A perspective from practice1
Internationally it is recognized, and is a fact, that Leniency Programs are a very valuable tool to discover cartels, so it must be cared for and protected.2
Confidentiality of the identity of the applicants in a Leniency Program3 is a principle that antitrust authorities, according to the last paragraph of the Federal Antitrust Law (“LFCE”)4, i.e. the Federal Antitrust Commission (“COFECE”) and the Federal Telecommunications Institute (“IFT”) have an obligation to guarantee.5 Maintaining confidentiality of the identity of applicants is a fundamental element for the success of such program, since it is an incentive to participate in it, given that it prevents applicants from being stigmatized by society, by the cartel members, or by other authorities.
A document issued by the COFECE titled “The Leniency Program of the Federal Antitrust Commission, 10 years after its implementation: what has its impact been?”6 highlights the benefits that a Leniency Program has for society, since, through it, cartel conducts, i.e., absolute monopolistic practices are dissuaded, detected, sanctioned, and ceased; and international cooperation to sanction cartels that cross through different jurisdictions is facilitated.7
Such document also acknowledges that maintaining confidentiality regarding the identity of the economic agent applying for immunity is a clear obligation of the authorities. To protect such confidentiality, as such document sets forth, the COFECE “performs several actions that go from processing confidential files to which only public officials authorized for such purpose have access, to failing to mention the economic agent as a beneficiary of the program in the relevant resolution”8
In turn, the respective guidelines for the immunity program, both from the COFECE and from the IFT, set forth the assignment to the application of an alphanumeric Code that, among other matters, facilitates maintaining confidentiality of the identity of applicants.9
In addition to the measures mentioned in the preceding paragraphs, we consider it pertinent to analyze the possibility of implementing greater precautions, even the most basic and elementary ones, as may be: (i) that the hearings inside the immunity docket be held in places other than the COFECE or the IFT, for the purpose that the applicants are not identified, even by their competitors, when they attend the offices of the antitrust authorities; (ii) if the foregoing is not possible, establish entry protocols that prevent the name of the applicants, or any other information that enables their identification, from being recorded in the entrance areas of the antitrust authority and/or at the address where they are located; (iii) that the offices or places intended for hearings be isolated to prevent applicants from being identified; among other useful measures that experience may teach to implement.
In addition to the foregoing, a situation that becomes of utmost importance, is maintaining confidentiality regarding the identity of applicants in the investigations conducted by the Attorney General’s Office (Procuraduría General de la Republica) in the relevant investigation docket. Through a press release from the Investigating Authority (Prosecutor) of the COFECE, dated February 15, 2017, it was made public that such authority obtained powers to file claims as granted both by the LFCE10 and the Federal Criminal Code (“CPF”)11. According to such press release, jointly with issuing the probable liability report, it requested a criminal action against several individuals that may have coordinated in public tenders called by the health sector, between the years 2009 and 2015.12
Given the foregoing, I consider that we should not lose sight that the obligations of the antitrust authorities to fulfil the mandate of maintaining “in confidentiality the identity of the Economic Agent, and the individuals that intend to apply the benefits of such article”13; remains effective, and it shall guarantee, through implementation of the appropriate measures, that with its criminal claim, or resulting therefrom, it does not disclose the identity of the immunity applicants. In addition to filing and even signing agreements to implement measures and protocols to be followed by the Attorney General’s Office so that in the investigation docket, or even during the criminal process, the identity of the applicants remains confidential.
On such regard, in criminal procedures, I consider it prudent to mention the following concern: will the antitrust authorities file a claim only against such persons that do not have immunity? If so, the confidentiality principle is put at risk, since such persons over which the claim was made, either through themselves, or through their attorneys, by mere elimination, and by not seeing the name of all the cartel participants, may deduce which are those with immunity, and thus the confidentiality principle regarding the identity will have been broken. The foregoing generates a risk that may affect the incentives of those that consider applying for the Leniency Program.
Another important risk that may be deemed a strong disincentive to apply for immunity, given that the LFCE and the CPF are not clear on that regard, consists of: what will happen with the immunity applicants if the antitrust authorities file a claim, even against those same applicants seek to avoid any hassle arising from a criminal investigation for committing cartel activities.
The suggestions and questions made must be cleared, since a lack of certainty regarding maintaining confidentiality at all times of the identities of the applicants both before the antitrust authorities, and the Attorney General’s Office, may take away incentives from those that consider it an option to apply for the immunity program.
The slightest risk of annoyance could affect the success of the immunity program.
1Ismael Henestrosa Pérez, Senior Associate on antitrust and competition matters in Aziz & Kaye.
2In Mexico, COFECE published on its website the following achievements: "Since the creation of COFECE as an autonomous authority applications for immunity have increased, of 113 received in 10 years, 52 were submitted between 2014 and 2016. Seven investigations have been sanctioned in which there have been requests for immunity, with a total amount of 512.3 million pesos." Press release available at: https://www.cofece.mx/cofece/index.php/prensa/historico-de-noticias/celebra-cofece-10-an-os-del-programa-de-inmunidad
3Included in article 103 of the LFCE. The English version of the LFCE is available at: https://www.cofece.mx/cofece/images/Documentos_Micrositios/Federal_Economic_Competition_Law.pdf
4In Mexico, there are two authorities for antitrust matters, COFECE is entrusted with applying the LFCE in all sectors of the economy, except for those corresponding to Broadcast and Telecommunications, over which the IFT has jurisdiction.
5We can see this in the second to last paragraph of article 103 of the aforementioned law.
6P.2 of the document is available at: https://www.cofece.mx/cofece/attachments/article/44/Impacto10AnosProgramaInmunidad.pdf
7The immunity program, or Leniency Program, was born in the USA in 1977, expanded to Europe starting in 1996, and in the 2006 the Mexican Federal Antitrust Law was introduced.
8Idem P.11
9The guidelines are available at:
https://www.cofece.mx/cofece/index.php/normateca/category/52-guias-para-facil-lectura?download=967:guia-003-2015-guia-del-programa-de-inmunidad-y-reduccion-de-sanciones and
http://www.ift.org.mx/sites/default/files/guia_programa_inmunidad_accesible_0.pdf
10Article 77.
11Article 254 bis in connection with article 53 of the LFCE.
12Second paragraph of article 2454 of the CPF.
13Second to last paragraph of article 103 of the LFCE.
0+
