Hints of a Justice Department policy shift—one that evaluates corporate compliance programs as a potential leniency factor on antitrust cases—has come to fruition with announcements made Thursday.
The moves shouldn’t be much of a surprise for those who attended the Compliance Week 2019 conference in May. Principal Deputy Associate Attorney General Claire McCusker Murray tipped off attendees that such changes were in the offing. The Division, she said, was “looking to do more to award and incentivize good corporate citizenship” and “preparing to take into account how much companies invest in their compliance function in leniency evaluations.”
That policy is now in effect, says Assistant Attorney General Makan Delrahim. During a speech at the New York University School of Law on Thursday, “Wind of Change: A New Model for Incentivizing Antitrust Compliance Programs,” he detailed compliance program evaluations in an antitrust context. The Justice Department’s new approach is also detailed in a new policy manual and prosecutorial guidance that went public Friday.
For the first time, the Division will consider compliance at both the charging and sentencing stages of criminal antitrust investigations.
“The Antitrust Division is committed to rewarding corporate efforts to invest in and instill a culture of compliance,” Delrahim said. “Crediting compliance at charging is the next step in our continued efforts to deter antitrust violations and reward good corporate citizenship. We also remain dedicated to predictability and transparency.”
“Enforcement often is of inherently limited deterrent value because it is retrospective,” he added. “On the other hand, a company with a robust compliance program actually can prevent crime or detect it early, thus reducing the need for enforcement activity; minimizing the harm to consumers earlier and saving precious taxpayer resources.”
Delrahim stressed the new approach to compliance programs “should not be misconstrued as an automatic pass for corporate misconduct” and compliance programs will not be “assessed in a vacuum.”
“Enforcement often is of inherently limited deterrent value because it is retrospective. On the other hand, a company with a robust compliance program actually can prevent crime or detect it early, thus reducing the need for enforcement activity; minimizing the harm to consumers earlier and saving precious taxpayer resources.”
Assistant Attorney General Makan Delrahim
The effectiveness of a compliance program is just one of the 10 factors the new Justice Manual directs prosecutors to consider when weighing charges against a corporation. Among them, Delrahim suggested, four stand out as hallmarks of good corporate citizenship: implementing robust and effective compliance programs; promptly self-reporting when wrongdoing occurs; cooperating in the Division’s investigation; and taking remedial action.
Delrahim also noted prosecutors will consider three “fundamental questions” in their evaluations:
- Is the corporation’s compliance program well designed?
- Is the program being applied earnestly and in good faith?
- Does the corporation’s compliance program work?
The Division’s new approach allows prosecutors to proceed by way of a deferred prosecution agreement (DPA) when “the adequacy and effectiveness” of a corporation’s compliance program, weigh in favor of doing so.
Delrahim did caution, however, that having a compliance program does not automatically guarantee a DPA.
“We will, however, continue to disfavor non-prosecution agreements with companies that do not receive leniency, because complete protection from prosecution for antitrust crimes is available only to the first company to self-report and meet the Corporate Leniency Policy’s requirements,” he said.