Common Leniency Waiver Template

and Waiver-less Information Sharing

2013 ICN Cartel Workshop

Candice LEE, Competition Commission of Singapore

Takujiro KONO, Japan Fair Trade Commission

Dragomir ILIEV, European Commission　

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<Part I> Waiver-less information

sharing

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OECD/ICN Survey on International Competition Enforcement Co-operation,

2013

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• Five broad categories

– Public available information

– Non-public agency information

– Confidential information

• Leniency applicant information cannot generally be shared, and certainly not without a waiver

• Exceptions exist, (i) confidentiality waivers, (ii) national legislations (so-called information gateway), (iii) regional cooperation networks and (iv) bilateral agreements

– Non-confidential, case-related information

– Decisions after publication

Type of Information (OECD/ICN Survey)

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• What is “confidential” or “non-confidential”

– No commonly agreed definition at the international level

– Different definitions within the same jurisdiction

• Merger control law

• Provisions on behavioural conduct

Definition of Confidential Information (OECD/ICN Survey)

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• Exchange of (i)non-confidential info and (ii) internal agency info Frequently occurs

– Case discussions: market definition, assessment of competitive effects potential remedies, basis of fine, etc.

• Practical limitations Limit the effectiveness

– language, resource, different timing of investigations

Non-confidential info exchange (OECD/ICN Survey)

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• Obligations pursuant to Free Trade Agreements

– Provisions requiring signatories to cooperate in the development of any new competition measures and information exchange

• Mechanism in the Singapore Competition Act

– CCS may enter into arrangements with foreign competition bodies to provide assistance and furnish to the other party information required by the other party for the purpose of performing its functions.

Competition Commission of Singapore (CCS) - Formal Cooperation

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– Initiative with some agencies to align leniency processes

– Frequent dialogues with the ACCC and NZCC

• Sharing of knowledge and experience - in the area of enforcement, valuable leads have been generated through such information sharing initiatives

– Informal enforcement network between ASEAN, ACCC and NZCC

– ASEAN Experts Group in Competition

– Regular participant at international conferences and workshops on cartel enforcement by OECD, ICN, BRICs

CCS - Informal Cooperation

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– Formal cooperation agreements with other jurisdictions subject to confidentiality obligations

– Access to documents only at the PID stage with relevant redactions for confidential information.

– Necessary waivers from leniency applicants must be obtained before CCS proceeds to discuss information with other authorities.

CCS - Domestic Safeguards

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– Benefits of information sharing in investigations

• Alerts CCS to existence of documents, which CCS can then request from parties

– Limitations: Compliance with legal standards and confidentiality rules across jurisdictions

• Similarity of legal standards being a pre-condition for information sharing

• E.g. CCS experience – privilege against self-incrimination

Challenges in Information Sharing: Waiver-less Sharing

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• Waiver-less exchange of information in the framework of formal cooperation - bilateral/regional agreements

• Waiver-less exchange of information in the framework of informal cooperation

– Phase 1 - The investigation (from leniency application to dawn-raid)

• Does the legal framework allow information exchange at all?

• What is the scope of information exchange?

– Phase 2 - Assessment of conduct and decision making

• Can results of the investigation and assessment of conduct discovered be discussed?

• Is the timing discussed?

• Is the amount of the fine discussed?

– Phase 3 - Final decision and settlements (if available)

• Is the timing of decision coordinated

• Post decision – lessons learned?

• In the framework of the discussion, please also bear in mind and comment on some horizontal issues such as:

– Difficulties in exchange of confidential/non-confidential information

– Definition of confidential/non-confidential information

Discssussion

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• Leniency application stage (covert phase)

– No waiver-less information sharing

• In practice, even internal agency information not provided to another agencies without a waiver

• Investigation state (overt phase)

– Waiver-less information sharing possible to the extent not to discussing the party’s confidential information

• Publicly available information

• Agency non-public information (open investigation, market definition, competitive effects, possible sanctions)

JFTC Practice in Waiver-less Info Sharing

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• What is “Confidential” and “Non-confidential”

– Professional secret and Business secret

– Confidentiality obligation based on the AMA etc.

