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Beaton-Wells, C --- "Forks in the Road: Challenges Facing the ACCC's Immunity Policy for Cartel Conduct (Part 1)" [2008] UMelbLRS 7

Last Updated: 24 September 2009

Forks in the road: Challenges facing the
ACCC’s immunity policy for cartel conduct:

Part 1

Caron Beaton-Wells*

For the ACCC there are “forks in the road” in deciding how to deal with the
interaction between its highly acclaimed Immunity Policy for Cartel
Conduct and (1) the criminalisation of serious cartel conduct; (2) the rise in
private enforcement and damages claims in relation to cartel conduct; (3) the
increased significance of cartel case settlement or, in the criminal context,
plea negotiation; and (4) the potential strategy of offering alternative financial
rewards for cartel information. In relation to each of these, this article
(published in two parts) explores the issues involved; the ACCC’s current
proposals for dealing with them (to the extent any such proposals exist);
overseas models for tackling the issues; and the way forward in meeting the
challenges and/or harnessing the opportunities presented. Part 1 deals with
criminalisation and private enforcement. Part 2 of the article will deal with
settlements and alternative rewards.

Executive summary

The Australian Competition and Consumer Commission’s Immunity Policy for
Cartel Conduct (ACCC Immunity Policy) is widely considered to be the most
important tool at its disposal for enforcing the law against cartel conduct under
the Trade Practices Act 1974 (Cth). The effectiveness of the policy faces at
least four major challenges (or opportunities, as they may be seen) arising out
of significant domestic and international developments in the anti-cartel
enforcement arena in the last five years.

First, the criminalisation of serious cartel conduct will involve a bifurcation
of decision-making roles and responsibilities in relation to immunity as
between the Australian Competition and Consumer Commission (ACCC) and
the Commonwealth Director of Public Prosecutions (DPP). The DPP’s office,
with which final decisions as to criminal immunity will rest, has a very
different approach to immunity to that of the ACCC and it is an approach that
lacks the hallmarks of transparency, certainty and predictability considered
essential to an effective immunity policy in this field. The UK and Canadian
models for dealing with bifurcation indicate that, given sufficient good will,
shared commitment and a close working relationship, this is a challenge that
can be overcome. The way forward proposed in this article is for the DPP to
retain sole decision-making authority with respect to criminal immunity but
for the Prosecution Policy of the Commonwealth (DPP Prosecution Policy) to
be amended to recognise explicitly immunity in cartel cases as a separate

* Director of Studies, Competition Law, Melbourne Law School, University of Melbourne
Law School. This article is based on a paper delivered at the Competition Law Conference,
Sydney, Australia, May 2008. The author is grateful to Brent Fisse for comments on an
earlier draft and Christopher Tran for research assistance in preparing this article. The usual
disclaimers apply.
category, to be determined based on the ACCC’s recommendation, which is to
be based in turn on the ACCC Immunity Policy.

Secondly, the recent increase in levels of private enforcement and claims for
damages in respect of cartel conduct in Australia have aggravated the
long-recognised tension between the interests of private claimants in
accessing information provided to regulators by immunity applicants and the
interests of immunity applicants in protecting the confidentiality of that
information. To date, the ACCC has focused on this issue in isolation. By
contrast, the approach taken in the United States and more recently in Europe
highlights the value in examining the question of protected immunity
information as part of an overall consideration of the role of private litigation
in enforcing competition law and its relationship with public enforcement. The
way forward proposed in this article is for the ACCC to take a broader
approach to the information issue, part of which should include exploring
incentives for immunity applicants to disclose information voluntarily to
private claimants.

Thirdly, there are substantial benefits in having a system for settlement of
cartel cases that maximises the prospects of disclosure and cooperation by
leniency applicants. The increased attention given recently in international
circles to the design and administration of such a system suggests that a
review of the ACCC’s Cooperation Policy for Enforcement Matters is long
overdue. The way forward proposed in this article is for the ACCC to
undertake such a review having regard particularly to the system currently
proposed in Canada. The Canadian proposals are a useful guide especially in
relation to the settlement issues arising out of criminalisation and the
bifurcated enforcement model.

Fourthly, the emphasis on immunity policy should not prevent the ACCC
from giving serious consideration to alternative strategies for cartel detection
and, in particular, the potentially contentious idea of an alternative informant
reward system. A system for paying bounties for inside information on cartels
has strong support from influential commentators, has been in place
apparently to positive effect in Korea for some years and has just been adopted
as an experiment in the United Kingdom. The ACCC should monitor these
developments with a mind open to trialling an informant reward system at
some stage in the future, particularly should the immunity policy fail to
deliver on its promise of significantly increased discovery and deterrence of
cartel activity.

The issues canvassed in this article present ‘forks in the road’ for the ACCC
and its immunity policy. Criminalisation constitutes an immediate challenge,
while private enforcement and settlement might be better characterised as
involving both challenges and opportunities, with the possible adoption of an
alternative informant reward system to be seen as an opportunity for
exploration down the track. However, in respect of each, the ACCC faces a
choice between taking a narrow inward-looking, even complacent response,
and implementing a broader internationally-inspired and proactive approach.
The latter is advocated in this article with a view, not only to securing the
effectiveness of the ACCC Immunity Policy into the future, but also to
strengthening the enforcement of the law against cartels in Australia more
1 Introduction

Described as a ‘revolution’ in anti-cartel enforcement,1 the policy of offering
immunity from proceedings to the first eligible cartel member to fulfil the
policy’s conditions is seen by regulators world-wide as the most effective
means of detecting, investigating and prosecuting cartel activity.2 The ACCC
Chairman Graeme Samuel has described the ACCC Immunity Policy3 as
‘absolutely vital’ in the commission’s efforts to crack cartels,4 and has credited
it with exposing potential cases at the rate of about one a month.5

The aim of this article is to highlight and explore a number of the major
challenges facing the ACCC Immunity Policy in light of recent domestic and
international developments. There are various aspects of the policy that could
be seen to warrant review in order to meet the continually evolving standards
of international best practice in this area.6 However, the article focuses instead
on what are best characterised as ‘big picture’ issues relevant to the
effectiveness of the ACCC Immunity Policy, as well as to its role as one, albeit
a highly significant, element of the overall campaign to detect and deter cartel

The first of these challenges arises out of the criminalisation of serious

1 G Spagnolo, ‘Leniency and Whistleblowers in Antitrust’, Discussion Paper Series, No 5794,
Centre for Economic Policy Research, August 2006, p 2,
at <> (accessed 23 April 2008).
2 See the somewhat hyperbolic declaration by the Deputy Assistant Attorney-General for
Criminal Enforcement in the Antitrust Division of the United States Department of Justice:
‘Unquestionably, leniency programmes are the greatest investigative tool ever designed to
fight cartels’: S Hammond, ‘Preface: US Department of Justice’ in K Arquit, J Buhart and
O Antoine, Leniency Regimes, 2nd ed, European Lawyer, London, 2007, p vii. A more
objective indicator of the high regard in which such policies are held is the fact that today
more than 40 jurisdictions have some type of immunity program: see International
Competition Network, Cartel Working Group, Subgroup 1 — General Legal Framework,
‘Cartel Settlements’, Report to the ICN Annual Conference, April 2008, pp 5–6,
at <> (accessed 7 May
3 ACCC, ACCC Immunity Policy for Cartel Conduct, 2005,
at <> (accessed 14 February 2008).
4 As quoted most recently in E Sexton, ‘To catch a cartel’, Sydney Morning Herald¸ 21 March
2008, p 35.
5 See the interview with Chairman Samuel in A Caldwell, ‘ACCC calls for harsher penalties
for cartels’, Australian Broadcasting Corporation transcripts, 2 November 2007,
at <> (accessed 12 May 2008).
6 For example, criticisms have been levelled at the extent to which there is a genuinely
‘paperless’ process for making immunity applications under the policy. These criticisms
were made in a speech by Professor Bob Baxt at a Seminar on Criminalising Cartel Conduct:
Issues of Law and Policy, University of Melbourne, 25 February 2008 (copy on file with
authors, to be published in the June 2008 issue of Aust Bus L Rev). There have also been
calls for the provisions relating to revocation of immunity to be revisited with a view, eg, to
introducing an avenue of review: see Law Council of Australia, Trade Practices Committee
of the Business Law Section, ‘Submission on the criminalisation of cartels’, 5 March 2008,
at < & ContentID=1350> (accessed
7 May 2008). There are also questions as to whether the current formulation of the ‘role in
the offence’ exception (based on coercion or clear leadership) should be narrowed: see, eg,
the analysis in C Leslie, ‘Antitrust Amnesty, Game Theory and Cartel Stability’ (2006) 31
Jnl of Corporations Law 453.
decades. However, it is only in the last five years that there has been serious
consideration of the use of an informant reward system, offering financial
incentives to whistleblowers (generally not persons involved in or likely to be
liable for the unlawful activity) for informing on the cartel. The possible
adoption of such a system raises a series of questions, not confined to its
interaction with the immunity policy, including its social acceptability and the
sufficiency of protection for whistleblowers from reprisals.

Structure and terminology

This two part article is structured to deal with each of the challenges
introduced above in turn as follows:

In Part 1:

Immunity Policy and Criminalisation (Section 2);

Immunity Policy and Private Enforcement (Section 3);

In Part 2:

Immunity Policy and Settlement (Section 4);

Immunity Policy and Alternative Informant Rewards (Section 5).

In each Part, the relevant issues are identified at the outset, background to
explain how such issues arise is provided, overseas models are canvassed, and
finally the way forward for the ACCC in tackling the challenge is proposed.

The words ‘immunity’, ‘leniency’ and ‘amnesty’ are used interchangeably
in some jurisdictions while having slightly different meanings in others.9 In
this article, as far as possible (bearing in mind that quotations will reflect the
terminology used in other sources), ‘immunity’ is used to refer to the situation
in which the first-in cartel informant escapes prosecution altogether,
‘leniency’ is used to refer to the situation in which subsequent cartel
informants receive penalty reductions or other concessions, and the use of
‘amnesty’ is avoided.

2 Immunity policy and criminalisation

Enhancement of the ACCC Immunity Policy is regarded by the ACCC as one
of the key benefits of the introduction of criminal penalties for serious cartel
conduct.10 Consistent with the views of antitrust enforcers around the world,
it is argued that the tougher the penalties, referring particularly to the spectre
of jail time, the more attractive the safehaven offered by immunity.11

9 See, eg, Hammond, above n 2, p viii.
10 See the comments of ACCC Chairman, Graeme Samuel: ‘The [immunity] policy will be
significantly enhanced and strengthened by the introduction of criminal penalties’, as
reported in Sexton, above n 4, p 35; ‘It [criminal sanctions] puts a whole new dynamic into
the . . . cost-benefit analysis of participating in a cartel or more importantly taking advantage
of the immunity policy to effectively disclose the existence of a cartel and avoid
prosecution’, as reported in AAP, ‘Cartel players will have trouble sleeping at night: ACCC’,
Australian Associated Press Financial News Wire, 1 June 2006; ‘The combination of that
(leniency) policy and the prospect of jail sentences will operate more effectively than almost
anything else that’s been done of recent times in this area to suddenly break open these
secretive processes’, as reported in G Costa, ‘Tip-off time for ACCC’, The Age,
11 December 2004.
11 See, eg, Hammond, above n 2, p x: ‘All else being equal, . . . a jurisdiction without
However, it was also recognised early on that criminalisation would involve
bifurcation of decision-making roles and responsibilities as between the
ACCC and the DPP and, if not handled properly, this would pose a significant
threat to the effectiveness of the ACCC Immunity Policy.12

2.1 The issues

The bifurcated model raises important practical questions concerning which
agencies will make immunity decisions; the timing of such decisions; the
process for making immunity applications; and the criteria or conditions that
will be applied in assessing applications. The answers to these questions have
consequences for the extent to which the applicable policy (or policies, as the
case may be) are sufficiently certain, transparent and predictable — attributes
generally regarded as central to an effective immunity policy for cartel

The challenges raised by bifurcation in the context of immunity also reflect
differences in culture, philosophy and priorities between the ACCC as a
regulatory agency and the DPP as a prosecutorial agency.14 These differences
are less readily addressed, and their implications not as predictable, in advance
of the experience of actually working together on cases as they arise under the
new regime.15 Yet, as has been emphasised in the work of the international
plenary forum of antitrust regulators, the International Competition Network

individual liability and criminal sanctions will never be as effective at inducing amnesty
applications as a programme that does. Individuals stand to lose the most and so avoiding
jail is the greatest incentive for seeking amnesty.’ See also the discussion in W Wils,
‘Leniency in Antitrust Enforcement: Theory and Practice’ (2007) 30 World Competition:
Law & Economics Review 25 at 55–7.
12 See 2.2 below.
13 S Hammond, ‘Cornerstones of an effective leniency program’, Paper presented at ICN
Cartels Workshop, Cracking Cartels Conference, Sydney, November 2004, p 4,
DoJ.rtf> (accessed 25 April 2008); Organisation for Economic Cooperation and
Development, Directorate for Financial, Fiscal and Enterprise Affairs Committee on
Competition Law and Policy, Report on Leniency Programmes to Fight Hard Core Cartels,
27 April 2001, at [2], at <> (accessed 25
April 2008).
14 As discussed generally in relation to regulators and prosecutors in Australian Law Reform
Commission, Principled Regulation: Federal Civil & Administrative Penalties in Australia,
Report No 95, 2002, p 351 at [9.39], at <
au/other/alrc/publications/reports/95/> (accessed 14 February 2008). In the case of the
ACCC and DPP particularly, note the acknowledgement by the ACCC in the consumer
protection field that ‘there may be disparities in the enforcement priorities or resources’ of
the two agencies: see ACCC, Submission to the Productivity Commission inquiry into
Australia’s Consumer Policy Framework, June 2007, p 94,
at <
5595f22c95bfd3a417d&fn=ACCC%submission%20to%20PC%> (accessed 12 May 2008).
15 Note in this regard the comments of Justice Heerey regarding the difficulties likely to arise
in making decisions about which cases to prosecute and his observations that such problems
‘cannot be solved in advance by memoranda of understanding, however comprehensive’.
See Justice Heerey, ‘Commentary on Paper of Brent Fisse and Caron Beaton-Wells’,
Seminar on Criminalising Cartel Conduct: Issues of Law and Policy, University of
Melbourne, 25 February 2008 (copy on file with authors, to be published in the June 2008
issue of Aust Bus L Rev).
(ICN),16 making immunity work in a bifurcated system will require not only
consistency in regulatory and prosecutorial policies, but equally if not more
importantly, ‘shared philosophy about the seriousness of cartel conduct,
shared priorities in prosecuting cartel activity and open and constant

