Question

Explain the logic behind the corporate leniency policy for cartels by the Department of Justice.

Answer 1

The Leniency Program of the Antitrust Division is its most important research method for the prevention of cartel activity. Corporations and individuals who report their cartel activity and assist in the cartel investigation identified by the Division may escape criminal conviction, fines and jail sentences if they meet the program's requirements.

In essence, the leniency policy offers either total immunity from fines or a reduction in fines that would otherwise have been imposed by the Commission on companies involved in a cartel-which self-report and give evidence. It also benefits the Commission, not only by piercing the cloak of secrecy in which cartels operate, but also by obtaining insider evidence of the infringement of the cartel. The leniency policy also has a very dissuasive effect on the formation of cartels and destabilizes the operation of existing cartels as it creates distrust and suspicion among members of the cartel.

The Leniency Program creates a race between conspirators to report the cartel to authorities for the purpose of obtaining immunity from prosecution, as well as restricting the damages that private claimants may recover from subsequent litigation. The Division of Antitrust issues only one application for leniency per plot. Post-cooperators are not immune from criminal prosecution, but will generally receive fewer fines and expose fewer of their executives to indictment than non-cooperators do.