Would you credit it? Compliance policies and antitrust fines

Video | October 2019 | 07:12

Video Details

Would you credit it?  Compliance policies and antitrust fines
Shaha El-Sheemy Hi Richard, good to see you. I wanted to talk to you about an interesting and perhaps unusual development concerning compliance and the value, specifically, of having a good compliance programme. So, earlier this year, the Department of Justice in the US announced that it will start to credit companies if they have a robust compliance programme. And I wondered what your thoughts are on this and what this development means and generally the merits of such an approach.
Richard Whish QC
Yes, it’s an interesting debate and it’s been going on for a number of times. And, as you say, the DOJ has now embraced the idea, as has the UK and other competition authorities around the world. To my mind it’s really about awareness and do businesses fully understand what competition law is and the risks involved in infringing it? And the evidence does suggest that there is still quite a low level of understanding of what competition law is. The CMA recently have commissioned some research from ICM Unlimited and one of the questions that they asked, this was published in 2018, was… they went to 1,200 businesses and asked them, basically were they aware of competition law? They have done this survey about every four or five years and even in the latest survey they say that 23 per cent of respondents said that they were very or fairly familiar with competition law – which is another way of saying that 77 per cent of respondents weren’t aware of it. And 16 per cent said that they had never heard of competition law. So obviously more has to be done in terms of raising awareness. And if you can raise awareness and then persuade people to have competition law compliance programmes, I mean, it must be in principle a good idea.
Shaha El-Sheemy
So, with that in mind you’ve got the competition authorities that do provide credit for, and recognise, compliance programmes that work. But you have quite an opposing school of thought where you’ve got competition authorities –  and notably the European Commission – that does not see it that way and actually thinks well, why should we credit a company whose compliance policy has failed?
Richard Whish QC
Well, and I do understand where the European Commission is coming from. Because, let’s face it, when they are conducting these investigations, typically the defendants are enormous, multinational corporations who quite frankly should, and indeed do, know about competition law. And if they have got a competition law compliance programme in place, so they should, why then give them credit for having one, because it’s just part of their corporate responsibility. Indeed, I can see the argument that says, if you’ve got one of these compliance programmes and then totally fail to implement it, if anything, it could be an aggravating factor, suggesting that the fine should be raised. So I see the logicality of that argument, but then I think one has to recognise that the “clients” of the European Commission are very different from the “clients” of the competition authority of Fiji or Barbados, or Peru.  So, in a sense, it’s a question of what fits in which jurisdiction.
Shaha El-Sheemy
And, you do get some commentators saying that you’ve got now the US development as quite a marked shift in policy and you, of course, have the UK and, I think, Australia, Canada, there are quite a few competition authorities that already take that approach of crediting companies who have a good compliance programme. So, do you think that then we may see more competition authorities around the world following and getting into this?
Richard Whish QC
Well, look, the first think I would say, is, I think, every country has to do what is best for it. There’s no one size fits all answer to this. Local authorities know their local circumstances, culture, conditions, etc. What I would say is, in the modern era, authorities meet one another all the time, whether it’s the ICN, within Europe, the ECN, OECD, UNCTAD. There are any number, there are regional fora – ASEAN, MERCOSUR, COMESA, etc. Authorities talk to each other all the time and I’m sure that there will be more of this kind of approach taken. But I wouldn’t go so far as to say everyone is going to do it, because it is a question of what suits which particular system. 
Shaha El-Sheemy
And so, an interesting point to note here is that you do have this kind of opposing dynamic where you could have the compliance carrot, shall we call it, or should we be using the enforcement stick? So the competition authorities have both of those and an interesting parallel that can be drawn is how these mechanisms have been used traditionally, it seems, in the anti-bribery and corruption space. So I’d be interested in your thoughts as to how this would work out in the antitrust...
Richard Whish QC
Well, look, I think in the end what we are trying to do is to raise the level of corporate responsibility and we mustn’t look at these things exclusively as competition lawyers. Sometimes it is better to look at it down from above and ask ourselves the question what do we want the responsible board of a responsible company to do? And that is to comply with all systems of law, which is anti-bribery law, it’s competition law and numerous other laws, some of which, of course, have a kind of economic content to them. So I think what one needs at corporate level is a holistic approach to all aspects of compliance.
Shaha El-Sheemy
A notable aspect of all this, of course, is then how does a company translate this for their own practical purposes? So, of course, the availability of credit for compliance would mean that there is a significant reduction in exposure available to companies, and so how would you say that this could be implemented, what would you say to businesses who are looking to redesign or implement their compliance programmes?
Richard Whish QC
Well, I think the first thing is you can’t get a competition law compliance kit off the shelf, it has to be bespoke to your own business because businesses vary very much from one to another. So the kind of practices that you have to be concerned about may vary. But once you’ve adopted the policy, it is not a tick box exercise. It has to have buy-in from the board level itself – including Chairman and CEO or whatever the lead figures are called – and it has to be continually monitored, enforced, there has to be ongoing training, there has to be updating, etc, etc. It can’t just be something that is symbolic, it’s got to be for real. 
Shaha El-Sheemy
Thanks very much, Richard, that’s helpful.