Businesses should review their competition risk assessment in light of new measures announced in March. These encourage individuals to recognise and anonymously report anti-competitive practices at both the European and the national level. If they are a success, these measures could lead to an increase in investigations and reduce the availability of leniency programmes.
European Commission whistleblowing tool
On 16 March, the European Commission introduced a new whistleblowing tool that allows individuals to report anti-competitive practices while retaining their anonymity. This is protected through the use of a bespoke third party encrypted messaging system, allowing two-way communication, with only the content of the messages being disclosed to the Commission.
Margrethe Vestager, head of competition policy for the Commission, explained the basis for this new tool saying:
If people are concerned by business practices that they think are wrong, they can help put things right. Inside knowledge can be a powerful tool to help the Commission uncover cartels and other anti-competitive practices. With our new tool it is possible to provide information, while maintaining anonymity.
This initiative sits alongside the leniency programme already in place that allows businesses to report their involvement in anti-competitive behaviour for a reduced fine.
If the tool succeeds in encouraging more whistleblowers to report issues anonymously, we can expect to see this lead to more investigations. A business involved in a cartel may lose its opportunity to obtain immunity or a reduction of fines under any leniency programme where the whistleblower information is sufficient to prosecute.
CMA advertising campaign and incentives for whistleblowers
On 20 March the UK Competition & Markets Authority (CMA) launched an advertising campaign called ‘Cracking down on Cartels‘.
This campaign aims to raise awareness of cartels and encourages people who believe that they may have witnessed illegal cartel behaviour to report this to the CMA anonymously.
Andrea Coscelli, Acting Chief Executive, said:
Cartels are both harmful and illegal, and the consequences of breaking the law are extremely serious. That is why we are launching this campaign – to help people understand what cartel activity looks like and how to report it so we can take action.
There is an incentive being offered for this reporting, with the CMA advising that they may pay a whistleblower (to the extent that the individual is not themselves engaged in the illegal conduct) up to £100,000. This payment is discretionary and will depend on the value of the information provided, the nature of the cartel and the effort or risk involved for the whistleblower. While the offer appears to be aimed at employees and contractors, it is possible that other third parties such as consultants could take advantage of this incentivised ‘route to revelation’.
What does this mean for businesses?
These new measures have raised the risk of anti-competitive behaviour being recognised and revealed at both a European and national level. As a result of this heightened revelation risk, businesses should review their competition risk assessment, competition compliance programme and internal whistleblowing processes.
Guidance on assessing your competition risk, as well as recommendations on controls including internal whistleblowing processes, can be found in Practical Law’s Competition risk: how to assess the inherent and residual risk in your business.