REPRINT risk & R&Ccompliance INTERNATIONALDATA PRIVACY INCARTEL EUROPE ENFORCEMENT REPRINTED FROM: RISK & COMPLIANCE MAGAZINE JAN-MARJUL-SEP 2014 ISSUE rriskisk & && ccomplianceompliance JAN-MAR������������ 2014 RC ��������������������������������� RC www.riskandcompliancemagazine.com ������������������ ������� ������������������������� Inside������������ this issue: ��������������������������� �������������FEATURE The evolving role of the chief risk��������� officer ��������������������������������� EXPERT FORUM Managing your company’s regulatory exposure HOT TOPIC Data privacy in Europe www.riskandcompliancemagazine.com VVisitisit the website to request a free copy of the full e-magazine Published by Financier Worldwide Ltd [email protected]@financierworldwide.com © 2014 Financier Worldwide Ltd. All rights reserved. MINI-ROUNDTABLE MINI-ROUNDTABLE INTERNATIONAL CARTEL ENFORCEMENT 2 RISK & COMPLIANCE Jul-Sep 2014 www.riskandcompliancemagazine.com INTERNATIONAL CARTEL ENFORCEMENT MINI-ROUNDTABLE PANEL EXPERTS Scott Hammond Heather Irvine Partner Director Gibson, Dunn & Crutcher LLP Norton Rose Fulbright South Africa T: +1 (202) 887 3684 T: +27 11 685 8829 E: [email protected] E: [email protected] Scott D Hammond is a co-chair of the Antitrust and Heather Irvine is the head of the Norton Rose Fulbright Competition Practice Group at Gibson, Dunn & Crutcher, African competition law team based in Johannesburg. She has LLP. Mr Hammond is internationally recognised by senior been involved in some of the most high profile competition competition officials and private practitioners as one of the law cases in South Africa since the Competition Act came into leading figures behind the globalisation of cartel enforcement. effect, including two applications to the Constitutional Court. Before joining Gibson Dunn, Mr Hammond served for eight She is currently advising on a dawn raid conducted by the years as the highest-ranking career official at the Antitrust Zambian Competition Authority. Ms Irvine advises on regulatory Division of the US Department of Justice. issues in the telecommunications and energy sector, including recent High Court review applications dealing with ICASA’s regulation of wholesale mobile call termination rates and NERSA’s recent determination on the maximum charges for piped gas by Sasol Gas. Mark Jones Heather Lamberg Kafele Partner Partner Hogan Lovells International LLP Shearman & Sterling LLP T: +44 (0)20 7296 2428 T: +1 (202) 508 8097 E: [email protected] E: [email protected] Mark Jones is a partner at Hogan Lovells International LLP Heather Lamberg Kafele is a partner in the Antitrust and based in London and specialising in EU and UK competition law. Litigation Groups in Shearman & Sterling LLP’s Washington, He advises on antitrust investigations and compliance, merger DC office. She has extensive experience in complex litigation, control clearances, and market reviews. Mr Jones’ experience investigations, and regulatory proceedings with a particular includes a secondment to the UK competition authority. He is a emphasis on complex antitrust, competition and consumer recognised competition specialist in the legal directories. issues. She has represented plaintiffs and defendants in a variety of antitrust cases, including monopolisation, price-fixing (cartel), predatory pricing, bundling, tying, false advertising, unfair competition and leveraging cases in state and federal courts across the country. Ms Kafele has extensive experience in representing clients in cartel matters. Ms Kafele has handled worldwide internal investigations of cartel activity. www.riskandcompliancemagazine.com RISK & COMPLIANCE Jul-Sep 2014 3 INTERNATIONAL CARTEL ENFORCEMENT MINI-ROUNDTABLE RC: To what extent have you seen As a result, it is now no longer unusual for up to an increase in international cartel 10 or more jurisdictions to simultaneously launch enforcement in recent years? In what investigations of cartel activity as a result of leads ways are governing bodies ramping up generated by a common immunity applicant. This their efforts in this area? has contributed to a network of enforcement among competition enforcers resulting in greater Hammond: The landscape for international cartel coordination and information sharing. The upshot enforcement has changed dramatically in recent being that the risks and costs associated with years. The changes stem from a near universal engaging in international cartel activity have never consensus among competition enforcers that been greater. international cartels inflict substantial harm and that stronger sanctions are required to deter cartel Jones: There has been a continuing trend of activity. This has led many jurisdictions to amend