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

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 THURSDAY, APRIL 21, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Paula W. Render, Partner, Jones Day , Chicago Theodore L. Banks, Scharf Banks Marmor , Chicago 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 .

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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: • Public sources • Joint venture • Customers partners • Suppliers • Trade associations • Competitors • Agents 8

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

Example: Using a Competitive Intelligence Firm • 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”) 10

Risks of other communications • Agreements to raise price, allocate markets, or rig bids • Benchmarking • Comparisons of one company’s wages/benefit offering vs. another’s •Warnings (I’ll do X if you do Y) 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 “It is indisputable that the most effective deterrent to cartel offenses is to impose jail sentences on the individuals who commit them.” 15

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

Substantial fines: another DOJ priority https://www.justice.gov/atr/criminal-enforcement-fine-and-jail-charts 17

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

Another consequence: Private cases DOJ announces investigation of three corporate defendants 20

Another consequence: Private cases Two class DOJ actions filed announces in Canada investigation of three corporate 80+ class defendants action cases filed in US courts alleging nationwide conspiracy 21

Another consequence: Private cases Securities cases in US and Canada Two class DOJ actions filed announces in Canada investigation of three corporate 80+ class defendants action cases filed in US courts alleging nationwide conspiracy 22

Another consequence: Private cases Securities cases in US and Canada Two class Guilty pleas by DOJ actions filed two corporate announces in Canada defendants and investigation three of three employees, to corporate conduct in one 80+ class defendants part of one action cases state filed in US courts alleging nationwide conspiracy 23

Another consequence: Private cases Securities cases in US and Canada Class actions Two class Guilty pleas by alleging DOJ actions filed two corporate conspiracy announces in Canada defendants and affecting investigation three prices in US of three employees, to and Canada corporate conduct in one by all three 80+ class defendants part of one corporate action cases state defendants filed in US continue courts alleging nationwide conspiracy 24

Another consequence: Private cases Securities cases in US and Canada Class actions B Two class Guilty pleas by alleging A DOJ actions filed two corporate conspiracy N announces in Canada defendants and affecting K investigation three prices in US R of three employees, to and Canada U corporate conduct in one by all three P 80+ class defendants part of one corporate T action cases state defendants C filed in US continue Y courts alleging nationwide conspiracy 25

Effect on stock price Stock price 14 12 10 8 6 4 2 0 26

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. “This antitrust thing will blow over.” -Bill Gates, 1995 30

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 . . . Do . . . • . . . lecture about the • . . . explain risks specific to their areas: antitrust statutes. pricing, sales, etc. • . . . give materials for • . . . provide real-time further study. training and tests. • . . . assume one size • . . . focus training on fits all. each group’s area. 33

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

Depending on the function: Study the rules . . . . . . or stay away from the edge. 40