United States: The Antitrust Division Announces Landmark Policy Shift To Credit Robust Corporate Compliance

Last Updated: July 30 2019
Article by Kathryn (Katie) Hellings and Susan Musser

"An ounce of prevention is worth a pound of cure." Assistant Attorney General Makan Delrahim (Delrahim) for the Antitrust Division of the U.S. Department of Justice (the Division or DOJ) called on the words of Benjamin Franklin as he detailed a historic change to the DOJ leniency program. While the Division has traditionally encouraged companies to report cartel activity by awarding the first company to report a violation with leniency, it has given minimal credit to defendants at either the charging or sentencing stage for corporate compliance programs.

That changed 11 July when Delrahim announced sweeping changes to the Division's approach to incentivizing compliance, including awarding credit at charging for compliance programs and permitting prosecutors to proceed by Deferred Prosecution Agreements (DPAs) against early cooperators that have effective compliance programs. In conjunction with these changes, the Division published for the first time ever a guidance document for companies detailing how antitrust compliance programs will be evaluated in criminal antitrust investigations.

The Division's new policy: reward and incentivize corporate compliance

In the past, the Division has relied on its leniency program to incentivize companies to self-report cartel activity. Under its leniency program, the first company to self-report antitrust violations was immune from prosecution, while other members of the cartel would at minimum be required to plead guilty and pay fines. While early cooperators could receive a penalty reduction, only the first whistleblower received the benefit of immunity from prosecution. The Division's belief that effective compliance programs are those that allow the company to claim leniency underscored its winner-takes-all approach. Under this policy, DPAs for effective compliance programs were essentially unattainable. Delrahim announced that companies may now be credited at both the charging and sentencing stage for robust compliance programs. This fundamental shift provides avenues for credit and deferred prosecution even if a company was not first to disclose cartel activity under the leniency program.

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