increased cartel enforcement worldwide, as the their competition laws to replace administrative recent track record of fines levied against cartelists penalties with criminal sanctions for cartel offences by competition/antitrust agencies around the world or to raise existing maximum penalties for individual shows. In the EU, for example, total cartel fines and corporate offenders. As a result, cartel were at a similarly high level in 2013 as in 2012 – at members face the prospect of being simultaneously approximately �1.9bn. Competition authorities have investigated by multiple jurisdictions seeking to looked to improve their enforcement toolkit on a impose ever-increasing, and sometimes overlapping, number of fronts, including greater international sanctions. The risk of detection has also risen cooperation between themselves; increased in parallel with the rising penalties. Competition criminalisation of cartel activity; more extensive enforcers have made huge strides in their ability to deployment of investigatory powers such as dawn detect and prosecute international cartel activity raids; and more effective procedures to uncover even when the cartel activity occurred outside of a and prosecute cases through, for example, leniency jurisdiction’s national borders. Enforcers around the and settlement regimes which use the prospect of world are deploying a similar voluntary disclosure immunity from or reduction of fines to incentivise program to encourage companies to simultaneously companies which have been involved in cartels to report international cartel activity in exchange for come forward with evidence of them and admit immunity wherever they face exposure to sanctions. liability. 4 RISK & COMPLIANCE Jul-Sep 2014 www.riskandcompliancemagazine.com INTERNATIONAL CARTEL ENFORCEMENT MINI-ROUNDTABLE Irvine: Competition authorities around the penalties, including over $2.25bn in fines to date world are increasingly tackling global cartels from the auto parts cases alone. Jurisdictions in a coordinated way, by increasing communication between authorities on investigations, both formally and “Cartel members face the prospect of informally, and coordinating ‘dawn raids’. Investigations in one jurisdiction being simultaneously investigated frequently spark similar investigations in by multiple jurisdictions seeking to another jurisdiction. This is particularly impose ever-increasing, and sometimes true in Africa, where relatively new overlapping, sanctions.” competition authorities such as those in Namibia and Botswana leverage off the experience of the more established South Scott Hammond, African Competition Commission in order Gibson, Dunn & Crutcher LLP to identify sectors of the economy likely to be prone to cartels, and to combat practices which outside the US and Europe are also stepping up harm consumers such as price fixing and bid rigging. their enforcement activity, with many now pursuing criminal prosecution against price-fixing activity Kafele: The past several years have seen record that was previously categorised as a civil offence. In fines issued by ‘core’ competition enforcement Korea, the Financial Telecommunications & Clearings jurisdictions like the US and EU, as well as rapid Institute (KFTC) is now frequently recommending growth in the number of countries pursuing and criminal prosecution against individuals as well as enforcing anti-cartel statutes. Increasingly, cartel against companies. Similarly, Japan has a criminal investigations are characterised by extensive cartel case pending. Brazil’s enforcement agency has international cooperation. At least nine separate also increased its activity level in the wake of recent enforcement agencies coordinated with the US legislative reforms, and in 2014 imposed record fines Department of Justice (DOJ) during the course of of almost $1.4bn on participants in a cement cartel. the ongoing auto parts investigation, and as many as 10 separate agencies are currently investigating RC: Could you highlight some of the the alleged LIBOR rigging conspiracy. These cross- recent international cartel cases of border investigations have resulted in record note? How were these cases concluded, www.riskandcompliancemagazine.com RISK & COMPLIANCE Jul-Sep 2014 5 INTERNATIONAL CARTEL ENFORCEMENT MINI-ROUNDTABLE and what impact will they have on the bearings. The Commission is also investigating market? other automotive components, such as airbags, seat belts, thermal systems for cars and lighting Jones: The spotlight has been firmly on the systems. On announcement of the most recent financial sector in the continuing fallout from the automotive parts cartel decision, it said that more financial crisis. The European Commission fined than