Leniency in Asian Competition Law

The concept of "leniency" in competition law, or better known as the "leniency programme", has proven to be an extremely important instrument in fighting unfair competition. In the Republic of Northern Macedonia (hereinafter RNM), this concept of suppressing or reducing unfair competition, more or less, exists solely as a law conception. Nowadays, when the EU discusses the impact of the global crisis and the Coronavirus pandemic on the level of utilization of ”leniency programme", this concept is still unknown or not a well-known concept for business sector in RNM. The main focus of this article is “leniency programme” in RNM. The key questions that we aim to answer here, are: whether and to what extent this instrument is predicted in Macedonian competition law? Is it predicted only as a law category, or it has practical implications too? Although this research refers to RNM, we strongly believe that a thorough study of “leniency” requires exploration of European conception of “leniency” too. For that purpose, we use relevant EU legislation, as well as practice. Thus, our main goal is to consider the position of RNM towards “leniency” and bring into relation to the Macedonian competition law. We base our hypothetical framework on the assumption that the applicability of “leniency programme” in RNM is at the lowest level. Furthermore, that the undertakings are not interested in applying “leniency”. This situation is partly due to the lack of information, the complexity of the application procedure, as well as other factors that are related not only to the attitude of the executive of undertakings, but more to the general economic circumstances, economic development, the market size of goods and services, etc. Using the analytical-descriptive method, the comparative method, and the method of analysis and synthesis, we’ll elaborate the situation in RNM regarding this issue, and we will present our views considering the questions: whether certain measures should be taken regarding „leniency program“, and what should be done to boost the use of this program in the Macedonian business sector.

An Improvement of Leniency Programs Where There Exists the Coordination Problem

The leniency program is a pardon mechanism that allows cartel members to complain to the business competition authorities about cartel operations and receive partial or whole exemption from the penalties and/or fines that should be imposed. In Japan, the Leniency Program is in use. This article's formulation of the problem is how to create a leniency program in Japan based on the Antimonopoly Act and what are the chances of doing so to expose cartels in Indonesia's competition law system. This article offers a normative legal analysis of Indonesia's prospective use of leniency schemes in cartel proceedings. The research is descriptive-analytical in character, and data collecting through literature reviews and interviews, whereas data processing is qualitative. The findings of the research and debate indicate that it is highly likely that Indonesia will implement the leniency program by enacting the bill as the new Business Competition Law. The research's finding is that the leniency program is likely to be implemented in Indonesia by passing the bill as the country's new Business Competition Law because it is comprehensively implemented in Japan, from reporting procedures to sentencing reductions. It is suggested that Law No. 5/1999, whose provisions include a leniency program system, be amended, and that the KPPU then work with the LPSK to offer protection for reporters in the leniency program system.

Leniency under the Japanese Antimonopoly Law (AML) is claimed to have been a success. Toshiyuki Nambu, an official of the Japan Fair Trade Commission (JFTC) writing in his personal capacity, recently expressed this opinion in an article with the telling title ‘A Successful Story: Leniency and (International) Cartel Enforcement in Japan’. Nambu’s assessment is in line with those expressed by several early observers of the leniency programme. Former Chairman of the JFTC, Kazuhiko Takeshima claimed ‘that the leniency programme has produced significant results since its introduction.’ And an international firm of solicitors has similarly claimed that with leniency ‘the JFTC now has teeth’. Akinori Uesugi, formulating his observations one year after the leniency programme went into effect in 2006, gave direction for drawing such conclusions. The leniency programme, he observed, had triggered high number of leniency applications, giving way to a smooth decision making process by the JFTC. The number of leniency applications and the process of decision-making tell a partial story only, and they are insufficient measures for assessing the success or otherwise of a leniency programme. A leniency programme is an enforcement tool, aimed at facilitating both deterrence and detection of cartels. To appreciate fully the effectiveness of a leniency programme, and to assess any overarching policy on cartel deterrence and detection, more information is required. While acknowledging the high rate of leniency applications in Japan and the possible conclusions that can be drawn from it, this chapter draws on additional data, including the nature of the firms applying for leniency, the nature of the cartels detected through leniency and the extent to which leniency applications are followed by infringement decisions by the JFTC. Based upon this data, the chapter offers a more rigorous and complete assessment of the effectiveness of the Japanese leniency programme to date.

The cartel is regarded as a desease that inflicts on the open market economy. Whilst its presence is detrimental to the public, the most serious issue is its secrecy, which has posed a major problem to competition authorities all over the world. To address this, many countries including Malaysia have introduced a leniency programme for the detection of cartels by persuading their members to approach the authorities to admit involvement in the cartel activities and assist the authorities to expose other cartel participants. The objective of this paper is to conduct a study on the legal framework of the cartel and Malaysia’s leniency programme. The paper contains a detailed analysis of the Competition Act 2010 (Act 712) (CA 2010), the Guidelines on Leniency Regime (Leniency Guidelines) by the Malaysian Competition Commission (MyCC) and academic research in this area. The findings show that while the leniency programme is available under the Leniency Guidelines, data on leniency applications made to date are not available on the MyCC’s website. In addition, the MyCC’s decisions published on its website revealed that of six cartels that were found to have committed infringement, none had been first detected through the leniency programme. Therefore, the effectiveness of the programme has yet to be proven.

