Starting from Scratch: How and When to Create an Antitrust Compliance Program

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CHAPTER 1

STARTING FROM SCRATCH: HOW AND WHEN TO CREATE AN

ANTITRUST COMPLIANCE PROGRAM

As in-house antitrust counsel, you’ve been tasked with assembling from scratch an antitrust

compliance regime within your company. The end goal seems obvious enough—establish the

requisite culture of compliance, detection and monitoring infrastructure, and training to prevent

antitrust violations, and ensure “first in” status if all else fails. The question is how to move

forward when no formal antitrust compliance program already exists.

Critical to the success of any compliance program is a very high degree of “buy-in” across

the company. Experience confirms that successful programs share a number of common

elements: (1) genuine, explicit and repeated “top-down” messaging; (2) a productive relationship

between the in-house antitrust legal advisor and the businesses; and (3) context-sensitive training

of the full range of employees who can expose the company to serious antitrust risks. A

company lacking any antitrust compliance regime will often feel compelled to “do something,”

but you should resist the urge to move in an unstructured or hasty manner. There is no second

chance to make a first impression, and if you lose your key constituents early, it will be hard to

get them back.

There is also a need to prioritize. Often, the temptation will be to focus on vertical issues—

relationships with distributors/dealers, and with suppliers—because these seem to be the ones

raised most frequently. But companies are not fined criminally for antitrust violations in the

vertical arena, and class action exposure is likewise low. So the first priority should be on the

typically per se parts of antitrust—price-fixing, bid rigging, horizontal market allocation, and

other high risk activities including trade association participation, standards setting and gathering

competitive intelligence.

Once the priority topics are identified, you need to build the base of real-world information

that will enable you to develop and deliver effective antitrust training and advice. Effective

training requires not only the right substantive focus, but a format that allows the employees

easily to relate to the training scenarios, and to come away with a real understanding not so much

of the law, but of the kinds of situations that can lead to problems, how to avoid them, or

pragmatically deal with them if they arise.

Finally, successful compliance is an iterative process for many reasons—employees come

and go, the marketplace changes, the law changes, and sometimes the company’s risk appetite

changes as well. Establishing a culture of compliance is a continuous process, and one-off

preparation of a compliance manual and a training program is a recipe for compliance failure.

A. Compliance Programs and the Sentencing Guidelines

An oft-cited benefit of having a company-wide antitrust compliance program is that under

the United States Sentencing Guidelines, a federal court presiding over a criminal case may

depart from the standard fines and jail terms and impose a lesser punishment on the defendant.

The reality, however, is far different than the theory—if the company has had employees engage

in criminal antitrust conduct (generally, horizontal price-fixing), then more or less by definition