Steady as clockwork, auto parts investigations around the globe are continuing. These investigations have exposed wide-ranging price fixing conspiracies. Prosecutors rely on well-organized global enforcement cooperation, sophisticated electronic surveillance, leniency/amnesty plus programs and private damage actions. The toll in fines, imprisonment and damages goes on and on, ever higher. This train wreck was avoidable. There is still time to reduce the risk of further fallout. The adoption of effective antitrust compliance programs is essential to prevent the occurrence of such problematic activity in the first instance.
There are globally hundreds of investigations and proceedings – in the United States, the European Union, Canada, Japan, Korea, Australia and China. To date, fines and penalties exceed several billion dollars. Substantial jail time for dozens of individuals, many foreign nationals, is now routine. The United States has successfully extradited a foreign executive for violating U.S. antitrust laws. More extraditions are threatened. These investigations and the ensuing fallout will continue for years to come.
Now, the investigation process seems almost self-sustaining. Immunity, leniency and leniency plus policies are used to widen the net of suspected criminal activity. Evidently, there are ever-present incentives for companies to disclose what appears to be an apparent unending stream of industry groups that have engaged in criminal cartel activity. Sometimes, there is a literal a race to the enforcement authority’s door to blow the whistle on yet another industry, other companies and culpable individuals.
There is absolutely no excuse for a company to be caught up in cartel activity. The problem needs to be addressed at its roots. Companies need to stop illegal conduct before it begins. This means making compliance effective and compliance audits a number # 1 priority. A well-organized and thoughtfully implemented compliance policy is essential.
How is effective compliance achieved? “Best practices” elements are well known. A commitment to compliance must begin at the top with the board of directors and senior management. Compliance will not occur unless there is a culture of compliance – doing the right thing – that forms the company’s business culture. This means clear cut and well-communicated compliance policies, training and procedures. These compliance principles must be tailored to the company and its industry.
Take action now. An effective competition compliance program can hopefully avoid cartel activity from occurring and, in any event, will help reduce the sanctions that would be imposed if, despite the company’s best efforts, a problem arises.
An article on this topic by Howard W. Fogt was published in the Summer 2014 edition of MotorWorld and is available online.