Immunity, Sanctions & Settlements

Last verified on

United States

Scott Hammond
Gibson, Dunn & Crutcher LLP

    Immunity or a 100 per cent reduction in sanctions

  1. 1.

    What benefits are available to the first applicant to qualify?

  2. The first applicant to qualify receives a complete pass from prosecution with no sanctions imposed against the company or its officers, directors and employees who come forward with the company and fully and truthfully cooperate with the Antitrust Division’s investigation. Since a Corporate Leniency applicant is not charged nor convicted, it also avoids collateral consequences that may be triggered by a criminal felony conviction, such as a finding of prima facie liability in follow-on, civil private damage suits or automatic debarment actions. An immunity applicant may also qualify for benefits under the Antitrust Criminal Penalty Enhancement and Reform Act (ACPERA) by avoiding treble damages and joint and several liability if the applicant provides satisfactory cooperation to civil claimants. Finally, because the Antitrust Division maintains the confidentiality of the identity of, and information provided by, an immunity applicant, applicants may also avoid the public stigma associated with companies that face felony convictions under the US antitrust laws.

  3. 2.

    Do the protections extend to current and former officers, directors and employees?

  4. For applicants that self-report before an investigation has begun (Type A Leniency), all current officers, directors, and employees of the corporation who come forward with the company and cooperate fully with the Antitrust Division will receive protection from prosecution. For applicants that seek immunity after the Antitrust Division has received information about the illegal conduct (Type B Leniency), the grant of immunity for current directors, officers, and employees is not automatic under the language of the Antitrust Division’s Leniency Policy. The Policy states that the officers, directors and employees of Type B Leniency applicants will be considered for immunity from criminal prosecution on the same basis as if they had approached the Antitrust Division individually. However, the Antitrust Division has historically not distinguished between its treatment of current employees under Type A versus Type B Leniency, the recently updated guidance published by the Antitrust Division makes clear that the Division may exercise its discretion to exclude from Type B protection current directors, officers, and employees who are determined to be “highly culpable”. The Corporate Leniency Policy does not automatically cover former directors, officers or employees under Type A or Type B Leniency. In fact, former directors, officers, and employees are presumptively excluded from any grant of corporate leniency. However, the Antitrust Division has the authority to agree not to prosecute former directors, officers, and employees who cooperate, and it may agree to such coverage when a company demonstrates that it is able to secure valuable cooperation from its former employees.

  5. 3.

    Is immunity available after an investigation begins?

  6. Yes. A company may qualify for immunity even after the Antitrust Division has received information about illegal antitrust activity, whether before or after an investigation is formally opened, if it meets the conditions of the Antitrust Division’s Type B Leniency Program.

  7. 4.

    What are the eligibility requirements before an investigation begins?

  8. Before the Antitrust Division has begun an investigation, a corporation must meet the following requirements to qualify for immunity:

    • at the time the corporation comes forward, the division must not have received information about the activity from any other source
    • upon the corporation’s discovery of the activity, the corporation took prompt and effective action to terminate its participation in the activity;
    • the corporation reports the wrongdoing with candour and completeness and provides full, continuing, and complete cooperation to the Antitrust Division throughout the investigation;
    • the confession of wrongdoing is truly a corporate act, as opposed to isolated confessions of individual executives or officials;
    • where possible, the corporation makes restitution to injured parties; and
    • the corporation did not coerce another party to participate in the activity and clearly was not the leader in, or the originator of, the activity.

    A more detailed discussion of the eligibility requirements appears below.

  9. 5.

    What are the eligibility requirements after an investigation begins?

  10. After the Antitrust Division has received information about illegal antitrust activity, but whether or not a formal investigation has begun, a corporation may qualify for immunity if it meets the following criteria:

    • the corporation is the first to come forward and qualify for leniency with respect to the activity;
    • at the time the corporation comes in, the Division does not have evidence against the company that is likely to result in a sustainable conviction;
    • upon the corporation’s discovery of the activity, the corporation took prompt and effective action to terminate its part in the activity;
    • the corporation reports the wrongdoing with candor and completeness and provides full, continuing, and complete cooperation that advances the Division in its investigation;
    • the confession of wrongdoing is truly a corporate act, as opposed to isolated confessions of individual executives or officials;
    • where possible, the corporation makes restitution to injured parties; and
    • the Division determines that granting leniency would not be unfair to others, considering the nature of the activity, the confessing corporation’s role in the activity, and when the corporation comes forward.

    A more detailed discussion of the eligibility requirements appears below.

  11. 6.

    Will the applicant have to admit to a violation of law?

  12. Yes. The applicant must admit to its participation in a criminal antitrust violation involving price fixing, bid rigging, capacity restriction, or the allocation of markets, customers, or sales or production volumes before it will receive a conditional leniency letter. The Antitrust Division employs a "marker system" that permits applicants to secure a "place at the front of the line" without admitting to the commission of a criminal antitrust violation. However, in order to perfect a market and be granted conditional leniency, the applicant must admit to a criminal antitrust violation.

  13. 7.

    Are ringleaders or initiators of the conduct eligible?

