Antitrust Law Daily Wrap Up, ANTITRUST NEWS: ABA Antitrust Section comments on Brazil competition guidelines, (Oct 20, 2015)

By Greg Hammond, J.D.

The Antitrust and International Law Sections of the American Bar Association on October 19 submitted suggested refinements to the Administrative Council for Economic Defense of Brazil (CADE) on its Draft Guidelines on Competition Compliance Programs.

“The Sections commend CADE for its leadership in crafting these Draft Guidelines, which will encourage the development of robust and effective compliance training programs and corporate oversight, thereby further developing the culture of competition in Brazil.” Nevertheless, the Sections suggest a few refinements with regard to: (1) the relationship between compliance programs and penalties; (2) whistleblowing; (3) internal corporate leniency and complaint policies; and (4) how violations can occur at all levels of a corporation.

First, with regard to the relationship between compliance programs and penalties, the Sections suggest that CADE consider credits, compliance monitors, compliance training programs, and leadership commitment to compliance programs, among other concepts, to ensure that compliance training is not a mere “sham.”

Considering CADE’s proposed whistleblowing protections, the Sections commended CADE for recommending implementation of an anonymous compliance hotline—in which employees can register complaints or report on compliance issues—and for encouraging that reporting programs and hotlines remain anonymous and confidential. Nevertheless, the Sections suggested that CADE consider strengthening guidelines for encouraging employee self-monitoring and reporting by recommending that corporations consider protections against retaliation, particularly for lower-level and non-culpable employees.

In encouraging internal corporate leniency and complaint policies, the Sections suggested that CADE: (1) encourage companies to introduce an internal whistleblowing system in the form of an internal corporate leniency policy, which would encourage employees to raise questions or abandon illicit conduct; and (2) clarify that it does not require a corporate leniency policy to go beyond protecting a whistleblower for consequences concerning the reported infringement, such as disciplinary actions for unrelated activities.

The Sections also suggested that CADE reference applicable attorney-client privilege rules in its internal investigations discussion, which would encourage corporations to implement strong compliance programs and to thoroughly investigate reports of wrongdoing.

Finally, the Sections recommended that CADE consider strengthening the point that violations can and do occur at all levels of a corporation, which would strengthen corporations’ incentives to adopt effective compliance training programs no matter the violation.

News: Antitrust