Client Alert
Evaluating Corporate Compliance Programs - DOJ’s Antitrust Division Issues New Guidance
July 17, 2019
By:
Corporate compliance programs – formal corporate policies, practices, and procedures designed to ensure compliance with applicable legal requirements – have long been recognized as an important management tool for nonprofit associations as well as for-profit companies to avoid or to mitigate civil and/or criminal liability. An effective corporate compliance program is especially important in the antitrust area – where violations of the law can result not only in multimillion-dollar civil fines and treble damage awards, but also significant jail time for responsible corporate officers and employees. The Antitrust Division of the U.S. Department of Justice ("DOJ") has long granted credit to corporations with effective compliance programs through its leniency policy – which provides for full or partial immunity for companies that voluntarily self-report antitrust violations. More recently, the Antitrust Division has credited compliance efforts at the sentencing stage.
On July 11, 2019, the Antitrust Division announced that it would begin considering and evaluating corporate compliance programs in making charging decisions – the determination of what if any criminal charges should be brought and against whom. In connection with the new policy announcement, the Antitrust Division also issued written guidance explaining the factors it would consider in evaluating corporate compliances at the charging and sentencing stages of an antitrust investigation. The Antitrust Division’s guidance statement – which generally mirror the compliance factors considered relevant under the federal U.S. Sentencing Guidelines – is a useful window into the thought process of federal prosecutors evaluating corporate culpability for antitrust violations.
The Antitrust Division’s guidance statement poses three preliminary questions that go to the heart of DOJ’s evaluation of the efficacy of a corporate compliance program:
- (1) Does the company’s compliance program address and prohibit criminal antitrust violations?
- (2) Did the antitrust compliance program detect and facilitate prompt reporting of the violation?
- (3) To what extent was a company’s senior management involved in the violation?
The guidance statement goes on to discuss in detail nine key factors that prosecutors should consider when evaluating the effectiveness of a corporate compliance program: (1) the design and comprehensiveness of the program; (2) the culture of compliance within the company; (3) responsibility for, and 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; and (9) remediation methods.
The Antitrust Division recent guidance statement is a timely reminder that an active and effective compliance program is the best defense against the possibility of catastrophic liability and/or jail time for violations of the antitrust laws. Trade associations and professional societies – whose members are often direct competitors – should be especially diligent in ensuring that their compliance programs are updated periodically to reflect the guidance provided by the Antitrust Division. For further information, please contact David Monroe at dmonroe@gkglaw.com or Steve Fellman at sfellman@gkglaw.com.