Last week Assistant Attorney General for the Antitrust Division Makan Delrahim announced a reversal to longstanding DOJ policy, which will now consider crediting an antitrust violator’s compliance policy in making criminal charging decisions. All corporate actors should take note of this significant change. For the first time, robust antitrust compliance programs can factor into both charging and sentencing considerations. The antitrust division has long disregarded compliance policies at the charging stage on the theory that the occurrence of a violation proved the ineffectiveness of the policy. Now, however, the DOJ is embracing the notion that the “fact that some misconduct occurs shows that a program was not foolproof, but that does not necessarily mean that it was worthless.” “Wind of Change: A New Model for Incentivizing Antitrust Compliance Programs,” speech by AAG Makan Delrahim, July 11, 2019 - quoting Rod Rosenstein.
Under the new policy, which went into effect in conjunction with the DOJ’s announcement, the Justice Manual has been updated to delete language “stating that the Antitrust Division would not give credit at the charging stage for a compliance program.” Still, AAG Delrahim noted, “complete protection from prosecution for antitrust crimes is available only to the first company to self-report and meet the Corporate Leniency Policy’s requirements.” In fact, an effective compliance policy “is but one of the ten factors to be considered pursuant to the Principles of Federal Prosecutions of Business Organizations.” AAG Delrahim emphasized that “four in particular stand out,” including (in addition to a “robust and effective compliance policy”): (1) prompt self-reporting of violations; (2) cooperation with the DOJ; and (3) remedial action taken following a violation.
Going forward, DOJ prosecutors must consider, inter alia, “the adequacy and effectiveness of the corporation’s compliance program at the time of the offense, as well as at the time of the charging decision.” There is “no checklist or formulaic requirements” for evaluating a compliance program’s effectiveness. Rather, the DOJ will consider three “fundamental” questions: (1) Is the compliance program well designed? (2) Is it applied earnestly and in good faith? (3) Is it effective?
Under the new DOJ policy, corporations that do not qualify for leniency may nevertheless be eligible for deferred prosecution. Antitrust compliance policies have always come highly recommended, but the new changes provide even more incentive for firms to maintain robust and effective compliance programs.