2.2 The background

In the ACCC’s submission to the Dawson Committee of Review,18 it observed
that an ‘effective leniency policy [referring to the predecessor to the ACCC
Immunity Policy still in draft form at the time of the Dawson review] would
complement criminal sanctions’ but that ‘to be effective the leniency policy
should be transparent and certain’.19 It pointed out that ‘to ensure the level of
certainty necessary for the leniency policy to be effective, the DPP would need
to commit to the policy in a transparent way’.20 In particular, it ‘would be
necessary to ensure the DPP’s view of the public interest was consistent with
that of the Commission and took into account the importance of maintaining
an effective, certain and transparent leniency policy for breaches of
competition law’.21

The Dawson Committee observed that ‘certainty of detection is a better
deterrent than severity of punishment for most criminal offences’ and noted
that in the United States the immunity policy of the Department of Justice
(DOJ) had been found to be ‘the most effective investigative tool for detecting
cartel behaviour’.22 The committee recognised that under a criminal regime
‘immediate difficulties’ would confront the ACCC’s (then proposed) leniency
policy for cartel conduct given that the sole authority to grant immunity from
prosecution lies with the DPP, the DPP is generally not involved in the early
stages of an investigation and in any event the DPP’s discretion is sparingly
exercised and would not readily accommodate the policy proposed by the
ACCC.23 The committee’s recommendation in favour of criminal sanctions
for serious cartel behaviour was expressly subject to the identification of a

16 The ICN is an association of antitrust regulators that aims to promote dialogue between
national agencies, building at least consensus if not ultimately convergence towards sound
competition policy principles across the global antitrust community. See generally,
<> (accessed 13 May 2008).
17 International Competition Network, Anti-Cartel Enforcement Manual, Cartel Working
Group Subgroup 2: Enforcement Techniques, p 10 [2.6.7], at <> (accessed 25 April
18 The Dawson Committee was an independent committee appointed by the government in
2002, headed by former High Court Judge, Sir Daryl Dawson, charged with the task of
reviewing the competition provisions of the Trade Practices Act 1974 (Cth). Its report and
the submissions made to it are available at <
content/report/downloads/PDF/Chpt10.pdf> (accessed 25 April 2008).
19 ACCC, ‘Submission to the Trade Practices Act Review’, 2002, pp 49–50,
at <> (accessed 27 April 2007).
20 Ibid, p 50.
21 Ibid, p 50.
22 Trade Practices Committee of Review, Review of the Competition Provisions of the Trade
Practices Act, January 2003, p 158, at <
content/report/downloads/PDF/Chpt10.pdf> (accessed 25 April 2008).
23 Ibid, p 159.
‘workable method of combining a clear and certain leniency policy with a
criminal regime’.24

A working party was convened by the government of the day to address this
and other issues involved in implementing the Dawson Committee’s
recommendation.25 The report of the working party has never been released.26
However, given the express proviso to the Dawson Committee’s
recommendation, presumably the working party did address the question of
how to ensure that the ACCC Immunity Policy was not compromised by the
bifurcated decision-making process involved in a criminal regime. Both the
ACCC and the DPP were represented on the working party.27

In the only publicly available submission to the working party, the Law
Council of Australia’s Trade Practices Committee expressed concern that the
‘certainty and transparency afforded by the ACCC’s very recently
implemented Leniency Policy for Cartel Conduct may be compromised by the
introduction of criminal sanctions for that conduct’.28 According to the
committee, the introduction of criminal sanctions and the perpetuation of the
DPP’s approach to immunity, in which it retains significant prosecutorial
discretion, will have the consequence that:

(a) the progress towards enhanced detection of cartels with the ACCC’s cartel

conduct Leniency Policy will be stalled, if not seriously compromised; and

(b) Australia’s approach will frustrate rather than enhance international

cooperation on this issue and will, at least from the perspective of the US

Department of Justice, not represent international best practice.29
In his Press Release of 2 February 2005 the former Treasurer announced

appropriate protection for whistleblowers that come forward to uncover cartel

conduct will be provided through a clear and certain immunity policy. International

experience suggests immunity for whistleblowers is critical in uncovering cartels.

Guidelines will be published setting out the conditions for immunity to be granted

by the DPP, upon the advice of the ACCC. The respective roles and responsibilities

of the ACCC and the DPP will also be defined in the MOU [referring to a proposed

Memorandum of Understanding between the two agencies].30

24 Ibid, pp 161, 163, 164 [Recommendation 10.1].
25 Treasurer, ‘Working party to Examine Criminal Sanctions for Cartel Behaviour’, Press
Release, 3 October 2003, at <
releases/2003/086.asp> (accessed 17 August 2007.
26 A request for access to the report under the Freedom of Information Act 1982 (Cth) has been
refused and the refusal has been upheld by the Administrative Appeals Tribunal on the
grounds of the cabinet and internal working documents exemptions of the Act. An appeal has
been lodged in the Federal Court. For details of these proceedings, see Brent Fisse’s website,
at <> (accessed 12 May 2008).
27 ‘Working party to Examine Criminal Sanctions for Cartel Behaviour’, above n 25.
28 Law Council of Australia Trade Practices Committee of the Business Law Section,
‘Submission to the working party on Penalties for Cartel Behaviour, Department of the
Treasury’, 12 December 2003, p 19, at <
submissions/2389560306.pdf> (accessed 25 April 2008).
29 Ibid, p 20.
30 See Treasurer, ‘Criminal penalties for serious cartel behaviour’, Press Release, 2 February
2005, at < 004.htm
&pageID=003&min=phc&Year=2005&DocType=0> (accessed 14 February 2008).
More specifically, addressing the concerns expressed before the Dawson
Committee and the working party regarding the role of the DPP, the former
Treasurer gave an assurance that the DPP Prosecution Policy will be amended
so that immunity can be granted at an early stage of the investigation and upon
clearly defined preconditions which were enumerated in the Press Release and
reflected closely the pre-conditions of the ACCC Immunity Policy.
The former Treasurer further foreshadowed that the ACCC would publish
guidelines to ensure that there was a ‘clear understanding of the availability of
immunity, and the conditions under which it will be granted’.31

2.3 The current proposal

On 11 January 2008, together with an Exposure Draft Bill, the current
government released a draft MOU between the ACCC and the DPP (Draft
MOU).32 Surprisingly, the arrangements for immunity outlined in the Draft
MOU did not address the concerns expressed by the Dawson Committee. Nor
were they consistent with the announcement of the former Treasurer in
February 2005.

2.3.1 The Draft MOU

Immunity is dealt with in Pt 7 of the Draft MOU. That section starts
promisingly with the statement that ‘the DPP and ACCC recognise that
maximisation of certainty and minimisation of discretion as far as reasonably
possible are crucial to the effective operation of immunity policies for cartel
conduct’.33 However, the system outlined for decision-making in relation to
immunity provides minimum certainty and maximum discretion, at least as far
as the DPP is concerned.

Under the proposed system, applicants seeking immunity from civil and
criminal proceedings must make their applications to the ACCC.34 The ACCC
will manage these applications:

or refuse immunity;

refer the matter to the DPP for prosecution and, if not, deciding
whether to recommend to the DPP that the applicant be granted
criminal immunity.35

Where the matter concerns criminal investigation and prosecution as well as
civil proceedings, the ACCC will decide whether to grant immunity from civil
proceedings in accordance with the ACCC Immunity Policy only after
consultation with the DPP.36

31 Ibid.
32 At < & ContentID=1330> (accessed
7 May 2008).
33 Draft Memorandum of Understanding between the ACCC and DPP on Serious Cartel
Conduct, at [7.1], at <
NavId=037&ContentID=1330> (accessed 21 April 2007).
34 It is difficult to imagine a scenario in which an applicant would apply for only civil or only
criminal immunity.
35 Draft MOU, above n 33, at [7.1].
36 Ibid, at [7.1].
Where the matter is not to be referred to the DPP for criminal prosecution,
the ACCC will decide whether to recommend to the DPP that the applicant be
granted criminal immunity based on the ACCC Immunity Policy.37
If the ACCC recommends immunity, the DPP will decide whether to grant
immunity from criminal proceedings in accordance with the DPP Prosecution

The Draft MOU has to be read in conjunction with the ACCC Immunity
Policy and the DPP Prosecution Policy in their current form (given that there
are no public proposals for their amendment).39

2.3.2 The ACCC Immunity Policy

The ACCC Immunity Policy was published in August 200540 (following an
extensive review of its 2003 Leniency Policy for Cartel Conduct).41 The
policy is to be read in conjunction with its Interpretation Guidelines.42 In
summary, under the policy, the ACCC will grant immunity if:
• the applicant applies for immunity under the policy and satisfies the
following conditions:
– the applicant is or was a party to a cartel;
– admits that its conduct may breach the Trade Practices Act 1974
(Cth) (TPA);
– is the first to apply for immunity in respect of the cartel;
– has not coerced others to participate in the cartel and was not the
clear leader of the cartel;
– has ceased involvement or indicates to the ACCC that it will cease
– in the case of a corporate applicant, its admissions are truly a
corporate act and not simply the isolated confessions of certain
• at the time of receipt of the application the ACCC has not
received written legal advice that it has sufficient evidence to
commence proceedings in relation to at least one contravention
of the TPAarising from the conduct in respect of the cartel; and
• the applicant provides full disclosure and cooperation to the

The policy provides for corporate immunity, derivative immunity (to cover
employees and officers of a corporation with corporate immunity) and

37 Ibid, at [7.1].
38 Ibid, at [7.1].
39 Ibid, at [7.1].
40 ACCC Immunity Policy for Cartel Conduct, above n 3.
41 ACCC, ‘Review of the ACCC’s Leniency Policy for Cartel Conduct’, Discussion Paper,
2005, p 4, at <
(accessed 25 April 2008).
42 ACCC, ACCC Immunity Policy Interpretation Guidelines, 2005,
at <
(accessed 12 May 2008).
43 ACCC Immunity Policy for Cartel Conduct, above n 3, p 1 [4].
individual immunity.44 It also has provisions relating to the placement of
markers; affirmative amnesty; oral applications; confidentiality and limitations
on the use of information provided in the application process; revocation and
other related matters.45

In practice, the ACCC is prepared to grant immunity under its policy at the
early stages of an investigation and even before an investigation into the cartel
that is the subject of the immunity application has begun. This is consistent
with its commitment to provide prompt notification to an applicant of the
outcome of an application for immunity.46

The ACCC clearly regards the immunity policy as one of, if not the, most
important tools at its disposal in detecting and prosecuting cartel conduct.47 It
acknowledges the potential for perceived unfairness in treating
co-conspirators differently.48 However, consistent with the approach taken
internationally,49 the ACCC argues that an immunity policy is warranted by
the highly secretive nature of cartel arrangements and by the benefits of such
a policy in facilitating detection of activity that would otherwise most likely
remain undetected, and further in destabilising existing and deterring future
cartels. Such benefits are seen as outweighing any moral or political concerns
associated with the system.50 In assisting in the detection, destabilisation and
deterrence of cartels, the ACCC Immunity Policy, Samuel has argued,
‘delivers benefits to all Australians’.51

2.3.3 The DPP Prosecution Policy

Under the Draft MOU the decision to grant immunity from criminal
proceedings is to lie with the DPP in accordance with the DPP Prosecution
Policy.52 The DPP has the power to grant such immunity, by way of an
undertaking not to prosecute, under s 9(6D) of the Director of Public
Prosecutions Act 1983

Under the DPP Prosecution Policy, such an undertaking will only be given

44 Ibid.
45 Ibid.
46 ‘Review of the ACCC’s Leniency Policy for Cartel Conduct’, above n 41, p 4.
47 See, eg, ACCC, ACCC Leniency Policy for Cartel Conduct, 2005,
at <> (accessed 12 February
2008); G Samuel, ‘Cracking cartels’, 2004, Paper presented at ICN Cartels Workshop,
Cracking Cartels Conference,, Sydney, November 2004, at <http://www.accc.
&fn=20041124%20Cracking%20Cartels.pdf> (accessed 12 February 2008).
48 G Samuel, ‘The ACCC approach to the detection, investigation and prosecution of cartels’,
Paper presented at Economics Society of Australia Detection of Cartels Symposium,
28 September 2005, p 7, at <
Society_Cartels.pdf> (accessed 25 April 2008).
49 Report on Leniency Programmes to Fight Hard Core Cartels, above n 13, p 2 [1].
50 For a discussion of the moral aspects of immunity policy, see Wils, above n 11, at 50.
51 Samuel, above n 48, p 7.
52 Cth DPP, Prosecution Policy of the Commonwealth, 1992,
at <> (accessed 6 February 2008).
53 It also has the power under s 9(6) to undertake that answers given in evidence in proceedings
will not be admissible in evidence against the person, other than in proceedings in respect
of the falsity of evidence given by the person.
if the following two conditions are met:54

• the evidence that the accomplice [applicant for immunity] can give is

considered necessary to secure the conviction of the defendant, and

that evidence is not available from other sources; and

• the accomplice can reasonably be regarded as significantly less

culpable than the defendant.
If these two conditions are met, the ‘central issue’ that the DPP will
consider under the DPP Prosecution Policy in deciding whether to give an
undertaking is whether ‘it is in the overall interests of justice that the
opportunity to prosecute the accomplice in respect of his or her own
involvement in the crime in question should be foregone in order to secure that
person’s testimony in the prosecution of another’.55 In making this
assessment, the DPP takes account of the following matters:

• the degree of involvement of the accomplice in the criminal activity

in question compared with that of the defendant;

• the strength of the prosecution evidence against the defendant

without the evidence it is expected the accomplice can give and, if

some charge or charges could be established against the defendant

without the accomplice’s evidence, the extent to which those charges

would reflect the defendant’s criminality;

• the extent to which the prosecution’s evidence is likely to be

strengthened if the accomplice testifies — apart from taking into

account such matters as the availability of corroborative evidence,

and the weight that the arbiter of fact is likely to give to the

accomplice’s testimony, it will also be necessary to consider the

likely effect on the prosecution case if the accomplice does not come

up to proof;

• the likelihood of the weakness in the prosecution case being

strengthened other than by relying on the evidence the accomplice

can give (for example, the likelihood of further investigations

disclosing sufficient independent evidence to remedy the weakness);

• whether there is or is likely to be sufficient admissible evidence to

substantiate charges against the accomplice, and whether it would be

in the public interest that the accomplice be prosecuted but for his or

her preparedness to testify for the prosecution if given an undertaking

under the TPA; and

• whether, if the accomplice were to be prosecuted and then testify,

there is a real basis for believing that his or her personal safety would

be at risk while serving any term of imprisonment.56

The differences between these provisions and those of the ACCC Immunity
Policy are self-evident. They are a function of the fact that, while the latter
was developed to meet the specific challenges of detecting and prosecuting
clandestine collusive activity, the DPP Prosecution Policy was developed in a
different context and is driven by different considerations. For example, the
DPP Prosecution Policy provisions focus on accomplices. However, cartel

54 Prosecution Policy of the Commonwealth, above n 52, at [5.5].
55 Ibid, at [5.6].
56 Ibid, at [5.6].
activity involves joint principals as well as accomplices. The provisions are
also designed with individual rather than corporate offenders in mind and
hence there is no accommodation made for derivative immunity.

