Leniency Program: Congress arms Indecopi in the fight to detect and punish cartels

The National Institute of Competition and Protection of Intellectual Property (Indecopi) may continue to use the Leniency Program in its fight against anti-competitive practices, after the Consumer Defense and Justice commissions of Congress approved extending the benefits in criminal headquarters for effective collaborators obtained by the regulatory body.

What happened? First, it must be understood that the Leniency Program allows economic agents to access the benefit of reduction or exoneration of sanctions, in exchange for providing evidence for the detection of cartels, according to the Law for the Repression of Anticompetitive Conduct.

However, Law 31040, approved in 2020 without the favorable opinion of Indecopi’s Commission for the Defense of Free Competition, criminalized anti-competitive conduct without extending the benefits to those who collaborate with the regulatory body during the criminal phase. Consequently, the collaborations were reduced.

Now, the aforementioned commissions gave their approval to Bill 3669/2022-CR, which modifies the Penal Code and the Single Ordered Text of the Law for the Repression of Anti-competitive Conduct in favor of strengthening Indecopi and its collaboration strategy to eradicate cartels from the Peruvian market. It will still have to be debated in plenary.

“The Commission agrees with the reform of the Leniency Program, to prevent the criminalization of anti-competitive conduct from affecting this program, which, in Peru and at a comparative level, has been the most useful tool for detecting cartels that both hurt the economy and consumers,” the task force said in a statement.

Clemecia Program: Indecopi against cartels

The national director of Investigation and Promotion of Free Competition, Jesús Espinoza, welcomed Codeco’s decision and stressed that approximately 35% of the cases that Indecopi has sanctioned in recent years had the support of the Leniency Program.

Through this, economic agents access the benefit of reduction or exoneration of sanctions, in exchange for providing evidence for the detection of cartels, according to the Law for the Repression of Anticompetitive Conduct.

“This bill rightly restricts criminal prosecution of cartels, which are the most harmful behaviors for the economy and for consumers and, in addition, extends the benefits for collaboration with criminal headquarters to encourage collaborators to go to Indecopi . This also avoids overlapping in the investigation and the risk that those investigated point out that since the case is being investigated in criminal courts, the Indecopi procedure should be suspended, ”he said.

Espinoza also specified that the aforementioned bill will allow for a robust Leniency Program, which conforms to the technical standards and best practices recommended by the Organization for Economic Cooperation and Development (OECD) and the World Bank.