Globalization is characterized by a process where the economy becomes more tightly integrated and manifested in the form of free trade. Free trade forced by economic globalization has brought adverse effects. Some of the harmful effects of free trade include the rise of international cartels, for instance, those involved in price-fixing, bid-rigging, output limitation, and market sharing. This normative legal research aims to examine the application of leniency programs in the enforcement of Competition Law in Singapore and how Indonesia can learn from Singapore. The research indicates that one particular method is commonly used in several countries in the context of law enforcement against cartels, which is known as the leniency program or the Whistleblower. Singapore, as one of the neighboring countries of Indonesia, also applies for the leniency program. As a result, Singapore has successfully resolved many international cartel issues. Consequently, the leniency program gives benefits for providing evidence for related cases. In conclusion, Indonesia should learn from Singapore's experience in implementing the leniency program to prevent the negative effect of free trade, including the proliferating international cartels.

Leniency programmes in competition law make it possible to grant immunity from fines, or a reduction of any fine that would otherwise have been imposed on an undertaking who was a party to an unlawful agreement restricting competition. This immunity or fine reduction is granted as a reward for the cooperation with the competition authority and the provision of evidence of an unlawful agreement restricting competition. Legal rules regarding the application of leniency programmes have been introduced at the EU level as well as in the national legislations of numerous countries, including Polish law. The author makes an attempt to establish the degree to which the Polish leniency programme is an effect of the impact of EU law or the application of law within the EU (for instance, by its institutions). The analysis has been made on three levels. Examined first was the degree to which the Polish leniency programme is a result of spontaneous harmonisation. Second, the impact of legislative harmonisation in the area of leniency programmes was taken into consideration. Finally, it was verified whether those Polish authorities that apply Polish competition law are inspired by judgements issued by EU courts in cases regarding leniency programmes.

Chapter 3 The Impact of the Corporate Leniency Program on Cartel Formation and the Cartel Price Path

Going once, going twice, reported! Cartel activity and the effectiveness of antitrust policies in experimental auctions

This research is intended to explain whether the leniency program can be applied in Indonesia. In accordance with Law No. 5 of 1999, Indonesia currently has not implemented a leniency program in terms of cartel empowerment efforts. The Leniency Program is expected to be a solution to reduce and be able to open a veil of cartel that has been difficult to prove. Research method in this paper using normative method with the analysis of regulations and comparative law. The results of this study show that the leniency program that has been launched by the developed state can reduce and open cartel cases significantly. Even so, the application needs to be considered according to the needs of the country. In a number of other studies, developing countries that apply the leniency program only duplicate those that have been implemented by other countries so that their application is less effective. The amendment to the competition law is needed to applied leniency program

This research is intended to explain whether the leniency program can be applied in Indonesia. In accordance with Law No. 5 of 1999, Indonesia currently has not implemented a leniency program in terms of cartel empowerment efforts. The Leniency Program is expected to be a solution to reduce and be able to open a veil of cartel that has been difficult to prove. Research method in this paper using normative method with the analysis of regulations and comparative law. The results of this study show that the leniency program that has been launched by the developed state can reduce and open cartel cases significantly. Even so, the application needs to be considered according to the needs of the country. In a number of other studies, developing countries that apply the leniency program only duplicate those that have been implemented by other countries so that their application is less effective. The amendment to the competition law is needed to applied leniency program

Going Once, Going Twice, Reported! Cartel Activity and the Effectiveness of Leniency Programs in Experimental Auctions

Reflections on Leniency Programs: In Search for Effectiveness

Over the last few decades, leniency programs have become important components of anti‐cartel policies in many jurisdictions. An extensive literature shows how such programs can destabilize cartels and even discourage their formation in the first place. Much less studied are settlement policies under which reduced fines are offered to settling parties late in the prosecution (when the probability of conviction is high). In particular, there has been little attention paid to the interaction of leniency and settlement policies. This paper examines whether the availability of late‐stage settlements could negatively impact the effectiveness of early‐stage leniency programs. Our main finding is that an appropriately designed settlement program can make collusion more difficult: In equilibrium, the adoption of an optimal settlement program by the Antitrust Authority reduces the occurrence of cartels by decreasing the long‐run gain from collusion. However, an overly generous settlement policy may undermine leniency programs and encourage the formation of more cartels.

Aiming at attracting cartel members to surrender or expose illegal acts of others by reducing or exempting them from public law responsibilities, the leniency program in anti-monopoly law is an effective mechanism throughout the world to discover and crack cartels. The leniency program can be divided into various categories, all of which are based on three preconditions: Filing an application, providing effective information and fully cooperating with anti-monopoly authorities. China has a legal tradition similar to the program as well as legal grounds for establishing such program. However, implementation of the program in China may face potential problems arising from various factors including inner conflicts of the anti-monopoly legal regime, ambiguity of enforcement rights and weakness and lack of administrative law liabilities.