On Tuesday I attended the Global Antitrust Enforcement Symposium at the Georgetown University Law Center. This is a day long program covering a wide range of global competition law topics including cartels, mergers, abuse of dominance and patents. This is a great program, but the panel I was most interested in was Collaboration, Conversations and Cartels. The panel was moderated by Phil Warren and the panelists were Aimee Imundo, Leslie M. Marx, Brent C. Snyder and Ingrid Vandenborre.
I found this panel alone worth the price of admission. (Though I attended as a guest of Bates White, one of the program sponsors). The theme of the discussion was that there are many ways that competitors can work together in pro-competitive collaborations, but such collaborations raise increased risk of sliding into anticompetitive activities. I will write another blog post about the comments of this panel, but for now I want to focus on the comments of Brent Snyder, [Deputy Assistant Attorney General, Antitrust Division, Criminal Enforcement], relating to the Division’s policy on giving (or not giving) credit for compliance programs in criminal case charging decisions and plea negotiations.
Mr. Snyder repeated that the Division does not give what he termed “backward looking” credit for failed compliance programs. That is, when the Division is facing a situation where very senior officials in the company were in involved in a criminal offense, and/or the offense spanned many years and involved numerous company officials, the Division will not decline to charge the company or agree to a reduced sentence because the company had an antitrust compliance program. The Sentencing Guidelines themselves do not give credit for compliance programs in such a situation. To understand the Division’s position, it is helpful to keep in mind that they are talking about hard-core price-fixing or bid rigging offenses, i.e high level corporate executives holding clandestine meeting in airports, hotels or elsewhere to engage in fraud against their customers. Compliance programs are deemed ineffective in these situations under the Sentencing Guidelines and by the Division.
Mr. Snyder, however, also talked about where the Division will give credit for antitrust compliance programs. Where a company has had a failed (or no) program and is going to be criminally charged by the Division, if the company can document that it has taken substantial steps to implement a robust compliance program and changed the culture of the organization, the Division will consider giving credit in plea negations for this effort. This is referred to as “forward looking” compliance program credit. In fact, the Division has now done so in two plea agreements: (1) Barclay’s in the Forex investigation, and more recently (2) KYB Corp. in auto parts. Forthcoming sentencing memorandums should explain what the companies did to earn this credit. Mr. Snyder also said there are more plea agreements in the works where companies will receive credit for “forward looking” compliance programs.
This is a change in policy since I left the Division in early 2013, and I think it is a good change. The defense bar and the compliance community deserve a great deal of credit for educating the Division about how its policies affect their ability to get companies to devote resources to antitrust compliance. There is competition for compliance dollars and the Division can provide incentives (besides the Corporate Leniency Program) to see some of those $$ make their way to antitrust training. By the same token, I think the Division deserves a lot of credit for considering these views and adopting a new policy in the public interest. Of course, there are some (perhaps many) who would like to see the Division give credit even for “failed” compliance programs, but as long as cartels continue to be composed of senior executives, and cover long spans of time, the Division is not likely to be receptive to this argument.
Mr. Snyder did acknowledge that faced with a case of a true “rogue” employee, the Division may consider the existence of an otherwise robust compliance program as a mitigating factor in charging/sentencing decisions. But, he reiterated that these are not the kinds of cases the Division sees. The cartels the Division prosecutes are either widespread throughout a company, or may involve only a few but very senior people (i.e. In a road construction big rigging case, the cartel may involve just one person–but that person would have to be the President or someone else very senior to commit the company to the crime). Mr. Snyder cautioned that making the “rogue employee” argument where it clearly does not apply could undermine counsel’s credibility and make the Division skeptical about the company’s willingness to cooperate completely.
When I was with the Division (33 years), I never ran across what I would consider a lone rogue employee. Hypothetically, there could be a rare case where a local salesperson of a national (or international) company may have had inappropriate conversations with a local salesman of a competitor. But, the volume of commerce that could be affected in this situation, and the narrowly circumscribed pricing authority (if any) that a local salesman might have, would mean that matter was too small for the Division to allocate resources to. Such a case may be referred to a state or local office.
The attorneys on this panel were extremely experienced and had many more insights of interest to me (and perhaps you) so I hope to do another post soon.
Thanks for reading.
PS. This is the first time I have inserted a picture in a post. (I won’t say how long it took me to figure this out). I hope my blogging is better than my photography.