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Prompt self-reporting of any antitrust cartel involvement will be a key factor in obtaining leniency from the Department of Justice in the future.
The Antitrust Division of the Federal Trade Commission updated its leniency policy on Monday, aiming for "transparency, predictability, and accessibility in criminal enforcement." In addition to cooperating with the division to avoid criminal prosecution, a company must now "promptly self-report after discovering its wrongful conduct and undertake remedial measures to prevent reoffending."
In a press release, Assistant Attorney General Jonathan Kanter of the Antitrust Division said, "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"
The Antitrust Division did not provide much clarity about what it means by "promptly" in a revised series of nearly 50 new frequently asked questions (FAQs) about its leniency program. It only stated that its decision would be made "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 officers, in addition to board members and legal counsel, have been added to the list of individuals who will be considered a "authoritative representative" of a company when illegal activity is discovered, according to the revised policy.
The Antitrust Division stated in its FAQs that "an organization will not be eligible for leniency if an authoritative representative learns of potential illegal activity and refrains from investigating further."
Furthermore, before receiving a conditional leniency letter, 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." According to the agency, this may necessitate the implementation of a "new or improved" compliance program.
Companies should consult the Antitrust Division's "Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations," which will be used to "assess an applicant's antitrust compliance, including its culture of compliance and risk assessment," according to the agency. The division also stated that a company's compliance program will be considered "at the time of the antitrust violation and when it makes subsequent improvements."
Before receiving a conditional leniency letter, a company must make efforts "to remediate the harm caused by the illegal activity" and "improve its compliance program to mitigate the risk of engaging in future illegal activity," according to the Antitrust Division.
Other antitrust violations that are "in furtherance of" that violation, such as mail or wire fraud or a violation of Section 2 of the Sherman Act involving a conspiracy to monopolize markets, are also covered by the leniency, according to the division.
By fLEXI tEAM