Updated DOJ Antitrust Guidance Offers New Insights for Companies’ Compliance Programs

At a Glance

• Although the updates include new and more detailed considerations for designing and implementing antitrust compliance programs, the underlying antitrust violations DOJ seeks to avoid are not new. As such, we anticipate this Antitrust Guidance will be as relevant to the DOJ under the Trump administration as it was in the waning days of the Biden presidency. It also aligns with the DOJ Criminal Division’s Evaluation of Corporate Compliance Programs update for September 2024, reinforcing the importance of companies aligning their antitrust compliance programs with their larger corporate compliance programs.
• As companies implement new technological tools such as AI and algorithmic pricing, the updates ask how companies are accounting for the potential antitrust risks presented by these tools, and where appropriate, how the same level of technology is used to detect and deter antitrust violations.
• Although mostly focused on criminal violations, the updates also stress that well-designed antitrust compliance programs address potential civil violations, such as improper information exchanges, exclusive dealing or violations of the Hart-Scott-Rodino Act.
• While confirming prior recommendations that executive and board engagement are essential for healthy antitrust compliance programs, the updates now extend that admonition to include examining how managers at all levels of the business have demonstrated the importance of antitrust compliance, as well as whether a company’s culture and policies adequately encourage reporting of antitrust violations.
• The new updates stress that compliance personnel should have access to all relevant company data sources and technological resources necessary to actively monitor employee compliance with the antitrust program.

The Antitrust Division of the Department of Justice (DOJ) announced in November updates to its 2019 Evaluation of Corporate Compliance Programs in Criminal Antitrust Enforcement (Antitrust Guidance), which provides insights on how prosecutors consider companies’ antitrust compliance programs when making charging decisions and sentencing recommendations. In addition to valuable new insights about how DOJ will evaluate antitrust compliance programs given recent technological innovations, the Antitrust Guidance also stresses for the first time that well-designed compliance programs should minimize the risks associated with civil antitrust violations as well as criminal ones.

Although the Antitrust Guidance includes new and more detailed considerations for companies as they design and implement their own corporate compliance programs, the underlying antitrust violations DOJ seeks to avoid are not new. As such, we anticipate this Antitrust Guidance will be as relevant to the DOJ under the Trump administration as it was in the waning days of the Biden presidency. Importantly, the Antitrust Guidance aligns with the DOJ Criminal Division’s Evaluation of Corporate Compliance Programs update for September 2024, reinforcing the importance of companies aligning their antitrust compliance programs with their larger corporate compliance programs.

Established Foundations for Defensible Antitrust Compliance Programs

As before, DOJ will ask three preliminary questions when evaluating the efficacy of an antitrust compliance program:

• Does the compliance program address and prohibit criminal antitrust violations — e.g., price-fixing, bid-rigging, market allocation, group boycotts and supply control?
• Does the compliance program detect and facilitate prompt reporting of the violation?
• To what extent was a company’s senior management involved in the violation?

The answers to those questions will influence the focus of DOJ’s efforts to evaluate the effectiveness of a company’s antitrust compliance program. In making that evaluation, DOJ focuses on some or all of several elements DOJ believes are hallmarks of an effective compliance program: (1) the design and comprehensiveness of an antitrust compliance program; (2) the culture of compliance within the company; (3) responsibility for, and resources dedicated to, antitrust compliance; (4) antitrust risk assessment techniques; (5) compliance training and communication to employees; (6) monitoring and auditing techniques, including continued review, evaluation and revision of the antitrust compliance program; (7) reporting mechanisms; (8) compliance initiatives and discipline; and (9) remediation methods. Importantly, DOJ states that prosecutors should be evaluating the program’s effectiveness during the course of their investigation, including through witness interviews. This reality creates a further imperative for companies to be proactive in their compliance programming efforts — and effectively prepare employees for witness interviews during investigations.

Although DOJ recognizes that even the most effective antitrust compliance program cannot deter every violation, a well-designed and well-implemented program should nonetheless “enable a company to swiftly detect and address” antitrust violations and give them “the best chance to self-report and qualify for [DOJ’s] Corporate Leniency policy,” which confers nonprosecution protection on the company and eligible personnel in exchange for cooperation against individual and corporate co-conspirators.

Moreover, DOJ emphasizes that, within the company, the compliance or legal function with responsibility over antitrust compliance must be well-resourced and sufficiently senior to command respect from the rest of the organization and actively monitor and enforce the antitrust compliance program. The Antitrust Guidance asks, for example, whether antitrust compliance personnel report to senior leadership (including company executives and the board of directors), and whether there have been requests for additional compliance resources that have been denied.

New DOJ Considerations for Antitrust Compliance Programs

1. Emerging Technologies

As companies implement new technological resources to minimize costs and maximize profitability, the new Antitrust Guidance asks how companies are accounting for the potential antitrust risks presented by these tools, and where appropriate, using the same level of technology to detect and deter antitrust violations:

• The Antitrust Guidance specifically flags artificial intelligence and the use of algorithmic pricing tools that companies increasingly use to conduct business. The DOJ and the Federal Trade Commission (FTC) previously highlighted the antitrust risks posed when such technologies facilitate price fixing between competitors because, for example, competitors use the same third-party algorithm to set prices. The Antitrust Guidance asks what companies have done to assess the risks posed by these new tools, the extent to which compliance personnel are involved in the deployment of such tools, and how quickly companies can detect and correct decisions made by artificial intelligence that are not consistent with the companies’ values with respect to antitrust compliance. This new content reinforces the developing expectations within government at all levels that companies begin to establish effective artificial intelligence compliance management activities.
• Echoing previous DOJ and FTC guidance regarding ephemeral messaging platforms such as Microsoft Teams, Google Chats, Signal, and Slack, the Antitrust Guidance instructs prosecutors to consider how a company’s antitrust compliance program addresses its use of such technology, and the crucial evidence that such communications may hold regarding prohibited antitrust conduct. For example, the Antitrust Guidance instructs prosecutors to consider whether companies have mechanisms to manage and preserve information contained within their electronic communications platforms, and whether companies have guidelines concerning the use of such platforms, including whether employees are required to preserve their communications. Moreover, to the extent companies permit employees to not preserve or affirmatively delete messages, what is their rationale for that decision?

2. Inclusion of Civil Antitrust Risks

• While DOJ’s Antitrust Guidance is mostly focused on deterring, detecting and remediating criminal violations, the updates also stress that well-designed antitrust compliance programs address potential civil violations, which could include, for example, improper information exchanges, exclusive dealing or violations of the Hart-Scott-Rodino Act. Companies facing DOJ or FTC civil scrutiny should expect a similar inquiry into whether their antitrust compliance programs address the conduct under investigation. A company’s antitrust compliance program should be assessed on a case-by-case basis to include those potential violations that pose the most risk to the company based on its unique business and market position, whether the government might choose to enforce violations civilly or criminally. Because many civil antitrust violations depend on the restricting party’s market share and other industry-specific factors, the assessment of what to include in the company’s antitrust compliance program should be revisited periodically to reflect new economic developments.

3. Setting the Tone for Antitrust Compliance Across the Company

• The Antitrust Guidance confirms prior recommendations that executive and board engagement are essential for healthy antitrust compliance programs, but now extends that admonition to include examining how managers at all levels of the business have demonstrated the importance of compliance with antitrust laws (often referred to as “tone from the middle” management layers). The DOJ will ask how the company has demonstrated its commitment to compliance and modeled ethical behavior. Does leadership attend and engage in antitrust trainings? Have they persisted in their commitment to antitrust compliance even in the face of competing business objectives? Has leadership been involved in any antitrust violations, and were they held personally accountable for any such violations?
• Consistent with an overall increase in DOJ’s focus on incentivizing whistleblowing and early reporting of violations, DOJ also will assess whether a company’s culture and policies adequately encourage reporting of antitrust violations. Does the company have an anti-retaliation policy, and does it actively measure whether employees feel comfortable reporting violations? For the first time, the Antitrust Guidance expresses concern regarding the use of nondisclosure agreements and similar restrictions on current and former employees that might deter whistleblowers or otherwise violate the Criminal Antitrust Anti-Retaliation Act.

4. Well-Resourced Antitrust Compliance Programs

• The Antitrust Guidance also recognizes that well-designed antitrust compliance programs must be actively monitored and revisited to respond to company-specific risks and market developments. The new updates stress that compliance personnel should have access to all relevant company data sources and technological resources necessary to actively monitor employee compliance with the antitrust program. Moreover, DOJ will consider what actions were taken if a violation was identified and to what extent the company updated its antitrust compliance policy and training program to account for the violation and other “lessons learned.” They also will ask if compliance personnel monitor antitrust developments within their industry to identify potential new risks.

For More Information

The antitrust laws are nuanced and complex and their application to specific business situations often requires a fact-intensive analysis. Companies are encouraged to seek assistance from counsel regarding the design and implementation of their antitrust compliance programs.