On July 11, 2019, the Department of Justice (“DOJ”) Antitrust Division announced a new policy to encourage companies to invest in comprehensive and effective antitrust compliance programs. The Antitrust Division’s new policy represents a shift from its long-standing Corporate Leniency Policy, which incentivizes companies to self-report antitrust violations.
Since 1993, the DOJ has encouraged timely self-reporting to help root out antitrust violations through its all-or-nothing Leniency Policy. Companies that are first to self-report antitrust violations receive a “total pass” from the DOJ, which includes immunity from criminal charges, non-prosecution agreements for cooperating employees and reduced damages in related civil actions. Any company that self-reports thereafter is not offered any relief, with the DOJ often insisting on guilty pleas, irrespective of the effectiveness of the company’s corporate compliance program or whether the company had taken any remedial actions. Historically, prosecutors claimed it would be counterintuitive to consider a company’s compliance program at the charging stage, since antitrust violations involved the entire business, and the DOJ had never recommended a reduction at the sentencing stage for an effective compliance program.
Now, prosecutors will consider a company’s compliance program at the charging stage, creating the potential for companies that invest in their compliance programs to receive a deferred prosecution agreement (but specifically not a non-prosecution agreement), regardless of whether they qualify under the Corporate Leniency Program. Compliance programs may also be considered in the sentencing phase either by reducing the company’s culpability score, mitigating the amount of the fine, or in determining whether the company should be granted probation.
As part of this new policy, the Antitrust Division has released, for the first time, a public guidance document explaining how compliance programs will be evaluated in the charging and sentencing phases. The division’s guidance begins with three basic questions for prosecutors to consider: (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? and (3) to what extent was a company’s senior management involved in the violation?
In the new guidance document, the Antitrust Division outlined the factors that it will consider in evaluating the effectiveness of a company’s compliance program. These factors include:
- An effective and comprehensive design and implementation integrated throughout the business.
- Senior management’s commitment to “good corporate citizenship.”
- Executives with the autonomy and authority to allocate adequate resources allocated to the program in accordance with the company’s structure and size.
- Controls implemented to identify and remediate “antitrust risk.”
- Appropriate training of and communication with employees.
- Monitoring and periodic revision of the program.
- Anonymous reporting outlets.
- Internal incentives and disciplinary actions to deter antitrust violations.
- Remediation efforts subsequent to discovery.
Companies should aim to model their programs around these specific factors.
In abandoning its all-or-nothing approach, the Antitrust Division now provides a moderate middle ground for companies that proactively take steps to avoid antitrust issues. For a company to best position itself to address the DOJ’s new guidelines, we recommend consulting with outside counsel to review and update existing antitrust compliance programs and, where necessary, design and implement effective new policies, training, and internal controls.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.