Whistle blowing legislation discussed at House

Legislators in the House commerce committee on Tuesday continued discussing regulations that, once enacted, would allow companies to blow the whistle on cartels or cartel-like behaviour in which they participate in return for leniency.

The regulations form part of EU law which Cyprus has already delayed harmonising with. Specifically, they relate to a directive “to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market.”

Earlier this year, parliament passed a new law on competition protection, but it cannot be properly enforced until the accompanying regulations are enacted as well. The European Commission has initiated infringement proceedings against Cyprus, as the island should have adopted the relevant regulations by February 2021.

Among others, the regulations provide for immunity from fines if a company is the first to provide evidence that enables national competition authorities to initiate audits or where the evidence is sufficient to establish a breach of competition rules.

In addition, a company will be eligible for reduced fines if it “submits evidence of the alleged secret cartel which represents significant added value for the purpose of proving an infringement covered by the leniency programme, relative to the evidence already in the national competition authority’s possession at the time of the application.”

According to the EU regulation, to qualify for leniency applicants – undertakings disclosing such information to authorities – must satisfy a number of conditions, such as: having ended their involvement in the alleged secret cartel at the latest immediately following the leniency application; providing the names of all other undertakings that participate or participated in the alleged secret cartel; and providing detailed description of the alleged secret cartel, including the affected products, the affected territories, the duration, and the nature of the alleged secret cartel conduct.

The information provided by a whistleblower must be on a voluntary basis.

Companies wishing to generally disclose cartel-like behaviour can report this to the national competition authority – in Cyprus’ case the commerce ministry’s Commission for the Protection Competition – to other national public authorities, or to the European Commission itself.

During earlier discussions, representatives of the Chamber of Commerce and Industry, and of the Employers and Industrialists Federation, had agreed with the proposed regulations.