PCC to start ‘Leniency Program’ for cartel members this week

The Philippine Competition Commission (PCC) is launching this week a Leniency Program for cartel members to come forward with information against anti-competitive groups in exchange of immunity from suit or lower fines.

PCC Competition Enforcement Office Director Orlando Polinar said Thursday the program is set to take effect this Saturday, January 19.

“The Leniency Program is similar to a whistle-blower program that is designed to offer incentives—such as immunity from suit and reduction of fines—to cartel members who will provide information, confess their participation, and aid the competition law enforcers towards successful investigation and prosecution of cartels,” he told reporters in Quezon City.

Under the program, past and present members of cartels—or businesses conniving to manipulate the market to their advantage—who report information such as price-fixing, bid-rigging, output restriction, and market allocation can avail themselves of the benefits.

“Any current or former director, officer, trustee, partner, employee, or agent of a juridical entity that participates or participated in a cartel may apply for leniency independent of their employer, or of the corporation or partnership that they are associated with,” said Polinar.

The first member of a certain cartel who reports will be given immunity from suit, while the second member of the same cartel will get lower fines. Cartels in the country can be fined from P100 million to P250 million, and its members imprisoned for up to seven years.

“Knowing there is strong incentive for a cartel member to confess, cooperate in the investigation, and escape punishment while the other members suffer high sanctions also makes joining cartels unstable and less attractive,” said Polinar.

“The fines and jail terms alone speak volumes on how detrimental cartels can be for ‘gaming’ the market and unabated profiteering,” he said.

Other cartel members may also report to the PCC, but only the first two will be able to get immunity from suit and lower fines.

“The aim here is to drive a wedge among cartel members by creating a dilemma that someone can report them at any point to avoid suit or have reduced fines,” said Polinar.

The Leniency Program is a tool used by antitrust commissions across the globe, reducing cartel formation by about 59 percent.

“Among antitrust enforcement circles, especially in the US and EU, it is known that majority of cartel cases are initiated because of leniency applicants,” Palomar noted.

The PCC developed its own program, using inputs from various parties, after consultations with various stakeholders.

Polinar noted the program is under a committee of officials of the PCC, but he declined to elaborate on the identity of the head and its members—citing safety and security reasons.

To ensure the safety and privacy of the program applicant, the commission will hold meetings with the Department of Justice (DOJ) to possibly enter a whistleblower under the witness protection program.

Polinar noted that the PCC may impose fines and sanctions on supposed members of cartels who misinform the commission.

“Giving misleading or false information to the PCC is prohibited by the law. The commission itself can penalize on the fact that the applicant has given false or misleading information to the office,” he said.

Asked about the investigations on cartels operating in the country, Polinar declined to give out details so as not to prejudice the ongoing probes.

The PCC will release the results of the investigations once they are available, noting that there are “quite a few.” —VDS, GMA News