Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Antitrust Division official promotes compliance as company culture, (Sep 10, 2014)

By Greg Hammond, J.D.

In a speech delivered yesterday, an official of the U.S. Department of Justice Antitrust Division encouraged companies to adopt effective compliance programs to prevent antitrust violations. Deputy Assistant Attorney General Brent Snyder made the remarks (“Compliance is a Culture, Not Just a Policy”) to the Joint Anitrust Compliance Workshop of the International Chamber of Commerce and the United States Council of International Business in New York City.

“A truly well-run compliance program should prevent a company from conspiring to fix prices, rig bids, or allocate markets,” Snyder noted as his most basic and important point. “Effective compliance programs should prevent that crime from beginning or, at a minimum, detect it and stop it shortly after it starts.”

According to Snyder, the risk of detection and punishment has never been higher, highlighting the need for companies to develop and implement effective compliance programs. A company’s participation in a price-fixing cartel poses a number of risks, including steep fines, significant jail time for executives, expensive attorneys’ fees, substantial civil damages, further criminal investigations, and bad publicity. Each year, “there are fewer places to hide from international cartel enforcement,” says Snyder, as more and more countries are establishing effective and aggressive cartel enforcement programs.

To establish an effective compliance program, Snyder made a number of suggestions. First, he recommended that compliance should start at the top, with senior executives and board of directors. He pointed out that if senior management fully supports and engages with the company’s compliance efforts, employees are substantially more likely to follow suit. Similarly, Snyder suggests that companies ensure their entire organization is committed to compliance efforts and are ready and able to participate in them.

Other suggestions include that companies: (1) adopt proactive compliance programs that regularly monitor and audit risk activities; (2) be willing to discipline employees that commit antitrust crimes or fail to take reasonable steps to stop the criminal conduct; and (3) take responsibility for criminal antitrust conduct and take action to prevent such conduct from occurring in the future. “Active refusal to accept responsibility, including resisting effective compliance, will result in probation and independent monitors,” Snyder noted.

Snyder also presented a number of “hard truths” to the companies that attended the conference. First, he noted that “the existence of a compliance program almost never allows the company to avoid criminal antitrust charges,” as a “truly effective compliance program would have prevented the crime in the first place or resulted in its early detection.” Second, the Antitrust Division seldom recommends that companies receive credit at sentencing for preexisting compliance programs. However, lower culpability scores and fines may be given for effective compliance programs, as long as the company discovers and self-reports the offense prior to outside discovery.

In closing, Snyder noted that the purpose of having an effective compliance program is to be a good and responsible corporate citizen; to avoid being the subject of a criminal antitrust investigation; and the prospect of early detection and leniency. “Each of these reasons for having a compliance program is a carrot - a very valuable carrot. And, if the stick becomes necessary, it is the company’s conduct and how it responds to the investigation that will determine what the stick looks like,” he said.

News: Antitrust AntitrustDivisionNews