The document discusses the declining trend of companies self-reporting international cartel activities for leniency and the increasing risks associated with private damages and confidentiality loss for applicants. It highlights the need for competition authorities to create policies that safeguard self-reporters and honor the 'golden rule' to encourage leniency applications. Additionally, it notes that Latin America is seeing rising cartel self-reporting, while the sustainability of leniency programs is threatened by excessive sanctions and legal risks.

1. OECD Roundtable on Challenges and
Coordination of Leniency Programs
Scott Hammond
June 5, 2018

2. • A downturn in companies cooperating in international cartel
investigations after another company self-reported in exchange for
“leniency”
• A downturn in self-reporting international cartel activity in the US and
globally in exchange for “full immunity”
• The leniency (second-in) application rate slowed before the downturn in
self reporting
• Proliferation of costs associated with cooperating and settling with an
ever-growing number of jurisdictions on five continents
• Competition authorities have successfully coordinated on fine-
calculation methodologies to mitigate against double-counting
• Competition authorities risk tipping the balance against seeking leniency
by imposing excessive sanctions on the second company to provide
cooperation
Leniency Trending
2

3. • Downturn in companies’ self-reporting international cartel activity in
exchange for full immunity
• Trend cannot be explained by the cyclical nature of cartel investigations
over time
• The Golden Rule: Thou shalt not leave a self-reporting company in a
worse position than a company fighting the authority
• An immunity applicant’s exposure to private damages has increased
while the safeguarding of its self-incriminating information by
competition authorities has diminished
Self-Reporting Trending
3

4. • Private plaintiff settlements fail to adequately incentivize and reward
self-reporting and risk killing “the goose that laid the golden egg”
• Competition authorities need to promote policies and legislation that
honors the Golden Rule and reduces private damage exposure for
companies receiving full immunity
o Differentiating between private damage benefits for immunity
versus leniency applicants?
• 2004 U.S. federal law (ACPERA) reducing exposure for conditional
immunity recipients has not operated to limit private damage exposure
and incentivize immunity applications as intended
Private Damage Payouts Often Exceed Fine Savings
4

5. • Applicants encountering less confidentiality protecting the self-reporter’s
identity and the information provided
• Competition authorities are increasingly required to publicly disclose an
applicant’s information in response to court orders
• Recommend that competition authorities resist compelling “waivers” in
order to promote international cooperation
• Recommend that competition authorities adopt policies and/or promote
legislation designed to safeguard confidentiality to the greatest extent
possible
Erosion of Confidentiality Protections
5

6. • The credible threat of criminal sanctions can be either the greatest
incentive or greatest disincentive to self-reporting and leniency
• The FNE’s (Chile) experience is an OECD Model for:
reigning in an independent and overzealous public prosecutor
working with the National Congress to pass an antitrust criminal law that
simultaneously protects the integrity of the FNE’s Leniency Policy
maximizing transparency in its leniency, leniency-plus, fining and criminal
referral policies
securing the full confidence of the Chilean and international antitrust bar and
business community as well as the Chilean public
Exposing Leniency Applicants to Criminal Prosecution
6

7. • Latin American is a hot spot for self-reporting domestic and international
cartel activity
 Chile has joined Brazil and Mexico as a destination for international cartel self-
reporting
 Columbia and Peru have joined Chile, Brazil, and Mexico in bringing front-page,
record-breaking domestic cartel cases using their leniency programs
• Andean Competition Commission (CAN) case threatens Colombia’s (SIC)
and Peru’s (INDECOPI) leniency programs and self-reporting throughout
Latin America
 SGCAN considering Technical Staff Report recommending maximum fine against
company that self-reported conduct to authorities in Colombia, Peru and Ecuador
 Ecuador (SCPM) promised full immunity and then closed its 18-month
investigation, and opened and closed it again, before sending the applicant’s self-
incriminating information to the CAN with a referral to investigate
 CAN has no leniency program
Leniency Programs are Fragile
7

8. 8
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