Canada’s Corporate Compliance Program

The Canadian Competition Commission has become a leading voice on the importance of competition compliance programs.  Canada had previously acknowledged that in certain circumstances, companies could get credit for having a compliance program, even if a breach in the program has led to a violation (here). Last week Canada updated its Corporate Compliance Bulletin with this announcement giving guidance in establishing an effective compliance program. The announcement states:

This bulletin seeks to help businesses of all sizes in the development of a credible and effective compliance program, but the updated bulletin pays special attention to small and medium‑sized businesses. It is designed to help businesses get the solid information they need to reduce their risk of contravening the law.

Commission Pecman, Canadian Commissioner of Competition, issued this statement:

“The updated Corporate Compliance Programs bulletin provides Canadian businesses with the guidance needed to play by the rules and avoid the pitfalls of anti‑competitive behaviour. Fair competition makes for a strong economy. Canadian businesses and consumers reap the benefits of a competitive and innovative marketplace.”

I’d add that compliance programs add value in other ways: increased investor confidence; ability to attract ethical employees and positive “branding” with the consuming public.  The Canadian Corporate Compliance Program bulletin has many links and is an important source of information for those interested in antitrust/competition compliance programs.

My Own Thoughts On Compliance Credit

As mentioned, Canada leads the way in providing an incentive for companies to implement an effective ethics and compliance program by allowing the possibility for credit, even if some employees didn’t take the message to heart and a violation occurred. Leading commentators have urged the United States and EU to take a similar approach. I’ve added a slightly different approach—adding a stick to the carrot. In a letter I’ve written to the United State Sentencing Commission, I advocated that there be an upward adjustment in an individual’s sentence if he had the authority to institute an effective antitrust compliance program (as defined in the Sentencing Guidelines) and failed to do so. Many antitrust defendants are sufficiently high in the corporation (the c-suite) that they have some responsibility for training. And many of these individuals, if they commit the company to a price-fixing/bid rigging scheme, direct subordinates to implement the scheme.  If an individual is an antitrust defendant it is obvious he didn’t adhere to an ethics and compliance program. But, to me, it is an aggravating factor if that individual was high enough in the company to have instituted a compliance program and didn’t to do so. Such an executive failed their employees by not providing subordinates the training needed to perhaps resist involvement in the criminal activity.  And, no compliance program means subordinates don’t have access to “whistle-blower” mechanisms to report illegal activity they may be directed to engage in.  In many cases I prosecuted, subordinates usually had a notion that price-fixing was wrong–but maybe had no idea it carried a ten-year jail sentence.  When the boss said “Go to this meeting; they went.”  And if they had misgivings, there was no compliance program mechanism in the company through which they could voice their concerns.  I always felt the senior executives who failed to give subordinates proper training deserved an extra measure of culpability.

This proposal of course has limitations. A defendant cannot have a sentence “enhanced” unless he has been convicted personally of an antitrust violation. This “stick” does not apply to senior executives or Board of Directors who did not violate the law. The stick, however, could also be an enhancement for corporate defendants who are convicted of antitrust violations, but had no compliance program.

One Last Note

The Antitrust Division did take a step forward on the compliance issue by publicly giving credit to a corporate defendant, Barclays, for beefing up a compliance program during an investigation (here).  The Division has not spoken publicly about this recent development. My partner, Hays Gorey Jr., is a panelist at the Sixth Annual Chicago Forum on International Antitrust Issues conference in Chicago this week where Brent Snyder, Deputy Assistant Attorney General for Criminal Enforcement is also a speaker.  There is a good chance Mr. Snyder will address the issue at the conference.

Stay tuned.

Thanks for reading.