The DPP Prosecution Policy also does not prescribe a formal application
process and hence does not deal with questions such as the ability to make an
oral application and the confidentiality of information provided in support of
an application. It sets out the factors to which the DPP will have regard but
does not impose any obligations on the applicant, such as full and frank
disclosure and cooperation, and nor does it make provision for revocation.

More importantly, immunity is not automatic upon satisfaction of the
conditions set out in the DPP Prosecution Policy.57 Rather, once those
threshold criteria are met, the DPP then undertakes an assessment of what the
‘overall interests of justice’ require in the circumstances of the case (having
regard to what appears to be a non-exhaustive list in the DPP Prosecution
Policy).58 There is no way that an applicant could predict the outcome of such
an assessment.

The way in which the factors identified as relevant to this assessment are
formulated make it clear that the DPP retains maximum discretion in making
determinations about immunity (contrary to the statement in the Draft MOU
regarding the need for minimal discretion, referred to above).59 The extent of
the discretion is exemplified in the condition that the immunity applicant ‘can
reasonably be regarded as significantly less culpable than the defendant’ and
the consideration of ‘the degree of involvement of the accomplice in the
criminal activity in question compared with that of the defendant’.60 This to be
compared with the far more narrowly prescribed ACCC condition that the
applicant ‘has not coerced others to participate in the cartel and was not the
clear leader of the cartel’.61

Finally, and as crucially, the practice of the DPP is to make decisions about
immunity at the conclusion of an investigation62 (indeed, from the
considerations listed as relevant it is clear that such decisions could only be
made once all the evidence is available) and, further, the DPP Prosecution
Policy makes it clear that undertakings under s 9(6D) will only be given ‘as
a last resort’.63 The latter reflects the basic prosecutorial philosophy that
persons of equal or greater complicity should not escape prosecution while
others of equal or lesser complicity are charged.64

57 Ibid, at [5.5].
58 Ibid, at [5.6].
59 Contrary also to the view held by antitrust enforcers around the world that an effective
immunity policy must ‘make the ultimate sacrifice for transparency — the abdication of
prosecutorial discretion’: S Hammond, ‘Fighting Cartels — Why and How? Lessons
Common to Detecting and Deterring Cartel Activity’, Paper presented at Modern Museum,
Sweden, 12 September 2000, p 7, at <> (accessed 22 April 2008); Korea Fair Trade Commission, ‘Recent Changes to Korea’s Cartel
Enforcement Regime’, at [17], at <> (accessed 22 April 2008).
60 Prosecution Policy of the Commonwealth, above n 52, at [5.5]–[5.6].
61 ACCC Immunity Policy for Cartel Conduct, above n 3, p 1 [4(iv)].
62 See ‘Criminal penalties for serious cartel behaviour’, above n 30.
63 Prosecution Policy of the Commonwealth, above n 52, at [5.4].
64 See the recent comments of Justice Gyles in this regard: ‘it is unacceptable to grant a person
2.3.4 Responses to the Draft MOU

Submissions to Treasury on the Exposure Draft Materials expressed
significant concerns about the immunity arrangements proposed in the Draft
MOU. Commentators unanimously opposed the proposed arrangements. In
particular, concerns were centred around the prospect of immunity
applications in respect of criminal proceedings being decided by the DPP and
in accordance with the DPP Prosecution Policy in its current form and the
attendant loss of the certainty, predictability and transparency, considered
critical to the effectiveness of an immunity policy in respect of cartel

Most of the submissions suggested that concerns regarding inconsistencies
between the ACCC Immunity Policy and the DPP Prosecution Policy be
addressed by amending the latter to make it consistent with the former.66
However, some went further, arguing that the decision on immunity from
criminal suit should not rest solely with the DPP (as is currently proposed,

immunity from prosecution in order to prosecute others with the same or a lesser degree of
criminality’ in ‘Commentary on Paper of Brent Fisse and Caron Beaton-Wells’, Seminar on
Criminalising Cartel Conduct: Issues of Law and Policy, University of Melbourne,
25 February 2008 (copy on file with authors, to be published in June issue of Aust Bus L
65 See the comments in American Bar Association Section of Antitrust Law and Section of
International Law, ‘Comments of the American Bar Association Section of Antitrust Law
and Section of International Law In Response to the Commonwealth Government of
Australia’s Request for Public Comment on the Draft Legislation Providing Criminal
Penalties for Serious Cartel Conduct’, February 2008, p 17,
at <> (accessed 25 April 2008); C Beaton-Wells and B Fisse, ‘Submission: The Exposure Draft
Bill, Draft ACCC-DPP MOU and Discussion Paper introducing criminal penalties for
serious cartel conduct in Australia’, 7 March 2008, p 89 [13.4],
at <
Brent_Fisse.pdf> (accessed 25 April 2008); Blake Dawson, ‘Submission on Trade Practices
Amendment (Cartel Conduct and Other Measures) Bill 2008 — Exposure Draft’, 7 March
2008, p 23 [6.2], at <> (accessed 25 April 2008); Business Council of Australia, ‘Criminal penalties for serious
cartel conduct — draft legislation’, 7 March 2008, p 14,
at <> (accessed 25 April 2008); Clayton Utz, ‘Submission to the Treasury: Exposure Draft —
Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008’, 7 March
2008, pp 7–8 [38], at <> ,
(accessed 25 April 2008); Consumer Action Law Centre, ‘Discussion Paper: Criminal
Penalties for Serious Cartel Conduct’, 29 February 2008, p 7,
at <> (accessed 1 May 2008); Law Council of Australia, Trade Practices Committee of the
Business Law Section, ‘Submission to the Treasury on the criminalisation of cartels’,
5 March 2008, p 58 [198]–[200], at <
1350/PDF/LCA_Trade_Practices_Committee.pdf> (accessed 1 May 2008).
66 ‘Comments of the American Bar’, above n 65, pp 2, 15–18; Blake Dawson, ‘Submission on
Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008’, above n 65,
pp 22–4 [6.2]; Law Council of Australia, ‘Submission to the Treasury’, above n 65, pp 3,
7–8 [9], [33]–[39].
with a recommendation from the ACCC) but rather should be made jointly by
the ACCC and DPP.67

In addition to concerns regarding the DPP’s approach to immunity under
the DPP Prosecution Policy, the submissions raised several other issues
confronting the administration of the immunity policy under a criminal
regime. Questions were raised, for example, regarding the relationship
betweenACCC decisions on immunity and the decision to refer a matter to the
DPP for prosecution68 and, in that context, the potential for use by the DPP of
information provided by an immunity applicant in a subsequent criminal
prosecution,69 as well as whether there should be avenues for review of
decisions relating to immunity (including decisions as to whether the criteria
for immunity have been met and decisions to revoke immunity).70

2.3.5 The ACCC’s position71

Since its 2002 Submission to the Dawson Committee the ACCC has not had
much to say publicly about the immunity arrangements for the criminal
regime. In a 2005 speech Samuel made the statement that ‘[t]he ACCC and
DPP will work closely together to ensure that there is certainty in relation to
immunity from both civil and criminal liability. Both agencies understand that
if this certainty cannot be delivered the Immunity Policy will be
compromised.’72 No further detail was offered as to how such certainty was to
be achieved. Also in 2005, in a position paper on the revisions to the former
Leniency Policy, the ACCC stated that the policy ‘will need to be reviewed
again during the criminal sanction implementation process to ensure that the
lenient treatment under the two penalty regimes is compatible’.73
More recently, in a paper for a cartel conference organised by the American
Bar Association Section of Antitrust Law in January 2008, Mark Pearson, the
Executive General Manager of the ACCC Enforcement and Compliance
Division, referring to the forthcoming criminalisation of serious cartel conduct
in Australia and the involvement of the DPP as the prosecutorial agency, said
as follows:

There are also obvious implications for the ACCC’s Immunity and Cooperation
Policies. Immunity would be pursuant to the DPP Prosecution Policy of the
Commonwealth which is administered by the DPP:

67 Law Council of Australia, ‘Submission to the Treasury on the criminalisation of cartels’,
above n 65, pp 59–60 [204]–[208]; Business Council of Australia, ‘Criminal penalties for
serious cartel conduct’, above n 65, p 14.
68 Beaton-Wells and Fisse, above n 65, pp 90–1 [13.5].
69 Law Council of Australia, ‘Submission to the Treasury on the criminalisation of cartels’,
above n 65, pp 60–2 [209]–[220].
70 Ibid, pp 62–5 [221]–[233].
71 The DPP’s position is not known. It has made no public utterances on the issue, or for that
matter on any aspect of the criminalisation debate.
72 G Samuel, ‘The Enforcement Priorities of the ACCC’, Speech at Competition Law
Conference, 12 November 2005, p 29, at <
(accessed 13 May 2008).
73 ACCC, ‘Review of the Leniency Policy for Cartel Conduct’, Position Paper, 26 August
2005, p 1 [7], at <
(accessed 7 May 2008).

Decisions regarding immunity from criminal prosecution will be made by

the DPP, on advice from the ACCC;

Granting immunity up front is a departure from the DPP’s usual practice of

waiting until after proceedings have been finalised;

Aiming for alignment between immunity in civil and criminal matters and

appreciate [sic] that such alignment provides certainty to business;

This will necessitate early consultation between the ACCC and the DPP.74

These statements are of interest for what they do not say as much as for
what they do say. While Pearson does suggest that it is intended that the DPP
make immunity decisions at an early stage in investigations,75 he goes no
further than to say that consistency between the ACCC and DPP policies will
be ‘aimed for’.

Subsequently, a press report on 21 March 2008 quoted the following
response by Samuel to the criticisms made of the proposed immunity

Samuel says the issue is a ‘furphy’ and the ACCC and the DPP have a ‘very clear’

understanding of how the immunity policy works and why it is needed to police


‘There will be no tension’, he says. ‘The policy we have is the one that will apply.’

That will become evident once the new system is in operation, he says.76

The suggestion that it is the ACCC policy that the DPP will apply
contradicts the proposal under the Draft MOU. There are several possible
interpretations, none of which, given the lack of public information about
these matters, is capable of rising above speculation. One is that theACCC has
failed to persuade the DPP that it should apply the ACCC’s policy or amend
the DPP Prosecution Policy to make a special case for cartel conduct, but is
still hoping to bring the DPP round to this way of thinking before the first
application for immunity from criminal prosecution is received. Another is
that the DPP has agreed to apply the ACCC’s approach to immunity in
practice, undertaking to act accordingly when the times comes, but is not
prepared to amend its policy formally to reflect as much. A further possibility
is that it has been agreed that it is not necessary to amend the DPP Prosecution
Policy as in reality the DPP will rubber-stamp the ACCC’s recommendation
on the question of immunity. Yet another possibility is that agreement to
amend the DPP policy has been reached in principle but negotiations are still
ongoing as to the precise wording of the amendment.

The inability to spell out a coherent approach five years after the Dawson

74 M Pearson, ‘Criminalisation of Cartels’, Paper at American Bar Association, International
Cartels Workshop, San Francisco, February 2008 (copy on file with author).
75 See also Organisation for Economic Cooperation and Development, Directorate for
Financial and Enterprise Affairs Competition Committee, Plea Bargaining/Settlement of
Cartel Cases, DAF/COMP(2007)38, p 80 n 15, at <
oecd/12/36/40080239.pdf> (accessed 8 May 2008), where it was stated in a section
contributed by the ACCC: ‘It is proposed that the DPP Prosecution Policy will be amended
to enable immunity to be granted at an early stage of a cartel investigation.’
76 Sexton, above n 4, p 35.
Committee Report and more than three years after Costello’s announcement
does not bode well for the future working relationship between the agencies
on what are likely to be as, if not more challenging, issues than the drafting
of the MOU. Perhaps this is to be expected given the fractured and tense
relationship between the Australian Securities and Investments Commission
(ASIC) and the DPP over prosecutorial decision-making with respect to
criminal offences under the Corporations Act.77 However, unless the
inconsistencies between the two policies are remedied, the resultant
uncertainty will seriously undermine the role played by immunity policy in the
detection and investigation of cartel conduct in Australia.

2.4 Overseas models

The challenges posed for immunity policy by a bifurcated enforcement model
are not unique to Australia. However, it is evident also from overseas
experience that there are different ways of meeting these challenges. The
approaches adopted in the United Kingdom and Canada present two different

2.4.1 The United Kingdom

In the United Kingdom the Office of Fair Trading (OFT) is the competition
regulator and as such is responsible for investigations and enforcement in
relation to cartel activity, whereas the Serious Fraud Office (SFO) is the
agency responsible for all criminal prosecutions involving serious or complex
fraud and as such is the body assigned to prosecute cartel offences.78 In the
report commissioned by the OFT on implementation of the new criminal
regime in 2002 (Hammond and Penrose Report), the authors recognised that
there was a dilemma in ensuring that the OFT had a sufficiently certain policy
governing immunity from prosecution while ‘maintaining the integrity of the
SFO as the prosecuting authority and the criminal justice system in the UK as
a whole’.79

The dilemma was resolved by empowering the OFT to issue a ‘no action’
(comfort) letter the effect of which is to prevent individuals from being
prosecuted under the cartel offence (in the United Kingdom criminal liability
only applies to individuals).80 The procedure is authorised under s 190(4) of
the Enterprise Act 2002.81 Similar criteria and conditions apply to the grant of

77 As detailed, for eg, in P Wood, ‘Prosecutorial Predicament’, Australian Financial Review,
1 June 2006, p 62.
78 M Furse and S Nash, The Cartel Offence, Hart Publishing, Oxford and Portland, Oregon,
2004, pp 5–6.
79 Sir A Hammond and R Penrose, Proposed Criminalisation of Cartels in the UK: A Report
Prepared for the Offıce of Fair Trading, OFT365, 2001, p 30,
at <> (accessed 25 April
80 Office of Fair Trading, The cartel offence: Guidance on the issue of no-action letters for
individuals, April 2003, at <
enterprise_act/oft513.pdf> (accessed 25 April 2008). See also Office of Fair Trading,
Leniency and no-action: OFT’s draft final guidance note on the handling of applications,
OFT803, November 2006, Section 4, at <
reports/comp_policy/oft803a.pdf> (accessed 25 April 2008).
81 Section 190(4) provides: ‘Where, for the purpose of the investigation or prosecution of
a no-action letter as apply to the grant of leniency/immunity under the OFT’s
policy relating to civil proceedings.82 Further, where a company has been
granted civil immunity under that policy, corresponding criminal immunity
(by way of a no-action letter) is granted automatically to all of its current and
former directors and employees.83

The Hammond and Penrose report suggested that a no-action letter only be
granted ‘following a joint decision-making process involving the OFT and
SFO’.84 However, the MOU between the two agencies that was subsequently
entered into makes it clear that ‘decisions about whether to grant leniency or
issue no-action letters rest with the OFT’.85 The only qualification is that ‘if
any such decision could have an impact on the outcome of an existing
SFO-led cartel investigation or prosecution, the OFT will consult the SFO’.86

2.4.2 Canada

In Canada the Competition Bureau (Bureau) is responsible for administering
and enforcing the Competition Act 1985. While it undertakes cartel
investigations and brings civil proceedings, responsibility for criminal
prosecutions lies, as in Australia and the United Kingdom, lies with the

Canadian DPP (to whom the powers and authority of the Attorney-General
have been delegated for this purpose).87 The Bureau’s immunity policy was
revised and updated in October 2007.88 That policy makes it clear, as did its
predecessor, that authority to grant criminal immunity rests with the DPP and
that the authority is exercised in accordance with the policy articulated in the
Federal Prosecution Service Deskbook (FPS Deskbook)89—the equivalent to
the Australian DPP Prosecution Policy.

