- The Department of Justice (DOJ) has announced a policy change under which it will consider a company’s antitrust compliance program in mitigation of alleged criminal violations of antitrust laws.
- The DOJ’s previous approach in antitrust cases did not consider compliance programs in deciding whether a company should be charged.
- Compliance programs must be “effective and robust” to be considered.
- Corporate executives and in-house counsel should now assess the strength of antitrust compliance programs to ensure they meet the qualifications outlined by the DOJ.
In a remarkable change of policy, last week the DOJ’s Antitrust Division announced that, for the first time, the Division will consider antitrust compliance programs in deciding whether to charge a company with a criminal antitrust violation. Previously the Division only gave a benefit to the first company that self-reported an antitrust violation by granting total amnesty under its leniency program, and giving only limited credit to other early cooperators at the sentencing stage. The new shift in the Division’s policy promises to provide significant benefits to companies facing criminal antitrust scrutiny, but only for companies with “effective and robust” antitrust compliance programs. Companies should now consider revisiting their compliance programs to ensure they are “effective and robust” as well as up-to-date under the guidelines provided. Companies without an existing antitrust compliance program should consider establishing one without delay.
Assistant Attorney General Makan Delrahim announced the change in policy on July 11, noting “the Antitrust Division is committed to regarding corporate efforts to invest in and instill a culture of compliance.” Delrahim went on to note the success of crediting compliance at the sentencing phase, describing the decision to credit compliance at the charging phase as “the next step in our continued efforts to deter antitrust violations and reward good corporate citizenship.”
Guidance Documents Outline Key Considerations for Prosecutors
To promote “predictability and transparency” the Division issued public guidance documents outlining precisely what prosecutors should look for when evaluating antitrust compliance programs in the context of criminal violations of the Sherman Act. The guidance documents, titled “Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations,” direct prosecutors to answer the following questions about a corporation’s compliance program:
- Is it well-designed?
- Is it being applied “earnestly and in good faith”?
- Does it work?
Depending on the effectiveness of the compliance program being considered, prosecutors may reduce the company’s “culpability score,” decline to sentence the company to probation or reduce the applicable fine for the antitrust violation. If prosecutors conclude that the factors outlined in the guidance documents weigh in favor of declining to charge, the prosecutor may enter into a Deferred Prosecution Agreement with the company.
Assistant Attorney General Delrahim indicated that the new approach came, in part, from suggestions at a public workshop held last year with in-house counsel, outside counsel and international enforcers. Delrahim explained, “I believe the time has now come to improve the Antitrust Division’s approach and recognize the efforts of companies that invest significantly in robust compliance programs.”
Next Steps: Examine Current Compliance Processes
Now is the time for corporate executives and in-house counsel to assess the strength of antitrust compliance programs to ensure they meet the qualifications outlined by the DOJ. If you have questions about how to craft and apply your compliance program, please contact the authors.