In the era of global antitrust cartel enforcement, antitrust practitioners often scratch their collective heads and ask why is antitrust compliance so ignored by government enforcement agencies. Instead of promoting antitrust compliance programs by offering real and meaningful incentives, antitrust enforcement agencies offer no carrots to companies to enhance their antitrust compliance program.
Antitrust enforcement leaders often promote a simplistic argument – if a company violates the antitrust laws, the company’s compliance program, by definition, did not work. That view has no bearing in reality – companies can violate the law even while they have an effective ethics and compliance program.
The Justice Department and the SEC recognized this fact in the FCPA Guidance, stating that a company could earn a declination when they have an effective anti-corruption compliance program even when the company engaged in bribery. The Antitrust Division has not provided a satisfactory answer to the question why the government will not apply this principle to antirust violations.
The purpose of an effective antitrust compliance program is to detect and prevent antitrust violations. Here are some basic suggestions to improve a company’s antitrust compliance program:
1. Attend to the Company’s Culture: As I often say (and repeat myself), you can adopt all the fancy policies, procedures, controls and reporting requirements you want, but when you boil it all down – the best protection against misconduct is a corporate culture of ethics and integrity. This applies with full force to potential antitrust violations. Every senior manager knows that companies cannot collude to restrain price, output, territories and bids with their competitors. A cartel is clearly illegal and there is no nuance to the issue. Meeting with competitors and fixing prices or allocating markets is not a grey area. A company with a commitment to an ethical culture will maintain the best protection against such illegal behavior.
2. Increase CCO Responsibility for Antitrust Compliance: For years, lawyers had a monopoly over antitrust compliance, claiming that there were complex legal issues surrounding antitrust issues. As a result, CCOs often play little to no role when it comes to antitrust compliance. That is a big mistake. CCOs have to expand their responsibilities to include antitrust compliance and bring lawyers into the fold. Of course, there are questions on antitrust issues but there is little disagreement on collusion and cartel behavior. The challenge for CCOs is to work closely with their legal counterparts and coordinate their efforts.
3. Enhance Controls and Conduct Meaningful Audits: CCOs can help companies to audit their antitrust compliance programs to build better controls and monitoring techniques. CCOs know how to take a set of controls, enhance them to reflect the real risk and monitor them through audit procedures. For example, when company sales employees attend industry gatherings where competitors are present, there need to be important controls in place, and certifications that may be required. It is important to apply “traditional” compliance controls to antitrust risks and conduct. Lawyers are not practiced in this area – CCOs are and they need to work in this area.
4. Emphasize Antitrust Training: For some reason, companies often ignore the significance of antitrust risks and the importance of antitrust training programs. Antitrust compliance often takes a back seat to other more pressing issues like anti-corruption compliance. Again, companies have to focus on proactive efforts to communicate and reinforce the message of avoiding potential antitrust risks. Training programs addressing antitrust risks, controls and reporting procedures are the most important means to communicate this message.