United States: Updated Guidance from the Department of Justice’s Antitrust Division

in short

On November 12, 2024, the U.S. Department of Justice’s Antitrust Division updated its Evaluation of Corporate Compliance Programs (ECCP) in criminal antitrust investigations.¹ New additions include guidance such as using “managers at all levels” to “set the tone from the middle” by “demonstrating to employees the importance of compliance” and establishing policies that consider using “ad hoc messaging or non-company approaches”. Communication, “applied” data analysis tools. . . Compliance and Monitoring” and engaging compliance staff in the “deployment of artificial intelligence and other technologies to assess the risks they may pose.” Additionally, ECCP will now apply it to civil investigations. The department’s update reiterates that enactment The need for strong compliance policies, if properly designed, should prevent and detect potential misconduct under antitrust laws. Companies should work with counsel to review their current compliance policies and make necessary updates.

content

1. go deep
   1. Artificial Intelligence and Technology
   2. communication channels
   3. management and culture
   4. Monitoring and reporting
   5. Applicable to civil antitrust violations
   6. in conclusion

The ECCP has no legal force but provides guidance to department prosecutors on how to evaluate a company’s compliance program when making charging decisions and sentencing recommendations. In this way, the ECCP provides useful insights for companies seeking to reduce the risk of antitrust violations through compliance programs.

There are slight changes to the key questions the department asks when evaluating a company’s compliance program (changes are underlined):

1. “Is the company’s compliance program well designed?”
2. “Is the program implemented in earnest and in good faith? In other words, does the program have sufficient resources and authority to operate effectively?”
3. “Is the company’s compliance program effective in practice?”

The significant revision to the second question highlights the need for organizations to support a more proactive compliance policy.

The most significant changes to basic policies focus on artificial intelligence and technology, communication channels, management and culture, and monitoring and reporting. In addition, the updated ECCP addresses its application in civil settings.

Artificial Intelligence and Technology

The use of data, analytics and emerging technologies has been a focus of the Department of Justice for some time. In fact, in September this year, the Justice Department’s Criminal Division updated the ECCP to address how companies should prevent new technologies from being misused. Therefore, it is not surprising that the antitrust department’s updated ECCP adds similar guidance on artificial intelligence (AI). As companies increasingly adopt artificial intelligence and other advanced technologies, it is critical to proactively assess the potential antitrust risks posed by these tools. Strong compliance strategies must evolve alongside technological advances to ensure compliance with ethical standards and regulations. Compliance should be considered as early as possible in the design phase of new technology. New guidance on artificial intelligence includes:

risk assessment– Antitrust risk assessments should explicitly address the use of new technologies, including “artificial intelligence and algorithmic revenue management software.” This involves assessing how these tools impact business operations and identifying potential antitrust risks associated with their deployment, particularly the potential for these tools to result in price fixing and other types of collusion.

Proactive risk mitigation— As new technologies are introduced, companies must implement risk reduction measures before the technology is fully integrated into business processes. For example, companies should establish mechanisms to quickly “detect and correct decisions made by artificial intelligence or other new technologies that are inconsistent with the company’s values.”

Compliance officers’ understanding of technology— Compliance staff should be actively involved in the deployment of technologies such as artificial intelligence. To do this effectively, “compliance organizations (should) understand the artificial intelligence and other technology tools used by companies.” Understanding the capabilities and functionality of new technologies before they are adopted by companies is essential to identifying potential compliance issues and ensuring that these tools Alignment with the company’s values ​​is critical.

communication channels

The updated ECCP adds questions about how companies manage electronic communications channels related to antitrust compliance. These changes include the following:

Guide to Non-Corporate Communication Channels — Compliance programs should identify and evaluate all electronic communication channels used by employees, including non-standard channels. Companies should establish clear guidelines regarding the use of ad-hoc messaging or non-corporate communication methods. Temporary messaging deletes messages after a period of time or after viewing. Many apps, such as WhatsApp, Snapchat, and Signal, offer temporary messaging capabilities. Companies need to clarify when such communications are “permitted” and when “employees must withhold these communications.”

Saving mechanism—— A compliance plan should not only define the settings that control the retention and deletion of electronic records, but also spell out “the rationale for the company’s approach to what settings are permitted.”

“Hot” word training—— ECCP now states that if employees receive training on “antitrust ‘hot’ words,” the training should be “focused on detecting and deterring antitrust violations, not making antitrust violations more difficult to detect.” Additionally, companies should tailor training to each employee’s role and industry, incorporating “specific antitrust violations that have occurred in those industries in the past.”

management and culture

The updated ECCP encourages compliance leadership beyond senior management. The department now expects companies to foster a compliance culture that actively engages “managers at all levels”.

Attracting middle managers— The ECCP now asks how “managers at all levels” demonstrate a commitment to antitrust compliance. This requires middle managers to “set the tone from the middle” by discussing compliance and modeling ethical behavior in day-to-day operations.

Measuring Compliance Culture— In addition to cultivating a culture of compliance, companies should now “measure the effectiveness of…” . . (Their) compliance culture. “Recruitment and incentives should “reinforce a commitment to an ethical culture.” What’s more, companies should be “responsive to[their]compliance culture measurements” in order to make improvements where necessary.

Monitoring and reporting

The updated ECCP provides additional considerations for effective monitoring and reporting to ensure compliance with antitrust regulations, including the following:

Data access and analysis— ECCP now asks compliance officers whether they have “timely access to all relevant data sources” and whether they “use data analytics tools.” These tools should be used to monitor employees and AI decisions.

Encourage reporting – The ECCP has added new questions about reporting and dealing with whistleblowers. Companies should determine whether their policy is to “encourage(e) reporting of antitrust violations” or to “cool(e) reporting.” Compliance programs should assess employees’ “willingness to report violations.” Additionally, companies should now consider how confidentiality agreements may affect reporting. The department will ask “whether confidentiality agreements and other employee policies clearly provide that employees may report antitrust violations internally or to government authorities.”

Internal Investigation Standards – The updated ECCP asks if the compliance policy contains clear criteria for determining which violations “merit further investigation.” It should include steps to “ensure that the investigation is independent, objective, appropriately conducted and properly recorded.”

Respond to monitoring—— The ECCP supplement emphasizes the use of monitoring and auditing to “notify changes to compliance policies” and to make revisions “to account for previous antitrust violations within a company or industry.”

Applicable to civil antitrust violations

Investing in a strong antitrust compliance program is critical for companies, not only to reduce criminal risk but also to protect against civil antitrust violations. The updated ECCP adds that companies “should expect civil teams to consider many of the same factors as criminal prosecutors when evaluating the effectiveness of their compliance programs.” Demonstrating a strong compliance program to civil enforcers can “avoid further compliance and reporting requirements imposed by the courts or the retention and oversight of external monitors”.

in conclusion

A well-designed compliance program can foster a culture of responsibility and ethical behavior, which can help prevent antitrust violations from occurring in the first place. If a problem does arise, a strong compliance framework enables companies to promptly self-disclose—ensuring the best chance of receiving the benefits of the Antitrust Division’s leniency—and cooperate with investigations, demonstrating a company’s commitment to correcting any issues. The latest update to the ECCP demonstrates the department’s expectations for companies to adopt more proactive compliance programs.

1 Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations U.S. Department of Justice: Antitrust Division (November 2024).