The Antitrust Division of the Department of Justice (“Division”) now considers a company’s compliance program at the charging and sentencing stages in a criminal antitrust investigation. The Division incorporated these changes into the Justice Manual. The Division also published a guide for evaluating compliance programs under this new approach.
Prior Division Approach to Investigations
While an effective compliance program has become a factor of corporate criminal enforcement generally, the Division’s approach to criminal antitrust investigations remained unchanged since the early 1990s. The Division’s long-standing policy would not give credit to a company for its compliance program at the charging or sentencing stages of a criminal antitrust investigation.
Announcing the Change
On July 11, 2019, Assistant Attorney General (“AAG”) Makan Delrahim announced that the time has come for the Division to recognize the efforts of companies to implement and invest significantly in robust compliance programs. Therefore, AAG Delrahim said, the Division will “(1) change its approach to crediting compliance at the charging stage; (2) clarify its approach to evaluating the effectiveness of compliance programs at the sentencing stage; and (3) for the first time, make public a guidance document for the evaluation of compliance programs in criminal antitrust investigations.”
Updating Justice Manual
In order to effectuate its new approach, the Division updated the Justice Manual by deleting language that credit should not be given at the charging stage for a compliance program.
Although designed to be used by prosecutors, the Manual also assists a company in self-evaluation of its compliance program. The Manual states: “Good corporate citizens: (1) implement robust and effective compliance programs, and when wrongdoing occurs they, (2) promptly self-report, (3) cooperate in the Division’s investigation, and (4) take remedial action.” Prosecutors are discouraged from crediting compliance programs when the other indicators of good corporate citizenship are absent.
A compliance program should be evaluated at the charging stage in light of three fundamental questions: “(1) Is the corporation’s compliance program well designed? (2) Is the program being applied earnestly and in good faith? (3) Does the corporation’s compliance program work?”
Guide for Evaluating Compliance
In addition, the Division published a Guide for evaluating compliance programs. The Guide is broken into two parts: the first relates to evaluating antitrust compliance programs at the charging stage, and the second pertains to compliance considerations at the sentencing stage. The section pertaining to the charging stage elaborates on the three fundamental questions above and identifies elements of an effective antitrust compliance program, including: (1) the design and comprehensiveness of the program; (2) the culture of compliance within the company; (3) responsibility for, and resources dedicated to, antitrust compliance; (4) antitrust risk assessment techniques; (5) compliance training and communication to employees; (6) monitoring and auditing techniques, including continued review, evaluation, and revision of the antitrust compliance program; (7) reporting mechanisms; (8) compliance incentives and discipline; and (9) remediation methods.
The section pertaining to sentencing details the Division’s approach to compliance considerations in accordance with the U.S. Sentencing Guidelines and 18 U.S.C. § 3572. The guidance not only discusses reductions in sentencing for an “effective” compliance program but also provides directions for case specific assessments. Other sections include guidance on the Division’s approach to recommending probation, periodic compliance reports as a condition of probation, or an external monitor to ensure the implementation of an effective compliance program.
First in the Door is Best
AAG Delrahim reminded everyone that the Division’s Corporate Leniency Policy remains in place as it has been for 25 years. The “ultimate credit” for an effective compliance program is detecting crimes and reporting them promptly. The benefit of being the first to report is “immunity from criminal charges and penalties, non-prosecution for its covered and cooperating employees and the detrebling and other benefits available under the Antitrust Criminal Penalty Enhancement & Reform Act.”
While the Division’s new approach places great emphasis on a compliance program during the charging stage, it should not be misconstrued as an automatic pass for corporate misconduct. Although prosecutors will evaluate pre-existing compliance programs during a criminal antitrust investigation, the Division has not determined how much weight to give a compliance program, as it will be a fact-based determination. Yet, the Division’s new consideration of a company’s compliance program in the charging and sentencing stages of a criminal antitrust investigation provides an incentive for companies to implement and invest in robust compliance programs.