• Criminal sanctions for violation

• Provisions granting powers to exchange information are included in the AMA

• Bilateral agreement such as USA (1999)

• Some type of Confidential information (e.g. internal agency information) could be shared with foreign agency in theory

– But in practice…

Legal Framework in Japan - What is Confidential? -

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<Part II> Common leniency waiver

template

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• Confidentiality waivers Often relied upon to address existing limitations to exchange of confidential information

• Due to length and complexity of the process based on formal framework (information gateway)

• More than 2/3 allowed to use waivers

• Some adopted a standard form of waivers.

• Most agencies, even having a standard form, often negotiate the terms for transmitting information and/or documents

Reforms in the area of waivers are views as a way to foster more valuable co-operation through more effective information exchange

Waivers: Key Area for more effective information exchange (OECD/ICN

Survey)

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• Ensuring not limiting or restricting the ability of agencies to exchange information in a useful manner, the scope of and the conditions attached to waivers needs to standardize.

• Developing a model confidentiality waivers gained a fair consensus, ranking 4th in terms of priority.

• ICN Model Waiver received the second highest cumulative store for “Usefulness” among ICN work products

Priority for Model Waivers (OECD/ICN Survey)

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– Reluctance, delay or refusal in providing waivers

• Going forward, CCS plans to seek waivers early on and also possibly include the granting of waivers as a requirement of leniency

– Possible disincentive for leniency applicants – possibility of private action, exposure in other jurisdictions and criminal liability

• Waiver mechanism allows leniency applicants to be precise and nuanced as to jurisdiction CCS can share information with and extent of information shared

– Impact of investigations overseas

– Differences in waiver templates – length and scope; administrative costs for CCS and the party

CCS experience

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– Leniency application to make sure the party has applied to other agencies

– If it has, JFTC requests a waiver

• At least the identity of the applicant needed for effective coordination

• In most cases, full-waivers (excepting exchanging documents provided by the applicant) are given

– Waivers given orally No written agreement

– Timing of Waivers; 1week+ Too late in some cases

– Denial of full waivers

JFTC experience

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– Benefits of a common waiver template

– Agencies' experiences

• voluntary in nature

• refusal of a waiver

• debates on wording - too restrictive?

– Leniency applicant's concerns

• different place in different jurisdictions

• timing of granting a waiver

• potential ramifications of allowing sharing of information

Discussion

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– Applicant/application details + applicable confidentiality rules + scope of waiver

– Type of information exchange

– Level of protection of info in A2 received from A1

– Level of protection of info in A1 received from A2

– Level of protection towards 3rd parties

Discussion – building blocks for waiver template

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– Language observations

– Shall a copy of the waiver be sent to A2?

– Declaration in writing from A2?

– Privileged information?

– Duration?

– (…)

Discussion – wording - comments

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- [Name of the applicant] agrees to a waiver of the confidentiality rules of [Agency A] to [orally] discuss the submission made by [name of the applicant] to [Agency A] with [Agency B] regarding its investigation of [number of file/short description of market/industry].

- [For AGENCIES WHERE EXCHANGE OF DOCUMENTS IS PROHIBITED – For the avoidance of doubt, this waiver excludes the transmission by [Agency A] of any hard copy or electronic version of documents or submissions made by [name of applicant] including any quotations or extracts of them].

Discussion – wording - comments

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- [Agency A] shall make [Agency B] fully aware of the confidentiality of the information disclosed by virtue of this waiver. [Agency A] shall treat information received from [Agency B] in accordance with its own applicable confidentiality rules.

- The present waiver does not alter [Agency A] obligation to protect the confidentiality of information submitted by the applicant with respect to parties other than [Agency B] in accordance with the applicable legislation.

Discussion – wording - comments

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