The terms of the FPS Deskbook are very similar to the DPP Prosecution
Policy in their restrictive and discretionary approach to the grant of immunity
from criminal prosecution. Significantly, however, there is a separate section
that appears to recognise immunity from prosecution under the Competition
Act as being in a different category, referring to the Bureau’s policy and
indicating that the Bureau may recommend that a person or corporation be
given a ‘guarantee of immunity in order that the Bureau may obtain and

offences under section 188, the OFT gives a person written notice under this subsection, no
proceedings for an offence under section 188 that falls within a description specified in the
notice may be brought against that person in England and Wales or Northern Ireland except
in circumstances specified in the notice.’
82 The cartel offence, above n 80. See also Leniency and no-action, above n 80, Section 4.
83 Leniency and no-action, above n 80, at [4.9], [4.15].
84 Hammond and Penrose, above n 79, p 30 [5.11].
85 MOU between the Office of Fair Trading and the Director of the Serious Fraud Office,
October 2003, OFT547, p 3 [13], at <
business_leaflets/enterprise_act/oft547.pdf> (accessed 25 April 2008).
86 Ibid, p 3 [13].
87 W Rowley QC and M Low AC (Eds), Cartel Regulation: Getting the fine down in 37
jurisdictions worldwide, Global Competition Review, 2008, p 31.
88 Competition Bureau Information Bulletin, Immunity Program under the Competition Act,
October 2007, at <
immunitye.pdf/$file/immunitye.pdf> (accessed 25 April 2008).
89 Ibid, p 2 [9].
investigate information provided to it’.90 The FPS Deskbook Appendices
contain sample immunity agreements within this category.

Albeit the FPS Deskbook states that Crown Counsel retain full independent
discretion in deciding whether to grant immunity, the fact that cartel cases are
singled out in the FPS Deskbook appears to be significant in practice. The
experience has been that ‘while the commissioner’s policy does not legally
bind the DPP or the Attorney-General . . . there is a high degree of
predictability that, on a party’s compliance with the policy, a recommendation
by the commissioner would be followed’.91 One of the principal practical
reasons for this appears to be that there is a close working relationship
between Bureau staff and representatives of the Attorney-General. This
relationship is reinforced by the fact that:

the lawyers of the Canadian Department of Justice (who represent the

Attorney-General) are located one floor above the Bureau’s office and are typically

involved from an early stage in the investigatory process and at key points along the

way as a case winds its way through the Bureau to the Commissioner’s office. . . .

a key benefit of the close working relationship between the Canadian DOJ and

Bureau staff is that applicants for immunity can have a very high degree of comfort

that recommendations made in accordance with the Immunity Bulletin will be

accepted by the Attorney-General.92

Canada has had an immunity program in place since 2000. As at 2008, it
was reported that no recommendation for immunity in a competition case has
ever been rejected by the Canadian DPP.93

2.5 The way forward

Having regard to the criticisms made of the current proposal, and the
approaches that have been taken in other jurisdictions, there are several
possible options for addressing the challenges for immunity policy under the
bifurcated enforcement model in Australia. The main possible options appear
as follows:

(1) Retain decision-making authority solely in the DPP, but amend the

DPP Prosecution Policy to expressly recognise immunity in cartel

cases as a separate category and refer to the ACCC Immunity Policy

as the basis on which recommendations will be made by the ACCC

to the DPP, while making it clear that the DPP retains full

independent discretion in deciding whether to grant immunity;

(2) Retain decision-making authority solely in the DPP, but amend the

DPP Prosecution Policy to expressly recognise immunity in cartel

cases as a separate category and set out criteria, conditions and

processes for the grant of immunity by the DPP to guide its

decision-making in such cases that are consistent with the ACCC

Immunity Policy;

90 Public Prosecution Service of Canada, Federal Prosecution Service Deskbook, at [35.4.5],
at <> (accessed 22 April 2008).
91 Rowley and Low, above n 87, p 35.
92 P Crampton, ‘Canada’s New Competition Law Immunity Policy — Warts and All’ (2001)
International Tax Jnl 19 at 22.
93 Rowley and Low, above n 87, p 35.

(3) Retain decision-making authority solely in the DPP, but amend the

DPP Prosecution Policy to expressly limit the circumstances in which

the DPP can reject an ACCC recommendation to grant immunity;

(4) Provide that the ACCC and DPP are to make decisions regarding

criminal immunity, jointly applying the ACCC Immunity Policy;

(5) Provide that the ACCC and DPP are to make decisions regarding

criminal immunity, jointly applying the DPP Prosecution Policy

(amended as per Option 2);

(6) Establish sole authority in the ACCC to make decisions regarding

criminal immunity, with provision for consultation with (and

possibly recommendations by) the DPP.

Given the strong tradition in Australia of an independent prosecutorial
agency, option 6 seems the most unlikely option. For the same reason, and
notwithstanding the support expressed in some of the submissions to Treasury
for joint ACCC-DPP decision-making, options 4 and 5 and even option 3 seem
unlikely to appeal — at least to the DPP.94

Option 2 is the most attractive from a range of perspectives in that it would
retain at least the appearance of prosecutorial independence, while preserving
the critical aspects of the ACCC Immunity Policy credited for its

Option 1 is a weaker variant on option 2 and may not go far enough to
provide the certainty, transparency and predictability required to attract
immunity applications in cartel cases. Nevertheless, as shown by the
experience in Canada, this weakness in the policy statement can be
compensated for by a close working relationship between regulatory and
prosecutorial staff such that, in practice, the prospects of a prosecutorial
decision not to follow the regulator’s recommendation becomes highly
unlikely, and importantly is seen as such by potential immunity applicants.

Aside from the assertion of the ACCC Chairman that ‘the ACCC already
enjoys a good relationship with the DPP’95 (presumably a reference to their
experience in the rare cases in which criminal prosecutions are brought for
breaches of the consumer protection provisions),96 there is no public
information available on the relationship between the two agencies. Samuel
plainly appreciates that in the context of criminal sanctions for serious cartel
conduct, ‘it will be absolutely critical that the two agencies work well
together’ and that ‘very close cooperation’ will be required ‘where a cartel
participant has sought immunity’.97 However, little detail has been provided

94 See the discussion in Beaton-Wells and Fisse, above n 65, pp 60–2 [11.2], where it is pointed
out that generally the approach taken in the Draft ACCC-DPP MOU (whether in relation to
decisions to investigate, refer for prosecution, prosecute or grant immunity) appears to be to
retain as much as possible the independence and distinctive roles of each agency while
providing for consultation at early stages and then on an ongoing basis throughout the
enforcement process. Clearly, the ‘case-team’ model adopted in the United Kingdom by the
OFT and the SFO has been rejected in Australia.
95 Samuel, above n 48, p 24.
96 See C Parker and N Stepanenko, Centre for Competition and Consumer Policy, Compliance
and Enforcement Project: Preliminary Research Report, 2003, p 23, at <http://www.cccp.> (accessed 12 May 2008).
97 Samuel, above n 48, p 24.
on the question of how such cooperation will be achieved in practice.98 Rather,
the attitude appears to be that the business sector, legal profession and other
interested parties should be content simply to accept the chairman’s

3 Immunity policy and private enforcement

Traditionally the level of private enforcement of competition law in Australia
has been low. Very few actions for damages consequent upon breaches of the
competition provisions of the TPA have been brought.99 There have been only
four cartel class actions to date and all have been recent.100 It is thus not
surprising that questions relating to the conduct of such actions specifically
(relating to issues of proof and procedure, for example) and the relationship
between public and private enforcement more generally have not attracted
much attention in Australia.101 However, with the public attention given to
several recent cases — not least the private suits brought in respect of the
Visy/Amcor cartel — this appears to be changing.102 In particular, questions
have been raised concerning the impact of private enforcement actions on the
ACCC Immunity Policy.103 In the international arena also there has been
significant interest in recent years in the role of private antitrust enforcement

98 The provision made for dispute resolution in the Draft MOU appears disturbingly minimal:
above n 33, at [8.1]–[8.3].
99 As at 2006, there had been only four concluded actions for monetary damages in relation to
Pt IV contraventions since the Act came into operation. They were cases involving resale
price maintenance, exclusive dealing and misuse of market power: Hubbards Pty Ltd v
Simpson Ltd [1935] ArgusLawRp 95; (1982) 41 ALR 509 (appeal in Simpson Ltd v Hubbards Pty Ltd (1982) 44 ALR
695); Parrys Department Store (WA) Pty Ltd v Simpson Ltd [1983] FCA 223; (1983) ATPR 40-393; Cool &
Sons Pty Ltd v O-Brien Glass Industries Ltd (1981) 35 ALR 445 and (1981) 40 ALR 88
(appeal in [1983] FCA 191; (1983) 48 ALR 625); Taprobane Tours WA Pty Ltd v Singapore Airlines Ltd
[1990] FCA 325; (1990) 96 ALR 405 (appeal in (1991) 33 FCR 158; 104 ALR 633). The low number of such
cases has been attributed largely to the expense of mounting damages actions and the
difficulty in proving damage amounts. However, figures on the number of settled actions are
not available. For discussion of the experience to date and prospects of private enforcement
of competition law in Australia, see D Round, ‘Consumer protection: At the merci of the
market for damages’ (2003) 10 CCLJ 1; R Smith, ‘Further to Round on penalties, damages
and Pt IV of the TPA’ (2003) 11 CCLJ 1; S Corones, ‘Proof of Damages in Private
Competition Law Actions’ (2002) 76 ALJ 374; B Sweeney, ‘The Role of Damages in
Regulating Horizontal Price-Fixing’ [2006] MelbULawRw 26; (2006) 30 MULR 837.
100 One of the four is the class action brought in relation to the Visy/Amcor cartel, referred to
below: see M Blackburn, ‘Amcor Class Action’, at <> (accessed 30 November 2007). The others were in the animal vitamins cartel case which
settled for $30 million in 2006 (Darwalla Milling Co Pty Ltd v F Hoffman-La Roche Ltd
(No 2) [2006] FCA 1388; (2006) 236 ALR 322; (2007) ATPR 42-134); the $200 million class action currently
on foot against seven international airlines including Qantas for price fixing of air freight
surcharges; and, most recently a class action filed against two multinational chemical
companies arising out of a global rubber cartel: see M Drummond, ‘Class action over rubber
cartel’, Australian Financial Review, 3 December 2007, p 7.
101 See Round, above n 99, referring to the ‘paucity of literature on the economics and law of
damages for anti-competitive behaviour in Australia’: at 3.
102 See the discussion of the implications of the Visy case for private competition law
enforcement in Australia (as well as its other implications) in C Beaton-Wells and
N Brydges, ‘The cardboard box cartel case: was all the fuss warranted?’ (2008) 36 Aust Bus
L Rev 1.
103 See the comments made by Samuel in his press interviews following the Visy decision in
November 2007 in which he voiced his concern that ‘[t]he threat of follow-up class action
and the balance between private and public enforcement mechanisms, as
reflected, for example, in reports on the subject released by the OECD104 and
ICN,105 and most recently (as discussed below) by the European

3.1 The issues

The specific issue that arises in relation to immunity policy and private
enforcement concerns the access of private claimants to information provided
by applicants in support of an application for immunity or in fulfilment of the
obligations of disclosure and cooperation attached to a grant of immunity.
More broadly, there are questions as to how the objectives and operation of the
immunity policy and the private enforcement system may be rendered
compatible, if not mutually enhancing. These questions in turn have
implications for the way in which the regulator regards its role in the
enforcement of competition law generally.

