The prompt self-reporting of any involvement in an antitrust cartel will be a key consideration going forward in receiving leniency from the Department of Justice.
The agency’s Antitrust Division on Monday published updates to its leniency policy aimed at “transparency, predictability, and accessibility in criminal enforcement.” Among the changes, a company must now “promptly self-report after discovering its wrongful conduct and undertake remedial measures to prevent reoffending” in addition to cooperating with the division to avoid criminal prosecution.
“Corporate boards and executives, and the counsel advising them, should understand that sitting on their hands after detecting an antitrust crime will have real ramifications—losing out on leniency means severe consequences,” said Assistant Attorney General Jonathan Kanter of the Antitrust Division in a press release.
In a revised series of nearly 50 new frequently asked questions (FAQs) about its leniency program, the Antitrust Division did not provide much clarity about what it means by “promptly.” It only stated its assessment will be “based on the facts and circumstances of the illegal activity and the size and complexity of operations of the corporate applicant. It is the applicant’s burden to prove that its self-reporting was prompt.”
Compliance officer responsibilities: The revised policy added compliance officers, in addition to board members and legal counsel, to the scope of individuals who will be considered an “authoritative representative” of a company as it pertains to the discovery of illegal activity.
“An organization will not be eligible for leniency if an authoritative representative learns of potential illegal activity and refrains from investigating further,” the Antitrust Division stated in its FAQs.
In addition, a company “must demonstrate to the division that it has satisfied its obligation to address its future antitrust risk and remediate its criminal conduct before it will be granted a conditional leniency letter.” This may require the implementation of a “new or improved” compliance program, the agency added.
Companies should refer to the agency’s “Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations,” as that will be the guidance against which the Antitrust Division said it “will assess an applicant’s antitrust compliance, including its culture of compliance and risk assessment.” The division also said it will consider a company’s compliance program “at the time of the antitrust violation and when it makes subsequent improvements.”
A company must make efforts “to remediate the harm caused by the illegal activity” and to “improve its compliance program to mitigate the risk of engaging in future illegal activity” before it is granted a conditional leniency letter, according to the Antitrust Division.
The division further clarified leniency extends to other antitrust violations that are “in furtherance of” that violation—for example, mail or wire fraud or a violation of Section 2 of the Sherman Act concerning a conspiracy to monopolize markets.