On January 26, 2024, the U.S. Department of Justice’s (DOJ’s) Antitrust Division and the Federal Trade Commission (FTC) released a joint statement reinforcing document preservation obligations for companies and individuals that are the subject of government investigations and litigation, with an emphasis on the use of collaboration tools and ephemeral messaging platforms.1Specifically, both agencies are updating language in their standard preservation letters and specifications for all second requests for mergers, voluntary access letters, and compulsory legal process to address the increased use of messaging platforms that automatically delete the content of communications.
This Alert explains the importance of the agencies’ announcement and provides practical guidance to companies and their counsel regarding the preservation of ephemeral messages.
Background
The DOJ and FTC’s joint statement is the latest effort by the agencies to ensure that relevant communications are preserved during government investigations and litigation in light of companies’ increased use of collaborative workspaces such as Slack, Signal, and Microsoft Teams, which often have a built-in functionality to delete messages after a short period. In September 2022, Deputy Attorney General (AG) Lisa Monaco directed prosecutors to consider whether a company has “implemented effective policies and procedures governing the use of personal devices and third-party messaging platforms to ensure that business-related electronic data and communications are preserved.”2Deputy AG Monaco indicated that a company’s ability to effectively preserve business communications over ephemeral and encrypted messaging applications will factor into a corporate resolution and “can impact a prosecutor’s evaluation of the effectiveness of a corporation’s compliance program, as well as the assessment of a corporation’s cooperation during a criminal investigation.”3
As described in our previous alert, in March 2023, the DOJ’s Criminal Division elaborated that prosecutors should consider, among other things, whether “the use of personal devices or messaging applications—including ephemeral messaging applications—impaired in any way the [company’s] compliance program or its ability to conduct internal investigations or respond to requests from prosecutors or civil enforcement or regulatory agencies.”4Additionally, the DOJ and the FTC formed a working group to consider revising the language in grand jury subpoenas and civil investigative demands to address the agencies’ concerns that messages sent by employees through encrypted platforms such as WhatsApp could be irretrievably lost.5
In the January 2024 joint announcement, Deputy Assistant AG for the Antitrust Division Manish Kumar emphasized that the DOJ and the FTC expect companies and their counsel to “preserve and produce any and all responsive documents, including data from ephemeral messaging applications,” during government investigations and litigation, and that failure to do so could result in obstruction of justice charges.6Director Henry Liu of the FTC Bureau of Competition stressed that “[c]ompanies and individuals have a legal responsibility to preserve documents when involved in government investigations or litigation” and that such responsibility applies to ephemeral messaging applications.7
Deputy Assistant AG Kumar has also cautioned that counsel should be “mindful” about employees’ use of ephemeral messaging platforms when responding to DOJ investigations and that obstruction of cartel investigations through the use of such technology is “an area of great enforcement interest” to the DOJ.8 Similarly, Leslie Wulff, chief of the Antitrust Division’s San Francisco office, advised that counsel for companies under investigation should preserve ephemeral messages and other communications as soon as their client receives a subpoena. She warned that “missteps” during a cartel investigation could result in criminal liability not only for a company’s employees but also for company counsel.9
Guidance for Companies Using Ephemeral Messaging Platforms
- In general, counsel for the company should understand each type of messaging platform that employees use, whether on company devices or personal devices used for business communications, and then decide which platforms employees may use for company business. Additionally, the company and counsel should:
- Have policies in place to ensure that the company can disable the auto-deletion function of ephemeral messaging platforms in the event of an investigation. Consider using different policies in different countries to account for different data privacy laws.
- Implement policies on employee use of ephemeral messaging applications when conducting business using either company or personal devices and consider whether the use of such messaging applications should be prohibited or limited in any way.
- Consider whether to use a technical solution that will automatically save messages from messaging applications.
- Include as part of compliance training any company policies on employee use of ephemeral message applications to conduct business.
- Discipline employees who violate these policies.
- Upon anticipating or learning of an investigation, company counsel should ensure that ephemeral messages are being preserved and are readily accessible. In particular, the company and counsel should:
- Immediately have the IT department disable any auto-deletion function and preserve the communications contained in the company’s messaging platforms.
- If a platform’s auto-deletion function is not enabled on a company-wide basis, ensure that individual employees cannot enable the auto-deletion function through altering the platform’s settings on their devices.
- If there is a disruption to a platform, notify employees of the platform’s outage and instruct them to communicate via email or another approved company communication platform that does not delete communications.
- Determine whether employees falling within the scope of a subpoena or request for documents have used personal devices or platforms for business communications and take any necessary steps to preserve such communications.
- Ensure that the company’s litigation hold notices include provisions for preserving encrypted and ephemeral messaging, both on company and personal devices.
Key Takeaways
The DOJ and the FTC are taking greater steps to ensure that companies preserve electronic business communications during government investigations and litigation, with a focus on encrypted platforms and ephemeral messaging applications. Companies and their counsel should be proactive in ensuring they have the necessary procedures in place to retain these types of materials as soon as they anticipate or learn of a government investigation as outlined in this Alert. Failure to do so may result in the company not receiving charging or sentencing credit for its compliance program, increase the likelihood that the company will be criminally charged, and, in the worst case, lead to criminal obstruction charges for the company and individuals.
[1] Press Release, U.S. Dep’t of Just., “Justice Department and the FTC Update Guidance that Reinforces Parties’ Preservation Obligations for Collaboration Tools and Ephemeral Messaging” (Jan. 26, 2024), https://www.justice.gov/opa/pr/justice-department-and-ftc-update-guidance-reinforces-parties-preservation-obligations.
[2] Memorandum, U.S. Dep’t of Just., “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Sept. 15, 2022), https://www.justice.gov/opa/speech/file/1535301/download.
[3] Id.
[4] U.S. Dep’t of Just., “Evaluation of Corporate Compliance Programs” (updated Mar. 3, 2023), https://www.justice.gov/criminal-fraud/page/file/937501/download.
[5] Dan Papscun & Ben Penn, “Auto-Delete Chats Prompt Review of Antitrust Probe Changes (1),” Bloomberg Law (Mar. 29, 2023), https://news.bloomberglaw.com/antitrust/auto-delete-chats-prompt-review-of-antitrust-probe-changes.
[6] Note 1, supra.
[7] Id.
[8] Khushita Vasant, “Destruction of ephemeral messages of ‘great enforcement interest’ in global cartel probes, US DOJ official says,” mlex (Jan. 17, 2024), https://mlexmarketinsight.com/news/insight/destruction-of-ephemeral-messages-of-great-enforcement-interest-in-global-cartel-probes-us-doj.
[9] Khushita Vasant, “US DOJ official warns of criminal action against companies, lawyers over failure to preserve communications in cartel probes,” mlex (Jan. 25, 2024), https://mlexmarketinsight.com/news/insight/us-doj-official-warns-of-criminal-action-against-companies-lawyers-over-failure-to-preserve#:~:text=Antitrust%20counsel%20advising%20clients%20in,of%20Justice%20official%20warned%20today.
