Why, After Mercedes, NCAA, Audi, Keurig, You Should Move Your Antitrust Training to The Front Burner


Let’s talk a little more about antitrust training. Since I wrote my first blog on it a few weeks ago, several more antitrust stories have hit the headlines. Just yesterday we discovered that China will fine Audi about $40 million for violating antitrust laws. Under the 6-year-old anti-monopoly regulation, the National Development and Reform Commission (NDRC), China’s anti-trust regulator, can impose fines of between 1 and 10% of a company’s revenues for the previous year. Audi had already said its sales arm had violated “part” of the country’s anti-monopoly laws, and that it would accept the penalty.

Earlier that week I had seen that Mercedes and Chrysler were also being targeted by the NDRC in China – actually “targeted” may be a soft way of putting it, as Mercedes’ offices were actually raided… and had voluntarily cut their prices by up to 20% to “showcase their commitment to the Chinese marketplace. In fact, according to that article, “Business sentiment is deteriorating in China as dozens of foreign companies, including Germany’s three biggest luxury carmakers, are being targeted in the country’s broadest antitrust investigation since the nation’s anti-monopoly law went into effect six years ago.”

Clearly there is something going on in China, and that alone, if you are a global organization, should have you thinking about updating your antitrust training and policies.

Let’s see… a few days before that was the NCAA case, where a federal judge ruled NCAA’s rules prohibiting athletes from being paid for use of their names, images and likeness, violate antitrust law because they “unreasonably restrain trade.”

And I just caught up on the Keurig case, or should I say cases, as the coffee company is actually facing about 25 antitrust lawsuits. Yeah, 25. They fall into two categories. The first relate to Keurig’s patents on the “K-Cup” format, which expired in 2012. Those suits allege that in order to continue its K-Cup monopoly, Keurig designed its new Keurig 2.0 brewer with a lock-out mechanism as part of an anticompetitive scheme that will force owners of the machines to pay at least 15% to 25% more for K-Cups and prevent them from buying other cups. The other lawsuits claim the company was just shady… entered into exclusionary agreements with suppliers and distributors to prevent competitors from entering the market, improperly acquired competitors, and engaged in sham patent infringement litigation, all in order to maintain its monopoly. Shady.

Mercedes, Audi, Keurig, NCAA, Chrysler; these are not small names. They’ve generated a lot of press. And those are just the cases I read about in the last week or so. In July China was going after Google and Microsoft for antitrust violations. Business names don’t get much bigger than that. These are all over the Wall Street Journal, Twitter, at least in the circles I follow in ethics and compliance. So I keep thinking to myself, “Is it just me? Why isn’t antitrust training more, well, front-burner?”

It turns out it’s not just me (phew). Our friend Michael Volkov thinks antitrust training doesn’t receive enough attention, either. He wrote a blog “4 Ways to Improve Antitrust Compliance Programs” and number 4 was “Emphasize Antitrust Training.” He wrote:

“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.”

As I wrote in my previous blog, antitrust covers several areas and these cases span nearly all of them. The purpose of antitrust law is to promote or maintain market competition by regulating anti-competitive behavior by businesses. Monopolization? That’s covered by Audi and Mercedes. Price-fixing? The Keurig case has it covered. Trade restraint? Read the NCAA case. Collusion and discriminatory pricing? Keurig, again. And remember, most of these aren’t even decided yet.

Given the amount of high profile companies in high profile antitrust legal predicaments right now, it seems to me, now is the time to take a long look at your antitrust policies and training. Are your employees aware of your policy? Do they even understand what antitrust is? When is the last time you trained them on the critical points? If you are part of a global enterprise and you operate in China, I wouldn’t even wait until next week. China is on an antitrust tear and your in-house counsel and compliance officer are probably swallowing TUMS at an alarming rate, just reading about it.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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