3.2 The background

Maintaining the confidentiality of the information provided by immunity
applicants is generally recognised as a key attribute of an effective immunity
policy.107 In particular, exposure to or strengthening of follow-on damages
claims based on information provided to a regulator is said to be a genuine
concern for and a potential disincentive to immunity applicants — if not in
making the application in the first instance then in doing so in a full and frank
manner, notwithstanding the potential for revocation of immunity should the
applicant be considered to have failed in its disclosure obligations.108

can be a disincentive for those cartel members thinking of confessing’. In particular, the
ACCC’s concern is that coat-tail actions by private litigants, either individually or as a class,
will undermine the operation of its leniency policy, a policy seen as ‘a crucial weapon’ in the
fight against cartels: G Samuel, ‘Cartel ringleaders are well-dressed criminals, so why not
send them to jail?’, The Age, 3 November 2007, p 2. Samuel reiterated these concerns in
March 2008: see Sexton, above n 4, p 35.
104 Organisation for Economic Cooperation and Development, Policy Roundtables, Private
Remedies, 2007, at <> (accessed 12 May
105 International Competition Network, Cartels Working Group Subgroup 1 — general
framework, ‘Interaction of Public and Private Enforcement of Cartel Cases’, Report to the
ICN Annual Conference, Cape Town, May 2006, at <
final-version.pdf> (accessed 12 May 2008).
106 See 3.4.2 below.
107 Anti-Cartel Enforcement Manual, above n 17, p 8 [2.6.3].
108 Applicants are concerned also regarding disclosure to fellow cartel members, foreign
competition agencies and other domestic regulators. Hence, immunity policies generally
contain provisions that assure disclosure to such agencies only with the consent of the
applicant. See Report on Leniency Programmes to Fight Hard Core Cartels, above n 13,
p 14 [40]. In recent years, there has been particular concern in the European Community
about the discoverability in private suits brought in the United States (in which treble
damages are available) of documents associated with leniency applications made in the EC:
see the discussion in K Nordlander, ‘Discovering Discovery — US Discovery of EC
Leniency Statements’ (2004) European Competition L Rev 646; M Bloom, ‘Despite its Great
Success, the EC Leniency Programme Faces Great Challenges’ in C-D Ehlermann and
I Atanasiu (Eds), European Competition Law Annual 2006: Enforcement of Prohibition of
Such considerations underpin both the so-called ‘paperless process’
relevant to immunity applications whereby presentations and submissions are
made orally and also the provisions for confidentiality, subject to the
applicant’s consent or the operation of normal legal processes, that are
increasingly common features of immunity policies around the world.109 In
relation to the former, under the ACCC Immunity Policy, applicants are not
required to make an application in writing and it is thereby expressly
acknowledged that applicants can avoid ‘generating any new documents
which may involve admissions or provide a road map to others’.110 Insofar as
the ACCC creates its own records, the policy further provides that the
commission will ‘work with applicants and their lawyers to ensure, as far as
possible, that its records do not prejudice the applicant’s interests’.111 In
relation to confidentiality, the policy provides that ‘the ACCC will use its best
endeavours to protect any confidential information provided by applicants for

Recent cases cast doubt on the extent to which the ACCC’s ‘best
endeavours’ will be effective in preventing third party access to documents
either provided or generated in the immunity process, or for that matter, in
other contexts such as compliance with s 155 notices and penalty negotiations.
There are increasing indications that such documents may be accessible under
statutory or court-approved compulsory processes — for example, under
subpoena, notices to produce, discovery rules, O 46 of the Federal Court Rules
and freedom of information legislation. Further, these cases have raised
questions about the extent to which the ACCC may rely on various privileges
(particularly public interest immunity privilege and legal professional
privilege) to resist such access.113

In the immunity context, this concern was highlighted recently by the
ACCC’s failure to resist an order to produce to Cadbury for the purposes of
its damages action against Amcor and Visy, proofs of evidence from
employees of Amcor, the successful immunity applicant, prepared for the
purposes of the ACCC’s penalty proceeding against Visy.114 While Gordon J

Cartels, Hart Publishing, Oxford and Portland, Oregon, 2007, pp 558–60; I Forrester,
‘Searching Beneath the Cherry Tree in the Garden: European Thoughts on How to Enhance
the Task of Uncovering and Thereby Deterring Cartels’ in Ehlermann and Atanasiu, ibid,
pp 170–9.
109 Anti-Cartel Enforcement Manual, above n 17, p 8 [2.6.3]; P Crampton and G Reynolds QC,
Leniency Programmes in Competition Law, pp 14–15,
at <> (accessed 21 April 2008).
110 ACCC Immunity Policy Interpretation Guidelines, above n 42, p 5, 2.5, [40].
111 Ibid, p 5, 2.5, [41].
112 Ibid, p 6, 2.6, [45]. In relation to regulators in other jurisdictions, the guidelines provide that
the ACCC will not share confidential information provided by the immunity applicant or the
identity of the applicant, except as required by law, without the consent of the applicant: see
113 See Professor B Baxt, ‘Cracking Cartels: International and Australian Developments:
International Cooperation’, Paper presented at ICN Cartels Workshop, Cracking Cartels
Conference, Sydney, November 2004, at <
%20Bob%20Baxt> (accessed 12 February 2008), and the cases referred to therein.
114 Cadbury Schweppes Pty Ltd v Amcor Ltd (2008) ATPR 42-218; [2008] FCA 88;
BC200800675. See further the related decision in Cadbury Schweppes Pty Ltd v Amcor Ltd
upheld the ACCC’s claim to legal professional privilege in respect of a limited
category of the documents, she rejected its claims of legal professional
privilege and public interest immunity privilege in respect of the balance
(constituting the large majority of documents for which the ACCC had sought
protection). The commission was held to have waived legal professional
privilege by filing the documents and serving them on Visy.115 The public
interest claimed by the ACCC to require protection of the documents was ‘to
encourage, by ensuring the confidentiality of the information they provide,
cartel whistleblowers to come forward’.116 Without being able to rely on the
confidentiality of such information, so the ACCC argued, ‘whistleblowers
might be dissuaded from coming forward and the public interest in rooting out
cartel conduct correspondingly injured’.117

The court found these arguments to be devoid of both factual and
theoretical merit. As to the former, Gordon J pointed to the fact that Amcor
itself had not sought any guarantee of confidentiality in its immunity
application and that, in any event, the ACCC had led no evidence that any
cartel whistleblower, whether in this case or otherwise, ‘has demonstrated
reluctance to come forward based on a concern that information provided
might become public’.118 As to the theoretical merit of the ACCC’s argument,
Gordon J rejected the notion that a party in the position of Amcor could have
a reasonable expectation of confidentiality given the inevitability that
statements of a cooperating conspirator will be used against (ie, disclosed to)
the non-cooperating conspirators.119 She was equally critical of the ACCC’s
fall-back ‘free-rider’ argument that ‘Cadbury should not have the benefit of
the ACCC’s work precisely because it could easily do the work itself’.120 As
to this, Gordon J observed:

(2008) ATPR 42-224; [2008] FCA 398; BC200802054. Cf Korean Airlines Co Ltd v ACCC
[2008] FCA 265; BC200801368 in which Jacobson J upheld the ACCC’s claim to public
interest immunity privilege in response to a notice to produce internal documents relevant to
its decision-making with respect to settlement with KAL over allegations of price fixing of
air cargo freight charges. The judge accepted the ACCC’s evidence that disclosure entailed
a ‘serious risk of adversely affecting the Commission’s ongoing investigation into conduct
suspected to have been carried out by the applicant and other carriers, and thereby impeding
the Commission’s fulfilment of its statutory functions in the public interest’: at [66]–[69].
115 Cadbury Schweppes Pty Ltd v Amcor Ltd (2008) ATPR 42-218; [2008] FCA 88;
BC200800675 at [20].
116 Ibid, at [27].
117 Ibid, at [28]. This argument found some support in the observation in ACCC v ABB Power
Transmission Pty Ltd [2003] FCA 626; BC200303170 at [43] that:
It may be that the public interest would be served by a principle that communications
between the Commission and a party who has contravened the Act, which occur in an
endeavour to make frank disclosure and give full cooperation to the Commission in its
investigations, should have some protection in order to induce such frank disclosure and
full cooperation. It may well be that there would be a reluctance to make frank disclosure
and cooperate fully if communications that thereby resulted were then to be available for
general publication.
118 Cadbury Schweppes Pty Ltd v Amcor Ltd (2008) ATPR 42-218; [2008] FCA 88;
BC200800675 at [29].
119 Ibid, at [30].
120 Ibid, at [31].

there is at least an equal, if not more compelling, public interest in allowing private

litigants to rely on the output of regulatory investigations, which are undertaken by

public regulators at least in part on their behalf. The ACCC should be ‘motivated by

a desire to do its duty, both towards the public and towards individual investors’

(ACCC v Michigan Group Pty Ltd [2002] FCA 1439 at [22]). It is not motivated by

corporate profit motives or competitive concerns. Indeed, the ACCC often justifies

requests for findings of fact, declarations, and injunctions that may be of little or no

importance in the matter before the court on the grounds that they will be useful to

follow-on private litigants: ACCC v Michigan Group Pty Ltd [2002] FCA 1439

at [24]; ACCC v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 at [105]–[107]

(discussing s 83 of the Trade Practices Act 1974 (Cth), which outlines the

circumstances in which findings made in penalty proceedings under s 77 may be

used as prima facie evidence in damages proceedings brought under s 82).121

Of relevance to the broader issue involved in the relationship between
immunity policy and private enforcement, Gordon J went further to express
the view that the ‘real concern’ of the ACCC was that potential immunity
applicants would be deterred from cooperation, not by the disclosure of
information, but by the effects of such disclosure, that is by the heightened
prospects of damages exposure. She continued:

In my view, the confidentiality and free-rider arguments ostensibly advanced here

by the ACCC are, at best, a proxy for that concern, and at worst a smokescreen

obscuring it. To be fair, the appropriate total level of private civil liability (ie,

penalties plus damages) an actor should face for cartel conduct is a valid issue, and

one which was long ago recognized by authorities and commentators in the US in

the context of cooperation and leniency . . .

But to acknowledge the ACCC’s concern is not to approve of its proposed method
for resolving that concern. On the contrary, the ACCC’s attempt to use common law
privilege doctrine to protect cooperators when they are faced with private suits for
damages, albeit partially successful here, appears to me to be misguided. Whether
cartel whistleblowers such as Amcor or those who cooperate with the regulators
after the commencement of penalty proceedings (either by settling like Visy or in
some other manner) should be rewarded or encouraged by reduced exposure or
enhanced protection in damages proceedings is a broad question of policy that
should be addressed by the legislature, not by ad hoc judicial tinkering through the
backdoor of privilege.122

Unlike regulators in other jurisdictions (discussed in 3.4 below), the ACCC
does not have any formal public statement of its position on the ‘broad
question of policy’ identified by Gordon J with respect to the balance to be

121 Ibid, at [32].
122 Ibid, at [46]–[47]. The ACCC has brought an appeal from Gordon J’s decision. Since the
decision, the ACCC Chairman has been cited in the media reiterating the arguments
resoundingly rejected by Gordon J — ‘whistleblowers will not come forward if they believe
information they give the commission will later be used in lawsuits seeking compensation’
— he was reported as saying, less than a month after the decision. ‘We need to be sure that
we can get absolute co-operation from parties that come to us to seek immunity’, and he
went on, ‘that means maintaining confidentiality of material that’s provided to us’. And,
finally, in a not so subtle stab at the law firm responsible for the class action brought against
Amcor and Visy, ‘if the integrity of our immunity policy is not protected, then the Maurice
Blackburns will not have their third party actions because the cartels won’t be revealed.’ See
Sexton, above n 4, p 35. Cf the views of Maurice Blackburn to the effect that the ACCC is
‘siding’ with cartelists against private claimants: J Eyers, ‘Cartel immunity policy under
attack’, Australian Financial Review, 11 July 2008, p 56.
struck between public and private enforcement concerns, nor has it instigated
any structured process of debate or consultation on the question. The issue did
receive a cursory mention in a speech by Chairman Samuel in 2005 in which
he emphasised that the ‘ACCC’s prime focus is on deterring, stopping and
prosecuting cartels’.123 He noted ‘a growing recognition of victims of cartels
that they are entitled to seek redress’, coinciding ‘with an increased interest
from private legal firms (and litigation funders) to pursue such private
claims’.124 His ‘expectation’ was that such claims are ‘set to become more
common in Australia’ and that ‘this will surely act as a further deterrent’.125

The ACCC, said Samuel, ‘sees private proceedings as a legitimate and
valuable avenue of redress’.126 However, in his view, it was not possible for
the ACCC ‘to share information that has been obtained using the ACCC’s
compulsory information gathering powers under section 155 of the Act’ or
information obtained ‘on a confidential basis’ (presumably a reference to
information provided by immunity applicants, amongst others). And, insofar
as it might be suggested that the ACCC ‘should actively seek findings of fact
that will assist private damages claimants’, there may be ‘legitimate reasons
in a particular matter for the ACCC to obtain findings that do not cover all
instances of certain conduct, or indeed, not pressing for findings of fact at
all’.127 The ACCC ‘would not wish to jeopardise the public interest of
obtaining an agreed penalty or other outcome merely because this would not
advance a private damages action, or would advantage certain private parties
over others’.128

123 Samuel, above n 48, p 21.
124 Ibid, p 21.
125 Ibid, p 21.
126 Ibid, p 21.
127 In the Visy case, eg, the ACCC declined to allege or seek findings of fact in relation to loss
suffered by contract customers. In the agreed statement of facts, it was stated that ‘the ACCC
does not allege as part of its case in this proceeding that the conduct, insofar as it is admitted
to constitute either arriving at an unlawful understanding or giving effect to such an
understanding, had any negative financial impact on or caused loss to any of the named
customers’. See agreed statement of facts between the applicant and the first to sixth
respondents, filed in ACCC v Visy Industries Holdings Pty Ltd No VID 1650 of 2005,
12 October 2007, at [374]. While Heerey J nevertheless accepted that the conduct involved
in the case was of a kind ‘inherently likely to cause loss’ (see ACCC v Visy Industries
Holdings Pty Ltd (No 3) (2007) 244 ALR 673; [2007] FCA 1617; BC200709371 at [314]),
this is not of much assistance to the private claimants in proving their case for damages. As
was acknowledged by Maurice Blackburn lawyer, Brendan Murphy: ‘It’s a case where we
have a lot of work to do, and we have a lot of econometric work to do, proving the “but for”
price’: see The Law Report, Australian Broadcasting Corporation transcripts, 30 October
2007, at <> (accessed 30 November 2007).
128 Samuel, above n 48, p 21. Samuel made the same comments in a paper two months later:
Samuel, above n 72, pp 26–7. They were repeated again in a contribution by the ACCC to
Policy Roundtables by the Organisation for Economic Cooperation and Development Policy
Roundtable on Plea Bargaining in 2006 and on Private Remedies in 2007: Plea
Bargaining/Settlement of Cartel Cases, above n 75, p 82; Private Remedies, above n 104,
pp 294–5.
3.3 The current proposal

Given the ACCC’s growing concern regarding the extent to which it may be
compelled to disclose information in its possession, it is unsurprising that the
Exposure Draft Bill released on 11 January 2008 contained provisions
addressing this issue.129 Currently, the ACCC is prohibited under the Act from
disclosing information given to it in confidence or obtained in the exercise of
its compulsive powers and relating to a matter under Pt IV unless required or
permitted to do so by the Act or another law of the Commonwealth.130 The
provisions proposed under the Exposure Draft Bill, referred to for present
purposes as the ‘protected cartel information scheme’ (PCI scheme), invest
substantial discretion in the ACCC with respect to providing access to
information, while at the same time significantly limiting the capacity of
others to obtain access through invocation of the usual legal processes.