  14. Under either Type A or Type B leniency, the applicant bears the burden of demonstrating that it "did not coerce any other party to participate in the anticompetitive activity being reported and was not the leader in, or the originator of, the activity". Likewise, for Type B leniency, leniency may only be granted if it would not be unfair to others, "considering the nature of the illegal activity, the confessing corporation’s role in it, and when the corporation comes forward". These requirements are read to disqualify from leniency only an applicant that can be shown clearly to be "the" single organiser or "the" single ringleader of the conspiracy. Applicants will not be disqualified under this condition simply for being the largest company in the industry or the entity with the greatest market share. It is noteworthy that the Antitrust Division has said publicly on numerous occasions that no leniency applicant has ever been removed from its leniency programme based on a finding that the applicant was the ringleader or the initiator of the conduct. That track record demonstrates that, whenever possible, the Antitrust Division has construed this requirement in favour of accepting applicants into the programme.

  15. 8.

    When must the applicant terminate its involvement in the conduct?

  16. A corporate leniency applicant must "promptly" terminate its participation in the illegal conduct upon its discovery by the company. A company terminates its participation in the conduct by stopping further participation in that activity, unless continued participation is carried out with the approval of the Antitrust Division for purposes of assisting the investigation. A company that seeks a marker from the Antitrust Division immediately after discovering anticompetitive conduct, and that effectively terminates its involvement at or around the time of self-reporting, will be viewed as having taken prompt action to terminate.

  17. 9.

    What constitutes termination of the conduct?

  18. Leniency applicants most commonly satisfy this requirement by reporting the anticompetitive activity to the Antitrust Division and stopping any further participation in that activity, unless its continued participation is sanctioned by the Antitrust Division to further an ongoing covert investigation. In general, if the Antitrust Division is persuaded that the company and its high-level management have done everything that could reasonably be expected to terminate the company’s involvement in the anticompetitive activity being reported, conspiratorial contacts that continue for a short period of time thereafter by rogue employees will not defeat the corporation’s immunity application.

  19. 10.

    Will the applicant be required to make restitution to victims?

  20. Yes, however, restitution is excused where it is not possible. Examples of where restitution will be excused include when the applicant is in bankruptcy, the sole victim of the conspiracy is defunct, or the payment of restitution would substantially jeopardise the applicant’s continued viability. Restitution is normally resolved through civil actions with private plaintiffs, and the applicant must satisfy the Antitrust Division that it has made all reasonable efforts to pay restitution before final leniency will be granted.

  21. 11.

    Can more than one applicant qualify for immunity?

  22. No. Only the first qualifying corporation may be granted immunity for a particular antitrust conspiracy.

  23. 12.

    Can an applicant qualify if one of its employees reports the conduct to the authority first?

  24. If an employee reports the conduct to the authority first, then the employer runs the risk that it will no longer be eligible for immunity. To be eligible, the corporation would have to meet the requirements of the Antitrust Division’s Type B Leniency Program, which bars entry if the government’s investigation has already obtained sufficient information to proceed criminally against the company.

  25. 13.

    Does the afforded protection extend to any non-antitrust infringements?

  26. The protection afforded by the grant of immunity protects the applicant from prosecution by the Antitrust Division not only for a criminal antitrust offence but for any non-antitrust crimes committed in connection with the anticompetitive activity being reported. For example, conduct that is often integral to the commission of a criminal antitrust violation, such as mailing, faxing, or emailing bids agreed upon with competitors, can constitute other offences, such as mail or wire fraud violations or conspiracies to defraud. The protections afforded by the grant of immunity would apply to such offences. However, the grant of leniency only binds the Antitrust Division and does not limit the ability of other federal and state prosecuting agencies from prosecuting these offences. However, the risk of exposure is greatly mitigated by the track record that has developed over the more than 20 years since the Antitrust Division’s Leniency Program was revised in 1993. The Division has expressed that in its experience, other prosecuting agencies do not use other criminal statutes to do an end-run around leniency. Nevertheless, the Division warns that applicants should not expect to use the Leniency Program to avoid accountability for non-antitrust crimes. The Division recommends that leniency applicants with exposure to both antitrust and non-antitrust crimes report all crimes to the relevant prosecuting agency, since self-reporting is one factor that federal prosecuting agencies consider when making charging decisions. 

  27. 14.

    What confidentiality assurances are given to the first applicant to report?

  28. The Antitrust Division holds the identity of immunity applicants and the information they provide in strict confidence, much like the treatment afforded to confidential informants. Therefore, the Antitrust Division does not publicly disclose the identity of an immunity applicant or information provided by the applicant, absent prior disclosure by, or agreement with, the applicant, unless required to do so by court order in connection with litigation.

  29. 15.

    Does the authority publish guidance regarding the application of the programme?

  30. Yes. Information regarding the leniency program is available at www.justice.gov/atr/public/criminal/leniency.html.

  31. 16.

    Do the rules for obtaining immunity in your jurisdiction conflict with the immunity rules in other jurisdictions?

  32. No. There is significant convergence between the Antitrust Division’s Corporate Leniency Program and the programmes of the world’s major competition authorities with regard to the requirements for securing immunity from prosecution for the first company to self-report.

    Immunity application and marker process

  33. 17.

    What is the initial process for making an application?

