The Administrative Council for Economic Defense ("CADE") has recently made a preliminary version of Guidelines for Competition Compliance Programs available for public consultation. This initiative aims to establish general, non-binding directives for companies on what competition compliance programs are, how they can be implemented, and the benefits and importance of adopting them. Until October 18, CADE will be welcoming public feedback on its preliminary version.
The guidelines draw attention to the benefits of adopting robust compliance programs, including: (i) prevention of risks, (ii) early detection of problems, (iii) identification of infringements by other companies, (iv) reputational benefits, (v) employee awareness; and (vi) a reduction in costs and contingences.
To structure robust compliance programs, the guidelines recommend the following measures: (i) to ensure a high level of commitment to the program: consultation with the top management, the investment of adequate resources in the program and autonomy for those responsible for its implementation; (ii) periodic risk analysis; (iii) planning for risk mitigation by means of training programs, internal communication, monitoring procedures, documentation of such initiatives and internal disciplinary procedures; and (iv) periodic reviews and updates.
The proposed guidelines encourages the adoption of solid competition compliance programs by considering it as an action taken in good faith by the company, which, in the event of a prosecution by CADE, may count in the company's favor when the authority evaluates applicable fines. On the other hand, the adoption of superficial and/or ineffective programs, with the sole intention of obtaining the above mentioned advantage (i.e., sham programs), shall be deemed bad faith, and the company may be subject to higher fines.
The release of the proposed Guidelines for Competition Compliance Programs is another example of CADE's trend for developing soft law instruments. The guidelines are an important and positive step forward for orientating and encouraging companies to adopt such programs.
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