Assistant Attorney General Makan Delrahim stated that it is time for the Antitrust Division to “recognize the efforts of companies that invest significantly in robust compliance programs.”
On July 11, 2019, the Antitrust Division of the United States Department of Justice announced a historic shift in its treatment of corporate compliance programs. Reversing its long-standing policy, the Antitrust Division will now require its prosecutors to consider a company’s compliance program, along with other factors, in making a charging decision. The policy change was included in the Antitrust Division’s first-ever guidance document for the evaluation of compliance programs in criminal antitrust investigations. The Antitrust Division’s guidance follows similar guidance provided by the Justice Department’s Criminal Division in April 2019.
The Antitrust Division’s policy had long been that when deciding whether and how to charge a company with criminal antitrust violations (such as price-fixing, bid rigging and market allocation), prosecutors should not consider the existence or effectiveness of the company’s antitrust compliance program. Thus, companies received no credit at the charging stage for compliance programs. Under the Antitrust Division’s Corporate Leniency Policy, instituted in 1993, leniency in charging decisions was reserved for the first company to make full disclosure of its criminal conduct to the Antitrust Division; such companies receive immunity from prosecution. For companies that did not win the “race for leniency,” the Antitrust Division insisted on a guilty plea. But going forward, even companies that lose the race for leniency may receive a deferred prosecution agreement (DPA), rather than plead guilty, based upon early cooperation, the strength of their compliance program and other factors.
The New Policy
In a speech announcing the new policy, Antitrust Division Assistant Attorney General Makan Delrahim stated that it is time for the Antitrust Division to “recognize the efforts of companies that invest significantly in robust compliance programs” and to offer the public “a guidance document for the evaluation of compliance programs in criminal antitrust investigations.” In addition to detailing the factors that Antitrust Division prosecutors will consider in deciding whether and how much to credit compliance programs at the charging stage, the guidance document clarifies the Antitrust Division’s approach to evaluating the effectiveness of such programs at the sentencing stage.
Like Criminal Division prosecutors, Antitrust Division prosecutors will consider three fundamental questions in evaluating a corporation’s compliance program:
- Is the corporation’s compliance program well-designed?;
- Is the corporation’s compliance program being implemented effectively?; and
- Does the corporation’s compliance program work in practice?
Elements of an Effective Antitrust Compliance Program
When evaluating the effectiveness of an antitrust compliance program, Antitrust Division prosecutors should consider the following nine factors:
- The design and comprehensiveness of the program;
- The culture of compliance within the company;
- Responsibility for, and resources dedicated to, antitrust compliance;
- Antitrust risk assessment techniques;
- Compliance training and communication to employees;
- Monitoring and auditing techniques, including continued review, evaluation and revision of the antitrust compliance program;
- Reporting mechanisms;
- Compliance incentives and discipline; and
- Remediation methods.
For each of these elements, the guidance document provides a list of relevant questions that prosecutors should consider. But the guidance document makes clear that these factors are not a checklist or formula, and not all of them will be relevant in every case.
An Ounce of Prevention
Quoting “wise Philadelphian” Benjamin Franklin—who famously said “an ounce of prevention is worth a pound of cure”—Delrahim stated that he hopes this new approach to compliance will incentivize more companies to make antitrust compliance a top priority. Delrahim emphasized that a company with a robust compliance program “actually can prevent crime or detect it early, thus reducing the need for enforcement activity.”
This change in policy is another example of the DOJ’s recent efforts to encourage self-reporting, full cooperation and remediation by companies in corporate criminal investigations. With this new guidance, the Antitrust Division joins the Criminal Division in sending a clear signal that an effective compliance program can help companies avoid, or lessen the impact of, criminal charges.
Companies should examine their antitrust compliance programs to ensure that they meet the criteria outlined in the Antitrust Division’s new guidance document.