  34. There is not a rigid, formal procedure for applying for immunity. Counsel for the applicant may contact the Antitrust Division’s Deputy Assistant Attorney General for Criminal Enforcement (the Criminal DAAG), who reviews all immunity requests, or the Director of Criminal Enforcement. Alternatively, counsel may apply by contacting any of the Antitrust Division offices handling criminal matters in Washington DC, New York, Chicago, or San Francisco. The contact information for these offices can be found on the Antitrust Division’s website at www.justice.gov/atr/contact/offices.html. Marker requests made to one of these offices will be forwarded immediately to the Criminal DAAG for determination about the availability of a marker. 

  35. 18.

    What information is required to secure a marker?

  36. The Antitrust Division sets the evidentiary threshold for obtaining a marker very low in order to encourage companies to come forward at the first indication of wrongdoing. To obtain a marker, counsel must:

    • represent that some information has been detected indicating that the client has engaged in a criminal antitrust violation;
    • disclose the general nature of the conduct discovered;
    • identify the industry, product, or service involved in terms that are specific enough to allow the Division to determine whether immunity is still available and to protect the marker for the applicant; and
    • identify the client.
  37. 19.

    How much time will an applicant have to perfect its marker?

  38. Markers are typically granted for an initial period of 30 days, but the length of time an applicant is given to perfect its application is based on factors such as the location and number of company employees counsel needs to interview, the amount and location of documents counsel needs to review, and whether the Antitrust Division already has an ongoing investigation at the time the marker is requested. As noted below, marker periods are routinely extended.

  39. 20.

    Can the deadline for perfecting the marker be extended?

  40. Yes. The Antitrust Division maintains the discretion to extend markers and routinely grants extensions for fixed periods of time when it is satisfied that the company is moving forward with all due diligence to perfect its marker.

  41. 21.

    What is required to perfect the marker?

  42. To perfect its marker, the applicant must be in a position to admit to its participation in a criminal violation of the Sherman Act. A corporate proffer acknowledging the conduct will not suffice. The Antitrust Division will insist on reviewing the key documents and interviewing the principal participants who admit to being involved in the violation before issuing its conditional leniency letter.

  43. 22.

    Can the scope of the marker be expanded if additional information is discovered by the applicant?

  44. Under certain conditions, yes. Companies frequently apply for leniency before completing their own internal investigations in order to ensure their place at the front of the line. As a result, the Antitrust Division may learn from the company or one of the applicant’s employees of anticompetitive activity that is more extensive than the conduct originally reported and thus that falls outside the scope of the marker or the conditional leniency letter if it has already been issued. For example, an applicant’s executives may report evidence showing that the anticompetitive activity was broader in terms of its geographic scope or the products covered by the conspiracy. In such cases, assuming that the applicant has not tried to conceal the conduct, that it is providing full, continuing, and complete cooperation, and that the applicant can meet the criteria for immunity on the newly discovered conduct it reported, the immunity coverage will be expanded to include such conduct. If the newly discovered conduct constitutes a separate conspiracy, the new immunity protection will be provided in a separate conditional leniency letter.

  45. 23.

    Can an applicant lose its marker if a second applicant comes forward with better information?

  46. Never. The Antitrust Division has a firm policy preventing companies that are not the first to report from "leap frogging" ahead of the immunity applicant for any reason while the applicant is being given the opportunity to perfect its marker.

  47. 24.

    What if the applicant’s investigation reveals that no violation exists?

  48. If the applicant’s investigation reveals that no violation occurred, then the marker will be terminated, the corporation will receive no protection, and the Antitrust Division will typically close its investigation.

  49. 25.

    What if the authority decides not to investigate?

  50. If the Antitrust Division determines that the reported conduct does not amount to a criminal antitrust violation, then it will not issue a conditional leniency letter to the applicant. If the Antitrust Division’s investigation was opened based on the applicant’s self-reporting, then the Antitrust Division will typically close its investigation when it notifies the company of its determination that the reported conduct does not amount to a criminal antitrust violation. If the Antitrust Division determines that the conduct amounts to a criminal antitrust violation and the company has otherwise met all of the other eligibility requirements for leniency, but the Antitrust Division decides not to invest its limited resources toward further investigating the conduct, then the Antitrust Division will follow through on its obligation to provide the company with a conditional leniency letter. Companies in this situation, however, should keep in mind that the Antitrust Division will expect the applicant to make restitution to victims, where possible, as a condition of granting leniency. Some applicants have therefore chosen to withdraw their leniency applications in this setting after they have been notified of the Antitrust Division’s decision not to investigate and bring charges.

    Immunity cooperation obligations

  51. 26.

    What is the applicant required to produce?

  52. A leniency applicant is required to report the wrongdoing with complete candour and to provide full, continuing and complete cooperation to the Antitrust Division throughout the investigation. Paragraph #2 of the Antitrust Division’s Model Corporate Conditional Leniency letter, available at www.justice.gov/atr/public/criminal/leniency.html, describes the specific cooperation obligations of the applicant, such as provision of documents, information, and materials, wherever located, and using its best efforts to secure the cooperation of its current directors, officers, and employees.

  53. 27.

