By Fernando Laguarda, Mark Davis, and Patrick O’Donnell
The Department of Justice Antitrust Division wants your help to stop price fixing. In a recent speech, Assistant Attorney General Makan Delrahim announced modifications to the Division’s long-standing policy against giving companies credit at the charging stage for having an antitrust compliance program. The goal is to incentivize more companies to adopt compliance programs, educate employees, and build a robust culture of compliance.
The Division already grants amnesty under their “leniency program” to the first whistleblower to come forward and report cartel activity – and it will continue to do so. Historically, this incentive was the Division’s most important investigative tool, helping to crack more cartels than all the other tools at their disposal. But “amnesty” is available only to the first cartel participant (company or individual) to self-report (even if the second participant follows by only minutes or hours). Self-reporting also raises the specter of follow-on civil liability and damaging publicity for companies who consider applying.
Historically, antitrust enforcers were of the view that compliance programs that failed to catch cartels weren’t effective to begin with. They also wanted to provide the strongest possible incentives for participating in the amnesty program. The new policy is intended to reward companies who (in Delrahim’s words) “invest significantly” in a more proactive compliance culture. Companies with effective compliance programs could receive deferred prosecution agreements (DPAs) and credit at the sentencing phase. This change reflects a more realistic view that educating employees can actually deter crime in the first place – and that corporate liability should hinge on more than being first to report a cartel. Plus, it aligns with the Department’s other criminal enforcement components, which also credit compliance efforts.
Companies seeking to take advantage of the new policy were not given a checklist to use for assessing whether their compliance program is good enough. Instead, the Division has provided general guidance that emphasizes robust design and implementation. Perhaps the most important element, in addition to standard inquiries about the efficacy of the compliance program in any individual charging case, will be the role of senior executives – whether they were engaged in illegal activity or actively supported and cultivated a culture of effective compliance.
There is no certain way to avoid prosecution or a stiff sentencing recommendation if your company is involved in price-fixing, but a few best practices are worth considering consistent with the DOJ’s announcement. Effective compliance begins with an up-to-date, written antitrust compliance policy that is easily accessible across the company. The policy should provide a process for employees to report antitrust concerns, and it is essential to respond quickly if any are raised. Perhaps the most important step that can be taken to ensure an antitrust compliance policy is taken seriously is for a board member or senior executive to be responsible for its implementation.
Training (and re-training) employees consistent with the antitrust compliance policy is essential to making sure it is effective, not just words on a page. Keeping track of employees who participate in training is one way to assess its impact. And DOJ will expect that top management, not just lower-ranking personnel, participate.
Every company has its own concerns about what conduct might pose antitrust risk, so it is important to focus both training and internal monitoring efforts on the higher-risk aspects of the company. Pricing, customer and vendor relations, and trade association membership all deserve attention. For many companies, this may mean extra training and monitoring of the sales function as well as any other company personnel who communicate with competitors (perhaps for innocuous reasons, such as technical standard setting). Remember that a compliance program is only judged after the fact, with the benefit of hindsight, once an antitrust problem actually arises. This may be unfair, but you can mitigate the risk more effectively by thinking proactively about where exposure is most likely to arise and focusing your efforts there. And you’ll have a better story to tell if, despite your diligent efforts, you one day have to throw yourselves on the tender mercies of the Justice Department’s prosecutorial discretion.
For more information regarding Harris, Wiltshire & Grannis LLP’s antitrust practice, please contact Patrick O’Donnell at (202) 730-1312; or Mark Davis at (202) 730-1336.
This advisory is not intended to convey legal advice. It is circulated to our clients and others as a convenience and is not intended to reflect or create an attorney-client relationship as to its subject matter.
 Makan Delrahim, Assistant Attorney General, US Dep’t of Justice, Remarks at the New York University School of Law Program on Corporate Compliance and Enforcement, Wind of Change: A New Model for Incentivizing Antitrust Compliance Programs (July 11, 2019).
 US Dep’t of Justice, Antitrust Division, Frequently Asked Questions about the Antitrust Division’s Leniency Program and Model Leniency Letters (Jan. 26, 2017).
 Justice Manual, Principles of Federal Prosecution of Business Organizations, Corporate Compliance Programs, § 9-28.800.
 US Dep’t of Justice, Antitrust Division, Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (July 2019).