Designing and Implementing Competition Law Policy and Training - - PowerPoint PPT Presentation

The audio portion of the conference may be accessed via the telephone or by using your computer's

• speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

Presenting a live 90-minute webinar with interactive Q&A

Designing and Implementing Competition Law Policy and Training

Minimizing Cost of Noncompliance, Drafting Compliant Contracts, Training Business Clients on Commercial Communications

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURSDAY, APRIL 21, 2016

Paula W. Render, Partner, Jones Day, Chicago Theodore L. Banks, Scharf Banks Marmor, Chicago

Tips for Optimal Quality

Sound Quality If you are listening via your computer speakers, please note that the quality

• f your sound will vary depending on the speed and quality of your internet

connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-961-8499 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

FOR LIVE EVENT ONLY

Continuing Education Credits

In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. A link to the Attendance Affirmation/Evaluation will be in the thank you email that you will receive immediately following the program. For additional information about continuing education, call us at 1-800-926-7926

• ext. 35.

FOR LIVE EVENT ONLY

Program Materials

If you have not printed the conference materials for this program, please complete the following steps:

• Click on the ^ symbol next to “Conference Materials” in the middle of the left-

hand column on your screen.

• Click on the tab labeled “Handouts” that appears, and there you will see a

PDF of the slides for today's program.

• Double click on the PDF and a separate page will open.
• Print the slides by clicking on the printer icon.

FOR LIVE EVENT ONLY

Designing and Implementing Competition Law Policy and Training

April 21, 2016

Agenda

• Business communications that pose risk
• Government enforcement and private actions

arising out of unlawful business communications

• Best practices for minimizing risk

6

TYPES OF BUSINESS COMMUNICATIONS THAT POSE RISK

7

Risks of competitive intelligence

• Examples: information about a competitor’s

upcoming pricing action or capacity reduction

• Can be pro- or anticompetitive, depending on the

source and venue:

8

• Public sources
• Customers
• Suppliers
• Competitors
• Joint venture

partners

• Trade associations
• Agents

Example: Signaling

• United Airlines CEO to investors in Jan. 2015:

“We will absolutely not lose our capacity discipline. It's very healthy for us and very healthy for the industry.”

• In June 2015, airline execu-

tives publicly discussed “capacity discipline” at a meeting of the airlines’ trade association in Miami.

9

• A third party can get you in trouble (e.g.,

collusion, unfair methods of competition)

• Implement behavioral rules
• No deception
• No theft
• No improper use of technology

(“web scraping”)

Example: Using a Competitive Intelligence Firm

10

• Agreements to raise price, allocate markets, or

rig bids

• Benchmarking
• Comparisons of one

company’s wages/benefit

• ffering vs. another’s
• Warnings (I’ll do X if you do Y)

Risks of other communications

11

Example

• The FTC sued U-Haul for invitations to collude stemming from

conduct in 2006. In an internal memo, for example, U-Haul’s regional managers were instructed to raise prices above Budget’s rate, and then to “let Budget know” to get Budget to match.

• Another memo offered a “script” for managers to use when

contacting their counterpart at Budget: “Try ‘Are you tired of renting 500 miles for $149 and $28 commission? Then, tell your Budget/Penske rep that U-Haul is up and they should be too.’”

• In the Matter of U-Haul Int’l Inc. and AMERCO, FTC File No. 081-0157

12

GOVERNMENT ENFORCEMENT AND PRIVATE ACTIONS

13

Prison for price-fixers: a top DOJ priority

14

Prison for price-fixers: a top DOJ priority

15

“It is indisputable that the most effective deterrent to cartel offenses is to impose jail sentences on the individuals who commit them.”

Prison for price-fixers

16 https://www.justice.gov/atr/criminal-enforcement-fine-and-jail-charts

Substantial fines: another DOJ priority

17 https://www.justice.gov/atr/criminal-enforcement-fine-and-jail-charts

DOJ’s Amnesty Program

18

Consequence: Individual Liability

• Yates Memo (9/9/15)
• To be eligible for any cooperation

credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.

• Both criminal and civil corporate investigations

should focus on individuals from the inception of the investigation.

19

20

Another consequence: Private cases

DOJ announces investigation

• f three

corporate defendants

21

Another consequence: Private cases

DOJ announces investigation

• f three

corporate defendants 80+ class action cases filed in US courts alleging nationwide conspiracy Two class actions filed in Canada

22

Another consequence: Private cases

DOJ announces investigation

• f three

corporate defendants 80+ class action cases filed in US courts alleging nationwide conspiracy Two class actions filed in Canada Securities cases in US and Canada

23

Guilty pleas by two corporate defendants and three employees, to conduct in one part of one state

Another consequence: Private cases

DOJ announces investigation

• f three

corporate defendants 80+ class action cases filed in US courts alleging nationwide conspiracy Two class actions filed in Canada Securities cases in US and Canada

24

Guilty pleas by two corporate defendants and three employees, to conduct in one part of one state

Another consequence: Private cases

Class actions alleging conspiracy affecting prices in US and Canada by all three corporate defendants continue DOJ announces investigation

• f three

corporate defendants 80+ class action cases filed in US courts alleging nationwide conspiracy Two class actions filed in Canada Securities cases in US and Canada

25

Guilty pleas by two corporate defendants and three employees, to conduct in one part of one state

Another consequence: Private cases

Class actions alleging conspiracy affecting prices in US and Canada by all three corporate defendants continue B A N K R U P T C Y DOJ announces investigation

• f three

corporate defendants 80+ class action cases filed in US courts alleging nationwide conspiracy Two class actions filed in Canada Securities cases in US and Canada

Effect on stock price

26

2 4 6 8 10 12 14

Stock price

BEST PRACTICES FOR MINIMIZING BUSINESS COMMUNICATIONS RISK

27

BEST PRACTICE: KNOW THE AUDIENCE.

