Elements of an Effective Antitrust Compliance Program

Article by Ronald B. Ravikoff and Michael S. Pasano

Companies increasingly recognize the value of adopting sophisticated compliance programs to ensure that their employees remain within the bounds of federal and state laws that prohibit price fixing and related activities.

A compliance program is worthwhile for the same reason an insurance policy is: to cover potentially devastating risks. Violations of criminal antitrust laws may result in felony convictions punishable by imprisonment and fines as high as $350,000 for individuals and $10,000,000 for corporations. Short of criminal liability, violations of antitrust laws may give rise to government investigations under both the Federal Trade Commission Act and similar state acts. Enforcement activity typically leads to private litigation, with the threat of treble damages, disruptive injunctions, and huge attorneys' fees.

In addition to preventing antitrust violations, the existence of an antitrust compliance program may serve to mitigate the consequences of a violation that occurs in spite of the policy. The federal sentencing guidelines explicitly provide for lower penalties if a corporation has an effective program to prevent and detect violations of law (8C2.5(f)). And some courts now instruct the jury that the existence of an antitrust compliance program may be evidence that the corporation itself did not intend to violate the antitrust laws.

An antitrust compliance program also educates company employees about permissible conduct under the antitrust laws. Without such training, the company could be at a competitive disadvantage because employees might refrain from aggressive business practices they mistakenly believe are illegal.

Most antitrust compliance programs consist of three elements: (1) audit of existing practices, (2) preparation and maintenance of an antitrust policy guidebook, and (3) ongoing employee education.

The Antitrust Audit

The first step in the establishment of an antitrust compliance program is ensuring that the company currently complies with all antitrust laws. Typically, companies retain outside counsel to review existing policies and practices. Such an audit identifies problem areas requiring immediate corrective action and pin-points aspects of the business to which the antitrust laws have particular relevance.

An antitrust audit normally consists of interviews with employees and a review of company documents. Counsel conducts interviews in small groups...