And the Beat Goes On (Part 2)

And the Beat Goes On (Part 2)

And the Beat Goes On (Part 2)

New DOJ Antitrust Guidelines on Corporate Compliance Programs

On homage to Sonny & Cher’s anthem to continuing change, let’s look at some new and some updated expectations in the new DOJ Antitrust Division’s July release of its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.

The Antitrust compliance guidelines reinforce the DOJ’s updated guidelines in its Criminal Division’s recently-updated (April) Evaluation of Corporate Compliance Programs. The Antitrust guidelines mirror the Criminal Division’s focus on three key questions:

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

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

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

The following Antitrust guidelines outline does not exactly mirror but largely tracks the Criminal Division’s guidelines:

  • Design and comprehensiveness
  • Culture of compliance
  • Responsibility for the compliance program
  • Risk assessment
  • Training and communication
  • Periodic review, monitoring and auditing
  • Reporting
  • Incentives and discipline
  • Remediation and role of the compliance program in the discovery of the violation

Generally, the Antitrust guidelines follow the Criminal Division’s guidelines but tailored specifically to antitrust compliance. For instance, the Antitrust guidelines want to know whether policies and procedures, training and communication and other program elements exist specific to antitrust rules.

What’s specific about the Antitrust guidelines are how they focus a business’s attention to antitrust-related issues, such as the following:

  • Cooperation with competitors in cartels
  • Communication with competitors at trade shows and trade associations, or whether as part of legitimate collaborative arrangements
  • Retention and destruction of documents that may indicate antitrust violations
  • Toleration of antitrust violations in pursing new business, greater revenues, customer retention
  • Staff that oversees recruitment and hiring (as an example, in hiring from competitors or others who may share a competitor’s trade secrets).
  • Contract bids for possible bid rigging and market allocation
  • Pricing authority for making pricing changes for possible price fixing
  • Involvement of leadership, “high-level personnel”, or “substantial authority personnel” or others with authority to negotiate or set prices or approve significant contracts (This is particularly important to antitrust compliance because violations typically are due to the types of decisions that more senior individuals can make, such as agreements, contracts, and pricing decisions.)

The Antitrust guidelines reinforce that cooperating organizations can benefit from the Antitrust Division’s Corporate Leniency Program:

“Corporations and individuals who report their cartel activity and cooperate in the Division’s investigation of the cartel reported can avoid criminal conviction, fines, and prison sentences if they meet the requirements of the program.”

This is a specific issue in antitrust compliance regarding a business that works with competitors to limit or reduce competition through various activities: bid rigging, price fixing, and market allocation, for example. Generally, the first business to come forward to authorities receives the greatest leniency since regulators may not have been able to discover the criminal activity on their own.

All businesses should evaluate their risks specifically to antitrust violations. Certain industries, through their structure and history, are more susceptible to these problems, and their companies should be particularly vigilant regarding antitrust risks.

In the end, whether a business’s principal risks are antitrust, bribery, data privacy, harassment, or other compliance topics, the basic expectations for effective compliance management are largely the same, just with greater attention to and controls around the higher risk areas.

As shown through the DOJ’s April and July releases, the US Government continues to push for strong compliance management practices through updated guidance…

…and the beat goes on.

Jason has worked in ethics and compliance for over twenty-five years, consulting with Fortune 500™ companies across the business ethics and compliance spectrum, including assessing and strengthening corporate values initiatives, instituting leadership engagement efforts, developing and revising codes of conduct and policies, designing and implementing related procedures, developing monitoring systems, conducting risk, culture and program assessments.

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