3.3.1 The PCI scheme

Central to the proposed scheme is the concept of ‘protected cartel information’
(PCI). PCI is defined as information that was given to the ACCC in confidence
and relates to a breach or possible breach of the new cartel offence provisions
or the new civil penalty prohibitions.131
The scheme provides an exhaustive list of factors that will be relevant in
determining when PCI is disclosed (divulged or communicated)132 (the
relevant factors). That list is as follows:

• the fact that the PCI was given to the ACCC in confidence;

• Australia’s relations with other countries;

• the need to avoid disruption to national and international efforts

relating to law enforcement, criminal intelligence and criminal


• in a case where the PCI was given by an informant:

– the protection or safety of the informant or of persons

associated with the informant; and

– the fact that the production of a document containing PCI, or

the disclosure of PCI, may discourage informants from giving

PCI in the future;

• in the case of production or disclosure to a court — the interests of

the administration of justice; and

129 Although it was surprising in the sense that the issue was not addressed and such provisions
were not foreshadowed in the Dawson Committee’s report: see Trade Practices Committee
of Review, above n 22, p 165, or the press release of the former Treasurer of 2 February
2005, ‘Criminal penalties for serious cartel behaviour’, above n 30.
130 See s 155AAA of the TPA.
131 See ss 157B(7), 157C(7) of the Exposure Draft Bill. It is not clear why information that
relates to a breach or possible breach of the s 45 provisions is not included in the scheme.
Further, interpretational difficulties in relation to this definition immediately suggest
themselves — most obviously potential difficulties in determining: (1) the circumstances in
which information will be held to have been given ‘in confidence’ (eg, it is not clear whether
statements recorded in a transcript of a s 155 examination would be regarded as confidential
in this sense); and (2) what is sufficient to establish the relationship between the information
and the breach or possible breach.
132 See s 157B(7) of the Exposure Draft Bill.

• in the case of production or disclosure to a tribunal — the interests

of securing the effective performance of the tribunal’s functions.133
There are various contexts in which the scheme applies. The two contexts
of potential relevance for present purposes are:134

• where the ACCC may be required to produce PCI to a court or

tribunal, whether or not it is a party to the proceeding in which

production is sought (s 157B); and

• where access to PCI is sought from the ACCC by a party or

prospective party in a proceeding to which the ACCC is not a party

(s 157C).
The effect of these provisions appears to be as follows.
• Under s 157B:

– the ACCC may produce a document containing PCI or disclose

PCI to a court or tribunal, subject to having regard to the

relevant factors [as outlined above] (subs (4));135

– but the ACCC is not to be required to produce such a document

or disclose such information except with the leave of the court

or tribunal,136 and in granting such leave, subject to the court

or tribunal having regard to the relevant factors [as outlined

above] (subs (1));137

– and if a document is produced or information is produced or

disclosed in either way, it is not to be produced or disclosed in

other proceedings except where the ACCC has exercised its

power under subs (4) or a court or tribunal has given leave

under subs (1) in relation to the other proceedings.138
• Under s 157C:

– the ACCC may, on the application of a person, provide a copy

of a document containing PCI to the person where the person

is a party in a proceeding or is considering instituting

proceedings and the proceedings have not yet been instituted

(subss (3)–(4)),139 subject to having regard to the relevant

factors [as outlined above];140

133 See ss 157(1B), 157B(5), 157C(5) of the Exposure Draft Bill.
134 The other context is where a respondent to a proceeding brought by the ACCC seeking a
civil penalty or remedy under Pt VI seeks access to PCI that tends to establish the
respondent’s case (s 157(1A)–(1B)). Under s 157(1A), the ACCC is not required to comply
with a request for access to documents under s 157(1), as it would otherwise be required to
do, if the documents contain PCI, provided the ACCC has had regard to the relevant factors,
and a court is not entitled to direct the ACCC to comply (see s 157(2)). Section 157(1)–(1A)
apply only to requests for access to information by respondents in civil proceedings, and
hence should have no bearing on the usual prosecutorial obligation to disclose evidence to
an accused in a criminal case.
135 As listed in s 157B(4) of the Exposure Draft Bill. Furthermore, the provision states that the
ACCC ‘must not have regard to any other matters’.
136 Section 157B(1) of the Exposure Draft Bill.
137 As listed in s 157B(2) of the Exposure Draft Bill.
138 See s 157B(3), (6) of the Exposure Draft Bill.
139 See s 157C(3)–(4) of the Exposure Draft Bill.
140 As listed in s 157C(5) of the Exposure Draft Bill.

– but theACCC is not to be required to make discovery (however

described) to the person in either circumstance141 (and there is

no provision for leave by a court akin to the provision under

s 157B(1));

• and if a document is so produced, it must not be adduced in

other proceedings before the same court or another court or a

tribunal except where the ACCC has exercised the power under

subs (3)–(4), or in accordance with leave granted under

s 157B(1) in relation to the other proceedings, or as a result of

an exercise of power under s 157B(4) in relation to the other


3.3.2 Responses to the proposed PCI scheme

By regulating access to information held by the ACCC in relation to its
anti-cartel enforcement activities, the PCI scheme appears to be an attempt to
circumvent the uncertainty inherent in the application of the common law in
this area.142 As reflected in the list of relevant factors (outlined above), there
is a range of competing interests to be accommodated in any such regulation.
The questions are whether the proposed scheme reflects all such interests and
whether it strikes the right balance between them. The responses to the PCI
scheme proposal to date reflect the difficulties in achieving this balance and
raise the more fundamental issue as to whether this is an area best left to
legislation or to case-by-case adjudication applying long-established

(a) Section 157C
Concerns regarding the proposed PCI scheme have focused predominantly on
s 157C, which gives the ACCC the final decision whether to provide access to
information to a party in a proceeding (or potential proceeding) to which the
ACCC is not a party. Unlike s 157B this provision purports to exclude the
court from reviewing ACCC decisions and compelling the ACCC to provide
access. This provision has the greatest potential to undermine private litigation
by cartel victims and was criticised extensively by leading plaintiff law firm,
Maurice Blackburn Pty Ltd, in its submissions to Treasury on the Exposure
Draft Bill.143 The key criticisms made by Maurice Blackburn can be
summarised as follows:

141 See s 157C(1), (2) of the Exposure Draft Bill.
142 See, eg, ALRC, Privilege in Perspective: Client Legal Privilege in Federal Investigations,
Report No 107, 2007, p 26, at <
other/alrc/publications/reports/107/> (accessed 12 May 2008), where the ALRC refers to the
‘considerable uncertainty in relation to the powers of many federal investigatory bodies
under their own particular legislation — uncertainty that presently only can be resolved
through litigation’. As the ALRC also points out, privilege disputes are often slow and
frustrating: ‘Any uncertainty about what must be produced puts enormous pressure on all
concerned—and uncertainty can frustrate investigations and end up in protracted and costly
litigation, such litigation’: pp 26–7. See also the discussion in A Cossins, ‘Revisiting Open
Government: Recent Developments in Shifting the Boundaries of Government Secrecy
under Public Interest Immunity and Freedom of Information Law’ (1995) 23 Federal L Rev
143 Maurice Blackburn Pty Ltd, ‘Submission on Trade Practices Amendment (Cartel Conduct
and Other Measures) Bill 2008 — Exposure Draft’, 4 March 2008,

• The scheme inappropriately constrains the factors to be taken into

account by the ACCC in making decisions about access and is

weighted against access because the list of relevant factors does not

include the interests of the person seeking it, the purpose for which

access is sought or the relevance and probative value of the

information in achieving that purpose.144 It thus effectively seeks to

redefine the way in which public interest immunity privilege is

applied and to do so in a manner that favours the ACCC and cartel

offenders over the interests of cartel victims.145

• Moreover, the decision-making process will lack transparency in that

it purports to exempt the ACCC, not only from producing the

documents, but also from discovering them (that is, identifying and

describing them while making a claim for privilege as the basis for

non-production).146 It is also not apparent that the ACCC will

provide or be required to provide reasons for refusal of access.147

• There is no precedent for s 157C in statutory provisions regulating

access to documents held by police or other regulators such as the

ASIC.148 As illustrated recently in P Dawson Nominees Pty Ltd v

Multiplex Ltd,149 the competing interests involved in relation to such

access (including the regulator’s interest in preventing disruption to

its investigations) are well-served by judicial application of the

principles governing public interest immunity privilege.150

at <> (accessed 25 April 2008); Maurice Blackburn Pty Ltd, ‘Supplementary Submission on Trade
Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 — Exposure Draft’,
12 March 2008, at <
Blackburn_Supplementary.pdf> (accessed 25 April 2008). There were criticisms by others,
however. See Blake Dawson, ‘Submission on Trade Practices Amendment (Cartel Conduct
and Other Measures) Bill 2008 — Exposure Draft’, 7 March 2008, p 29,
at <> (accessed
25 April 2008); ‘Criminal penalties for serious cartel conduct — draft legislation’, above
n 65, pp 16–17.
144 Maurice Blackburn Pty Ltd, 4 March 2008 Submission, ibid, p 3 [19]–[20]. Cf s 157(1B)(e)
which includes ‘the legitimate interests of the corporation which, or the person who, made
the request under subsection (1)’ in the list of relevant factors to be taken into account by the
ACCC in deciding whether to refuse to comply with a request for PCI by a respondent to a
civil proceeding where the PCI relates to or tends to establish the case of the respondent. It
is incongruous that this or a similar factor has been omitted from the lists of relevant factors
in connection with s 157B and s 157C.
145 Maurice Blackburn Pty Ltd, 4 March 2008 Submission, above n 143, p 10 [62].
146 Ibid, pp 3–4 [21]–[23].
147 It would appear possible, however, for reasons to be obtained by way of an application under
s 13(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth).
148 Indeed, ASIC’s policy with respect to the release of information appears far more generous
than the approach proposed in the PCI scheme: see ASIC, Regulatory Guide 103:
Confidentiality and release of information, February 1996, especially RG103.16-RG103.18,
at <$file/ps103.pdf> (accessed 21 April 2008).
149 (2007) 65 ACSR 239; [2007] FCA 1659; BC200709376; P Dawson Nominees Pty Ltd v
Multiplex Ltd (2007) 64 ACSR 53; [2007] FCA 1044; BC200705433; ASIC v P Dawson
Nominees Pty Ltd [2008] FCAFC 123; BC200805200, especially at [48]–[62].
150 See also the recent decisions in Korean Airlines Co Ltd v ACCC [2008] FCA 265;
ACCC the power to impose conditions on the disclosure of such information.159

(b) Section 157B

Submissions to Treasury criticised the drafting of s 157B and its unworkability
in practice, as well as on grounds of principle. As to the latter, consistent with
its concerns in relation to s 157C, Maurice Blackburn criticised the attempt in
s 157B to replace well-established common law principles that seek to balance
competing public interests with provisions that inappropriately fetter judicial
discretion in resolving conflicts over access and which sway resolution against
the interests of cartel victims.160 By contrast, the Trade Practices Committee
of the Law Council saw merit in having the matters taken into account in such
disputes set out with clarity and in having the importance of the particular
matters identified in the list of relevant factors emphasised.161 It also
supported the enactment of s 157B on the grounds that it may ‘reduce the
potential for litigants to use court processes to interfere with regulatory
investigations by the ACCC’.162

As to its drafting, submissions pointed out that there are significant
uncertainties as to how s 157B will operate in practice. It is not clear whether
s 157B means that a party must first obtain leave of the court or tribunal to
serve a notice to produce or subpoena,163 or if after service, once the ACCC
objects to production, ‘leave’ must be obtained to compel production.164 The
concept of giving leave in the latter context seems incongruous. Arguably, in
such circumstances the court would be ordering the commission to make
production.165 Further, if it is intended that the party seeking access obtain
leave first to serve the notice or subpoena, it is difficult to see how this could
be done ex parte given that in any leave application neither the applicant nor
the court will know whether information held by the commission is classified
as PCI until the ACCC makes the claim.166 If leave must be sought to serve
the notice or subpoena and such leave is refused with the court having applied
the relevant factors, then it appears highly unlikely that the commission would
exercise its power to provide access voluntarily, applying those same

3.4 Overseas models

A full comparison of the statutory, general law and policy provisions affecting
the disclosure of information procured during the immunity process or other
aspects of the private enforcement system in key jurisdictions overseas would
be a formidably long and complex exercise that is both beyond the scope of
this article and, given legal, procedural and institutional differences (referred

159 Ibid, p 44 [165].
160 Maurice Blackburn Pty Ltd, 4 March 2008 Submission, above n 143, pp 12–13 [71]–[77].
161 ‘Submission to the Treasury on the criminalisation of cartels’, above n 65, p 42 [152].
162 Ibid, p 42 [155].
163 Under O 27A of the Federal Court Rules, leave is already required to issue a subpoena.
164 Maurice Blackburn Pty Ltd, 4 March 2008 Submission, above n 143, p 4 [26].
165 Beaton-Wells and Fisse, above n 65, p 97.
166 Maurice Blackburn Pty Ltd, 4 March 2008 Submission, above n 143, p 4 [28].
167 Ibid, p 4 [30].
to below), of questionable utility in any event. Nevertheless, there have been
certain significant developments overseas in relation to private enforcement of
competition laws generally, including in relation to the interaction between
private and public enforcement and, in that context, the impact of follow-on
private actions for damages on immunity programs. These developments, in
both the United States and Europe (at both community and national level —
for example, in the United Kingdom), reflect an approach to the important
issues of policy and practice involved in this area that is significantly
advanced, it seems, on the approach evinced to date by the ACCC.

