The Australian Competition and Consumer Commission Immunity Policy for Cartel Conduct: A Critical Legal Analysis

TLDR: The United States Corporate Leniency Policy Incarnate (CLPLP) was created by the American Chamber of Commerce of Commerce and the United States Chamber of Deputies (CDPP).

Abstract: ................................................................................................................ i THESIS CERTIFICATION ..................................................................................... iii ACKNOWLEDGEMENTS ...................................................................................... iv TABLE OF CONTENTS .......................................................................................... vi LIST OF TABLES ..................................................................................................... x I The ACCC Immunity Policy for Cartel Conduct An Introduction ........ 1 A Summary of Main findings in Relation to Immunity ....................................... 5 1 Threat of Severe Sanctions ........................................................................... 7 2 High Risk of Detection ................................................................................. 7 3 Transparency and Predictability in Enforcement ......................................... 8 B Theoretical Approach and Aims of Thesis ..................................................... 13 C Significance of Research ................................................................................ 14 D Methodology .................................................................................................. 15 E Outline of Chapters ........................................................................................ 19 II The Historical and Theoretical Underpinnings of the Immunity Policy 23 A The Birth of the Immunity Policy .................................................................. 24 1 The United States Corporate Leniency Policy Incarnate ........................... 26 B The Influence of Economics on Cartel Enforcement ..................................... 29 1 The United States Culture of Enforcement ................................................ 33 C A Theoretical Breakdown of the Immunity Policy ........................................ 37 III The Impact of Rationality on Immunity Policy Development ................. 44 A An Exploration of the Development of the Rational Actor Model ................ 45 1 The Economic Approach to Law Competition Law and Economics: An Introduction ........................................................................................................ 48 B The Evolving Concept of Rationality and the Behavioural Law and Economics Approach – A Limited Theoretical Approach to Regulatory Policy and Design ...............................................................................52 1 Behavioural Economics Research – Key Findings .................................... 57 2 Implications Of BE Research Findings ...................................................... 66 3 Criticisms of the Behavioural Economics Approach ................................. 68 C A New Approach to Assessing Cartel Immunity ........................................... 73 vii 1 Threat of Severe Sanctions ......................................................................... 74 2 High Risk of Detection ............................................................................... 74 3 Transparency and Predictability in Enforcement ....................................... 75 4 Transparency .............................................................................................. 79 5 Accountability ............................................................................................ 82 6 Consistency ................................................................................................ 83 7 Proportionality ............................................................................................ 85 IV Research Design ........................................................................................... 91 A The Interviews ................................................................................................ 94 B The Logistics of the Project ........................................................................... 94 1 Recruitment ................................................................................................ 94 2 Sample Selection ........................................................................................ 95 3 Setting ........................................................................................................ 97 4 Outline of the Interview ............................................................................. 97 5 Informed Participants ................................................................................. 98 C Method ..............................................................................101 1 The Process .............................................................................................. 102 V Empirical Insight into the Immunity Policy: Key Findings ................... 109 A Perceptions of & Attitudes Towards the Immunity Policy for Cartel Conduct ..........................................................................................109 1 The Concept of ‘Effectiveness’ ................................................................ 109 2 General Opinions about the Current Operation of the Policy .................. 114 B Eligibility & Cooperation ............................................................................. 125 1 Cartel Recidivism ..................................................................................... 125 2 Ringleader Exclusion ............................................................................... 129 3 Relationship between the ACCC and the CDPP ...................................... 132 4 Revocation of Immunity .......................................................................... 136 C The Tension between Public and Private Enforcement – Confidentiality and Third Parties ..............................................................................138 1 Confidentiality .......................................................................................... 138 2 Restitution to Third Parties ...................................................................... 144 3 Derivative Immunity for Employees ........................................................ 146 D Alternatives to the Immunity Policy ............................................................ 150

