US DOJ Antitrust Division Announces New Policy to Incentivize Compliance

/ Global Compliance Solutions Group LLC/

On Thursday, July 11 the US Department of Justice - Antitrust Division(1) announced(2) a new policy that will incentivize companies to implement antitrust compliance programs. The new policy allows prosecutors to consider compliance during the charging and sentencing stage in a criminal antitrust investigation.

The Justice Manual(3) previously stated that “credit should not be given at the charging stage for a (antitrust) compliance program.” The Division has now revised it’s manual and published a guidance document(4) that outlines what prosecutors should look for when they evaluate antitrust compliance programs.

Guidance Document Summary

  • The guidance document focuses on “the evaluation of compliance programs in the context of criminal violations of the Sherman Act such as price fixing, bid rigging, and market allocation”.(4)

  • The guidance was developed based on the Antitrust Division’s own experience and expertise, other resources within the DOJ, the Criminal Division’s guidance on Corporate Compliance Programs(5), and the US Sentencing Guidelines(6) evaluation of effective compliance programs (U.S.S.G. § 8B2.1).

  • The guidance document states that “a truly effective antitrust compliance program gives a company the best chance to obtain the significant benefits available under the Division’s Corporate Leniency program(7).”(4)

  • The evaluation of a company’s compliance program is only one of many other important factors that are considered during charging and sentencing. When prosecutors decide whether to bring criminal charges they must consider the Principles of Federal Prosecution and the Principles of Federal Prosecution of Business Organizations(8).

  • Division prosecutors recognize that the size of the company affects the resources that can be allocated to antitrust compliance and the extent of their antitrust compliance program.

Key Questions

There are three overarching questions prosecutors will ask themselves, when evaluating the effectiveness of a compliance program, at the time of an offense and at the time of a charging decision(4,8):

  • Is the program well designed?

  • Is the program effectively implemented (or applied earnestly and in good faith)?

  • Does the compliance program actually work in practice?

Preliminary questions that a prosecutor will ask when evaluating the effectiveness of a corporations antitrust compliance program include:

  • Does the company’s compliance program address and prohibit criminal antitrust violations?

  • Did the antitrust compliance program detect and facilitate prompt reporting of the violation?

  • To what extent was a company’s senior management involved in the violation?

Elements of an Effective Compliance Program

Factors that prosecutors should consider when evaluating the effectiveness of an antitrust compliance program include (click here to access the guidance document to read all questions evaluated for each factor listed below):

  • The design and comprehensiveness of the program

    • The Justice Manual requires prosecutors to evaluate whether or not a compliance program is a paper program or one that has been effectively implemented.

  • The culture of compliance within the company

  • Responsibility for, and resources dedicated to, antitrust compliance

    • Are there compliance personnel dedicated to compliance responsibilities?

  • Antitrust risk assessment techniques

    • What information or metrics has the company collected and used to help detect antitrust violations?

  • Compliance training and communication to employees

    • How has the company communicated its antitrust policies and procedures to all employees?

    • Are antitrust policies and procedures included in the company’s Code of Conduct?

  • Monitoring and auditing techniques, including continued review, evaluation, and revision of the compliance program

    • “An effective compliance program includes monitoring and auditing functions to ensure that employees follow the compliance program.”(4)

    • What monitoring or auditing mechanisms does the company have in place to detect antitrust violations?

  • Reporting mechanisms

    • Is there a publicized system in place whereby employees may report or seek guidance about potentially illegal conduct?

  • Compliance incentives and discipline

    • “Also relevant to an antitrust compliance program’s effectiveness are the systems of incentives and discipline that ensure the compliance program is well-integrated into the company’s operations and workforce.”(4)

  • Remediation methods

    • “Early detection and self-policing are hallmarks of an effective compliance program and frequently will enable a company to be the first applicant for leniency under the Division’s Corporate Leniency Policy.”(4)

Contact us to learn more about the Antitrust Divisions guidance and to find out how GCSG’s Advisory and Audit teams can guide and partner with you to reduce your antitrust compliance risk and help to protect your company’s bottom line and reputation.

References