28

Get their attention.

• Not just jail and fines. Also:
• Termination of employment
• Lost promotions and opportunities
• Loss of savings and 401(k) to

legal costs

• Civil lawsuits against individuals
• Lost workdays to assisting with

litigation

• Loss in value of stock

29

They don’t believe a problem will happen.

30

“This antitrust thing will blow over.”

• Bill Gates, 1995

They aren’t lawyers or economists.

.

31

What do they care about?

• They do not care about the Sherman Act.
• Senior management cares about the stock

price.

• The rest of the employees care about their

jobs.

• Show them how compliance relates to their

concerns.

32

Tailor Compliance Training

Don’t . . .

• . . . lecture about the

antitrust statutes.

• . . . give materials for

further study.

• . . . assume one size

fits all.

33

Do . . .

• . . . explain risks

specific to their areas: pricing, sales, etc.

• . . . provide real-time

training and tests.

• . . . focus training on

each group’s area.

Assign Risks to Jobs

• Think about what

each business unit does, what each job does

• How does their

activity implicate antitrust risk?

34

Alignment of risks and functions

• Sales > collusion
• Marketing > discrimination
• Strategy > acquisitions
• Management > punishment

35

Illustrate with Examples & Images from Each Business Unit

Hey, that’s our plant!

36

BEST PRACTICE: KEEP IT SIMPLE . . . USUALLY.

37

For most employees:

• Don’t fix prices.
• Don’t talk to anyone outside the

company about how you compete.

• Call if you have questions.

38

Some functions require more.

• Pricing
• Purchasing
• Standards setting
• Trade associations
• Human resources

39

40

Study the rules . . . . . . or stay away from the edge.

Depending on the function:

Consider NOT creating a comprehensive compliance manual.

41

BEST PRACTICE: CHOOSE THE RIGHT METHOD.

42

Is live training optimal? Maybe . . .

43

Maybe not.

44

Computer Based Training?

45

Yes, but it must be:

• Interesting
• Short
• Relevant
• Customization

always needed

46

Slides? That’s so 20th Century!

• How do employees communicate?
• Work from home, office, client location?
• What did they hear on the first day of their job?
• Goal: make information flow painless

47

BEST PRACTICE: CONTINUOUS SUPPORT.

48

Frequent messaging

• Compliance seminars - interactive
• Sales/department meetings
• Ad hoc (i.e., refresher prior to trade

association meeting)

• Online compliance training
• Website support
• Periodic bulletins

49

Invite calls for help.

• Designate someone in the

Legal Dept. to answer questions.

• Have a back-up.
• Track questions to

improve training.

• Be a crossing guard,

not a cop.

50

BEST PRACTICE: FREQUENT AUDITS.

51

The Antitrust Audit: Why?

• Identify actual or potential violations before an

investigation or suit.

• Determine the extent of known or suspected

violations.

• Identify risky business practices.
• Assess the effectiveness of antitrust compliance

and training.

• Keep employees on their toes.

52

The Antitrust Audit: Who?

• By counsel, to preserve privilege
• Inside counsel, for knowledge of company and

familiarity to employees

• Outside counsel, for fresh perspective, audit

experience

53

The Antitrust Audit: When?

• Before there’s a

problem

• Periodic
• Announced or random
• When employees call

for assistance

54

The Antitrust Audit: How?

• Review email with competitors or others who

pose potential problems

• Review trade association meeting minutes,

emails

• Review expense reports
• Review pricing, contracting and purchasing

practices

• Interview employees

55

Reprinted with permission of eWeek

56

PANELISTS

Paula Render is an antitrust litigator. She was part of the leadership teams for the Electrolux/GE merger case in 2015 and the US Airways/American Airlines merger case in 2013. She defends clients in class actions and other cases against claims of price-fixing, market allocation, boycotts, refusals to deal, price discrimination, tying, and other antitrust claims. In addition, Paula counsels clients on compliance and other antitrust issues.

prender@jonesday.com | 312-269-1555

57

Ted Banks focuses his practice on general corporate matters, antitrust counseling and transactions, and corporate compliance. He serves as a compliance monitor for the Federal Trade Commission and Competition Bureau of Canada, and is an adjunct professor at Loyola (Chicago) Law School, teaching Corporate Compliance. He is the editor of the Corporate Legal Compliance Handbook, published by Wolters-Kluwer..

tbanks@scharfbanks.com | 312-662-4897