The number of business cartels signing up to the Office of Fair Trading’s (OFT) leniency programme nearly doubled last year.
In 2010, the OFT accepted every one of the 25 leniency applications it received, compared with 13 of the 15 applications it received in 2009, according to Reynolds Porter Chamberlain (RPC), who obtained the information through a Freedom of Information Act request. The programme offers businesses involved in cartel behaviour an opportunity to secure 100% immunity from fines and prosecution in return for voluntarily providing the OFT with evidence of the cartel.
It was used recently by Barclays, which received 100% discount on its fine for cartel behaviour relating to the pricing of loan products for professional services firms, and by a number of construction companies involved in a major bid-rigging case who received reduced fines for their co-operation.
Stephen Smith, partner at RPC, said: “Cartel behaviour is notoriously difficult to detect. The leniency programme is an important policy tool in the OFT’s enforcement toolkit, enabling the OFT to obtain substantial evidence from businesses prepared to blow the whistle in exchange for a reduced penalty. Plea bargaining style deals are controversial, particularly where the evidence provided may be used subsequently in individual criminal prosecutions, but the tactic certainly seems to be working.”
Smith said there have been concerns among competition lawyers over government proposals to merge the OFT and the Competition Commission.
“The UK competition regime is generally well regarded by business and the legal community alike. There is therefore some concern, particularly in respect of a number of the government’s proposals, that what is perceived as a very effective system could be torn up.”