3.4.1 United States

Private competition law enforcement has been more vigorous in the United
States than anywhere else in the world.168 From the outset, Congress predicted
that private parties would play a central role in enforcement of the Sherman
Act,169 recognising that a robust system of private actions for damages would
complement public enforcement and increase dramatically the deterrence of
antitrust wrongdoing.170 This prediction has been realised in practice such that
the threat of civil damages exposure is today generally regarded as an equal
if not more powerful deterrent than criminal prosecution to cartel activity in
the United States.171

168 Antitrust Modernization Commission, Report and Recommendations, April 2007, p 241,
at <> (accessed 21 April 2008). It has been estimated that about 10% of US antitrust cases are
brought by the government and 90% by private litigants (including government actions
under the parens patriae provisions seeking compensation on behalf of antitrust victims): see
D Woods, ‘Private Enforcement of Antitrust Rules — Modernization of the EU Rules and
the Road Ahead’ (2004) 16 Loyola Consumer L Rev 431 at 435 n 11.
169 15 USC §§ 1–7 (2000 & Supp IV, 2004).
170 Indeed Senator Sherman believed that individuals should act as ‘private attorneys-general’
and that the antitrust laws should encourage such enforcement: Report and
Recommendations, above n 168, p 243.
171 This is not to say that there have not been significant fluctuations in the level of private
enforcement in the United States. See, eg, documenting the decline and resurrection of
antitrust class actions in that jurisdiction: S Calkins, ‘An Enforcement Official’s Reflections
on Antitrust Class Actions’ (1997) 39 Arizona L Rev 413 at 414–19. Recently, it has been
pointed out that the Supreme Court under its current Chief Justice has been intent on cutting
back on private enforcement — it having been more than 15 years since the court decided
an antitrust case in favour of a plaintiff: W Kolasky, ‘Reinvigorating Antitrust Enforcement
in the United States: A Proposal’ (2008) 22(2) Antitrust 85. Furthermore, achieving an
optimal balance between public and private antitrust enforcement is a subject of continuing
debate in the United States: see, eg, S Calkins, ‘Corporate Compliance and Antitrust
Agencies’ Bi-Modal Penalties’ (1997) 60 Law and Contemporary Problems 127; M Denger
and D Jarrett Arp, ‘Criminal and Civil Cartel Victim Compensation: Does Our Multifaceted
Enforcement System Promote Sound Competition Policy?’ (2001) 15 Antitrust 143;
American Bar Association Section of Antitrust Law, The State of Federal Antitrust
Enforcement: Report of ABA Section of Antitrust Law Task Force on the Federal Antitrust
Agencies — 2001, January, 2001, at <
2001/reports/antitrustenforcement.pdf> (accessed 12 May 2008); D Rosenberg and
J Sullivan, ‘Coordinating Private Class Action and Public Agency Enforcement of Antitrust
Law’ (2006) 2 Jnl of Competition Law and Economics 159; R Preston McAfee, H Mialon
and S Mialon, ‘Private Antitrust Litigation: Procompetitive or Anticompetitive?’ in V Ghosal
and J Stennek (Eds), The Political Economy of Antitrust, Elsevier, Amsterdam, 2007, Ch 17;
J Connor, ‘The United States Department of Justice Antitrust Division’s Cartel Enforcement:
Appraise and Proposals’, AAI Working Paper #08-02, 10 June 2008.
The vitality of private enforcement in the United States is attributable
largely to two factors: (1) the availability of treble damages;172 and (2) the
class action mechanism which allows plaintiffs to sue on behalf of both
themselves and similarly situated absent plaintiffs.173 There is also an
aggressive and experienced plaintiffs’ bar174 and Congress, state legislatures
and the courts have developed rules generally favouring plaintiffs, including
a generous system of discovery, the availability of prejudgment interest on
damages, provision for joint and several liability and bars on claims for
contribution as between defendants.175

At the same time, the potency of the threat of private damages claims and
the discoverability of information and documents provided in support of an
immunity application are said to be a matter of intense focus for prospective
immunity applicants.176 Thus, in 2004, legislation was passed in an attempt to
address the perceived tension between private enforcement interests and the
public interest in preserving the effectiveness of the immunity process.177 The
Antitrust Criminal Penalty Enhancement and Reform Act 2004178 increased
maximum corporate fines to US$100 million (a tenfold increase) and
maximum individual fines to US$1 million (from US$350,000), while also
increasing the maximum jail term from three to 10 years. This increase in
penalties is seen as important in enhancing the attractiveness of the immunity

172 This is provided for in s 4 of the Clayton Act 15 USC §§ 1–7 (2000 & Supp IV, 2004). For
a detailed discussion of treble damages in the United States, see E Cavanagh, ‘Antitrust
Remedies Revisited’ (2005) 84 Oregon L Rev 147 at 169–80.
173 Class actions account for approximately 20% of all private actions in US antitrust law,
however, their significance is greater than suggested by this figure given the sheer size of the
claims involved: C Jones, ‘The Growth of Private Rights of Action Outside the US:
Exporting Antitrust Courtrooms to the World: Private Enforcement in a Global Market’
(2004) 16 Loyola Consumer L Rev 409 at 427.
174 The match between the defendants’ bar and the plaintiffs’ bar has been referred to as
‘a match between Goliath and Goliath’: W Kovacic, ‘Private participation in the
Enforcement of Public Competition Laws’ in MAndenas, M Hutchings and P Marsden (Eds)
Current Competition Law II, British Institute of International and Comparative Law,
London, 2004, p 167.
175 For a general description of these rules, see Report and Recommendations, above n 168,
p 241. See also the US Contributions, Private Remedies, above n 104, pp 101–4, 185–94,
176 See, eg, R Hewitt Pate, ‘International Anti-Cartel Enforcement’, Paper presented at ICN
Cartels Workshop, Cracking Cartels Conference, Sydney, November 2004,
at <> , (accessed 12 May 2008)
observing that: ‘We frequently heard that applicants did not apply for amnesty because of the
prospect of US treble damage litigation. The removal of this disincentive — in fact, the
offering of a significant incentive — will lead to more amnesty applications in the United
States, and more simultaneous applications in multiple jurisdictions.’ See also G Spratling
and D Jarrett Arp, ‘International Cartel Enforcement and Leniency Programs: A Global
Perspective’, Paper presented at International Competition Network Workshop on Leniency
Programs, November 2004, p 32, at <
%20Gary%20Spratling.pdf> (accessed 8 May 2008).
177 In explaining the rationale for the legislation, Senator Orrin Hatch remarked that, despite the
success of the DOJ’s immunity program, ‘a major disincentive to self-reporting still exists:
the threat of exposure to a possible treble damage lawsuit’. See 150 Cong Rec S3610-02,
S3614, 2004 WL 714783 (2 April 2004).
178 (2004) 15 USC 1 Note, Public Law 108-237, 22 June 2004.

program.179 At the same time, the Act offers immunity applicants the prospect
of a significant reduction in civil liability, conditional upon the applicant
providing ‘satisfactory cooperation’ to civil plaintiffs.180

The reduction takes two forms. First, only single damages will be allowed
against the cooperating immunity applicant/defendant. This detrebling
provision is seen as significantly lowering the expected cost of future damages
claims.181 Secondly, the Act limits the federal and state liability of an
immunity applicant to the damages attributable to the commerce of the
applicant in the goods and services affected by the violation. This provision
has the effect of eliminating the doctrine of joint and several liability for an
immunity applicant under which, in the context of a cartel prosecution, each
corporate cartel member would potentially be liable for the full amount of a
plaintiff’s damages, irrespective of the cartel member’s share in the affected

It may still be too early to assess the impact of this scheme on the behaviour
of immunity applicants.183 While members of the DOJ have made bold
predictions about its capacity to strengthen both the public and private aspects
of the antitrust enforcement program in the United States,184 others have been

179 See D Fletcher, ‘The Lure of Leniency: Maximizing Cartel Deterrence in Light of La Roche
v Empagran and the Antitrust Criminal Penalty Enhancement and Reform Act of 2004’
(2005) 15 Transnational Law & Contemporary Problems 341.
180 W Baer, T Frazer and L Gyselen, ‘International Leniency Regimes: New Developments and
Strategic Implications’, Corporate Counsel’s International Adviser, 11/1/05 246-02, 246-04.
Cooperation includes:
(1) providing a full account to the claimant of all facts known to the applicant or
cooperating individual, as the case may be, that are potentially relevant to the civil
action; (2) furnishing all documents or other items potentially relevant to the civil action
that are in the possession, custody, or control of the applicant or cooperating individual,
as the case may be, wherever they are located; and (3)(A) in the case of a cooperating
individual — (i) making himself or herself available for such interviews, depositions, or
testimony in connection with the civil action as the claimant may reasonably require; and
(ii) responding completely and truthfully, without making any attempt either falsely to
protect or falsely to implicate any person or entity, and without intentionally withholding
any potentially relevant information, to all questions asked by the claimant in interviews,
depositions, trials, or any other court proceedings in connection with the civil action; or
(B) in the case of an antitrust leniency applicant, using its best efforts to secure and
facilitate from cooperating individuals covered by the agreement the cooperation
described in clauses (i) and (ii) and subparagraph (A).
181 Baer, Frazer and Gyselen, ibid.
182 Ibid. Thus, eg, ‘suppose a civil plaintiff class is found to have suffered US $100 million in
damages from a price fixing cartel. Before the 2004 Act, a single member of the cartel with
only a 10 per cent share in the affected market could face US $300 million in liability (the
full US $100 million trebled). Under the 2004 Act, however, if the cartel member were a
cooperating amnesty applicant, it would only be liable for US$10 million in damages (the
portion of the US $100 million in damages attributable to the cartel member’s 10 per cent
share of the affected commerce without trebling).’
183 As at 2006, there had apparently been only one ruling issued under the Act — in July 2005,
the US District Court for the Northern District of Illinois held that two companies were
entitled to the Act’s protection because they had provided satisfactory cooperation in the
civil litigation following the Antitrust Division’s sulphuric acid investigation. This was
reported in the American Bar Association Section of Antitrust Law, 2005 Annual Review of
Antitrust Law Developments, American Bar Association, Section of Antitrust Law, Chicago,
2006, pp 173–4.
184 See, eg, S Hammond, ‘An Overview of Recent Developments in the Antitrust Division’s
more circumspect. Questions have been raised, for example, regarding the
uncertain nature and extent of the cooperation required to qualify for the
benefits promised under the legislation and the potential for the requirement
to be exploited by unscrupulous plaintiffs.185 There has been concern also that
the authorities may be overwhelmed with immunity applications for conduct
that is, at worst, a civil violation.186 In addition, it has been pointed out that
immunity applicants seeking to avail themselves of these provisions will need
to weigh carefully the potential benefits of the 2004 Act against the potential
foreign implications of providing such detailed cooperation to US plaintiffs.187

The importance of the private antitrust enforcement system in the United
States recently received resounding endorsement by the Antitrust
Modernization Commission which recommended no change to the key facets
of the system to which much of its success has been attributed—in particular,
the provision for treble damages in antitrust cases.188 Given this, it will be
intriguing to observe how the tension between private enforcement and the
DOJ’s immunity program plays out in the future. It is not inevitable that the
latter will win the day.189 The view that private follow-on actions are a
disincentive to immunity applications has been contested on the ground that
applicants generally regard such actions as likely to occur whether or not

Criminal Enforcement Program’, Paper presented at the American Bar Association
Midwinter Leadership Meeting, 10 January 2005, p 12,
at <> (accessed 8 May 2008).
185 D Klawiter, ‘US Corporate Leniency after the Blockbuster Cartels: Are We Entering a New
Era?’, Paper presented at the European University Institute 2006 EU Competition Law and
Policy Workshop, p 13, at <
200610-COMPed-Klawiter.pdf> (accessed 8 May 2008).
186 Ibid, p 13.
187 Baer, Frazer and Gyselen, above n 180.
188 Report and Recommendations, above n 168, especially pp 243–4. See also the spirited
defence of the US’ litigation system in the Section of Antiturst Law and the Section of
International Law of the American Bar Association, ‘Comments of the Section of Antitrust
Law and the Section of International Law of the American Bar Association in Response to
the Request for Public Comment of the Commission of the European Communities on
Damage Actions for Breaches of EU Antitrust Rules’, April 2006,
at <
comments/aba.pdf> (accessed 8 May 2008).
189 See, eg, the comments in W Kovacic, ‘Private participation in the Enforcement of Public
Competition Laws’ in MAndenas, M Hutchings and P Marsden (Eds), Current Competition
Law II, British Institute of International and Comparative Law, London, 2004, p 167:
At a minimum, one can ask whether the leniency program of a jurisdiction becomes less
effective as an anti-cartel device as private rights grow more powerful and the potential
damage exposure from private suits increases. If the answer is ‘yes’ it is still not clear that
a jurisdiction is necessarily worse off, on balance, if it enhances private rights of action.
A central aim of competition policy is to achieve optimal deterrence. Augmenting
leniency mechanisms and strengthening private rights of action are alternative means for
increasing a firm’s incentives to comply with a prohibition against cartels. Leniency
increases the probability that misconduct will be detected, and strong private rights to
recover damages increase the likelihood that misconduct will be prosecuted and, more
important, raise the severity of the sanctions to be imposed upon wrongdoers beyond any
punishment obtained by the public prosecutor. To date, no researcher has assembled the
data to show which strategy — increasing detection or boosting sanctions — has the
greater effect in spurring compliance.
immunity is sought.190 Indeed, runs the argument, immunity has significant
advantages in the context of evaluating strategies for managing potential
damages exposure. First, it gives the successful applicant a head start in
negotiating restitution arrangements and restoring good will with customers191
and secondly, immunity, unlike a guilty plea, means that as against the
immunity applicants, plaintiffs will not be able to rely on the ‘prima facie
effect’ provisions.192 These observations in the US context are consistent with
the recent observations of the Chairman of the OFT in the United Kingdom in
which he questioned the extent to which the threat of private actions does or
should operate as a constraint on immunity applications. He foreshadowed, for
example, the likelihood that greater attention to corporate governance,
particularly at board level, ‘will drive competition compliance and encourage
leniency applications’.193 He also observed that there will be cases where the
business concerned has recently been bought and immunity might be sought
in view of the fact the new managers do not wish to be compromised by the
inheritance of unlawful activities by the vendors.194

3.4.2 Europe

In Europe, as in Australia, the incidence of private enforcement of competition
laws has been low195 and European commentators have debated questions as
to whether and how a greater degree of private enforcement might be
facilitated for some time.196 The European Commission entered the debate
substantively in December 2005 when it released a Green Paper on Damages

190 D Klawiter, ‘US Corporate Leniency after the Blockbuster Cartels: Are We Entering a New
Era?’ in Ehlermann and Atanasiu, above n 108, p 503.
191 Apparently amnesty applicants often contact potential private plaintiffs just as they contact
the enforcement agencies, seeking to work out restitution or settlements: Report on Leniency
Programmes to Fight Hard Core Cartels, above n 13, p 11 [30].
192 Klawiter, above n 190, pp 503–4. Under these provisions a final judgment against a
defendant in an action under the antitrust laws is admissible in a follow-on private damages
action as prima facie evidence of the antitrust violation: 15 USC § 16(1) (2000) (Tunney
193 P Collins, ‘Public and private enforcement challenges and opportunities’, Speech at the Law
Society’s European Group, 6 June 2006, p 7, at <
speeches/0306.pdf> (accessed 8 May 2008).
194 Ibid, p 7.
195 Although figures for the European Union are difficult to pin down, it has been estimated that
the ratio of government-initiated to privately initiated competition law actions is ‘something
like 21:1’, as compared with the US ratio of 9:1. A recent report commissioned by the
European Commission commented that damages had only been awarded on 28 cases in the
EU for anticompetitive conduct: D Waelbroeck, D Slater and G Even-Shoshan, Study on the
conditions of claims for damages in case of infringement of EC competition rules,
Comparative report, Ashurst, 31 August 2004, at <
antitrust/actionsdamages/comparative_report_clean_en.pdf> (accessed 8 May 2008).
196 See, eg, W Wils, The Optimal Enforcement of EC Antitrust Law: Essays in Law and
Economics, Kluwer Law International, The Hague and London, 2002, Ch 8; W Wils,
‘Should Private Antitrust Enforcement be Encouraged in Europe?’ (2003) 26 World
Competition: Law & Economics Review 473; A Komninos, ‘New Prospects for Private
Enforcement of EC Competition Law: Courage Crehan and the Community Right to
Damages’ (2002) 39 Common Market L Rev 447; Ehlerman and Atanasiu, above n 108;
C Jones, ‘Private Antitrust Enforcement in Europe: A Policy Analysis and Reality Check’
(2004) 24 World Competition: Law & Economics Review 13.
Actions for Breach of the European Community (EC) Antitrust Rules.197 In
the Green Paper the lack of private enforcement in Europe was attributed to
‘considerable hurdles . . . of a legal or procedural nature’ in the traditional tort
rules of Member States.198 The paper followed a study which had concluded
that this area of law in the Member States presented a picture of ‘total
underdevelopment’.199 Following the consultation initiated by the Green
Paper, on 3 April 2008 the commission released a White Paper with detailed
proposals for facilitating the establishment of an effective and efficient system
of private enforcement of competition law, at both community and national
levels.200 The proposed measures and policy choices in the White Paper deal
with rules of standing; collective (class) actions; access to evidence inter
partes through discovery rules; the binding effect of national competition
authority decisions; the fault requirement; definition and quantification of
damages; passing-on overcharges, limitation periods; costs; and also the
interaction between immunity programs and actions for damages.

