Whistleblowing

Tesco's £250 million profits overstatement bombshell was brought to the attention of the GC and new Chief Executive by an internal whistleblower.

Tesco's £250 million profits overstatement bombshell was brought to the attention of the GC and new Chief Executive by an internal whistleblower.  Adequate bribery procedures include 'speaking up' or whistleblowing reporting lines as key features of any organisation's bribery prevention policy.  And more than 70% of cartel investigations are triggered by whistleblowers seeking leniency.

In the UK, the Competition and Markets Authority has continued the OFT's policy of offering a cash reward of £100,000 for cartel whistleblowers (although those directly responsible responsible for cartel activity will not be able to benefit).  For companies, confessing can deliver reductions or even immunity from fines.  Examples of recent leniency discounts granted by the OFT are set out below:

Dairy - retail price incentives

Participants	Leniency applicant(s)	Leniency discount	Reason
9	Asda	10%	Total immunity from fines in relation to a separate infringement of the rules in other, separate, markets.

 

RBS and Barclays - loan pricing

Participants	Leniency applicant(s)	Leniency discount	Reason
2	Barclays	100%	Full immunity under leniency policy for whistle blowing.

 

Tobacco products - retail pricing

Participants	Leniency applicant(s)	Leniency discount	Reason
12	Sainsbury	100%	Full immunity under leniency policy for whistle blowing.
	T&S Stores	40%	Fine reduced reflecting leniency granted to Tesco, who acquired T&S in 2003.
	Somerfield	30%	Fine reduction under leniency policy.
	Asda	10%	Total immunity from fines in relation to a separate infringement of the rules in other, separate markets.

 

Construction Recruitment – constructive refusal to supply and price fixing

Participants	Leniency applicant(s)	Leniency discount	Reason
7	Ransted	100%	Full immunity under leniency policy for whistle blowing.
	Eden Brown	35%	Fine reduction under leniency policy.
	CDI	30%	Fine reduction under leniency policy
	Hays	30%	Fine reduction under leniency policy
	Fusion People	25%	Fine reduction under leniency policy
	Henry	25%	Fine reduction under leniency policy

 

Construction industry – bid rigging

Participants	Leniency applicant(s)	Leniency discount	Reason
103	-	100%	The OFT granted parties 100% reduction for any infringement that the OFT would not have known about but for the information provided by the leniency applicant.
		35%-65%	Where the OFT had information about a particular infringement from a source other than the leniency applicant, a reduction of between 35% and 65% was granted.
		50%	Five parties were granted a 50% reduction in fines in respect of infringements that the OFT had information about from another source.
		45%	Penalties imposed on 14 parties were reduced by 45%.
		40%	40% reduction was granted to 11 parties.
		35%	Three parties had their penalties reduced by 35%.

 

If you would like to discuss these issues, please do not hesitate to contact me.