Hong Kong’s Revised Leniency Policy and Its Potential to Deter Cartels

Leniency policy is an essential instrument of public enforcement of competition law, which promotes the detection of economic cartels through cooperation with the offenders, who serve as whistle-blowers. This study analyses the effectiveness and challenges of this policy in the European Union (EU) and Albania. Leniency policy has been one of the main reasons for the success in detecting cartels in the EU. On the other hand, although Albania has approximated the rules on leniency with those of the EU, leniency policy has not been successful. This article focuses on exploring the reasons for this phenomenon. The methodology used to answer the research question combines desk-review of EU legislation, Albanian legislation on competition and leniency, as well as the doctrine regarding the effectiveness of this policy. Another methodology used to address the research question is the comparative one between the reasons for the success of the leniency policy in the EU and the lack of success of the same policy in Albania. This study elaborates three key recommendations to improve Albanian leniency policy: improving the legal certainty and confidentiality of this policy, criminalizing cartels, and improving public awareness.

Although the concept of leniency programmes has been universally accepted, there is no consensus on the required details of the individual policies. Some have proven a great success; others have produced fewer results. This chapter aims at drawing lessons on the common features of successful leniency programmes from the theoretical and practical viewpoints. Jurisdictions where leniency programmes are at the beginning or early stages of implementation face different challenges from those that have now had a leniency policy in place for years. However, some common features are shared by all leniency policies and contribute to creating the right ecosystem where leniency policies can thrive. By looking at the experience in selected jurisdictions with older and younger leniency programmes, this chapter confirms the strict interdependence between an effective leniency policy and a well-functioning enforcement system, characterised by strong deterrence and high detection levels. Further, it identifies six main features as the basis for the successful design, implementation and effectiveness of leniency programmes.

The scope of this paper encompasses an analysis of the leniency policy introduced by the European Union (EU) public enforcement of competi­tion law and its interaction with private enforcement of competition law, par­ticularly focusing on the approach and challenges of Albania as an EU candi­date country. The purpose of this study is to examine the nature, characteristics, and effec­tiveness of the EU leniency policy within the context of competition law en­forcement. It investigates how the leniency policy affects private enforcement of competition law, particularly in relation to evidence disclosure and joint and several liability. Even though private and public enforcement of compe­tition law are considered to be complementary, the practice has shown that conflicts may arise, especially with the implementation of leniency policy. In addition, this paper aims to examine the Albanian approach to leniency pol­icy and examine possible challenges of the Albanian private enforcement of competition law. The methodology employed in this study includes a desk review and a com­parative study. The desk review methodology encompasses an analytical re­view of EU standards, treaties, and secondary legislation, Albanian legislation on civil judicial procedure and the public enforcement of competition law. Second, the comparative analysis is conducted to highlight similarities and differences between EU and Albanian competition law concerning leniency policy. In addition, the US example and its substantially different approach to­wards private enforcement of competition law is examined. The findings of this paper contribute to an understanding of the complex re­lationship between the EU public and private enforcement of the EU competi­tion law (especially during leniency proceedings) and its implications for Alba­nian practice. Lastly, this study’s findings provide new insights into the EU-ori­ented future of the Albanian competition law, offering suggestions for possi­ble amendments to the actual national competition legislation.

We examine the impact of the ACCC's leniency policy (Immunity Policy) on cartel stability. The policy, by reducing the fines of the first cartel members who cooperate with competition authorities, can act to deter collusion. However, we find that care is needed in how a leniency policy is implemented. It is possible that the leniency policy can make collusion easier to sustain than in its absence. Further, the ACCC's Cooperation Policy, which applies to all parties who assist the Commission with an investigation, can act to undermine the effectiveness of the leniency policy.

The allocative and productive inefficiencies generated by cartels have induced many governments to tackle them aggressively, thus making those agreements increasingly difficult to detect. Rewarding firms that help expose cartels with immunity or fine reductions is generally believed to enhance the effectiveness of antitrust enforcement, but no consensus exists as to how to frame leniency policies in order to maximize the incentives for firms to co-operate with antitrust authorities.The goal of this paper is threefold: (i) to compare the US, EU, and Italian leniency policies in order to identify their key differential features; (ii) to employ game theory as a yardstick to assess the different solutions and (iii) to single out the most effective ones for an optimal leniency scheme.To this end, this paper will first discuss, drawing upon insights from Rubinfeld, Leslie, Motta, and Polo, the application of game theory to cartels and leniency programs in general. Second, it will carry out a comparative assessment of the US, EU, and Italian systems. Once the key distinctive features have been identified, they will be analyzed through the lens of game theory in order to determine the incentives those solutions create for co-operation by cartel members with antitrust authorities.To conclude, specific recommendations for an optimal leniency scheme will be presented, having specific regard to: i) the eligibility of cartel instigators, ringleaders, and coercers for antitrust leniency; ii) penalty reductions for follow-up whistleblowers; iii) Amnesty Plus-style incentives to report membership in multiple cartels; and iv) decreasing penalty discounts according to co-operation order.

