DOJ Antitrust Division Debuts Guidance to Incentivize Corporate Compliance
White Collar Crime and Internal Investigations Alert 07/24/19 Luke Cass, Ed Broecker, Matthew Vogel
For the first time, the Department of Justice's Antitrust Division has published a document, "Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations" (the "Guidance") that focuses on evaluating compliance programs in the context of criminal violations of the Sherman Act. Implementation of an effective compliance program potentially mitigates the risk of future enforcement action.
The Guidance, available here, is intended to assist Antitrust Division prosecutors in their evaluation of a company's compliance programs in an effort to determine whether to prosecute and/or whether to reduce the fines and penalties in the event of a criminal prosecution or settlement. The Guidance contains two parts: the first relates to evaluating antitrust compliance programs at the charging stage, and the second addresses compliance considerations at sentencing. The Guidance is also intended to provide compliance officers and the public greater transparency of the Antitrust Division’s compliance analysis.
The Guidance follows on the heels of the DOJ Criminal Section's "Evaluation of Corporate Compliance Programs" and the Department of Treasury's "Guidance on Evaluation of Corporate Compliance Programs" efforts to provide greater insight and guidance on the importance of good corporate compliance programs and policies.
According to the head of the Antitrust Division, Assistant Attorney General Makan Delrahim, “The Antitrust Division is committed to rewarding corporate efforts to invest in and instill a culture of compliance,” and "[c]rediting compliance at charging is the next step in our continued efforts to deter antitrust violations and reward good corporate citizenship."
In concert with issuance of the Guidance, the Antitrust Division has clarified that it now can award credit for a compliance program at the charging stage and updated its manual to address Division processes for recommending indictments, plea agreements, and selecting monitors.
Although only applicable to criminal antitrust issues, all compliance professionals dealing with fair competition issues will need to be aware of how the DOJ's Antitrust Division will evaluate their programs if they are to try to avoid or mitigate any penalties associated with alleged violations.
The new Guidance asks three fundamental questions:
- Does the company’s compliance program address and prohibit criminal antitrust violations?
- Does 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?
The Guidance sets forth nine subparts that elaborate on the following key areas of an effective compliance program for antitrust violations, including:
- The design and comprehensiveness of the program;
- The company's culture of compliance;
- The responsibility for, and resources dedicated to, antitrust compliance;
- Antitrust risk assessment techniques employed by the company;
- The company's compliance training and communication to employees;
- The company's monitoring and auditing techniques, including continued review, evaluation, and revision of the antitrust compliance program;
- The company's reporting mechanisms;
- Compliance incentives and disciplinary measures embedded within the company structure; and
- The company's remediation methods once a violation is discovered.
According to the Antitrust Division, its "Leniency Program is its most important investigative tool for detecting cartel activity." 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." Additional information about the Antitrust Division's Leniency Program is available here.
However, having a strong compliance program that specifically addresses criminal antitrust violations allows companies to stay ahead of the enforcement curve and detect violations before they occur.
For more information on the DOJ Antitrust Division's debut Guidance, compliance programs, or antitrust matters please contact your Quarles & Brady attorney or: