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In the Wake of Antitrust Compliance Requirements

Antitrust compliance programs are a set of policies and internal controls aimed at helping companies stick to antitrust law guidelines. The program seeks to avert antitrust violations. However, an antitrust compliance policy may not stop every offense, but an effective program can identify and stop potential antitrust violations.

For instance, bid-rigging and monopolization are antitrust offenses. Monopolization is where a single company gains so much authority in a market that it can increase product prices in a manipulative manner. In contrast, bid-rigging involves collusive behavior between one or more bad actors to obtain favorable pricing or additional business within a competitive marketplace. These two offenses violate antitrust laws. The best antitrust compliance program is one that addresses all types of misconduct.

Factors that Support the Effectiveness of an Antitrust Compliance Program

According to the U.S Sentencing Guidelines, antitrust compliance programs must follow a similar structure to other compliance programs. And the Department of Justice (DOJ) 2020 guidance emphasizes that an antitrust compliance program must be well designed to detect and prevent antitrust violations.  

A compliance program should be used as a tool to educate employees and directors on preventing risks related to exploitative conduct. Companies that have implemented such programs can quickly identify and address unlawful anticompetitive practices. As a result, they gain the trust of antitrust authorities should a violation arise.

Here are the factors that define a well-designed antitrust compliance program:

  • Program design and comprehensiveness

The primary consideration is how well the program has been integrated into a company’s operations. For example, who is responsible for the program, when was it first implemented, how comprehensive are the internal controls, and how often is program revised to address industry shifts and related best practices. Program comprehensiveness also involves program accessibility to agents and employees. An effective antitrust compliance program is not just a mere ‘paper program.’ It should be crafted, put into effect, reviewed, and updated regularly as per the current guidelines.

  • Company’s compliance culture

For an antitrust compliance program to be effective, it must get support from an organization’s top executives on a routine basis. Everyone should commit themselves to supporting the company’s obligation to fair competition. All this is essential to enhance the success of company operations.

  • Risk assessment techniques

Antitrust offenses assume different forms. A good antitrust compliance policy should evaluate companywide operations against antitrust law. These are company operations such as contract preparation, acquisition strategy, sales communications, and more.

For example, a company with sales individuals who have the freedom to set prices should establish policies for detecting price-fixing and preventing such practices. Furthermore, when companies bid on projects, all bid information should be evaluated in order to avoid potential bid-rigging.

  • Creating policies and guidelines

A corporate antitrust compliance policy should not only focus on promoting industry best practices. It should be tailored to identify potential antitrust risks and offenses that are likely to occur within a company. After your company has discovered relevant antitrust risks, policies and procedures should be created to address each specific area of risk. For instance, a company may need to create an outline for reviewing bid submissions. That will help prevent employees from engaging rivals in lucrative contracts.

  • Offer adequate training and communication to the employees

A well-designed antitrust compliance policy offers inclusive training and communication to employees. This is to make employees aware of their responsibilities in mitigating potential antitrust violations. When employees are well-informed on what’s permitted, their confidence to do business correctly improves.

  • Regular review, monitoring, and auditing

Even as your company’s compliance program continues to identify potential antitrust risks within your organization, it’s critical to constantly monitor and audit operational functions to prevent your employees from violating antitrust laws.

To achieve that, you can create an antitrust compliance committee that will occasionally meet through unannounced or routine audits to help evaluate potential antitrust violations.

  • Reporting mechanism

An antitrust compliance committee provides directors and applicable stakeholders with accurate and timely information about industry developments, company violations, policy changes and other related matters. Furthermore, employees can use the antitrust compliance advisory committee to anonymously report potential/ongoing antitrust violations.

  • Incentives and discipline

Incentives and discipline enhance the effectiveness of an antitrust compliance program. Implementing disciplinary measures and having proper corrective actions in place ensures the company remains vigilant in remedying misconduct as it surfaces.

Why Outsource the Implementation of an Antitrust Compliance Policy?

Outsourcing implementation of antitrust compliance policies and the overarching program design in your company requires a strategic investment. An antitrust violation can lead to hefty financial penalties. As such, it’s paramount for organizations to contract with antitrust compliance consultants to help design, implement and manage an effective antitrust compliance program. Ongoing independent evaluation is also recommended to ensure your company has identified all possible threats as well as potential program improvements.

State and federal agencies encourage corporations to develop an antitrust compliance culture to avoid attracting costly fines in the event of a breach. The DOJ considers corporate compliance programs when calculating fines for breaching antitrust laws and when making decisions on filing criminal charges.  If your organization operates in a high-risk industry, adding anticompetitive controls to your ethics and compliance program is necessary as a proactive measure. Antitrust compliance is now a part of a matrix of concerns related to governance, risk mitigation, business ethics and compliance matters.

Key Takeaway

The DOJ has clearly outlined the factors that make up an effective antitrust compliance program. Earning the trust of antitrust authorities in the event of a violation can only be accomplished prior to said violation or misconduct. As such, compliant organizations understand the important of being proactive rather than reactive in addressing potential business risks. To ensure your organization remains effective in preventing compliance improprieties, contact Riddle Compliance regarding our antitrust compliance advisory services. Our compliance consulting solutions are tailored to fit your organization’s size and complexity as well as its antitrust compliance needs. Schedule a consultation today.