Significantly, these initiatives start from the premise that the right of victims
to compensation is guaranteed by EC law201 and that all persons having
suffered loss as a result of infringements of EC competition law are entitled to
access effective redress mechanisms so that they can be fully compensated.202
Thus, the primary objective of the White Paper was identified as being to
improve the legal conditions for victims to exercise their right to reparation
under the EC Treaty. However, it was also emphasised that effective remedies
for private parties increase the likelihood that anti-competitive conduct will be
detected and infringers will be held liable. Improving compensatory justice
thus was seen as inherently producing beneficial effects in terms of deterrence

197 In EU jargon, a ‘White Paper’ is a document containing proposals for community action in
a specific area. It sometimes follows a ‘Green Paper’ published to launch a consultation
process at the European level. While Green Papers set out a range of ideas presented for
public discussion and debate, White Papers contain an official set of proposals in specific
policy areas and are a prelude to Community legislation. It should be noted that prior to the
release of the Green Paper, the EC modernisation program, instigated in 2003, was designed
in part to facilitate private enforcement: Sweeney, above n 99, at 863, 866.
198 European Commission, ‘Green Paper on Damages actions for breach of the EC antitrust
rules’, COM(2005) 672 final, 19 December 2005, at <> (accessed 8 May 2008).
199 Waelbroeck, Slater and Even-Shoshan, above n 195. This is supported by a more recent
study commissioned by the OFT on the deterrent effect of competition enforcement. The
study found that companies and their advisers view private actions as the least effective
aspect of the competition regime in achieving compliance. When asked for suggestions as to
what could be done to improve compliance with competition law in the United Kingdom,
the most frequent responses included encouraging private damages actions. See OFT, ‘The
deterrent effect of competition enforcement by the OFT’, OFT962 and OFT963, November
2007, at <> and
at <> (accessed
13 May 2008). To date there has been only one representative action for a breach of
competition law in the United Kingdom, see The Consumers Association v JJB Sports plc,
Case No 1078/7/9/07.
200 European Commission, ‘White Paper on Damages actions for breach of the EC antitrust
rules’, COM(2008) 165 final, 3 April 2008, at <
antitrust/actionsdamages/files_white_paper/whitepaper_en.pdf> (accessed 13 May 2008).
201 This guarantee was confirmed by the decision of the European Court of Justice in Courage
Ltd v Crehan [2001] ECR I-6297.
202 ‘White Paper on Damages actions’, above n 200, pp 2–3.
of future infringements and greater compliance with EC antitrust rules.203 At
the same time, the White Paper identifies as a guiding principle the importance
of preserving a robust and effective system of public enforcement and
ensuring that private actions complement rather than replace or jeopardise the
measures taken by public competition authorities.204 Finally, it sought to
promote a ‘genuinely European approach’ to private enforcement, offering a
‘balanced solution to the current often inefficient compensation systems in
place, while avoiding over-incentives that could lead to litigation excesses as
perceived in some countries outside Europe’205 (reflecting the aversion often
expressed in Europe to developing a US-style litigation culture).206 Thus, the
commission made no proposals regarding the introduction of punitive
damages, opt-out class actions, contingency fees, the no-contribution rules or
jury trials.

The Green Paper pointed out that, given the complementary nature of
private and public enforcement, it was necessary to seek optimum
coordination between them. This was seen as being especially important for
coordination between immunity programs as a critical public enforcement
mechanism and private damages claims.207 In particular, it was seen as
‘appropriate to maintain the attractiveness of leniency programmes in Europe,
on the one hand, by ensuring an adequate level of protection of leniency
applications in a future context of an enhanced level of actions for damages,
and, on the other hand, to further reflect on the possibility to further
incentivise potential immunity applicants’.208 To this end, three issues were

First, the exclusion of discoverability or disclosure of immunity
applications was canvassed as a means of ensuring that the threat of disclosure
not have a negative impact on the quality of an immunity applicant’s
submissions, or even dissuade an infringer from applying for leniency in the
first instance.209 Such was the support for this measure that the White Paper
recommended that the exclusion protection apply to all corporate statements
submitted by all applicants for immunity in relation to a breach of Art 81 of
the EC Treaty (also where national competition law is applied in parallel) and
regardless of the outcome of the application. Further, the protection would
apply even where disclosure was ordered by a court, be it before or after

203 Ibid, p 3.
204 Ibid, p 3.
205 European Commission, ‘Antitrust: Commission presents policy paper on compensating
consumer and business victims of competition breaches’, Press Release IP/08/515, 3 April
2008, at <
=HTML&aged=0&language=EN&guiLanguage=en> (accessed 13 May 2008).
206 Referred to, eg, in a question asked in the Roundtable Conference with Enforcement
Officials, at the American Bar Association Section of Antitrust Law Spring Meeting,
Washington DC, 28 March 2008, transcribed in Antitrust Source April 2008,
at <>, p 9.
207 ‘Green Paper on Damages’, above n 198, p 9 [2.7].
208 European Commission, ‘Commission Staff Working Paper accompanying the White Paper
on Damages, actions for breach of the EC antitrust rules’, COM(2008) 165 final, SEC(2008)
404, 3 April 2008, p 84 [286], at <
antitrust/actionsdamages/files_white_paper/working_paper.pdf> (accessed 13 May 2008).
209 ‘White Paper on Damages actions for breach of the EC antitrust rules’, above n 200, p 10.
adoption of a decision by a competition authority, and even then voluntary
disclosure would be precluded at least until a statement of objections has been

The second measure examined in the consultation process was the
possibility of a rebate on damages claims for successful immunity applicants,
conditional upon provision of evidence to claimants in follow-on actions. This
suggestion attracted divergent views which led to the conclusion that, while
leaving it open as a future possibility, it should not be pursued further at this
stage given that ‘it has not been demonstrated that an enhanced level of
actions for damages would unduly affect leniency programmes and that such
a strong reward should be given to immunity applicants as regards their civil

As regards the third measure, the limitation of the scope of civil liability of
the successful immunity applicant, the commission considered the option of
removal of joint liability as between cartel members but set it aside after
concerns were expressed that it would not be sufficient to effectively limit the
immunity recipient’s liability. As an alternative, the commission put forward
for further consideration the option of limiting the civil liability of the
immunity recipient to claims by direct and indirect contractual partners.212 As
a result, the only persons entitled to receive compensation from the immunity
recipient would be the victims who directly bought the cartelised products or
services from the immunity recipient (ie, direct contractual partners), or those
further down the supply chain who bought these products or services (directly
or through intermediaries) from the direct contractual partners (ie, indirect
contractual partners). The burden of proving the extent to which its liability is
limited would have to be borne by the immunity recipient. At this stage, the
commission considered it appropriate to further reflect on the need for such an
incentive to be granted to immunity recipients, particularly as it was important
to ensure that the victims’ right to full compensation would not be unduly
affected, and that the other cartelists’ liability would not be unduly

3.4.3 United Kingdom

It will be interesting to monitor reactions to the proposals made in the White
Paper, both inside and outside Europe. The process undertaken by the
commission has sparked a far greater degree of interest in, debate about and
generally support for private competition law enforcement at national and
community levels than previously had existed in Europe. This is reflected, for
example, in the release on 18 April 2007 of a discussion paper by the OFT
instigating consultation on ‘facilitating private actions in order to optimize the
effectiveness of competition law in the UK, and to make redress for consumers
and businesses more accessible’.214 In November 2007, the OFT published its
report and recommendations.215

210 Ibid, p 10.
211 ‘Commission Staff Working Paper’, above n 208, p 83 [279].
212 ‘White Paper on Damages’, above n 200, p 10.
213 ‘Commission Staff Working Paper’, above n 208, pp 88–9 [305]–[306].
214 Office of Fair Trading, ‘Private actions in competition law: effective redress for consumers
In its discussion paper and report the OFT expressed support for the same
principles and objectives articulated by the European Commission as guiding
its process — in particular, the notion that ‘private actions are an essential
complement to public enforcement in the overall scheme of the competition
rules’ and the aim ‘to develop a system where public enforcement and private
actions work alongside, and in harmony with each other to the best effect for
consumers and for the economy’.216 Many of the same issues and proposals
dealt with by the European Commission were considered by the OFT in its
process. In relation to the issue of immunity, the OFT stressed the importance
of preserving the effectiveness of the program from a public interest point of
view and reported that the majority of respondents supported the proposition
that the program should not be undermined through the disclosure of
immunity documents.217 It recommended that a power be conferred on the
Secretary of State to provide, by Statutory Instrument, that immunity
documents, appropriately defined, are excluded from use in litigation without
the consent of the immunity applicant. The exclusion should apply
irrespective of whether the OFT proceeds to an infringement decision and the
power should be exercised on the advice of the OFT.218

The OFT also examined the issue as to whether the incentive to apply for
immunity would be enhanced by removing the burden of joint and several
liability from immunity recipients.219 This received strong support in
submissions to the OFT and hence it was recommended that a power be
conferred on the Secretary of State to provide, by Statutory Instrument, that
immunity recipients are not jointly and severally liable with the other
wrongdoers so that immunity recipients are only liable for the harm they
caused. The power could be exercised on the advice of the OFT.220 Indeed, the
OFT was even prepared to contemplate providing immunity recipients, in
exceptional circumstances, with total immunity from civil liability.221 The
OFT’s recommendations are currently under consideration by the UK

and business’, Discussion Paper, April 2007, at <
shared_oft/reports/comp_policy/oft916.pdf> (accessed 8 May 2008).
215 Office of Fair Trading, ‘Private actions in competition law: effective redress for consumers
and business’, Recommendations from the Office of Fair Trading, November 2007, p 10
[3.3]–[3.6], at <> (accessed 21 April 2008).
216 Office of Fair Trading, ‘Private actions in competition law: effective redress for consumers
and business’, Discussion Paper, April 2007, pp 5 [2.7], 7 [2.10],
at <> (accessed 25 April 2008).
See similarly the comments in Office of Fair Trading, November 2007 Recommendations,
above n 215, p 10 [3.3]–[3.6].
217 Office of Fair Trading, November 2007 Recommendations, above n 215, p 37 [9.1]–[9.4].
218 Ibid, p 38 [9.5].
219 Ibid, p 38 [9.6]. The OFT also raised for consideration the option of allowing claimants to
bring an action against an immunity recipient, while empowering the court to allow that
immunity recipient to seek contributions of up to 100% from non-leniency recipients.
However, this did not attract the same level of support as the option of removing joint and
several liability which was generally regarded as providing recipients with a higher degree
of certainty and incentives to apply for leniency: pp 38–9 [9.7].
220 Ibid, p 39 [9.9].
221 Ibid, p 39 [9.9].
3.5 The way forward

As compared with the proposals in the European Community and the United
Kingdom, as a means of reconciling the competing interests involved in the
disclosure of immunity information, the proposed PCI scheme could be seen
as generous to private litigants in that it does not involve an automatic
exclusion of access and allows, albeit in a limited fashion, for judicial
review.222 However, what is missing in the Australian context is an effort by
the regulator to lead a structured comprehensive debate on the role of private
enforcement of competition law generally and, in that context, to consider
how private actions might be facilitated by giving immunity recipients
incentives to provide information to assist private claimants in securing
compensation for their losses.223

The ACCC should follow the example of the European Commission and the
OFT in instigating a process of consultation about these matters, by:

(1) making a clear statement of the ACCC’s position on the importance

of private enforcement224 and its relationship with public

enforcement in achieving the goals of competition law;225 and

(2) canvassing, not just the issue of immunity, but the full range of

questions pertinent to private damages actions for competition law

infringements, including rules of standing, representative actions,

damages calculation, discovery rules and evidential issues (including

the role of s 83 of the TPA), the availability of the passing-on

defence, costs and funding arrangements and limitation periods.
If unable or unwilling to lead this process on its own, the ACCC should
consider forming a working group, co-opting members of the Federal Court,

222 See also s 100 of the New Zealand Commerce Act 1986,
at <
_act_commerce+act*> (accessed 12 May 2008).
223 Cf the statement of the ACCC’s overall position on private enforcement in essentially
neutral terms as being ‘that there is nothing that the ACCC does that is designed to
discourage or impact upon third party damages actions’. See the ACCC’s report to Private
Remedies, above n 104, p 295.
224 Such is the scarcity of information emanating from the ACCC on this topic that it is difficult
to know what the ACCC’s position is. It would also be interesting to compare the ACCC’s
position on private enforcement of the consumer protection provisions of the TPA. The
ACCC recently called for improvement of the provisions that enable it to bring
representative actions in respect of breach of the consumer protection provisions, observing
in this context that ‘a goal of consumer policy is to provide a range of flexible options in
order to prevent and correct instances of consumer detriment’: see ACCC, ‘Submission to
the Productivity Commission Inquiry into Australia’s Consumer Policy Framework’, June
2007, pp 12, 100 et seq at <
20PC%> (accessed 12 May 2008).
225 Cf the recent announcement by the Minister for Competition Policy and Consumer Affairs,
Christopher Bowen, that the Federal Magistrates Court is to be given jurisdiction in s 46
cases, at <
htm&pageID=003&min=ceb&Year=&DocType=> (accessed 12 May 2008). However,
politicised or misguided such a move might be (as suggested in some of the media
commentary: see, eg, J Durie, ‘Canberra puts politics before policy’, The Australian,
29 April 2008, p 30), it represents, on its face at least, a concession directed at easing the
burden on private plaintiffs.
the Attorney-General’s Department and the legal profession (with
representatives from both plaintiff and respondent firms) to formulate a set of
proposals to be released for wider consultation.

[This article is continued in a subsequent issue of the CCLJ, which will examine

immunity policy and settlement and immunity policy and alternative informant


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