July 17, 2019

DOJ to Reward Good Behavior With Change to Compliance Policy

In a sweeping policy change announced this past week, the Department of Justice Antitrust Division announced it will consider corporate compliance at the charging stage in criminal antitrust investigations. This is the first time the Antitrust Division has taken this approach.

The Antitrust Division’s long-time practice has been to deny credit for corporate compliance at the charging stage unless a company was the first whistleblower to come forward with its corporate malfeasance. One historical rationale for this position has been that a company’s corporate compliance program must not have been sufficiently comprehensive, enforced and/or effective if it did not prevent criminal activity.

However, taking the “an ounce of prevention is worth a pound of cure” approach, the Division has decided to recognize efforts of corporate entities to curb criminal activity through the investment in robust compliance programs.

In remarks announcing the new policy, Assistant Attorney General Makan Delrahim noted that companies that establish a good compliance program are suited to prevent crime or detect it, reducing the need for enforcement activity, minimizing the harm to consumers and saving government resources. The recent change, which will be reflected in the Justice Manual, is intended to reward corporate efforts to build such a “culture of compliance.”

Although there is not a “checklist” for evaluating a corporate entity’s compliance program, prosecutors are to consider three “fundamental” questions in their evaluation during charging:

  1. Is the corporation’s compliance program well designed?
  2. Is the program being applied earnestly and in good faith?
  3. Does the corporation’s compliance program work?

The goal of the policy change is to promote stronger compliance programs that will lower corporate misconduct by preventing and catching misconduct faster. Companies should note that this change will only impact the charging stage of criminal investigations; the DOJ will continue to disfavor so-called non-prosecution agreements, where the DOJ refrains from filing charges while allowing a company to demonstrate good conduct.

The Division’s written guidance for the evaluation of compliance programs in criminal antitrust investigations is available here. In a related announcement, in April 2019, the Criminal Division of the DOJ released written guidance for white-collar prosecutors to consider in evaluating corporate compliance programs.

Summer associate David Adeleye contributed to this article.

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