Tell Me You’ve Never Run an Antitrust Compliance Program Without Telling Me You’ve Never Run an Antitrust Compliance Program – Antitrust, EU Competition

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The Justice Department’s challenge to certain Google actions raises interesting antitrust questions. But during the first week of the trial, one aspect of Google’s antitrust program appeared to be the biggest problem. Some commentators were shocked to learn that Google’s lawyers were advising employees to avoid some of the antitrust buzzwords like “leverage” or “dominance.” Those of us who implemented antitrust compliance programs for decades they were shocked that anyone could be shocked by these common compliance tactics. Below I explain how such tactics can help accomplish these two goals compliance programs.

Objective 1: Follow the law

The first goal of compliance programs is, of course, to help companies comply with the law. All else being equal, companies would prefer to avoid the real and reputational costs of being known as lawbreakers. But complying with the law is not always easy. Sometimes the law is not clear—for example, the Sherman Act, Section 2, is very short, but the acts that constitute it
monopolization are vague at best. Sometimes the law or its interpretation changes – again section 2 is a good example as its interpretation has changed from 1960 to 2000 to today. Finally, entrepreneurs in training may be experts in business, but they are certainly not experts in all the laws that apply to them. So their lawyers have to tell them precisely, concisely and memorably how to comply with the law and then let them get back to their day jobs.

A list of words to avoid can be precise, concise and memorable. A sales manager doesn’t need to understand or remember all the intricacies binding law but he may not forget to ask for advice before using it in a note or require the purchase of a second product before allowing the sale of a very popular product.

Goal 2: To be seen as a law abiding person

Even if a compliance program doesn’t work perfectly and the government or a private prosecutor accuses a company of violations, a compliance program can still help. For example, DOJ started providing business loan for a good but not perfect compliance program in investigations and sentencing decisions.

More generally, a good program, perhaps even including a list of phrases to avoid, can also help a company explain to investigators, judges or juries why its actions did not violate the law. During any investigation or trial, lawyers will need to explain both these actions and the words used to describe them. Usually, the less explanation needed, the better. Therefore, if entrepreneurs avoid certain phrases and at the same time do their work honestly, the number of necessary explanations will be reduced and the burden of defense will be lightened. Lawyers will still be forced to explain why requiring the purchase of product B in order to obtain the defendant’s very popular product A is not anti-competitive. But their burden will be eased if they don’t also have to explain what some low-level marketing specialist meant in an email two years ago suggesting companies “take advantage of our dominance.”

As a result, standard compliance advice is to be clear and honest in what you write. Will you remember in six months or three years why you used that phrase? How will this phrase appear on the front page (New York Times/Wall Street Journal/Automotive News/government brief)? To make this advice even clearer and more memorable for marketers, the matching program will sometimes give examples, even long lists of words and phrases that will be difficult to explain and should therefore be avoided.

Why such advice may be necessary

This list of “banned words” cannot be the entire compliance program. As compliance specialists have long known — and as the Department of Justice clarified — multiple elements of the program must work together to create a “culture of compliance”. Simply avoiding certain words is unlikely to help if, say, the CEO scoffs at the need for such compliance programs, or is otherwise seen as mere “checking the box” by busy people’s legal departments.

Compliance lawyers must also avoid overdoing the list of prohibited words. In what is now a classic example, Product liability lawyers instructed engineers to avoid referring to car fires and instead use “thermal events”.. Legal advice on how to avoid creating bad documents cannot interfere with entrepreneurs honestly and accurately creating the documents necessary to run their business.

But this advice can reverse several impulses of many entrepreneurs. First, sports and war analogies are common in business parlance. Phrases like “crush the competition” or “kill them in the cradle” seem as commonplace in the boardroom as they are in the high school locker room. Second, many current or future managers like to use MBA-Speak even though it may not make sense in the given situation. Regardless of the meaning of phrases like “market control”. “leveraging our strengths” or “building a moat around our business” may or may not have an MBA or a CNBC interview, often means something very different in antitrust.

To be clear, I haven’t reviewed Google’s entire compliance program to understand what it says outside of the list of words to avoid. But while the court raises many interesting, even novel, antitrust issues, antitrust compliance programs should not be one of them.

The content of this article is intended to provide a general guide to the issue. Professional advice should be sought regarding your particular situation.

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