    Will the applicant be required to make a written confession?

  54. No. Companies are not required to make a written confession of wrongdoing.

  55. 28.

    Can third parties obtain access to the materials provided by the applicant?

  56. No. The Antitrust Division has a strict policy of protecting identity of leniency applicants and the information they provide in strict confidence, much like the treatment afforded to confidential informants.

  57. 29.

    Will the applicant lose its protection if one or more of its employees refuses to cooperate?

  58. The Antitrust Division’s Model Corporate Conditional Leniency Letter requires the company to use “its best efforts to secure the truthful, full, continuing, and complete cooperation” of any directors, officers and employees included in the scope of the conditional leniency letter. A corporation’s inability to secure the full and truthful cooperation of one or more individuals will not necessarily cause the Division to decline to grant a leniency application. The value and significance of the individuals who fail to cooperate, however, and the steps taken by the company to secure their cooperation, would be relevant to the Division’s determination as to whether the corporation’s cooperation is “truthful, full, continuing, and complete”, and whether the Division is receiving the benefit of the bargain if certain key executives fail to cooperate.

  59. 30.

    Will the applicant lose its protection if one of its employees engages in obstructive conduct before or after the application?

  60. A leniency applicant has never been removed from the Antitrust Division’s Corporate Leniency Program because of the obstructive conduct of one or more of its employees that occurred either before or after the application. However, the Antitrust Division takes obstructive conduct very seriously and an applicant will have to demonstrate that it took reasonable steps to safeguard against any obstruction and that the company is still fully able to advance the Antitrust Division’s investigation. If the Antitrust Division were to conclude that the obstructive conduct was sanctioned by top management and/or believe that the benefit of the bargain to the government was compromised by the obstructive conduct, then the applicant would be in jeopardy of losing its protection.

  61. 31.

    Will the applicant be required to provide materials protected by attorney-client privileges or work-product doctrine?

  62. No. Paragraphs #2 and #4 of the Model Corporate Conditional Leniency Letter state that the applicant and its directors, officers, and employees are not required to produce communications or documents protected by the attorney–client privilege or work–product doctrine as part of their cooperation obligations. Moreover, as stated in the introductory paragraph of the model letter, the Division does not consider disclosures made by counsel in furtherance of the leniency application to constitute a waiver of the attorney–client privilege or the work–product privilege.

    Granting immunity

  63. 32.

    How does the authority announce its promise not to charge or sanction?

  64. The Antitrust Division expresses its promise not to charge an applicant through the issuance of a conditional leniency letter. A Model Corporate Conditional Leniency Letter can be found on the Antitrust Division’s website at www.justice.gov/atr/public/criminal/leniency.html. Once the applicant fulfils all of its obligations during the course of the criminal investigation and any resulting prosecution of co-conspirators and the Antitrust Division has verified the applicant’s representations regarding eligibility, then the applicant will be provided with a final grant of immunity letter.

  65. 33.

    Does the authority put its commitment in writing?

  66. Yes. The Antitrust Division expresses its promise not to charge an applicant through the issuance of a conditional leniency letter. A Model Corporate Conditional Leniency Letter can be found on the Antitrust Division’s website at www.justice.gov/atr/public/criminal/leniency.html.

  67. 34.

    Who is given access to the document?

  68. The Antitrust Division treats a conditional leniency letter as confidential and will not disclose it to a third party in an unredacted form unless required to do so by court order in connection with litigation.

  69. 35.

    Does the authority publish a model letter for conferring immunity?

  70. Yes. Model letters for the Individual and Corporate Leniency Programs are available at www.justice.gov/atr/public/criminal/leniency.html.

    Individual immunity or leniency

  71. 36.

    Is there an individual immunity programme?

  72. Yes. While individuals may receive immunity protection as part of a Corporate Leniency application, the Antitrust Division offers a separate leniency programme for individuals.

  73. 37.

    What is the process for applying?

  74. Like the Corporate Leniency Program, there is not a rigid, formal procedure for applying to the Individual Leniency Program. The applicant may contact the Antitrust Division’s Deputy Assistant Attorney General for Criminal Enforcement (the Criminal DAAG), who reviews all requests for leniency or the Director of Criminal Enforcement. Alternatively, the applicant may apply by contacting any of the Antitrust Division offices handling criminal matters in Washington DC, New York, Chicago or San Francisco. The contact information for these offices can be found on the Antitrust Division’s website at www.justice.gov/atr/contact/offices.html. Marker requests made to one of these offices will be forwarded immediately to the Criminal DAAG for determination about the availability of a marker. 

  75. 38.

    What are the criteria for qualifying?

  76. To qualify for immunity, an individual must meet the following criteria:

    • at the time the individual comes forward to report the activity, the Antitrust Division has not received information about the activity being reported from any other source;
    • the individual reports the wrongdoing with candor and completeness and provides full, continuing, and complete cooperation to the Division throughout the investigation; and
    • the individual did not coerce another party to participate in the activity and clearly was not the leader in, or the originator of, the activity.

    Revocation of immunity

  77. 39.

    On what basis can corporate immunity be revoked?

