Criminalising Cartels - A Critical Interdisciplinary Workshop on an International Regulatory Movement
Thursday 12 November 2009
Organised by Centre for Competition Law & Policy
The aim of the roundtable is to generate discussion about the political, economic, regulatory and social dimensions of the criminalisation of cartel conduct with a view to better understanding the challenges associated with the design and enforcement of a criminal regime, as well as exploring the wider implications of criminalisation for competition policy, nationally and internationally.
Programme:
12h30 Registration and light refreshments
13h25Introduction Ariel Ezrachi, Oxford Centre for Competition Law and Policy
13h30 Cartel Enforcement and Criminalisation: An Overview Wouter Wils, European Commission Legal Service & King's College London
14h00 Does Cartel Criminalisation Have a Future Outside of the United States? Insights from the United Kingdom Experience Julian Joshua, Howrey
14h20 Practical issues arising from concurrent criminal prosecutions in the UK and overseas Michael OKane, Peters and Peters
14h40 Discussion
15h00 Tea and Coffee
15h20 Milestone or Roadblock? The Role of the Australian Competition and Consumer Commission in Criminalising Cartels Caron Beaton-Wells, University of Melbourne
15h40 Criminalisation and Compliance: The Gap Between Rhetoric and Reality Christine Parker, University of Melbourne
16h00 Recidivism, Criminalisation and the Growth of the Anti-Cartel Enforcement Industry Christopher Harding, University of Aberystwyth
16h20 Discussion
16h40 Tea and Coffee
17h00 Criminalisation in the Context of Negotiated Regulation Stephen Wilks, University of Exeter
17h20 Cartel Criminalisation: The Role of the Media in the ?Battle for Hearts and Minds? Andreas Stephan, University of East Anglia, Centre for Competition Policy
17h40 Discussion
18h10 Closing remarksCaron Beaton-Wells, University of Melbourne
17h40 Close of workshop
Places for this session are limited. If you wish to attend please register with the Centre in advance.
Outline of papers:
WOUTER WILS Cartel Enforcement and Criminalisation: An Overview
In this introductory talk, an overview will be given of the debate on and practice of criminal cartel enforcement in Europe, in the recent past and foreseeable future, including the arguments in favour and against such enforcement, and the institutional, legal and political complexities.
JULIAN JOSHUA Does Cartel Criminalisation Have a Future Outside of the United States? Insights from the United Kingdom Experience
This paper will entail a critical review and analysis of the experience in enforcing the cartel offence in the United Kingdom since the passage of the Enterprise Act 2002. To date, only two prosecutions have been brought. Attempts to prosecute pre-Enterprise Act price fixing as common law conspiracy to defraud have proven a costly failure. These cases have been controversial and, in various respects, damaging to the credibility of the Office of Fair Trading as an enforcement agency, if not to the criminalisation project generally. The paper will explore the reasons why there have been so few cases, as well as examine the outcomes and implications of those that have been brought. Lessons for definition of the offence, enforcement policy, agency competence and investigatory powers will be considered. More broadly, the paper will address the issue whether the UK criminalisation project was ill-conceived from the beginning and whether criminalisation of cartel conduct has a viable future outside the United States.
MICAEL O?KANE Practical Issues Arising from Concurrent Criminal Prosecutions in the UK and Overseas
This presentation will analyse from a practitioner perspective some of the developing areas in the UK following recent criminal prosecutions. Such areas include the interaction of the UK disclosure rules with the regimes abroad and the extent to which they may undermine foreign and domestic leniency programmes, the principle of double jeopardy and the extent to which this has been eroded by the Marine Hose case, as well as the need for transparency and uniformity of approach between competing prosecuting agencies.
