No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Compliance

Does Your Compliance Policy Matter to the Antitrust Division?

by Amanda Knapp
December 2, 2014
in Compliance
Does Your Compliance Policy Matter to the Antitrust Division?

In recent years, “compliance” has become a buzzword in the business world and the implementation of effective corporate compliance programs a necessary element of every industry’s best practices. These developments stem – in no small part – from the substantive policies and guidelines put into place to recognize and reward companies with effective compliance programs, even if those companies later end up in the crosshairs of a criminal investigation or prosecution.

Holding itself apart from this general trend, the Antitrust Division of the U.S. Department of Justice has rigidly maintained that a compliance policy is only “effective” if it actually leads a company to detect an antitrust violation and be the first to report the violation. Recently, however, Antitrust Division representatives have made public remarks that suggest a change of perspective, if not policy. This article discusses those recent remarks in the context of past policies and practices and offers a “cheat sheet” of takeaways with respect to the elements of effective compliance programs that are most important to the Antitrust Division.

Incentives for Effective Compliance Programs

In 1991, the U.S. Sentencing Guidelines were revised to permit reduced criminal sentences for companies with an “effective program to prevent and detect violations of law,” creating an additional incentive for companies to establish effective compliance programs in advance of a violation. As modified today, these guidelines provide detailed instruction on what makes a compliance program “effective” and note that a “failure to prevent or detect the instant offense does not necessarily mean that the program is not generally effective in preventing and detecting criminal conduct.” (USSG §§ 8C2.5(f), 8B2.1)1

Since then, the Department of Justice (DOJ) also modified its prosecutorial policies to encourage “truly effective” corporate compliance programs. Recognizing that “no compliance program can ever prevent all criminal activity by a corporation’s employees,” the DOJ outlined fundamental questions to be asked in assessing the effectiveness of a company’s compliance program. If a program is “effective,” the DOJ may charge only employees and agents or mitigate the charges or sanctions against the company. (United States Attorneys’ Manual, 9-28.800.)2

More recently, the DOJ teamed with the Securities and Exchange Commission (SEC) to produce an FCPA resource guide that emphasizes the substantial benefits of effective compliance programs. In this guide, the DOJ and SEC describe the incentives under the guidelines and policies above, but also note that an effective compliance program may influence whether charges are resolved through a deferred prosecution or non-prosecution agreement, the length of such agreements, probation terms, penalty amounts and the potential need for a monitor. (FCPA: A Resource Guide to the US Foreign Corrupt Practices Act, p. 56 (Nov. 14, 2012).)3  The agencies explain:

“These considerations reflect the recognition that a company’s failure to prevent every single violation does not necessarily mean that a particular company’s compliance program was not generally effective. [The] DOJ and SEC understand that ‘no compliance program can ever prevent all criminal activity by a corporation’s employees,’ and they do not hold companies to a standard of perfection. (Id.)”

Antitrust Division Holds Itself Apart

In 1993, shortly after the first Sentencing Guideline changes above, the Antitrust Division (Division) established a leniency policy specifically for antitrust violations, which permitted companies to qualify for “corporate amnesty” in two general circumstances:

(1) a company reports illegal activity before the Division learns about the activity from another source; or

(2) although the Division learned about the illegal activity from another source, the company is the first to report and qualify for leniency for a separate unreported illegal activity and the Division does not already have sufficient evidence to convict that company on the previously reported activity.

(Department of Justice, Corporate Leniency Policy.)4

If a company qualifies for amnesty, both the company and its cooperating employees may avoid criminal prosecution and some civil penalties.

Since the establishment of the leniency policy, the Division has separated itself from the general guidance above, maintaining that its leniency policy provides a sufficient (and exclusive) means for companies to benefit from an effective corporate compliance program, maintaining that a compliance program cannot be truly “effective” if it does not enable the company to either prevent the violation or qualify for amnesty under the leniency policy.

In this context, the Division contends that antitrust defendants are exempted from Sentencing Guidelines that otherwise permit sentencing reductions based on pre-existing effective compliance programs. (Ted Banks & Joe Murphy, CCEP, Antitrust: The Compliance Area You Thought You Knew, But Don’t, Ethisphere (June 4, 2013).)5 The Division also obtained an explicit exemption from prosecutorial policies favoring effective compliance programs, with a provision providing that “credit should not be given at the charging stage for a compliance program [in an antitrust prosecution,]” and that “amnesty is available only to the first corporation to make full disclosure to the government.” (United States Attorneys’ Manual, 9-28.400.)6

Presumably, these exemptions reflect an intent to maintain the Division’s leniency policy as “the only show in town” to mitigate corporate antitrust liability. But the same exemptions may also have the unintended consequence of leaving the Antitrust Division on the outside of the ever-growing discussion surrounding best policies and practices for compliance programs.

Recent Commentary from Antitrust Division Representatives

After several years of relative silence on the issue, two Antitrust Division representatives delivered public speeches addressing compliance in September of this year. Deputy Assistant Attorney General Brent Snyder discussed the value and importance of having an effective compliance program prior to a violation (or its discovery),7 and Assistant Attorney General Bill Baer discussed the importance of instituting effective compliance policies following a conviction or guilty plea.8

Snyder’s speech is likely the more significant, as it may signal a shift in the underlying perspective of the Division. Although Snyder began his speech by reiterating the Division’s long-standing positions – i.e., that compliance programs “should prevent a company from conspiring to fix prices, rig bids, or allocate markets,” and “should prevent the crime from beginning or, at a minimum, detect it and stop it shortly after it starts” – the language Snyder used throughout the remainder of his speech was notably qualified and not absolute.