  78. The Antitrust Division can revoke a grant of immunity if the applicant fails to meet any one of the eligibility requirements of its Corporate Leniency Program. However, as noted above, the Antitrust Division has historically tilted the implementation of the programme to help companies remain in the programme rather than looking for reasons to remove them. For that reason, the Antitrust Division has revoked only one conditional leniency letter since the programme was revised more than 20 years ago.

  79. 40.

    When can it be revoked?

  80. The conditional grant of immunity can be revoked at any time before the final leniency letter is granted. The final grant of leniency will not be granted until the investigation and any resulting prosecutions are complete.

  81. 41.

    What notice is required to revoke?

  82. Before the Antitrust Division makes a final determination to revoke a corporate applicant’s grant of conditional leniency, it will notify applicant’s counsel in writing of staff’s recommendation to revoke the leniency and provide counsel with an opportunity to meet with the staff and the DAAG for Criminal Enforcement regarding the revocation. During the time that a recommendation to revoke an applicant’s leniency is under consideration, the Antitrust Division will suspend the applicant’s obligation to cooperate so that the applicant is not put in the position of continuing to provide evidence that could be used against it should the conditional leniency be revoked.

  83. 42.

    Can the applicant file a judicial challenge to a decision to revoke?

  84. The Model Corporate and Individual Conditional Leniency Letters state that the applicant “understands that the Antitrust Division’s Leniency Program is an exercise of the Division’s prosecutorial discretion, and [it/he/she] agrees that [it/he/she] may not, and will not, seek judicial review of any Division decision to revoke [its/his/her] conditional leniency unless and until [it/he/she] has been charged by indictment or information for engaging in the anticompetitive activity being reported”. The Model Corporate Conditional Leniency Letter also notes that “[j]udicial review of any Antitrust Division decision to revoke [an individual’s] conditional non-prosecution protection granted [under the corporate conditional leniency letter] is not available unless and until the individual has been charged by indictment or information.” Accordingly, the Antitrust Division takes the position that the proper avenue to challenge a revocation of a leniency letter is in a motion to dismiss the indictment before a federal district court judge.

    Reduction in sanctions

  85. 43.

    Does the leniency programme allow for reductions in sanctions?

  86. The Antitrust Division’s Corporate and Individual Leniency Programs only award benefits to the first applicant to qualify. However, the Antitrust Division engages in settlements offering sentencing reductions to companies and individuals who accept responsibility and cooperate with its investigation, but this is done pursuant to plea agreements that fall outside of the Antitrust Division’s leniency programmes.

  87. 44.

    What is the process for seeking a reduction in sanctions?

  88. Reductions in sanctions are sought as part of the plea negotiation process that may be initiated by the government or by the target of an investigation at any time. Typically, pre-indictment plea negotiations yield more substantial reductions in sanctions than those reached after an indictment has been handed down.

  89. 45.

    Is there a marker process similar to immunity applications?

  90. No. There is no parallel to the Antitrust Division’s marker process used in corporate leniency applications.

  91. 46.

    Are the reductions in sanctions fixed or discretionary?

  92. Reductions in sanctions are discretionary and not fixed by law or regulation. However, the Antitrust Division provides guidance on the sentencing reductions and benefits available to companies and individuals that provide timely cooperation. See‘Measuring the Value of Second-in Cooperation in Corporate Plea Negotiations (29 March 2006), available at www.justice.gov/atr/public/speeches/215514.html. The Antitrust Division can make sentencing recommendations, but federal courts make the ultimate determination on the sentences imposed.

  93. 47.

    How are the reductions in sanctions calculated?

  94. The Antitrust Division takes into account the timeliness and value of a defendant’s cooperation in advancing the government’s investigation in calculating sentencing reductions. The Antitrust Division has historically rewarded a 30 to 35 per cent discount off the bottom of the Sentencing Guideline range to the first company to agree to plead guilty and cooperate. Companies that report thereafter have traditionally received proportionally smaller reductions.

  95. 48.

    Are there sentencing guidelines?

  96. Yes. Sentencing for corporations and individuals in antitrust cases are subject to the advisory US Sentencing Guidelines, published by the United States Sentencing Commission, which apply in all US federal criminal prosecutions.

  97. 49.

    If an applicant's cooperation reveals self-incriminating information that expands the scope of the conduct known to the authority, will that conduct be factored into the fine calculation?

  98. No. Antitrust Division plea agreements for Sherman Act offences commonly contain a provision stating that self-incriminating information provided by a defendant in connection with the plea agreement process will not be used to increase the defendant’s sentence. The Antitrust Division is not required under the Sentencing Guidelines to restrict the use of self-incriminating information in this manner. However, the Division has publicly committed itself to doing so as an additional incentive for defendants to cooperate fully.

  99. 50.

    Are there fixed or discretionary discounts for the first applicant to cooperate after the immunity applicant (assuming there is an immunity applicant)?

  100. Reductions in sanctions for the first applicant to cooperate after the immunity applicant are discretionary and not fixed by law or regulation. Reductions in sanctions take into account the timing of the applicant’s cooperation, the value and significance of the information provided, and whether the company brings forward evidence of additional, undetected collusive activity and receives an additional ‘Amnesty Plus’ discount.

  101. 51.