Extenuation is considered by the Court when issuing a sentence, manifesting the state’s leniency policy and the classification principle of penal liability in the Penal Code of Vietnam, ensuring efficiency and meaning of penalties. On this basis, this Article provides a new scientific approach to the definition of extenuation, analysing contents and levels of extenuation in provisions of the Penal Code 2015 (revised in 2017), examining issues in practical adjudication, and making recommendations on crime prevention and improvement of rehabilitation and re-education of individual and corporate offenders in the current context of the country.
 Keywords: extenuation, leniency policy, classification principle, goodness, penalty.

Across the EU we have witnessed the development of numerous programmes to eradicate cartel activity. Some of the significant developments have been increasing administrative fines, the development of leniency policy, the introduction of criminal sanctions, and the encouragement of private actions for compensation. This paper examines the interaction of criminal sanctions and leniency, and the interaction between private enforcement and leniency. The paper highlights the tensions and conflicts which arise between leniency policy and these new enforcement tools and suggests that these new polices should be seen as adjuncts to mainstream administrative enforcement. Where conflicts arise between public enforcement, as supported by corporate leniency, and criminal or private enforcement we suggest that maintaining the effectiveness of public enforcement should prioritised.

Criminal sanctions for individual offenders and leniency policies each have emerged as significant features of the cartel enforcement discourse globally in the last ten to fifteen years. However, the relationship between them and the implications of their combination remain largely unexplored. This article examines both the instrumental and normative dimensions of the relationship. It concludes that, on the current evidence, the case for criminalization on the grounds of enhancing leniency effectiveness is weak and that a leniency policy may undermine the normative function and force of the criminal law. The clear overarching implication of these conclusions is that the cartel criminalization-leniency combination is to be approached with considerable caution.

There is little doubt that the fight against cartels is one of the most important objectives of Antitrust Authorities, and the European Commission (EC herewith) represents no exception in this regard. While the Leniency Policy has been successful in triggering evidence by cartel participants and thus in determining the collapse of several cartels, it has not reduced considerably the length of the cartel proceedings, which is another potential benefit of leniency programmes. In this paper we find that a 10% fine reduction to firms which agree to settle with the Commission may be too weak an incentive for firms to settle. This means that the settlements participation rate will not be high enough to effectively reduce the duration of cartel proceeding.

The competition literature documents that leniency programmes can either destabilize or reinforce the sustainability of horizontal cartels. We contribute to this body of literature by looking at a specific type of cartels, namely hub and spoke cartels. Drawing on earlier work of Van Cayseele and Miegielsen (2013)1 on hub and spoke cartels, and Chen and Rey’s dynamic leniency model for horizontal cartels (2013),2 this paper builds a model that measures the impact of leniency programmes on hub and spoke cartels. From our model it follows that it is always desirable to offer some ex-ante leniency to the first-reporting hub and spoke cartel member to discourage cartel formation and that this optimal leniency rate is unique for both the hub and spokes.

This paper analyzes non-discriminatory and discriminatory leniency policies in a multi-stage cartel formation experiment where multiple ringleaders may emerge. Ringleaders often take a leading role in the coordination and formation of a cartel. A leniency policy which grants amnesty to all whistleblowers except for ringleaders may reduce the incentive to become a ringleader and thus disrupt cartel formation. Although theory predicts that cartels will always be reported, whistleblowing rarely occurs. Paradoxically we find that the discriminatory leniency policy induces more firms to become ringleaders, which ultimately facilitates coordination in the cartel.

