Deputy Assistant Attorney General Brent Snyder discussed the DOJ Antitrust Division’s view on corporate antitrust compliance efforts in a recent speech to the International Chamber of Commerce and the U.S. Council of International Businesses.
Snyder emphasized that the reason for implementing effective compliance programs is obvious: to avoid high fines for the company; significant jail time for executives; expensive attorneys’ fees; substantial civil damages owed to customers; and exposure to further criminal investigations – not to mention the associated bad publicity and internal distraction from the actual business of the company. Moreover, the antitrust penalties have also gone global as more and more countries are working together through Interpol to identify conspirators as they travel, and the U.S. has obtained extradition of executives for price fixing and for obstructing the underlying DOJ investigations.
Snyder said that while an antitrust compliance program cannot be “one size fits all,” there are several aspects that the Antitrust Division wants to see:
- First, “it starts at the top. A company's senior executives and board of directors must fully support and engage with the company's compliance efforts.”
- Second, "a company should ensure that the entire organization is committed to its compliance efforts and can participate in them. This means educating all executives and managers, and most employees – especially those with sales and pricing responsibilities. When appropriate, it may also mean providing training for subsidiaries, distributors, agents, and contractors.”
- Third, “a company should ensure that it has a proactive compliance program. This means that in addition to providing training and a forum for feedback, a company should make sure that at risk activities are regularly monitored and audited.”
- Fourth, “a company should think carefully about its approach to individuals who personally violated the antitrust laws or otherwise engaged in conduct inconsistent with an effective compliance program.” This means that “a company should be willing to discipline employees who either commit antitrust crimes or fail to take the reasonable steps necessary to stop the criminal conduct in the first place."
- Finally, “a company that discovers criminal antitrust conduct should be prepared to take the steps necessary to stop it from happening again. This likely includes making changes to a compliance program that failed to prevent the criminal conduct initially. A company should also recognize that, in such circumstances, it will be required to accept responsibility for that conduct.”
Snyder closed by giving what he called “two hard truths.” First, he said that the existence of a compliance program “almost never allows a company to avoid criminal antitrust charges.” Second, the Antitrust Division, “like the Department of Justice as a whole, almost never recommends that companies receive credit at sentencing for a preexisting compliance program.” However, having a compliance program may still benefit a company preparing to plead guilty to an antitrust crime, such as avoiding probation.
The take-away here? Having an antitrust compliance program in place won’t get a company off the hook for prosecution of criminal antitrust violations. But the real benefit of implementing a truly effective program is to prevent the antitrust violations from happening in the first place. To that end, companies should consult experienced antitrust counsel to ensure their compliance programs are truly robust – and not just window dressing.