DOJ’s evaluation of a company’s compliance program is relevant to its decision of whether to bring charges, to the terms of any resolution of charges and to its sentencing recommendations.

The U.S. Department of Justice Antitrust Division (DOJ) recently issued an update to its 2019 guidance to prosecutors on the factors to consider in evaluating a company’s antitrust compliance program. The new guidance, entitled “Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations,” follows the overall framework of the original document, instructing DOJ prosecutors to consider whether a company’s compliance program (1) is well designed, (2) is adequately resourced and empowered to work effectively, and (3) works in practice. But the updated guidance contains some important new instructions as well, including on topics such as the use of AI tools, ephemeral messaging platforms and nondisclosure agreements (NDAs)―all of which have been stand-alone topics of other DOJ compliance guidance.

While the updated guidance does not have the force of law, it provides a road map for companies to follow in designing or updating their antitrust compliance programs. DOJ’s evaluation of a company’s compliance program is relevant to its decision of whether to bring charges, to the terms of any resolution of charges and to its sentencing recommendations. In addition, the guidance states that companies seeking to mitigate the consequences of civil violations “should expect the civil team to consider many of the same factors when assessing the effectiveness of their compliance program as criminal prosecutors do.”

Highlights of the Updated Guidance

• As it has stressed in other guidance documents and in recent changes to its standard preservation letters and subpoenas, DOJ will consider what mechanisms the company has put in place to manage and preserve information contained in each of the company’s electronic communication channels, including ephemeral messaging applications.
• DOJ will also consider how the company’s risk assessment addresses its use of emerging technologies such as AI and algorithmic revenue management software.
• An important consideration for DOJ will be how the compliance function compares with other functions in the company in terms of stature, experience and compensation levels.
• DOJ will consider whether the company’s use of NDAs and other restrictions on current and former employees act to deter whistleblowers from reporting potential antitrust violations without fear of retaliation.
• DOJ will consider what incentives the company has in place to promote compliance—such as in its compensation structure—and what disciplinary measures the company has taken for those who engage in antitrust violations or who fail to take reasonable steps to prevent or detect violations.

What the Update Means for Companies

Companies should continually monitor their compliance programs to ensure that they adequately assess the risks presented by emerging technology tools such as AI. In addition, companies should put in place policies regarding employee use of communication devices to ensure that all communications—text messages, ephemeral or other instant messages, etc.—are preserved.

Companies should regularly audit and evaluate their compliance programs to ensure that the compliance function has the stature within the company and the resources to effectively identify and mitigate compliance risks. As part of such evaluations, companies should ensure that NDAs or other practices do not (inadvertently) inhibit employees from reporting potential antitrust violations. Finally, companies should provide proper incentives in their compensation and other policies to encourage compliant behavior and discipline those who commit antitrust violations or fail to take appropriate action to prevent such violations from occurring.

For More Information

If you have any questions about this Alert, please contact Sean P. McConnell, Brian H. Pandya, Christopher H. Casey, any of the attorneys in our Antitrust and Competition Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.