DOJ's Antitrust Division Announces New Policy To Incentivize Corporate Compliance At Charging

On July 11, 2019, the Antitrust Division of the U.S. Department of Justice (the "Division") announced for the first time that it would consider, and potentially reward, effective compliance programs at the charging stage in criminal antitrust investigations. Previously, and for more than 25 years, the Division had only considered compliance programs and efforts at the sentencing stage. Announcing the significant policy change, Assistant Attorney General Makan Delrahim noted the Division's continued commitment to "rewarding corporate efforts to invest in and instill a culture of compliance." Revisions to the policy are reflected in the Division's updated Justice Manual, which now addresses the evaluation of compliance programs at both the charging and sentencing stages as well as Division processes for recommending indictments, plea agreements, and selecting monitors. Among the many changes ushered in with this new guidance, the Division will now consider entering Deferred Prosecution Agreements ("DPAs") as a resolution option for companies with effective antitrust compliance programs. There are significant legal and business implications as a result of the new policy, which further underscore the importance of establishing and maintaining an effective and robust compliance program to minimize risks and exposure.

1. Preexisting Corporate Leniency Policy

   While the Division's Corporate Leniency Policy also allowed companies to receive credit, and ultimately leniency, in criminal antitrust investigations, it had two conditions which lessened the incentive to develop and maintain rigorous antitrust compliance programs. First, the Division's "first-in-the-door" requirement only considered the first company to come forward with material information about suspected violations for potential leniency even if a later-reporting corporation maintained a stronger corporate antitrust compliance program. Given the existence of similar rules in other jurisdictions globally, the first-to-report requirement also disincentivized reporting in any location unless a company was the first to report in every location. Second, notwithstanding a company's "first reporter" status, the Division did not explicitly consider the scope of the company's preexisting compliance program when making a leniency determination. These factors reduced the incentive for companies to implement and maintain robust compliance programs. At the same time, and for the same reasons...