Caught in a Cartel? Turn in Your Fellow Conspirators and Get Off Scot-free

Antitrust Authority hopes latest anti-cartel campaign will work.

"Caught in a cartel? The Antitrust Authority is offering you a one-time opportunity to receive immunity from prosecution." That's the opening shot in the business watchdog's new campaign, aimed at reviving its program to attract whistle-blowers who have any actionable information about restrictive trade practices.

Ronit Kam
Tomer Appelbaum

The revamped program, launched in cooperation with the State Prosecutor's Office and the Department for Legislation and Legal Counsel in the Ministry of Justice, provides the first member of a cartel to spill the beans to the Antitrust Authority with full immunity from criminal prosecution.

So what is a cartel, exactly? It's when competing - or supposedly competing - businesses fix prices, set quotas or divide the market among themselves by territory, client or type of product. Bid rigging, where competitors get together and decide which of them will submit bids for particular tenders, and at what terms, also constitutes cartel activity.

Those convicted of cartel-type business practices risk significant prison time.

The new campaign is modeled after efforts that proved successful in the United States and Europe; it also follows an initiative launched by the Antitrust Authority a few years ago that did not yield results.

The agency stresses that it is not offering blanket immunity. First of all, the whistle-blower must come forward before an overt investigation of the suspected cartel has begun. Also, the individual or corporation cannot be the kingpin of the cartel and must cooperate fully with the investigation.

If the whistle-blower is a corporation, immunity from prosecution extends to all its directors and employees, but only if the decision to come forward was taken by the corporation itself and not solely by one director or employee.

"We place great importance on heightening the criminal enforcement of the Restrictive Trade Practices Law, and are investing resources into exposing cartels. The new leniency program provides another means of taking on cartels, which harm competition and consumers," Antitrust Commissioner Ronit Kan said.