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Detecting Cartels and Gathering Information for
InvestigationsHiroshi Nakazato
Director of Information Analysis OfficeInvestigation Bureau
Japan Fair Trade Commission
2015 ICN Annual Conference, SydneyCartel Working Group, Breakout Session 2
April 30, 2015
1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
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1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
3
Good practice from Anti-Cartel Enforcement Manual Ⅰ
Reactive Methods of Detecting Cartels
“It is good practice for agencies to have a formal complaint system in place for receiving, handling and responding to complaints.”
(Chapter4, Cartel Case Initiation p9)
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Invest
igati
on
Pro
ceedin
gs
- Report of Violation by the Public- Detection of Violation by the JFTC’s own discretion - Leniency application
- Dawn Raids (On-the-spot Inspections)- Orders to Report- Interviews of Suspects
Investigation
Decision of Measures- Cease and Desist Order- Surcharge Payment Order- Criminal Accusation
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Beginning of Cases
Beginning of Cases
The JFTC, upon receipt of such a report, shall make necessary investigations with respect to the case. (Sec.45(2))
• Generally, the JFTC conducts supplementary research in these cases.
Report of Violation by the Public
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• Legal requirements for filing a complaint do not exist.
(anonymous oral reporting is also possible)
• Where any submitted report specifies facts in writing in
accordance with the JFTC’s Rules, and when the JFTC
decides to take, or not to take, appropriate measures with
respect to the case referred to in the report, the JFTC shall
promptly notify that effect to the person who made the
report. (Sec.45(3) )
Next Slide: Requirements of the Rules
Form of complaints
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Sec.33(1) of Rules on Investigations of JFTC:
A notice shall be given, where a report was made by a document stating the matters indicated as follows:
(i) Name or title and address of a reporting person
(ii) Name or title of a person who commits or has committed a violation
(iii) Details of the activity, time, place and other facts of a violation
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Number of Reports of Violation including Cartel Cases by the Public
(Excluding Reports from Procurement Agencies)
0
500
1000
1500
2000
2500
3000
2009 2010 2011 2012 2013
Number
Of Reports
Fiscal Year
2794
2094
1657 1646
1277
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1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
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Good practice fromAnti-Cartel Enforcement Manual Ⅱ
“Where possible, it may be necessary to protect the identity of a complainant throughout the lifetime of a case to avoid the possibility of reprisals ”
(Chapter4, Cartel Case Initiation 3.2, p8)
Available Information from Complainants
Competitor
Employee
Consumer
Customer
[Cartel Case] 1. Parties participating in the cartel
agreement2. Geographical region targeted by the
price-fixing3. Duration of implementation of the
price-fixing
[Bid-rigging Case] 1. Parties participating in the bid-rigging2. Details of rules for selecting an
expected bid winner
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Keep Confidential and Anonymous
• The JFTC keeps all reports confidential, and treats the information in a full deliberate manner.
• Nevertheless, complainants often make reports anonymously.
• In order to share information and keep anonymity, the JFTC accepts complaints including the following tools:
(1) Reporting by E-mail
(2) Using the Electric Reporting System on the JFTC’s
website
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Confidentiality is guaranteed to Leniency Applicants
• The JFTC does not proactively disclose the identity of a leniency applicant or information concerning the applicant.
• However, in such cases where the leniency applicant request to disclose, the identity of them and the fact about the grant of leniency or reduction rate on surcharge, the JFTC will make them publish on the its own website.
cf. general rules of tender system in Japan
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Point of discussion
• In your agency, how is the identity of informants or whistleblowers protected from disclosure?
• Protected legally, or practically?
• If protected practically, what kinds of measures are taken concretely? In particular, under criminal procedures, how does your agency respond in cases where respondents require your agency to disclose information about informants or whistleblowers?
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1. Complaint System
2. Protection for Complainants
3. Proactive Methods of Detecting Cartels
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Good practice fromAnti-Cartel Enforcement Manual 1Ⅲ‐
“It is good practice for agencies to use a variety of techniques and methods to detect cartels, including a mix of both reactive and proactive methods that will increase the opportunities for detecting cartels and help demonstrate a particular agency’s enforcement capacity.”
(Chapter4, Cartel Case Initiation p7)
“It is good practice for agencies to develop good working relationships with … international counterparts and to have regular contact in order to promote cooperation and the sharing of information as far as permitted by applicable laws, treaties and/or cooperation agreements.”
(Chapter4, Cartel Case Initiation p14)
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Good practice fromAnti-Cartel Enforcement Manual 2Ⅲ‐
• Bilateral Antimonopoly Cooperation Agreement Canada (2005), EU (2003), USA (1999)
• Economic Partnership Agreements - EPA (competition chapter only) Australia (2014), Chile (2007), Vietnam (2008), Indonesia (2007), Thailand (2007), Singapore (2002)…
• MOU on Cooperation KFTC: Korea (2014), CADE: Brazil (2014), VCA: Vietnam (2013), DOJ: Philippines (2013)
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Framework for International Cooperation (Japan)
• Case against Marine Hose Manufacturers (2008)
• Case against Manufacturers of Cathode Ray Tubes for Televisions (2009)
• Case against Bearing Manufacturers (2013)• Case against International Ocean Shipping
Companies (2014)
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International Cartel Case (Japan)
Proposal for Establishing the ICN Framework for Promotion of Sharing Non-Confidential Information for Cartel Enforcement (1)
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- Participating agencies register liaison officer(s)- Case team of agencies requests other participating agencies through liaison
officer to provide information on specific cartel cases- Requested agency provides the requested information at its discretion
Proposal for Establishing the ICN Framework for Promotion of Sharing Non-Confidential Information for Cartel Enforcement (2)
Merits of the framework- Participating agencies can seek information about
investigation of other agencies earlier and more easily.- Younger and smaller agencies may receive support from
experienced agencies which provide information about actual cases and experience actual enforcement cooperation.
Expected effect Through the framework, CWG could foster “Pick up the phone relationship” for improved cooperation for effective cartel enforcement.
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Point of discussion• What kind of merits would international
cooperation bring to your agency?
• How can we strengthen the international cooperation relationship?
• How can ICN help its member agencies to enhance their capacity to detect cartels?
Report of violation by the public and detection of violation by agency’s own authority are...
1. The methods of detecting cartels that will continue to work complementary with leniency programs. Especially, those methods could facilitate employees and customers to provide information, which leniency programs could not cover.
2. very important tools of detecting cartels for agencies with little experience.
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Conclusion
