"A Really New Leniency Program" - Newsworthy advice from Don Klawiter

In the Summer 2022 issue of the ABA Antitrust Section’s magazine, “Antitrust” (p. 52), Donald Klawiter wrote an important article on the leniency program that all competition lawyers and enforcers need to read.  In “A Really New Leniency Program: A Positive, Cooperative, and Enthusiastic Partnership for Effective Antitrust Enforcement,” https://www.linkedin.com/feed/update/urn:li:activity:6980179880931983360/ he provides a first-hand history of the Antitrust Division’s leniency program – how it worked and what made it successful.  He then examines what enforcers have been reluctant to admit but that anyone observing the field can plainly see – that the impact of leniency has withered.  

Klawiter explains that the basis of leniency was trust on both sides – defense counsel and enforcers.  But in recent years the Division has taken a more hostile approach, such as producing long and detailed FAQs that more closely resemble technical rules issued by a regulatory agency.  This approach sends the message that any variation from this detailed scheme can open a company up to prosecution even if it has fulfilled all the other requirements.  Rather than building on trust this sends the message that companies proceed at their own peril.  This leaves counsel and their clients loath to take the enormous risk involved in revealing an antitrust crime to enforcers.  

The article then spells out a very credible alternative approach to build back the cooperative relationship that marked the enormous success of the leniency program in a prior era. As he correctly notes, the initial leniency program met resistance inside and outside the Division, but wise leadership prevailed to develop the most effective anti-cartel tool in history.  Today we need that same level of courageous and intelligent leadership if we are going to protect free markets around the world.  

Klawiter also pursued a separate point of special note to some of us (e.g., Ted Banks, Brent Fisse in Australia, and me) – the odd flaw in the original program, that companies did not need to have, improve or implement a compliance program, even though they were admitting commission of a felony.  Klawiter noted that Hong Kong was the first to change this, and now the Antitrust Division has come around. There can be no doubt that in 2022 requiring an effective and credible compliance program cannot be considered an impediment, given how widespread is the expectation that any responsible company should have this. All leniency programs should require this of any leniency participant – either have a program at the time of admission into the program, or develop one as a condition for leniency.  

This article gives us a clear roadmap to restore a remarkable law enforcement tool.  Let’s not waste time – let’s move on this now.