The economic development of a state is impossible without ensuring a favorable investment climate, without ensuring non-discriminatory conditions for conducting business, including by ensuring fair competition between entrepreneurs and commercial companies.The Association Agreement between the Republic of Moldova and the EU states that "The Parties recognize the importance of free and undistorted competition in their commercial relations. The parties recognize that anti-competitive business practices are likely to distort the proper functioning of markets and reduce the benefits of trade liberalization." Starting from the assumed obligations, including the requirements regarding the harmonization of national legislation, in 2012 the parliament of the Republic of Moldova elaborated and adopted the new competition law no. 183/2012, the normative act invoked being, at that stage, an absolutely innovative one, succeeding a series of previous normative acts intended to regulate relations in the field of competition. The provisions of the analyzed law establish new approaches and attitudes, including principles, procedures and mechanisms, taking over the provisions of articles 101-106 of the Treaty on the Functioning of the European Union (TFEU). The law establishes the legal framework for the protection of competition, including the prevention and countering of anti-competitive practices and unfair competition, the realization of economic concentrations on the market, establishes the legal framework regarding the activity and competence of the Competition Council and the responsibility for the violation of the legislation in the field of competition. The main purpose of competition policies is to prevent companies from committing anti-competitive acts. Following this objective, most of the member states of the European Union have allocated powers to the national competition authorities/agencies in order to achieve two main objectives: ensuring the dissuasive effect of sanctions in order to prevent the commission of anti-competitive acts and taking the necessary measures in order to stop them. Our legislator took over the same positive practices adopted at the EU level and in the Competition Law regulated Leniency in art. 84. The article is dedicated to the analysis of the main provisions aimed at the leniency policy applicable in the Republic of Moldova, revealing the essence of this institution, the author also coming with some conclusions derived from the analysis of the national anti-competitive and criminal legislation.

This paper focuses on the theory and practice of antitrust action in detecting and deterring cartels, and analyzing the development of the modern leniency policy. Following the examination of the main conditions and reasons for cartel formation and sustainability, and a statistical analysis of cartel prosecutions, our attempt is to show that leniency programs, accompanied by strong enforcement powers and effective sanctions, increase the inherent instability of cartels and therefore have proven to represent a functional and successful tool for detecting and punishing, as well as preventing the formation of anticompetitive agreements.

We present the results of a laboratory bribery experiment in which two bidders compete for a contract and make offers to an employee of a firm which can be accompanied by a bribe. The employee then decides who to award the contract to. The roles of both bidders and the employee are played by subjects in the laboratory. We test whether different probabilities of a bribe being discovered influence the honesty of a contract placing. In a further treatment we investigate the effect of the possibility of cooperating with the authority (principal witness) in combination with a leniency policy in the form of a reduced fine for the all players who cooperate with the authorities. We find that the presence of a leniency policy reduces the number of bribes offered, but at the same time makes the bribes that are offered more profitable for corrupt bidders who earn more, especially under the principal witness condition.

在竞争合规领域，普遍存在的“威慑陷阱”现象反映了我国传统简单威慑的固有缺陷，有鉴于此，一套能将外部法律规制等效转化为企业合规自觉的激励体系必不可少。在将Lawler-Porter综合激励模型引入到我国竞争合规制度领域的过程中，达成“工作绩效”是激励机制的基本目标，立法、执法、司法是法律上的三大主要推进路径。适用严格责任、将合规作为法定量刑情节等立法措施能从外在环境上激发企业的合规努力，合规风险提示、宽恕政策等执法手段在事后奖励方面推进企业合规体系建设，综合认定的司法理念则会进一步增强企业的公平感。通过以Lawler-Porter内在逻辑为核心，借鉴海外企业合规的先进经验构建的一套完整循环的竞争合规激励机制，能够从根源上提高企业合规参与度与积极性，从而为推动我国竞争合规制度的不断完善提供参考路径。 In the field of competitive compliance, the widespread phenomenon of “deterrence trap” reflects the inherent defects of China’s traditional simple deterrence. In view of this, a set of incentive mechanism that can equivalently change the external regulation into the compliance consciousness of enterprises is essential. In the process of introducing Lawler-Porter Comprehensive Incentive Model into the field of China’s competition compliance system, achieving “job performance” is the basic goal of the incentive mechanism, legislation, law enforcement and justice are the three main promotion paths in law. The application of legislative measures such as strict liability and taking compliance as a legal sentencing circumstance can stimulate the compliance efforts of enterprises from the external environment. Law enforcement means such as compliance risk prompt and leniency policy can promote the construction of enterprise compliance system in terms of afterwards reward, and the comprehensive judicial concept will further enhance the sense of fairness of enterprises. Through a complete cycle of competitive compliance incentive mechanism and with the help of advanced experience in compliance from overseas enterprises, we can improve the compliance participation and enthusiasm of enterprises from the root, thus offering a reference path for promoting the continuous improvement of China’s competitive compliance system.