Trends In Information Technology Law: Looking Ahead To 2012

This article examines the incentives motivating whistleblowers when tipping off the competition authorities about cartel conduct. It suggests that, following the guidance of the European Courts, the statements that whistleblowers provide should be assessed cautiously and supported by corroborative evidence.

Cartels are by their nature secretive. Cartel members are unlikely to keep any documentary proof of their participation, and will usually take measures to destroy any such evidence. Sometimes firms cover their tracks by creative means, such as assigning each other 'code names' to throw suspecting competition authorities off the scent. Individual participants may use dedicated mobile phones or email addresses for cartel communications. The result is that cartels are difficult to detect and even more difficult to prove.

A leniency programme is therefore an enormously powerful weapon in a competition agency's arsenal. A firm which is participating or has participated in a prohibited agreement may approach the competition authority and obtain immunity from having a financial penalty imposed upon it in exchange for its full cooperation.

To 'cooperate', a whistleblower1 must be on hand to provide any and all information relating to the unlawful activities throughout the investigation and prosecution proceedings. It must make full disclosure to the authority of its involvement in the cartel. All evidence, including statements of employees who attended cartel meetings or had knowledge of the workings of the cartel must be produced.

The evidence provided in this process often forms the central pillar of the authority's case, and is used as a springboard to invoke other enforcement techniques. These may include surprise inspections at the premises of the other participants or subpoenas of people and documents from other firms.

Apart from revealing cartels and gathering evidence...