CARON BEATON-WELLS Milestone or Roadblock? The Role of the Australian Competition and Consumer Commission in Criminalising Cartels
In the last five years the criminalisation of ?serious? cartel conduct has become bipartisan policy in Australia culminating, in 2009, in the introduction of cartel offences attracting ten year maximum jail terms for individual offenders. This represents a dramatic shift, away from an accommodating even supportive attitude towards ?orderly marketing practices? (as much cartelisation was then called) in the 1960s, to a condemnatory punitive approach, just forty years later. A key actor in the orchestration of this shift has been the regulator, the Australian Competition and Consumer Commission (ACCC). This paper will focus on the role that has been played by the ACCC in relation to criminalisation. Taking a historical perspective, the paper will explore the significance of criminalisation as a milestone in the enforcement agency?s evolution and consider what it says about the ACCC?s relationships with three important constituencies: government, business, and the public. Through this lens, the paper will reflect on what criminalisation suggests about the role and status of competition policy in the Australian political and economic landscape more broadly. Looking to the future, the paper will examine the challenges facing the ACCC in administering the new criminal cartel regime and consider what are likely to be the indicators against which its success or otherwise is measured. This in turn will enable some predictions to be made concerning the implications of criminalisation for the next phase in the development of both the ACCC and Australian competition policy generally.
CHRISTINE PARKER Criminalisation and Compliance: The Gap Between Rhetoric and Reality
The primary justification for criminalisation offered by government and regulators is that criminal penalties, especially jail, will deter non-compliance better than civil penalties. Empirical evidence of an increased deterrent impact from criminalisation is, however, far from clear. The paper will examine whether there is empirical evidence that cartel criminalisation has or will improve compliance through either greater deterrence or other compliance mechanisms such as building normative commitment to the prohibition on cartel conduct. The paper will draw on existing empirical literature that tests what factors influence compliance and non-compliance among business firms and individuals, including literature on experiences of cartel enforcement and criminalisation in Australia, the UK and US. The argument of the paper will be that although the rhetoric might suggest cartel criminalisation to be a ?quick fix? compliance boost, careful understanding of the empirical evidence shows that criminalization of any conduct, including cartel conduct, will only achieve behavioral change in certain circumstances.
CHRISTOPHER HARDING Recidivism, Criminalisation and the Growth of the Anti-Cartel Enforcement Industry
The starting point of this discussion is the quandary underlying contemporary enforcement of the competition rules against cartels: that, despite an increase in the resources and legal sophistication of enforcement efforts, the amount of cartel offending remains impressively large. The subject gives rise to three main questions. The first question is one of empirical enquiry: what is really known about the extent and nature of cartel activity and how may the ?dark figure? of such activity be reliably calculated ? To what extent is such a calculation affected by the discoveries arising from an increased level of enforcement and the revelations of leniency programmes, and also by the legal and prosecutorial definition of cartels? The second question is criminological. In so far as there is a problem of cartel recidivism, how may that be understood and explained ? Is that a matter of corporate or individual delinquency, or both, interrelated in a complex and poorly understood way ? Are the impulses towards cartel offending economic or criminological in character, driven by profit motive or by an independent delinquent urge? The third question draws upon the sociology of organisations. Concern about cartels ? the ?battle? against cartels - has become a significant legal reality, of global proportions. There is little indication that this battle will diminish in the foreseeable future and it appears that both cartels and enforcement agencies are determined to continue to engage in the fight. Has the cartel problem and anti-cartel enforcement become an established way of life, with its own dynamic, embodying an increasingly entrenched set of business and professional interests ? long may the battle last? In this way the emergence of the anti-cartel enforcement enterprise provides a fascinating study of regulatory development and legal expansion.
STEPHEN WILKS Criminalisation in the Context of Britain?s Traditions of Negotiated Regulation
Criminalisation can be regarded as an extreme case of juridification whereby activities formerly constrained only by economic imperatives and social norms become subject to control through the apparatus of the law. In Britain that transition can be compared to the shift from negotiated self-regulation, what Moran calls ?club government?, to a modernised framework of clear principles, rules and independent enforcement. The paper will speculate on the degree to which the traditions of negotiated regulation have affected the design and enforcement of the criminalisation provisions. As part of that discussion it will employ Moran?s analysis of ?policy fiascos?, seek to identify unanticipated consequences of criminalisation, and explore the possibility that the provisions are counter-productive.
ANDREAS STEPHAN Cartel Criminalisation: The Role of the Media in the 'Battle for Hearts and Minds'
This paper will consider the importance of information dissemination through the media to the process of criminalisation. In particular, in challenging prevailing attitudes, lending legitimacy to cartel laws and encouraging normative compliance. The role of the media in changing attitudes to other unlawful behaviour will be considered, as well as a discussion of why competition law cases tend to be under-reported in mainstream media outlets, despite imprisonment and unprecedented levels of pecuniary fines.
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