, or a reduction in, sanctions, and, in some jurisdictions, immunity from proceedings/prosecution.
● Plea negotiation and settlements refers to case resolution tools which enable competition authorities to establish substantive findings, and facilitate and shorten procedures in a cartel case, working with the investigated parties in exchange for a reduction in sanctions.
II. RECOMMENDS that Adherents make hard core cartels illegal regardless of the existence of proof of actual adverse effects on markets, and design their anti-cartel laws, policies and enforcement practices with a view to ensuring that they halt and deter hard core cartels and provide effective compensation for cartel victims, in accordance with their legal frameworks, institutional set up and procedural safeguards. To this effect, Adherents should:
1. Implement an effective cartel detection system by:
a. Introducing effective leniency programmes which:
i. Set incentives for self-reporting by providing total immunity to the first applicant that reports its cartel conduct and fully co-operates with the competition authority and sanction reductions for subsequent applicants;
ii. Provide clarity on the rules and procedures governing leniency programmes and the related benefits;
iii. Facilitate reporting by using a marker system to encourage early reporting and provide certainty to applicants;
iv. Establish clear standards for the type and quality of information that qualifies for leniency;
v. Ensure continued co-operation between the leniency applicant and the competition authority throughout the investigation by taking into account factors such as the value of information submitted and the timing of the submission in determining the level of sanction reductions;
vi. Provide protection or reduction from sanctions for qualifying officers and employees of corporate leniency applicants;
vii. Exclude the availability of immunity for cartel coercers;
viii. Provide appropriate confidentiality protection to leniency applicants; and
ix. Seek to reduce unnecessary burdens for parties seeking leniency.
b. Using pro-active cartel detection tools such as analysis of public procurement data, to trigger and support cartel investigations.
c. Facilitating the reporting of information on cartels by whistle-blowers who are not leniency applicants, providing appropriate safeguards protecting the anonymity of the informants.
2. Ensure that competition authorities have effective powers to investigate hard core cartels by providing them the powers to:
a. Conduct unannounced inspections (“dawn raids”) at business and private premises, and access and obtain all documents and information necessary to prove cartel conduct;
b. Access electronic information that could help establish a cartel violation including electronic material that is stored remotely (e.g. on ‘the cloud’) and have access to appropriate investigative techniques, such as communications interception and surveillance authorisations. For this purpose, competition authorities should have trained specialised staff and adequate hardware and software equipment;
c. Request and obtain information from investigated and third parties, including other government entities;
d. Obtain oral testimony from individual witnesses;
e. Impose sanctions for non-compliance with mandatory requests and obstruction of investigations.
3. Enable co-operation of their competition authorities with other public entities, such as public procurement bodies, public prosecutors and anti-corruption agencies, including by facilitating the exchange of information and evidence among different public authorities, while ensuring adequate safeguards to protect against inappropriate disclosure.
4. Enable and incentivise early case resolution tools such as plea negotiation and settlements, which often require an admission of guilt and/or the admission of facts and/or a waiver of the right to appeal.
5. Provide for effective sanctions of a kind and at a level adequate to deter firms and individuals from participating in hard core cartels and incentivise cartel members to defect from the cartel and co-operate with the competition agency. To this effect, Adherents should introduce a combination of sanctions (civil, administrative and/ or criminal, monetary and non-monetary) for an adequate deterrent effect in their jurisdiction. Adherents should consider introducing sanctions against individuals having participated in cartels.
6. Provide a mechanism that gives anyone who has suffered harm caused by a hard core cartel the right to obtain redress or claim compensation for that harm from the persons or entities that caused it, carefully balancing the interaction of public and private enforcement, in particular to protect leniency programmes. To this effect, Adherents should aim to:
a. Establish rules that enable parties to access the evidence necessary to bring a claim for compensation;
b. Protect leniency statements, as well as settlement submissions, from disclosure to ensure the right balance between public enforcement by competition authorities and private enforcement by victims of cartels;
c. Allow private enforcement actions that do not follow on infringement decisions by competition authorities, so as to allow enforcement in cases where there is no prior decision;
d. Introduce collective redress mechanisms, which allow groups of similarly situated claimants to request compensation collectively;
e. Grant adequate probative value to final infringement decisions by competition authorities, in private enforcement actions concerning the same hard core cartel;
f. Suspend private enforcement limitation periods for the duration of the investigation by the competition authority.
7. Support the advocacy efforts of competition authorities vis-à-vis private and public stakeholders, regarding the effective prevention, detection and correction of hard core cartels and regulations that prevent collusive conduct.
8. Restrict exemptions, if any, from the coverage of Adherents’ laws against hard core cartels to those indispensable to achieve their overriding policy objectives. To this effect, Adherents should make their exemptions transparent and periodically assess their exemptions to determine whether they are necessary and limited to achieving their objective.
III. INVITES the Secretary-General and Adherents to disseminate the Recommendation.
IV. INVITES non-Adherents to take account of and adhere to the Recommendation.
V. INSTRUCTS the Competition Committee to:
a. Consider developing an implementation toolkit to support Adherents’ implementation of the Recommendation; and
b. Monitor the implementation of the Recommendation and report to Council no later than five years following its adoption and at least every ten years thereafter.