The Antitrust Division of the Department of Justice issued updated Guidance in November on the evaluation of corporate compliance programs in criminal antitrust investigations. The 2024 Compliance Guidance continues to demonstrate the DOJ’s commitment to rewarding efforts to cultivate a culture of compliance, including crediting effective compliance at the charging stage. The new Compliance Guidance also reflects an increased focus on a few areas: companies’ attention to new and evolving forms of technology in their compliance programs; the cultivation of a culture of compliance throughout an organization (not just at the top); and ensuring that responses to potential violations deter and prevent future violations. The 2024 Guidance appears to track the Antitrust Division’s enforcement priorities under Jonathan Kanter, before he stepped down as the Assistant Attorney General for the Division in December.
Consistency with the Prior Guidance
The Antitrust Division first published guidance as to how prosecutors should evaluate corporate compliance programs in the context of charging and sentencing in July 2019. The goal of the July 2019 guidance was to recognize companies’ efforts to create and maintain robust compliance programs and to encourage further investment in compliance efforts, revising the Division’s prior policy that corporations should not receive credit for an antitrust compliance program at the charging stage.
The new Compliance Guidance reiterates many of the same considerations that animated the 2019 guidance. With a few slight revisions, the Guidance continues to advise prosecutors to consider three fundamental questions in evaluating corporate compliance programs:
- Is the corporation’s compliance program well designed?;
- Is the program being applied earnestly and in good faith—i.e., is the program adequately resourced and empowered to function effectively?; and
- Does the compliance program work in practice?
The new Compliance Guidance instructs prosecutors to consider these questions by assessing the same set of factors outlined in 2019, including the comprehensiveness of the compliance program, the organization’s culture of compliance, risk assessment and monitoring techniques, and reporting and remediation methods. The 2024 Guidance also continues to prompt prosecutors to evaluate whether a company’s compliance program is appropriately tailored to account for the specific antitrust risks the company might face given its lines of business—for example, any legal or technical challenges that may result from the way in which a company enacts pricing changes, participates in industry meetings, or engages in bidding activities.
New in the 2024 Guidance
Application to Civil Actions
While the 2019 guidance focused solely on assessing a compliance program’s effectiveness in the context of criminal antitrust violations, the new 2024 Guidance additionally articulates that similar criteria apply to the assessment of antitrust compliance programs in the civil context. The new Guidance explicitly provides that, “[i]n seeking to resolve investigations into civil antitrust violations, companies asking the Antitrust Division to take notice of existing or improved compliance efforts . . . should expect the civil team to consider many of the same factors when assessing the effectiveness of their compliance program as criminal prosecutors do.”
“Tone from the Middle”
The new Guidance also includes a heightened emphasis on how middle management—in addition to senior leadership—reinforces a culture of compliance across an organization such that there is a “tone from the middle,” not just a “tone from the top”; whether a company allocates adequate resources and staff to compliance functions; and how a company responds to actual or potential violations, including whether the company’s compliance program evolves to prevent future violations and whether the company encourages and protects whistleblowers.
Attention to Developing Technologies
The 2024 Guidance reflects increased attention on how companies are addressing new and evolving technologies within their compliance programs. For example, the new Guidance advises prosecutors to ask whether companies have “clear guidelines regarding the use of ephemeral messaging or non-company methods of communication including the extent to which those communications are permitted and when employees must preserve those communications.” The Guidance additionally encourages prosecutors to explore the extent to which compliance programs engage with, monitor, and train employees on permissible versus impermissible uses of algorithms and artificial intelligence in connection with business functions.
This focus of the 2024 Guidance is consistent with the position the DOJ has taken in litigation in recent years under former Assistant Attorney General Kanter’s leadership. For example, the DOJ has litigated several cases involving claims that pricing algorithms enabled price-fixing conspiracies in violation of the antitrust laws.
- In an August 2024 complaint filed in the Middle District of North Carolina, the DOJ alleged that RealPage, Inc.’s AI-trained pricing algorithm—which generates pricing recommendations by drawing on nonpublic, competitively sensitive information—violates Sections 1 and 2 of the Sherman Act by facilitating collusive behavior among competitors. And, in Statements of Interest filed in Duffy v. Yardi Sys., Inc. in the Western District of Washington and an MDL in the Middle District of Tennessee involving RealPage, the DOJ asserted that the algorithms at issue enabled per se unlawful horizontal restraints of trade.
- The DOJ has also endorsed legal theories asserting that competing casino hotels violated Section 1 of the Sherman Act by using an algorithm to set hotel room prices. In its filings in Gibson v. Cendyn Grp., LLC and Cornish-Adebiyi v. Caesars Ent., Inc., the DOJ maintained that algorithms could facilitate horizontal price-fixing agreements even though the hotels were not required to accept the prices the algorithm recommended.
Likewise, in 2024, the DOJ and the FTC warned about the dangers associated with ephemeral messaging applications.
- In April, a senior official indicated that the Division would not hesitate to bring obstruction charges against counsel if clients fail to preserve responsive messages.
- Around this same time, the FTC filed a motion to compel Amazon to produce Signal messages, claiming that Amazon’s top executives used Signal to discuss antitrust and other sensitive business issues and enabled Signal’s disappearing-messages feature even after they were on notice about the FTC’s investigation, thereby resulting in spoliation.
In light of these cases, the 2024 Guidance likely reflects the Division’s interest in making sure prosecutors continue to view the use of data by AI tools and algorithmic models as a potential antitrust risk, and continue to ensure that compliance professionals assess these evolving practices for any antitrust risk. This may require robust compliance programs that provide employee training on permissible versus impermissible uses of these technological tools. Finally, the 2024 Guidance also likely suggests that prosecutors will want to see written policies clearly identifying appropriate channels for work-related communications and articulating the organization’s document retention practices.
In sum, the updated 2024 Compliance Guidance reflects the Antitrust Division’s continued focus on not only detecting and reporting antitrust violations but deterring and preventing future violations. The Guidance also reinforces and builds upon the broader initiatives recently pursued by the DOJ to mitigate the risks presented by new and emerging technologies—such as AI, algorithmic pricing, and ephemeral messaging—and to afford increased incentives and protections for whistleblowers. The Guidance further suggests that corporate compliance programs should be tailored to the specific antitrust and technological risks a company is likely to face, be supported and reinforced at all levels of the organization, and respond to evolving risks and known areas of weakness in existing practices.
