United States: 2014: The Year Of Anti-Trust Compliance? How To Get It Right: The Insider’s View

2014 promises to be another active year, both for UK anti-trust regulators and the European Commission. Enforcement levels and severe fines have made it difficult for companies who got it wrong in 2013. It is no surprise that 2014 may see an even heavier in-house counsel focus on compliance.

But getting compliance right is not easy. Experience suggests that there are a variety of valid approaches, but some degree of anxiety as to whether current best practice was being achieved.

We asked a number of leading in-house legal teams (with and without dedicated anti-trust functions) about their experiences, the scope of their anti-trust compliance regimes, what works well and areas where they are seeking improvement.

In this briefing, we summarise the (sometimes surprising) findings of this survey. We also point to just some of the other areas that will be in the anti-trust spotlight in 2014.

COMPLIANCE REALLY MATTERS

Each of the companies that we surveyed put anti-trust compliance at the top of its agenda, with senior management "buy-in" universal.

Many companies were also looking to link anti-trust compliance with their own business "core values": highlighting the importance of getting it right.

BUT SYSTEMS VARY

Compliance processes varied considerably, with a mix of hardcopy handbooks/ manuals and "classroom"/online training.

THE BEST TOOL IS FACE-TO-FACE TRAINING

Most companies said that face-to-face training was the most successful anti-trust compliance tool and sessions were often mandatory for employees.

Some positive lessons from training session experiences included:

  • The need to identify the right target audience: many companies avoided blanket training and looked to train "at risk" employees.
  • The benefits of being bespoke: think about case studies and whether the business should lead the session, with support from legal, rather than simply a "legal" session.
  • Good results from imaginative approaches: using role-play and putting business colleagues in "live" situations and discussing their reactions. Those surveyed also pointed to pitfalls in carrying out anti-trust training:
  • Too much detail can send the audience to sleep: less law, more practical examples.
  • Try to have standalone training sessions: tacking anti-trust on to other "compliance" sessions can lead to apathy and loss of message.

Refresh, refresh and refresh some more...each company surveyed had an active anti-trust compliance programme in place, with – very often – annual training and materials refreshed every 18 months to 2 years. In-house counsel felt uncomfortable leaving the gap between training for longer periods; as the law and regulatory strategy evolved continuously.

Protocols: companies all had a designated "go-to" protocol for questions/queries on anti-trust matters. This was seen as very important in ensuring compliance.

Most companies chose, as a first port of call, a line manager to deal with competition queries. This manager was often given advanced training. But more difficult queries (or urgent ones) would be dealt with by the legal department. Those surveyed said that this allowed greater communication within the business on anti-trust issues: sometimes employees did not want to call legal.

One company had a designated "competition hotline", which was manned by various legal counsel, for employees to raise urgent and potentially difficult questions.

Preparing for the worst, but hoping for the best. Anti-trust compliance was often coupled with practical tips on what to do if an authority started investigating a company:

  • Guidance on language in documents was a common-theme.
  • Informing employees of document retention policies was seen as important.
  • IT professionals were also brought into the training – but often this was tailored to their role in the event of an investigation.

Finally, we would not be surprised by growing recognition of the need to "train the trainers". As enforcement expands from horizontal cartels to vertical arrangements, "hub and spoke" communications, abuse of benchmarking and so on, companies may need to devise new mechanisms for dealing with day-to-day trading issues.

WHAT ELSE FOR 2014?

Whilst compliance seems to be on top of the agenda in 2014, here are a few other issues to look out for in the coming year:

  • Signification institutional changes in the UK and Europe: the UK's single competition authority (the CMA) will replace the OFT and CC in 2014. Companies and practitioners will be waiting to see if the CMA represents a "new world" for competition enforcement or more of the same. In Europe, the current EC's term ends in 2014. It will be interesting to see who will replace Joaquin Almunia and whether this will have any impact on priorities for DG Comp.
  • Private actions: both in the UK and Europe, 2014 is likely to see legislative developments to encourage the ability of claimants to sue for damages arising from anti-trust infringements. In particular in the UK and Germany, several major anti-trust damages cases will progress (Mastercard and Visa in the UK and Hydro-Peroxide in Germany) and go to trial (Morgan Crucible). In addition, several General Court and European Court judgements will look at the EC's obligations to provide access to documents submitted during cartel investigations and companies' rights to protect their confidential information.
  • Cartels: The European Commission may impose significant fines on Private Equity investors who owned a company that was involved in anti-competitive conduct. The coming decision may define a new scope and dimension with respect to the liability of financial investors.
  • The EC is likely to decide on which of its proposals it will take forward in respect of the European Union Merger Regulation, in particular on acquisitions of non-controlling minority shareholdings.
  • A new EC Technology Transfer Block Exemption will be adopted on 30 April 2014, upon the expiry of the current Regulation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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