Snyder acknowledged that a compliance program would only prevent all collusion in an “ideal world.” He also appeared to concede that an effective compliance program may not always uncover cartel activity in time to win the race to report under the Division’s leniency program, stating that a company with a partially effective compliance program “should be able to discover the cartel early, increasing its chances of seeking leniency before its co-conspirators do.” Finally, Snyder concluded his speech with two “hard truths:”

(1) “The existence of a compliance program almost never allows a company to avoid criminal antitrust charges,” and

(2) “[T]he Division, like the Department of Justice as a whole, almost never recommends that companies receive credit at sentencing for a pre-existing compliance program.” (Id.)

These “hard truths” are more flexible than they might otherwise seem, since they break from the Division’s former hard-line positions by suggesting that there might be a situation where the existence of an effective compliance program does enable a company to avoid criminal charges, or where the Division does recommend credit at sentencing for a pre-existing compliance program.

It is also notable that Snyder’s entire speech equates the Division’s treatment of corporate compliance programs with the historical treatment of such programs by the DOJ as a whole. This is significant because the Division’s positions in the past appeared to be specifically designed to separate the Division from the general DOJ rewards system for effective compliance programs. Thus, although Snyder’s speech does not revise the policies or exemptions discussed above, it does appear to signal a change in perspective, including recognition that it is at least possible for an antitrust compliance program to be “effective,” even where the program may have failed to actually prevent a violation or to support an application for leniency.

Cheat Sheet: What to Take From Recent Comments from Division Representatives

The recent speeches of Snyder and Baer pinpointed certain elements considered to be of primary importance to an effective antitrust compliance program. Based on those speeches, companies should take particular note of the following themes: 

  1. Compliance starts at the top. Executives and Board members must support and be knowledgeable about compliance efforts, laying the foundation for a “culture of compliance.”
  2. Educate. Executives, managers and employees with sales/pricing responsibilities must be educated in applicable law and given opportunities to report violations.
  3. Monitor and audit. All “at-risk” activities should be regularly monitored and audited, and the compliance program regularly evaluated.
  4. Discipline culpable employees. If culpable employees are retained in positions where they may repeat infringing conduct or impede an investigation, the company’s commitment to effective compliance may be questioned.
  5. Prevent further violations. If a compliance program fails to prevent certain criminal conduct, it must be revised to prevent similar violations in the future.

 

1 http://www.ussc.gov/guidelines-manual/2014/2014-chapter-8

2 http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/28mcrm.htm#9-28.800

3 http://www.sec.gov/spotlight/fcpa/fcpa-resource-guide.pdf

4 http://www.justice.gov/atr/public/guidelines/0091.pdf

5 http://ethisphere.com/magazine-articles/antitrust-the-compliance-area-you-thought-you-knew-but-dont/

6 http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/28mcrm.htm#9-28.400

7 http://www.justice.gov/atr/public/speeches/308494.pdf

8 http://www.justice.gov/atr/public/speeches/308499.pdf


Previous Post

LRN 309 – Government Contracting and Compliance

Next Post

Q&A With Roy Snell, CEO of HCCA and SCCE

Amanda Knapp

Amanda Knapp

Amanda Knapp new headshot (sorry, Ling) 12-2-14Amanda M. Knapp is an Associate at Roetzel & Andress, where she focuses her practice on business and commercial litigation, white collar government enforcement, and corporate compliance. She practices routinely before state and federal courts, representing businesses and individuals in antitrust and other class-action litigation, intellectual property litigation, environmental cleanup actions, constitutional and statutory challenges, contract and tort disputes, and other complex matters. She also routinely represents and advises clients in both government and internal investigations relating to white collar matters, and advises businesses in the establishment and improvement of effective corporate compliance programs. Ms. Knapp earned her law degree from Harvard Law School and a Bachelor of Arts from the University of Pennsylvania. She can be reached at aknapp@ralaw.com or 216-615-7416.

Related Posts

business person diving for answers

Diving Into the Deep End of ESG Reporting? Do You Even Know How to Get to the Pool?

by FTI Consulting
June 24, 2022

Companies are eager to establish their ESG programs, and it’s not hard to understand why. But as a trio of...

Stericycle FCPA Enforcement Action

Stericycle FCPA Enforcement Action

by Corporate Compliance Insights
June 23, 2022

Tom Fox dives into the details of Stericycle’s multinational bribery scheme in Latin America that landed the company millions of...

Ethisphere Launches The Sphere to Provide On-Demand Ethics and Compliance Benchmark Analysis

Ethisphere Launches The Sphere to Provide On-Demand Ethics and Compliance Benchmark Analysis

by Corporate Compliance Insights
June 23, 2022

Business ethics think-tank Ethisphere has launched a new product that aims to enable ethics and compliance leaders to efficiently benchmark...

Never the Same: 5 Ways Russia’s Invasion of Ukraine Will Impact Business Forever

Never the Same: 5 Ways Russia’s Invasion of Ukraine Will Impact Business Forever

by Thomas Fox
June 23, 2022

Tom Fox’s musings on the war following a recent chat with Exiger CEO Brandon Daniels; the pair discuss the ways...

Next Post
Q&A With Roy Snell, CEO of HCCA and SCCE

Q&A With Roy Snell, CEO of HCCA and SCCE

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance Decision-Making DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring Ransomware RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT