Last year, Maruyasu Industries, an auto parts manufacturer of steel tubes, was fined $12 million for its role in a criminal conspiracy to fix prices. At the time, Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division stated that the “Antitrust Division’s prosecution of widespread collusion in the auto parts industry has yielded more than $2.9 billion in fines and convictions of 46 corporations and 32 executives.” It is no secret that many of those auto parts companies were Japanese.
For those companies concerned about potential DOJ investigations, last month brought welcome news. The U.S. Department of Justice (DOJ) Antitrust Division announced new guidelines for evaluating corporate compliance programs, as well as even more benefits to having an effective compliance program.
What makes an effective compliance program? Compliance expert Joseph Murphy, writing for the Society of Corporate Compliance and Ethics, stated that “programs that work are about two things: a management commitment to do the right thing, and effective management steps to make that happen.” Murphy emphasized that even small companies can implement an effective compliance program without breaking the bank.
If
you have an effective compliance program, the DOJ Antitrust Division will take this into consideration when deciding:
- whether or not to charge you;
- your sentence (amount of fine, etc);
- if you should get a deferred prosecution agreement even though you are not a leniency participant.
In the guidelines, the DOJ describes nine elements of an effective compliance program: (1) the design and comprehensiveness of the 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 incentives and discipline; and (9) remediation methods.
The DOJ avoided listing specific methods. DOJ only lists questions to consider and offers potential options. The method you choose should be appropriate for the size of your company, your industry, etc. In particular,
it must be tailored towards the kind of risks you are likely to face.
For example, consider “monitoring.” According to the DOJ, “an effective compliance program includes monitoring and auditing functions to ensure that employees follow the compliance program.” The DOJ notes that monitoring may include “a periodic review of documents/communications from specific employees; performance evaluations and employee self-assessments for specific employees; [and/or] interviews of specific employees.”
Murphy suggests that for a small company, monitoring can be “walk[ing] around and talk with your people… when you walk around and ask questions, include a compliance and ethics checklist.”
However, the kinds of companies most worried about a DOJ antitrust investigation are large multinational corporations with divisions scattered across the world. The DOJ expects larger companies to be able to dedicate more resources to compliance. For these companies, a more formal tool, such as monitoring the communications of specific employees, or an email monitor tool, is much more common.
Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations, Department of Justice Guidelines (2019) [https://www.justice.gov/atr/page/file/1182001/download]
Compliance is a Culture, Not Just a Policy, Department of Justice Speech (2014): [https://www.justice.gov/atr/file/517796/download] Last year, Maruyasu Industries, an auto parts manufacturer of steel tubes, was fined $12 million for its role in a criminal conspiracy to fix prices. At the time, Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division stated that the “Antitrust Division’s prosecution of widespread collusion in the auto parts industry has yielded more than $2.9 billion in fines and convictions of 46 corporations and 32 executives.” It is no secret that many of those auto parts companies were Japanese.
For those companies concerned about potential DOJ investigations, last month brought welcome news. The U.S. Department of Justice (DOJ) Antitrust Division announced new guidelines for evaluating corporate compliance programs, as well as even more benefits to having an effective compliance program.
What makes an effective compliance program? Compliance expert Joseph Murphy, writing for the Society of Corporate Compliance and Ethics, stated that “programs that work are about two things: a management commitment to do the right thing, and effective management steps to make that happen.” Murphy emphasized that even small companies can implement an effective compliance program without breaking the bank.
If
you have an effective compliance program, the DOJ Antitrust Division will take this into consideration when deciding:
- whether or not to charge you;
- your sentence (amount of fine, etc);
- if you should get a deferred prosecution agreement even though you are not a leniency participant.
In the guidelines, the DOJ describes nine elements of an effective compliance program: (1) the design and comprehensiveness of the 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 incentives and discipline; and (9) remediation methods.
The DOJ avoided listing specific methods. DOJ only lists questions to consider and offers potential options. The method you choose should be appropriate for the size of your company, your industry, etc. In particular,
it must be tailored towards the kind of risks you are likely to face.
For example, consider “monitoring.” According to the DOJ, “an effective compliance program includes monitoring and auditing functions to ensure that employees follow the compliance program.” The DOJ notes that monitoring may include “a periodic review of documents/communications from specific employees; performance evaluations and employee self-assessments for specific employees; [and/or] interviews of specific employees.”
Murphy suggests that for a small company, monitoring can be “walk[ing] around and talk with your people… when you walk around and ask questions, include a compliance and ethics checklist.”
However, the kinds of companies most worried about a DOJ antitrust investigation are large multinational corporations with divisions scattered across the world. The DOJ expects larger companies to be able to dedicate more resources to compliance. For these companies, a more formal tool, such as monitoring the communications of specific employees, or an email monitor tool, is much more common.
Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations, Department of Justice Guidelines (2019) [https://www.justice.gov/atr/page/file/1182001/download]
Compliance is a Culture, Not Just a Policy, Department of Justice Speech (2014): [https://www.justice.gov/atr/file/517796/download]
Murphy, Joseph (Society of Corporate Compliance and Ethics): A Compliance & Ethics Program on a Dollar a Day [https://assets.corporatecompliance.org/Portals/1/PDF/Resources/CEProgramDollarADay-Murphy.pdf]