Recognizing compliance programs in the antitrust leniency process

Recognizing compliance programs in the leniency process

Those of us championing effective antitrust compliance programs have been very vocal in emphasizing the need for enforcement and regulatory agencies to use their leverage to enhance programs. When agencies recognize programs, but make it clear those programs need to be truly effective, this is a crucial step in empowering compliance people to be effective. The US Antitrust Division had resisted this, but finally agreed and changed its approach in 2019.

At the same time, but with less emphasis, we have advocated for agencies offering leniency to make having or enhancing a compliance program a condition for entry into the leniency program. Again for years agencies ignored this. In Caron Beaton-Wells & Christopher Tran, Anti-Cartel Enforcement in a Contemporary Age:  Leniency Religion (Hart Publ.; 2015), Brent Fisse and I, in our separate chapters, both advocated this step. To my knowledge, the competition agency in Hong Kong was the first to move in this direction.

Recently, from a speech by Richard Powers, I learned that the Antitrust Division has now made compliance programs part of the leniency process.  The leniency program, now covered in the Justice Manual, added a requirement that a company entering the leniency program must use “best efforts . . . to improve its compliance program to mitigate the risk of engaging in future illegal activity;” Justice Manual 7-3.310 5; 3.320 5.  Of course, to make this assessment the Division will use the evaluation questions it had published in Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations, U.S. Dep’t Of Justice (July 2019), https://www.justice.gov/atr/page/file/1181891/download . 

This is a logical step and an important one from a policy perspective. Any company that gets a full pass via leniency has nevertheless committed a criminal violation.  It makes sense to expect such a company to ensure it has a strong compliance program to prevent recurrence.  This shift by the Antitrust Division also reflects a key policy point, that having a compliance program is a sign of good faith and good corporate citizenship.  A company that is serious about preventing a recurrence of the violation that led it into the leniency program should step up to the need for a strong compliance effort. Whenever government makes it clear that it values effective compliance programs it also enhances the power of in-house compliance people and makes them better positioned to prevent wrongdoing.

 What about other jurisdictions’ leniency programs?  This new approach makes complete sense anywhere leniency is offered.  Those of us who advocate for strong compliance programs should be pointing out to other authorities that this is a good, practical model to follow. It adds to the legitimacy of the leniency program, and makes practical and policy sense.