are secretive and conducted through a conspiracy among a number of firms. As a result, detecting a cartel is a daunting task for competition authorities without co-operation from a member within the cartel itself.
Consequently, the leniency policy sets out to do exactly that: gain cooperation from a cartel member. Its strategy is simple: if a firm is found guilty of participating in a cartel they may be liable for an administrative penalty of up to 10% of the firm’s annual turnover. Thus, the leniency policy provides immunity to the first cartel member who confesses that they are a member of a cartel and hence disseminates distrust among all members of the cartel. This dissemination of distrust in conjunction with granting immunity from the penalty has made the leniency policy the most effective tool for detecting and prosecuting cartels. Nevertheless, it must be emphasised that a firm may only likely apply for the policy where the associated uncertainty is minimal.
The problem is that section 73A poses a risk of eroding the effectiveness of the leniency policy due to the uncertainty it creates. Although the Competition Commission may grant immunity to a cartel member, the National Prosecuting Authority (NPA) has the final discretion to grant criminal immunity to directors and/or managers. The commission can only recommend that a cartel member is “deserving of immunity”. As there is uncertainty whether the NPA will grant immunity to directors, the provision will inevitably deter firms from using the leniency policy to blow the whistle on fellow cartel members.
It is not difficult to imagine that the uncertainty around the risk of incarceration for directors and/or managers will dramatically decrease