Antitrust Compliance Takes Centre Stage: Recent Developments in the European Union
Fines for antitrust infringements in Europe are higher than ever, directors have been imprisoned, the competition authorities’ drive to enforce the rules shows no signs of ending. To say that competition law compliance is important would be an understatement. Compliance is crucial to the business policy of every company active in Europe. Companies must ensure that competition law compliance features in the consciousness of every employee charged with conducting its affairs. Not only because infringements of competition law can attract damage claims and some of the most severe penalties in the EU regulatory regime. Developing and maintaining a “culture of competition” ensures that a company can remain competitive and successful in the long term.
Companies frequently ask whether the existence of a compliance programme can help it avoid heavy fines from competition regulators. Of course, if implemented properly and effectively it should avoid a company ever being exposed to such a risk. However, what about where a company is in the unenviable position of facing a fine for an antitrust infringement? Can the existence of a compliance programme affect the ultimate level of the fine? This was recently considered by the competition authorities in London and Brussels.
The United Kingdom’s Office of Fair Trading (OFT) has suggested that the existence of a compliance programme in a company facing antitrust fines could actually result in the agency deciding to reduce the amount of the fine. On 19 October 2010 the OFT launched a public consultation of two draft guidance documents aimed at helping businesses and company directors to comply with competition law. In the draft documentation, the OFT reiterates its policy that the existence of a compliance programme will impact on the calculation of a penalty for competition law infringement and may result in a reduction in the fine by up to 10 per cent.
Just a few days later, on 25 October, the EU Competition Commissioner, Joaquín Almunia, set out the European Commission’s position in line with its guidelines and case law. The Commissioner stressed that reductions in antitrust fines will not be granted to companies merely because they have an internal competition compliance programme. In the Commission’s view, a “failed” compliance programme should not be rewarded. At the same time, he emphasised that compliance programmes are to be encouraged, and that the benefit of such a programme accrues to the company because it reduces the risk of cartel involvement in the first place. Implicitly, this raises the stakes for companies because, while it is important to have a compliance programme, it is even more important to ensure that it is effective.
In Germany, state-of-the-art compliance programmes can protect the leadership of a company from being personally liable, but the policy of the Federal Cartel Office, with respect to the effects of such programmes on the calculation of fines for companies, has not yet been clearly defined. Also, other antitrust authorities in the European Union have not expressed their position as clearly as the OFT or the European Commission. The prevailing practice to date tends to reflect a reluctance to reward the mere existence of an antitrust compliance programme – an approach more in line with that of the Commission.
Together, the recent messages from the OFT and Commission demonstrate that compliance is at the top of their agenda, placing companies on notice that effective compliance is expected. Companies must, therefore, take care to ensure they have an effective compliance programme. Whilst there may be some divergence in opinion as to whether a competition compliance programme should warrant a reduction in an antitrust fine, it is clear that companies are expected to ensure effective compliance programmes and will likely face harsher consequences in the absence of such a programme.
The main goal of every company should be to avoid exposure to fines in the first place, so the aim should be to have a good compliance programme. An effective antitrust compliance programme is tailor-made and implemented properly. The company should not just rely on an one-size-fits-it-all programme. Management support is crucial, and the company needs to implement and maintain a corporate antitrust compliance culture. Compliance training should be compulsory for all relevant employees and should preferably be conducted face-to-face. A properly designed and implemented compliance programme should avoid the risk of antitrust exposure.