Full text

University of Wollongong University of Wollongong
Research Online Research Online
University of Wollongong Thesis Collection
1954-2016
University of Wollongong Thesis Collections
2016
The Australian Competition and Consumer Commission Immunity Policy The Australian Competition and Consumer Commission Immunity Policy
for Cartel Conduct: A Critical Legal Analysis for Cartel Conduct: A Critical Legal Analysis
Pariz Lythgo-Marshall
University of Wollongong
Follow this and additional works at: https://ro.uow.edu.au/theses
University of Wollongong University of Wollongong
Copyright Warning Copyright Warning
You may print or download ONE copy of this document for the purpose of your own research or study. The University
does not authorise you to copy, communicate or otherwise make available electronically to any other person any
copyright material contained on this site.
You are reminded of the following: This work is copyright. Apart from any use permitted under the Copyright Act
1968, no part of this work may be reproduced by any process, nor may any other exclusive right be exercised,
without the permission of the author. Copyright owners are entitled to take legal action against persons who infringe
their copyright. A reproduction of material that is protected by copyright may be a copyright infringement. A court
may impose penalties and award damages in relation to offences and infringements relating to copyright material.
Higher penalties may apply, and higher damages may be awarded, for offences and infringements involving the
conversion of material into digital or electronic form.
Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily
represent the views of the University of Wollongong. represent the views of the University of Wollongong.
Recommended Citation Recommended Citation
Lythgo-Marshall, Pariz, The Australian Competition and Consumer Commission Immunity Policy for Cartel
Conduct: A Critical Legal Analysis, Doctor of Philosophy thesis, Faculty of Law, Humanities and the Arts,
University of Wollongong, 2016. https://ro.uow.edu.au/theses/4636
Research Online is the open access institutional repository for the University of Wollongong. For further information
contact the UOW Library: research-pubs@uow.edu.au

The Australian Competition and Consumer Commission
Immunity Policy for Cartel Conduct: A Critical Legal
Analysis
This thesis is submitted in fulfilment of the requirements for the
award of the degree
DOCTOR OF PHILOSOPHY
from
University of Wollongong
Pariz Lythgo-Marshall, BA LLB (HONS)
Faculty of Law, Arts & Humanities
School of Law
September 2015

i
ABSTRACT
This thesis provides a critical legal analysis of the Australian Competition
and Consumer Commission’s Immunity Policy for Cartel Conduct. The Immunity
Policy is touted as the ‘most effective anti-cartel enforcement tool in the world’ as it
aims to increase cartel detection and deterrence by offering the first cartel participant
full immunity from civil and criminal penalties. This thesis presents a detailed
examination of the theory underpinning the policy’s design and intended operation to
question whether the current model of assessing the effectiveness of the policy needs
to be enhanced in light of more recent theoretical developments.
Building upon this analysis, this thesis employs: a qualitative and cross-
comparative investigation into the eligibility and cooperation requirements of the
policy; an analysis of how the policy intersects with public and private enforcement
within Australia and how this impacts upon confidentiality and third party actions;
and a critical examination of some alternative measures to increase cartel detection
and deterrence in addition to immunity.
Despite the lionised rhetoric that surrounds the use of immunity policies
worldwide, these claims are largely untested. Given the nature of cartel conduct,
many quantitative assessments of the Immunity Policy are generated from
incomplete or unknown information about cartel conduct and heavily rely on
overgeneralised conceptions of rationality to inform the economic modelling upon
which these studies are based. As a result, the research in relation to the Immunity
Policy is currently quantitatively skewed and in need of a comprehensive analysis
using qualitative methods to provide valuable and unique insight into the design and
actual operation of the policy.
A qualitative and cross-comparative analysis was conducted to assist that
analysis. Semi-structured interviews were conducted with 16 prominent stakeholders
in Australia to provide detailed insight into the current design and operation of the
policy. This qualitative study helped inform the content and structure of the cross
comparative research. To complement these empirical insights, the respective
immunity policies in Canada, the United Kingdom and the United States were
analysed and compared to the Australian version to develop a model of best practice.

ii
As a result of this analysis, this thesis finds that the current approach to
assessing the effectiveness of the Immunity Policy is narrow and outdated. To
overcome these limitations, an enhanced model is developed, which is used to inform
the recommendations produced by the research. The use of this enhanced approach to
the assessment of the Immunity Policy will ultimately strengthen the Immunity
Policy and the recommendations made are therefore commended for adoption by the
ACCC.
This thesis reveals that there are a number of limitations inherent in the
design and operation of the Policy, including the approach most commonly used to
assess its effectiveness in achieving cartel detection and deterrence. In light of this,
the Immunity Policy should not be viewed as the single most effective anti-cartel
enforcement tool but as one important component of the ACCC’s overall
enforcement armory.
Most importantly, in order for this claim to be truly tested, there is a need for
the ACCC to implement viable alternative measures to Immunity, as outlined in this
thesis, which can also achieve cartel detection and deterrence and prevent the
overreliance on a single enforcement tool.