Antitrust and Competition Compliance More Critical Than Ever

with contributing authors Elene Karanicolas and Ayesha Ahmed

With well over 100 criminal cases against dozens of companies and many dozens of individuals in recent years, fines totaling several billions of dollars and average prison sentences now standing at 25 months, the Antitrust Division of the Department of Justice (DOJ) has established a track record for keenly enforcing antitrust laws.  In a recent speech, Brent Snyder, the Deputy Assistant Attorney General of the Antitrust Division of the DOJ, highlighted that other governments around the world are similarly engaged and have implemented their own aggressive anti-cartel programs.  Many organizations are collaborating with each other and with U.S. authorities, as well as international law enforcement agencies, to identify cartel conspirators and conspiracies.  Considering the adverse reputational impacts in addition to this, the price for participating in a price-fixing cartel has never been higher.

The DOJ has emphasized the importance of effective compliance programs in reducing cartel behavior among companies and increasing the chance of corporate leniency qualifications to companies that self-report price-fixing early.

While an effective antitrust compliance program will vary by organization depending on involved industries, geographies and operations, some general characteristics are widely applicable:

1. Corporate compliance must be embedded in the tone at the top. Senior executives are expected to foster a culture that encourages ethical conduct and commitment to compliance.  Not only should senior executives implement clear policies that establish standards for behavior, but they should also actively monitor compliance by employees on an ongoing basis.
2. All employees should be educated about antitrust compliance policies and practices. Effective training programs should be developed, prioritizing employees from departments with pricing responsibilities, such as sales.  Employees should be aware of reporting protocols and should feel safe reporting potential criminal conduct without fear of retaliation.  As appropriate, agents, distributors and other affiliated third parties should also be trained for leading practice.
3. Antitrust compliance should be monitored regularly. Internal assessments should be conducted and training certifications from employees should be reviewed regularly to actively monitor the effectiveness of antitrust compliance programs.  Senior executives must also periodically review strengths of the compliance program, as well as any deficiencies, violations and new risk areas to develop strategies for improvement.
4. Disciplinary measures should be stated clearly and delivered to policy violators. Companies need to have clear and sufficient disciplinary measures in place for when violations of the antitrust compliance program come to light.  Senior executives should be able to consistently determine an appropriate level of discipline and apply it fairly and promptly.  Though the DOJ does not necessitate termination of culpable employees, the company’s commitment to antitrust compliance may be questioned when such employees are retained.
5. Program improvement should be ongoing. Companies that discover antitrust misconduct should re-evaluate their risk mitigation strategies and remain alert to similar compliance program risks going forward. Companies should also be alert to new antitrust compliance risks and any changes that may be required to the compliance program as a result.

While the presence of an antitrust compliance program does not mean that a company is exempt from criminal charges for antitrust law violations, the DOJ may impose lower fines if a culpable company is able to demonstrate that adequate measures were taken to implement an effective antitrust compliance program.  Similarly, the DOJ’s corporate leniency program gives companies and individuals that are not ring-leaders and are the first to self-report illegal conduct as part of a cartel the opportunity to avoid prosecution.

Having an effective antitrust compliance program can help a company avoid heavy fines, prison time for executives and irreparable reputational damage.  Companies can take major steps toward implementing an effective antitrust compliance program by enforcing certain core principles – commitment from the top, effective training for employees, regular oversight reviews, prompt discipline of antitrust violations and continuous re-evaluation of risk assessment results with a focus on risk mitigation strategies.  When antitrust violations are found, regulatory bodies like the DOJ consider leniency for a company that is able to demonstrate that thoughtful efforts were made to create a sustainable compliance program and that good faith efforts were made to practice and monitor compliance.  Moreover, the implementation of an effective antitrust compliance program is more likely to prevent antitrust violations from occurring in the first place.