    Other than fine reductions, are there additional incentives offered to an applicant that is the first non-immunity applicant?

  102. Yes. A substantial sentencing reduction is just one of several potential benefits available to the first company to come forward after the immunity applicant. It may also result in more favourable treatment for culpable executives who also come forward with the company and also provide timely cooperation, a reduction in the scope of the commerce used to calculate a company’s fine, and a greater likelihood that the company will qualify for Lenciency Plus credit in a related investigation, among other potential benefits. For a fuller description of the benefits available to the first company to come forward and cooperate after the immunity applicant, see Measuring the Value of Second-in Cooperation in Corporate Plea Negotiations (29 March 2006), available at www.justice.gov/atr/public/speeches/215514.html.

  103. 52.

    Does the competition authority publish guidance regarding sentencing reductions?

  104. Yes. The Antitrust Division provides guidance on the factors that it considers in making recommendations on sentencing reductions in policy speeches that can be found on its website at www.justice.gov/atr/public/speeches/speech-criminal.html. In addition, Antitrust Division plea agreements are typically published on its website, and these documents set forth the amount of a defendant’s sentencing reduction. Moreover, guidance on the sentencing reduction is also typically addressed in the government’s sentencing memoranda as well as in the transcripts of the sentencing hearing, which are typically a matter of public record.

  105. 53.

    Does the authority provide for "Amnesty Plus" benefits?

  106. Yes. The Antitrust Division encourages subjects and targets of investigation to consider whether they may qualify for leniency in other markets where they compete. Such entities may be eligible for Amnesty Plus (also known as Leniency Plus) protection, which results in leniency for reporting the additional, previously undetected conduct, and a significant reduction in sanctions in the original investigation.

  107. 54.

    How is the Amnesty Plus discount calculated?

  108. The size of the Amnesty Plus discount depends on a number of factors, including:

    • the strength of the evidence provided by the cooperating company in the leniency product;
    • the potential significance of the violation reported in the leniency application, measured in such terms as the volume of commerce involved, the geographic scope, and the number of co-conspirator companies and individuals; and
    • the likelihood the Division would have uncovered the additional violation absent the self-reporting (ie, if there were little or no overlap in the corporate participants and/or the culpable executives involved in the original cartel under investigation and the Amnesty Plus matter) then the credit for the disclosure would be greater.

    Of these three factors, the first two are given the most weight.

    Cooperation obligations for sentencing reductions

  109. 55.

    Are the cooperation obligations similar to those for immunity applicants?

  110. Yes. A commitment by the defendant to provide full, continuing, and complete cooperation is nearly always required in Antitrust Division plea agreements. As discussed above, the amount of the substantial assistance reduction in the fine or period of incarceration below the Guidelines range that the government will recommend is directly tied to the timeliness and quality of the cooperation that the defendant is able and willing to provide. The specific types of cooperation that a defendant is required to provide to the government is specified in the plea agreement, including providing the government with all non-privileged documents and information, wherever located, in the possession, custody, or control of the defendant and appearing for interviews, grand jury appearances and trials. For corporate defendants, the defendant and any related entities covered under the plea agreement must also use their "best efforts" to secure the cooperation of current, and sometimes also former, corporate employees covered under the plea agreement, including making employees (even foreign-located employees), available at the defendant’s expense for interviews and testimony.

  111. 56.

    Will the applicant be required to make a written confession?

  112. The Antitrust Division will insist on an admission of wrongdoing from a pleading defendant, and the plea agreement document will typically include a section that sets forth the factual basis for the violation of the offence(s) that the defendant is admitting guilt. The factual basis need not encompass all of the defendant’s conduct, but it will have to be sufficient to provide an evidentiary basis for the court to accept the guilty plea.

  113. 57.

    Can third parties obtain access to the materials provided by the applicant?

  114. Information provided to the Antitrust Division in a criminal antitrust investigation is typically protected by federal grand jury secrecy laws and is generally unavailable to third parties. An exception exists for an indicted defendant, who will be entitled to pretrial discovery of the government’s evidence. However, the pretrial discovery is typically covered by a protective order that prevents unauthorised disclosure to third parties. A plaintiff pursing a separate civil cause of action against the defendant may be able to obtain discovery from the defendant of any information that the defendant provided to the government.

  115. 58.

    Will an applicant qualify for sentencing reductions if one or more of its employees refuse to cooperate?

  116. So long as a company is able to provide timely and valuable cooperation that advances the government’s investigation, it will qualify for a sentencing reduction even if one or more of its employees refuse to cooperate.

  117. 59.

    Will the applicant lose its protections if one of its employees engages in obstructive conduct before or after the application?

  118. The Antitrust Division takes obstructive conduct very seriously, and a company that engages in obstruction prior to the entry of a plea agreement should expect, at a minimum, that its sentencing reduction will be reduced, but it may also face a fine enhancement and/or a separate criminal charge for the obstructive conduct. If the obstructive conduct occurs after the plea agreement is entered with the court, then the government may seek to void the plea agreement, in which case the defendant will face renewed charges. However, voiding a plea agreement is an extraordinary step. If the applicant is able to demonstrate that it took reasonable steps to safeguard against any obstruction and that it is still able to advance the Antitrust Division’s investigation, then it is unlikely that the Antitrust Division will void the plea agreement. However, even if the Antitrust Division does not void the plea agreement, the company and/or any employees who engaged in the obstructive conduct could face additional charges for obstructive conduct after the plea agreement is entered.

