On July 11, 2019, the Antitrust Division of the Department of Justice announced a significant policy change aimed at incentivizing corporations to develop and maintain robust antitrust compliance programs.
For the first time, the DOJ will consider a corporation’s antitrust compliance efforts when making a charging decision in a criminal antitrust investigation.
Previously, when DOJ confronted criminal antitrust conduct such as price fixing, bid rigging or market allocation, the only way a company with a robust antitrust compliance program could receive credit was at sentencing.
In a speech delivered at the New York University School of Law Program on Corporate Compliance and Enforcement, Assistant Attorney General Makan Delrahim recognized that even an active compliance program may fail to detect every incidence of anticompetitive, illegal behavior. He said that “the fact that some misconduct occurs shows that a program was not foolproof, but that does not necessarily mean that it was worthless.”
Emphasizing the DOJ’s desire to “deter antitrust violations and reward good corporate citizenship,” Delrahim stated that “the time has now come to improve the Antitrust Division’s approach and recognize the efforts of companies that invest significantly in robust compliance programs.”
Accordingly, the DOJ removed from its Justice Manual — a handbook for federal prosecutors — text providing that “credit should not be given at the charging stage for a compliance program.” In addition, the Antitrust Division issued new guidelines to evaluate compliance programs when investigating and charging criminal violations of the Sherman Act.
Titled Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations, the 17-page document will assist federal prosecutors “at both the charging and sentencing stage of investigations,” while also providing “compliance officers and the public greater transparency of the Division’s compliance analysis.”
Although “not a checklist or formula,” the newly issued guidance identifies nine areas DOJ will consider in evaluating the effectiveness of antitrust compliance programs:
(1) Design and comprehensiveness of the program
(2) Culture of compliance within the company
(3) Resources dedicated to antitrust compliance
(4) Antitrust risk assessment techniques
(5) Compliance training and communication to employees
(6) Monitoring and auditing techniques
(7) Reporting mechanisms
(8) Compliance incentives and discipline
(9) Remediation methods
Acknowledging that not every area listed above is relevant in every case, Delrahim noted that three overarching questions will guide the Antitrust Division’s approach to compliance programs: first, whether the company’s compliance program addresses and prohibits criminal antitrust violations; second, whether the antitrust compliance program detected and facilitated prompt reporting of the violation; and third, the extent to which a company’s senior management was involved in the violation. These questions seek to determine if a corporation’s antitrust compliance program was well-designed and “applied earnestly and in good faith.”