Law Tips: Antitrust Part 1

ICLEF Law Tips #36

A General Practitioner’s Guide to Antitrust – Part 1

“Doing the right thing is not just the right thing to do – it is almost always the less expensive and less risky course of action.”

This week’s gems from our CLE faculty feature Judy L. Woods, Benesch Friedlander Coplan & Aronoff, Indianapolis, Chair of ICLEF’s current CLE on “ Antitrust for the GP.”  Judy’s concise guidance to fellow practitioners concerning antitrust compliance continues with:

There are many reasons businesses and their executives should strive to comply with antitrust laws. Studies have shown that employees want to work for companies with integrity. People want to do business with companies that are fair and honest.  Doing the right thing can be a strategic advantage in the market place. Other studies have shown that a corporate culture built on integrity and ethical conduct will permeate the business. These studies have shown that when honest, ethical business conduct starts at the C level, it spreads throughout a company.  When there is a lax culture, employees often cut corners, and have the attitude that they won’t get caught or it won’t matter if they do because “everybody does it.”  Tolerance of petty theft in the workplace (e.g., taking office supplies home for personal use) can lead to fudging on expense reports and similar activities, and then lead to other more serious ethical lapses and criminal violations. Business executives should consider whether it is really worth betting the company to gain a perceived advantage from cartel activity and whether it is worth going to jail over such a perceived gain.

Ms. Woods emphasizes that is is necessary for every company, regardless of size, to have an antitrust compliance program.  She gives the following specific reasons:

For most businesses, one of the most effective ways to comply with the antitrust laws is to develop, implement and maintain an antitrust compliance policy. An antitrust policy can help sales and marketing personnel and other employees and executives understand what they can and cannot do by outlining prohibited conduct and describing best or model practices. To be effective, an antitrust policy must be tailored to the particular business, must be easy to understand, and simple to follow.  In addition to promoting business integrity as discussed above, other important reasons to implement an antitrust compliance program are to:

  1. 1. Rationalize or formalize pricing and distribution systems and policies.
  2. 2. Qualify for governmental programs that require an antitrust compliance program as a condition of doing business with them.
  3. 3. Avoid or minimize the risk and expense of investigation and/or enforcement actions and subsequent litigation.
  4. 4. In the event of enforcement action in federal criminal cases, having a compliance and ethics program program in place may help lower the company’s “culpability score” under the Federal Sentencing Guidelines, and thus help reduce a corporate fine. 51

A compliance program will not prevent a criminal prosecution.  A strong corporate compliance program can help at the sentencing stage when the employees who committed the violation were not top level executives. Corporate antitrust liability, whether civil or criminal, is grounded on the theory of respondeat superior. Thus, there are few civil or criminal cases based on the situation where the antitrust violator is acting for personal gain, and not on behalf of the company’s objectives.  Most antitrust crimes are violations committed at the top of the company’s organizational chart.  When senior executives are culpable, even the best corporate compliance program will not make much of a difference.

A compliance program may in some circumstances help a company qualify for sentence mitigation under the sentencing guidelines. However, once DOJ has determined a violation occurred, a compliance program will not dissuade it from prosecuting.  The sentencing guidelines set forth seven minimum requirements that a compliance program must satisfy in order to qualify for sentence mitigation. 52

These are:

  • Clearly established compliance standards;
  • Assigning overall responsibility to oversee compliance to high-level executives within the company;
  • Exercising due care not to delegate responsibility to employees who have a propensity to engage in illegal conduct;
  • Taking reasonable steps to communicate standards and procedures effectively to all employees;
  • Taking reasonable steps to achieve compliance with standards;
  • Consistent enforcement of standards through appropriate disciplinary mechanisms;
  • Taking reasonable steps when an offense occurs to respond and to present future violations.

Hopefully, you garnered insight into antitrust compliance from Judy Woods’ advice so far.  Come back to Law Tips next week when we share her remarks on the hallmarks of a strong antitrust compliance program.

To view the upcoming Video Replays, the Online/On Demand Video or purchase the e-Publication of Antitrust Law for the General Practitioner Click Here.


About our Law Tips faculty member:
Judy L. Woods, Benesch Friedlander Coplan & Aronoff, LLP, Indianapolis, is a partner with the firm’s Litigation Practice Group. She focuses her practice on complex commercial and “bet the company” litigation, including antitrust, class actions, shareholder and corporate governance disputes, international contracts, finance disputes, fraud, RICO and other business disputes.

About our Law Tips blogger:
Nancy Hurley, Law Tips blogger, has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We plan to utilize her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook page, Twittering and other places her legal experience lends itself.

Thank you for reading ICLEF’s Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page. Also, look for blog updates on Facebook and Twitter.  Your comments are welcome as Nancy continues to sift through the treasure trove of knowledge of our expert faculty to share with you on Law Tips.


51   A corporation’s “culpability score” can be reduced if it had in place an effective compliance and ethics program.  To be considered “effective, such a program must, among other things, identify those with operational responsibility for the program and assign as the responsible person someone with direct reporting obligations to the company’s “governing authority” (e.g., the board of directors). Simply having a compliance program may not be enough to reduce the sentence in some enforcement actions, and sometimes the DOJ has taken the position that if a company is a criminal antitrust defendant, its compliance program must have failed and no credit should be given for the program.  In other instances, the DOJ has recognized that companies with strong compliance programs may be victimized by “rogue” employees or officers.

52   U.S. Sentencing Guidelines, Chapter 8.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN


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