  119. 60.

    Will the applicant be required to provide materials protected by attorney-client privilege or work-product doctrine?

  120. No. Defendants are not required to turn over communications or documents protected by the attorney–client privilege or work–product doctrine as part of their obligation to cooperate.

  121. 61.

    Can an applicant challenge the amount of the reduction of sanctions?

  122. The answer depends on the specific language used in the plea agreement. If the defendant enters into a plea agreement calling for a jointly recommended sentence, then a defendant is unlikely to be able to challenge the sentence imposed if it is greater than the fine called for in the plea agreement. However, in contested sentencing hearings where there is no agreement on the sentence or the amount of the sentencing reduction, then a defendant maintains the right to appeal the sentence.

    Settlements

  123. 62.

    How is the settlement process initiated?

  124. The settlement process may be initiated by either Antitrust Division staff or the defendant at any point in the investigation.

  125. 63.

    Is the amount of the sanction always fixed in the settlement agreement?

  126. The amount of the sanction is often agreed upon between the government and the defendant, but that is not always the case. If the parties agree upon the sanction, then pursuant to Federal Rule of Criminal Procedure 11(c)(1)(c), the sentencing court either accepts or rejects the agreement as a whole, including the proposed sanction.

  127. 64.

    What role, if any, do the courts play in the settlement process?

  128. Courts are specifically prohibited from participating in plea discussions. A signed plea agreement will be submitted to the court for consideration.A court’s role in the plea agreement process is to determine whether it is in the public’s interest to either accept or reject a plea agreement once it has been agreed to by the parties, and if accepted, to impose sentence.

  129. 65.

    Are the settlement documents, including any factual admissions, made public?

  130. Yes, although in exceptional circumstances, the documents may be placed by a court under seal for some period of time. Federal Rule of Criminal Procedure 11(c)(2) requires that the parties must disclose the plea agreement in open court, unless the court finds good cause and allows the parties to disclose the plea agreement in camera, for the judge’s inspection only. An example of good cause would be a judicial finding that the disclosure of a plea and cooperation agreement would jeopardise the integrity of a covert investigation.

  131. 66.

    Is an admission of wrongdoing required?

  132. Yes. The Antitrust Division’s policy is to require a factual admission of guilt to the court as a condition of entering into a plea agreement.

  133. 67.

    Do companies that enter into settlement agreements receive an automatic sentencing discount?

  134. No, there is no automatic or fixed settlement discount. However, companies that enter into settlement agreements routinely receive a sentencing discount that takes into account their acceptance of responsibility and the value and timeliness of their cooperation.

  135. 68.

    Do all of the subjects of an investigation have to agree to the settlement procedure before it is initiated by the authority?

  136. No, all of the subjects to an investigation do not have to agree to a settlement procedure before it is initiated by the Antitrust Division. 

  137. 69.

    Will the authority settle with subjects who refuse to cooperate?

  138. Generally, no. Because the main benefit that both the government and the defendant receive through the plea agreement is derived from cooperation, the Antitrust Division is generally highly averse to entering into settlement agreements with subjects who refuse to cooperate.

  139. 70.

    If the settlement discussions terminate without an agreement, may any information provided or statements made during the negotiations be used against the parties?

  140. No. Pursuant to Federal Rule of Criminal Procedure 11(f) and Federal Rule of Evidence 410, statements made by the defendant or the defendant’s counsel in the course of plea negotiations are generally not admissible at trial if the negotiations break down.

  141. 71.

    May a party to the settlement agreement void the agreement after it is entered?

  142. If a defendant has stated an intention to plead guilty, but the court has not yet accepted the plea of guilty, a defendant may withdraw the plea of guilty for any reason. Once charges are filed and the defendant enters a plea of guilty to those charges, a defendant may only withdraw a plea of guilty before the court imposes sentence if the defendant can show a "fair and just reason for requesting the withdrawal". After the court imposes sentence, the ability to withdraw a plea of guilty is severely limited.

  143. 72.

    Does the competition authority publish guidance regarding settlements?

  144. Yes. The Antitrust policies on settlements are outlined in two speeches located on the Antitrust Division website: The US Model of Negotiated Plea Agreements: A Good Deal With Benefits for All, available at www.justice.gov/atr/public/speeches/219332.htm; and Measuring the Value of Second-in Cooperation in Corporate Plea Negotiations, available at www.justice.gov/atr/public/speeches/215514.htm.

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Questions

    Immunity or a 100 per cent reduction in sanctions

  1. 1.

    What benefits are available to the first applicant to qualify?


  2. 2.

    Do the protections extend to current and former officers, directors and employees?


  3. 3.

    Is immunity available after an investigation begins?


  4. 4.

    What are the eligibility requirements before an investigation begins?


  5. 5.

    What are the eligibility requirements after an investigation begins?


  6. 6.

    Will the applicant have to admit to a violation of law?


  7. 7.

    Are ringleaders or initiators of the conduct eligible?


