Over the past few blog posts I have been ruminating on the Department of Justice (DOJ) Antitrust Division’s recent release of its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (Antitrust compliance program) in July. Its release follows that of the DOJ’s Criminal Division’s release of its Evaluation of Corporate Compliance Programs, (2019 Guidance) in April and the Office of Foreign Asset Control (OFAC) release of A Framework for OFAC Compliance Commitments, in May. These three documents go a long way in cementing the need for robust and effective compliance for corporations. Today I want to end this series by considering what the Antitrust compliance program means for the antitrust compliance professional and anticorruption/antibribery compliance (ABC) programs going forward. Recognizing that the Antitrust compliance program is designed to prevent, detect and then remediate illegal antitrust behavior, including anti-competitive and cartel actions, nevertheless, it is not only instructive for the ABC compliance professional.
In the area of Design and Comprehensiveness the Antitrust compliance program asks such questions as “Who is responsible for integrating antitrust policies and procedures into the company’s business practices? In what specific ways are antitrust compliance policies and procedures reinforced through the company’s internal controls?” This leads directly into the next area of inquiry about tracking. This is tracking employee actions and conduct in high risk areas and at high risk events. The Antitrust compliance program inquiries into company’s actions around not only monitoring business contacts with competitors but also attendance at trade shows, association meetings and if these systems are regularly monitored.
Also, if employees are required to or regularly attend such events, are they receiving not only training on appropriate (and illegal) conduct but are they receiving targeted reminders? All of these tactics should be embraced by the ABC compliance professional as a way to monitor data as specifically noted in the Antitrust compliance program such as pricing changes and bidding activity. Finally, with the growing number of Foreign Corrupt Practices Act (FCPA) enforcement actions where the customer itself is a part of the bribery scheme, this type of data and transaction monitoring is becoming even more critical.
While the 2019 Guidance spoke to culture, the Antitrust compliance program says, “employees should be ‘convinced of the corporation’s commitment to [the compliance program]’”. Moreover, the Division will “examine the extent to which corporate management has clearly articulated — and conducted themselves in accordance with — the company’s commitment to good corporate citizenship.” This same concept, “being a good corporate citizen” should be incorporated into every ABC compliance program.
The Risk Assessment in the Antitrust compliance program mandates review of a company’s “lines of business”. It poses the question not seen in the 2019 Guidance “Is the company’s antitrust compliance program tailored to the company’s various industries/business lines and consistent with industry best practice?” That not only uses ‘business lines’ language but also “consistent with industry best practices”. This is something that should be taken to heart by every ABC compliance professional. If the DOJ FCPA Unit comes knocking, you will be in much better position if you have met both of these Antitrust compliance program mandates and it also may portend a Fraud Section move to more robust requirements around risk assessments.
Risk assessment also points to metrics not seen in the 2019 Guidance. It asks, “What information or metrics has the company collected and used to help detect antitrust violations? … For example, if the company bids on contracts, is bid information subject to evaluation to detect possible bid-rigging? Does the company evaluate pricing changes for possible price-fixing?” From the ABC perspective, you should consider if you are using both bid and final contract pricing to determine if bribery and corruption is occurring. The numbers are there for analysis. It would not take too long a view to see that the FCPA Unit will soon be asking to see your analysis of both bid prices and contract prices from the ABC perspective in addition to the antitrust perspective.
Under Training, both the Antitrust compliance program and 2019 Guidance specify targeted effective training. Yet the Antitrust compliance program adds several components that every ABC compliance practitioner should well consider incorporating into their training. It asks, “How often is antitrust training updated to reflect marketplace, legal, technological, or other developments? Has the training addressed lessons learned from prior antitrust violations or compliance incidents?” The updating of training to reflect “marketplace, legal, technological or other developments” should be mandatory for the ABC compliance professional. For instance, have you incorporated regime change into your compliance training or that customers are now seen as a part of bribery scheme and incorporated the most recent enforcement actions where this occurred into your training?
It is in the area of Periodic Review, Monitoring and Auditing that a clear advance in data and data analytics is seen in the Antitrust compliance program. Here the Division expects a company to actively look for violations through detection and prevention. The Antitrust compliance program states a company should engage in a “periodic review of documents/communications from specific employees; performance evaluations and employee self-assessments for specific employees; interviews of specific employees”. The well-worn excuse that if we look, we might find something is rightfully relegated to the dustbin of ostrich behavior.
But the Antitrust compliance program mandates more than simply watching your employees. It states, “Does the company use any type of screen, communications monitoring tool, or statistical testing designed to identify potential antitrust violations?” Both the traditional approach of monitoring and interviewing coupled with a statistical analysis to see if there are any anomalies should be used by the ABC compliance professional to review information in their organization to see if there are any indications of FCPA violations.
The bottom line is that there is much for the ABC compliance practitioner to learn from the Antitrust compliance program. The data analytics, transaction monitoring and statistical analysis are all tools which need to be incorporated into an ABC compliance program. Each of these tactics will improve not only your compliance program but make your business processes run more efficiently and at the end of the day make your company more profitable.