The first applicant to report its violations will receive a complete exemption — from fines and criminal accusation — if the application is made before an enforcement investigation begins. A maximum of two other applicants in a single conspiracy can earn reductions in fines of 30 percent or 50 percent.
The applicants must comply with conditions similar to those in the U.S. and EC programs, but if the investigation has started, the application must be made within the first 20 days. The Fair Trade Commission also has the discretion to grant a second or third applicant immunity from criminal prosecution. There is no amnesty-plus program in Japan.
Early indications are that the Japanese program will have the same effect as the U.S. and EU programs in encouraging companies to come forward with information on cartels. According to a survey published in August 2005 by the Jiji Press English News Service, more than 40 percent of the largest Japanese firms were considering leniency applications.
Leniency is available to the first applicant to report a conspiracy unknown to the European Commission or, if the European Commission has already launched an investigation, the first to provide evidence sufficient to establish a violation. An applicant must provide any and all evidence in its possession and cooperate fully in the investigation. The applicant must not have taken steps to coerce others into the illegal activity.
The European Commission requires a much fuller confession of the violation than is the case in the United States, and the EC application may be used as evidence of the violation. And while the European Commission does not impose criminal penalties, some EU countries — notably the United Kingdom and Ireland — may undertake criminal enforcement. A successful EC leniency application will not affect potential criminal penalties where they apply.
Discretionary leniency, in the form of fine reductions, is available to later applicants (after the first one) that provide evidence that adds significant value to the investigation. The European Commission does not have an amnesty-plus program like the one in the United States, however.
Adding to the complexity of these multiple jurisdictions, in Europe the situation is further complicated by the existence of 26 authorities — the European Commission plus 25 national authorities — each with its own power to investigate and punish violations of European competition law.
Therefore, potential leniency applicants in Europe face uncertainty in determining to which authority or authorities they should submit applications. For example, the German authorities have just issued a major revision of their leniency program, with important changes in every facet of the program.
Understanding the differences among leniency programs can be quite daunting. The stakes are high, and proper guidance is crucial to complete the marathon of international legal clashes that lies ahead. Success requires an experienced team of international specialists with experience in assisting leniency applicants in all the major jurisdictions, as well as experience in helping those who have not won the race for leniency and must deal with the consequences.
Jeffrey Blumenfeld and Rob Lipstein are partners in the D.C. office of Crowell & Moring. Volker Soyez is an associate in the Brussels office. The authors would like to thank Gordon Mackenzie, counsel in the Brussels office, and Queena Hu, an associate in the Irvine, Calif., office, for their help in writing this article.