Leniency is an international practice and it affords enterprises with an opportunity to get out of a cartel, put an end to the cartel by disclosing it to the Competition Commission. And ultimately to avoid having to pay the financial penalty under the Competition Commission’s Leniency Program as set out in section 59 (7) of the Competition Act 2007.
An enterprise which comes forward with information that enables or assists the Competition Commission to determine a breach of Sections 41 or 42, or Section 43 where RPM facilitates a cartel, may receive substantial reductions in fines, or complete immunity from financial penalties.
Benefits to an enterprise
The first enterprise to provide the Competition Commission with evidence of the cartel activity can benefit from:
- total immunity where the Commission has not started an investigation on the matter at the time of disclosure (leniency application); or
- reduction of up to 100 per cent in the level of financial penalties where an investigation is already ongoing on the matter reported.
Under certain conditions, subsequent leniency applicants may also benefit from reduction of up to 50 per cent in the level of financial penalties.
Leniency for cartel initiators/coercers: up to 50 %
Since December 2017, the Competition Commission has extended its leniency programme so that even an enterprise which is the initiator of a cartel or which has coerced other businesses to take part in the cartel may be granted a reduction in fines.
Such an applicant must observe the general conditions for leniency. It will be granted a 50% reduction in fines if the applicant enterprise is first to apply for leniency with respect to the reported cartel activity, the application is made before an investigation has commenced, and provided that the Competition Commission does not already have sufficient information to establish the existence of the alleged cartel activity.
If the application by an initiator or coercer is made after an investigation has already been initiated then it may be granted up to 50% reduction.
An enterprise may benefit from a further reduction in its leniency grant if it also submits information and evidence of a completely separate cartel activity than the one which is being investigated.
The specific conditions to be met is that the enterprise is the first to disclose the second cartel conduct to the Competition Commission and the latter does not already have sufficient evidence of the cartel. The enterprise does not need to be in receipt of leniency in the first market to receive this reduction. It is sufficient for the enterprise to be receiving a reduction, by way of mitigation, for co-operation, in the initial cartel conduct for it to receive full immunity or up to 100% reduction in fines for the second reported conduct.
When applying for leniency whether full immunity, up to 100% or 50%, the applicant enterprise must satisfy the following conditions. The enterprise must –
- immediately submit to the Competition Commission, all information, documents and the evidence relating to the suspected breach available to it at the time of application for leniency,
- maintain continuous and complete co-operation throughout the investigation and until the conclusion of any action by the Competition Commission as a result of the investigation; and
- refrain from further participation in the cartel activity from the time of disclosure of the cartel activity to the Competition Commission (except as may be directed by the Competition Commission).
It must be noted that an enterprise which has initiated a cartel (the ring leader, the one which has a leading role) or which has coerced other enterprises to participate in a collusive agreement cannot benefit from the aforementioned forms of leniency.
Whether a party qualifies for total immunity from or reduction in fines will depend on several factors, including:
- the stage at which the disclosure is made;
- the quality of the documents/information/evidence submitted; and
- maintaining continuous and complete co-operation throughout the investigation and until the conclusion of the investigation.
The stage at which an enterprise comes forward to provide the Competition Commission with information on cartel activity is a determinant factor in considering the extent to which the enterprise qualifies for leniency.
There is NO opportune time to apply for leniency other than NOW!
The Competition Commission operates a MARKER SYSTEM for leniency applications. The Marker System protects an enterprise’s place in the queue for a given limited period of time and allows it to gather the necessary information and evidence in order to perfect the marker i.e. to either obtain immunity or a reduction of up to 100 per cent in financial penalties.
Cartel participants are therefore encouraged to apply for leniency at the earliest and to provide maximum relevant information before their ‘collaborators’.
Procedure for requesting immunity or a reduction in the level of penalties
The procedure for applying for leniency is simple. Enterprises are encouraged to contact the Competition Commission and submit relevant information and evidence of the reported cartel. Contact can be made by phone, email, letter or even walk-in the office of the Competition Commission (no need for appointment).
How to contact the Competition Commission
An enterprise or its legal representative may contact the Competition Commission for any information regarding the Competition Commission’s leniency programme as well as any form of assistance that may be required by an enterprise intending to apply for leniency.
The following means may be used to contact us :
Tel: +(230) 211-2005
Fax: +(230) 211-3107
Address: 10th Floor, Hennessy Court, Pope Hennessy Street, Port Louis