  8. 8.

    When must the applicant terminate its involvement in the conduct?


  9. 9.

    What constitutes termination of the conduct?


  10. 10.

    Will the applicant be required to make restitution to victims?


  11. 11.

    Can more than one applicant qualify for immunity?


  12. 12.

    Can an applicant qualify if one of its employees reports the conduct to the authority first?


  13. 13.

    Does the afforded protection extend to any non-antitrust infringements?


  14. 14.

    What confidentiality assurances are given to the first applicant to report?


  15. 15.

    Does the authority publish guidance regarding the application of the programme?


  16. 16.

    Do the rules for obtaining immunity in your jurisdiction conflict with the immunity rules in other jurisdictions?


  17. Immunity application and marker process

  18. 17.

    What is the initial process for making an application?


  19. 18.

    What information is required to secure a marker?


  20. 19.

    How much time will an applicant have to perfect its marker?


  21. 20.

    Can the deadline for perfecting the marker be extended?


  22. 21.

    What is required to perfect the marker?


  23. 22.

    Can the scope of the marker be expanded if additional information is discovered by the applicant?


  24. 23.

    Can an applicant lose its marker if a second applicant comes forward with better information?


  25. 24.

    What if the applicant’s investigation reveals that no violation exists?


  26. 25.

    What if the authority decides not to investigate?


  27. Immunity cooperation obligations

  28. 26.

    What is the applicant required to produce?


  29. 27.

    Will the applicant be required to make a written confession?


  30. 28.

    Can third parties obtain access to the materials provided by the applicant?


  31. 29.

    Will the applicant lose its protection if one or more of its employees refuses to cooperate?


  32. 30.

    Will the applicant lose its protection if one of its employees engages in obstructive conduct before or after the application?


  33. 31.

    Will the applicant be required to provide materials protected by attorney-client privileges or work-product doctrine?


  34. Granting immunity

  35. 32.

    How does the authority announce its promise not to charge or sanction?


  36. 33.

    Does the authority put its commitment in writing?


  37. 34.

    Who is given access to the document?


  38. 35.

    Does the authority publish a model letter for conferring immunity?


  39. Individual immunity or leniency

  40. 36.

    Is there an individual immunity programme?


  41. 37.

    What is the process for applying?


  42. 38.

    What are the criteria for qualifying?


  43. Revocation of immunity

  44. 39.

    On what basis can corporate immunity be revoked?


  45. 40.

    When can it be revoked?


  46. 41.

    What notice is required to revoke?


  47. 42.

    Can the applicant file a judicial challenge to a decision to revoke?


  48. Reduction in sanctions

  49. 43.

    Does the leniency programme allow for reductions in sanctions?


  50. 44.

    What is the process for seeking a reduction in sanctions?


  51. 45.

    Is there a marker process similar to immunity applications?


  52. 46.

    Are the reductions in sanctions fixed or discretionary?


  53. 47.

    How are the reductions in sanctions calculated?


  54. 48.

    Are there sentencing guidelines?


  55. 49.

    If an applicant's cooperation reveals self-incriminating information that expands the scope of the conduct known to the authority, will that conduct be factored into the fine calculation?


  56. 50.

    Are there fixed or discretionary discounts for the first applicant to cooperate after the immunity applicant (assuming there is an immunity applicant)?


  57. 51.

    Other than fine reductions, are there additional incentives offered to an applicant that is the first non-immunity applicant?


  58. 52.

    Does the competition authority publish guidance regarding sentencing reductions?


  59. 53.

    Does the authority provide for "Amnesty Plus" benefits?


  60. 54.

    How is the Amnesty Plus discount calculated?


  61. Cooperation obligations for sentencing reductions

  62. 55.

    Are the cooperation obligations similar to those for immunity applicants?


  63. 56.

    Will the applicant be required to make a written confession?


  64. 57.

    Can third parties obtain access to the materials provided by the applicant?


  65. 58.

    Will an applicant qualify for sentencing reductions if one or more of its employees refuse to cooperate?


  66. 59.

    Will the applicant lose its protections if one of its employees engages in obstructive conduct before or after the application?


  67. 60.

    Will the applicant be required to provide materials protected by attorney-client privilege or work-product doctrine?


  68. 61.

    Can an applicant challenge the amount of the reduction of sanctions?


  69. Settlements

  70. 62.

    How is the settlement process initiated?


  71. 63.

    Is the amount of the sanction always fixed in the settlement agreement?


  72. 64.

    What role, if any, do the courts play in the settlement process?


  73. 65.

    Are the settlement documents, including any factual admissions, made public?


  74. 66.

    Is an admission of wrongdoing required?


  75. 67.

    Do companies that enter into settlement agreements receive an automatic sentencing discount?


  76. 68.

    Do all of the subjects of an investigation have to agree to the settlement procedure before it is initiated by the authority?


  77. 69.

    Will the authority settle with subjects who refuse to cooperate?


  78. 70.

    If the settlement discussions terminate without an agreement, may any information provided or statements made during the negotiations be used against the parties?


  79. 71.

    May a party to the settlement agreement void the agreement after it is entered?


  80. 72.

    Does the competition authority publish guidance regarding settlements?