On Nov. 23, 2011, the European Commission (EC) unexpectedly produced its own guidance on EU competition law compliance (which it calls “a sort of competition highway code”), following the trend set by national regulators in the EU. The publication of this guidance provides another reminder of the importance of a suitable competition law compliance programme in the EU and of the characteristics of a robust and effective programme.

The EC makes it clear that it supports compliance programmes, tailored to the business in question. As with other regulators, such as the UK Office of Fair Trading (OFT), the EC suggests a proactive risk-based approach, including risk identification, assessment, mitigation and review, backed by “unequivocal senior management support”. The guidance specifically makes the points that ignorance of the law is no defence and that “being small is no excuse for not complying with the applicable EU or national competition rules”.

In a departure from the OFT’s approach, the guidance also confirms that, although all compliance efforts are welcomed, the existence of a compliance programme will not be used as a mitigating factor justifying the reduction of any fine imposed for an infringement of competition law. This is because the purpose of a compliance programme is to avoid an infringement in the first place. On the other hand, the existence of a programme will not be considered as an aggravating circumstance justifying an increase in a fine should there be an infringement. This is because “if the programme has failed . . . the sanction will come in the form of the fine imposed”. Therefore, as the EC points out, “a credible competition compliance programme can only deliver benefits to a company”.

The European Commission and national competition regulators in the EU continue their unremitting fight against anti-competitive practices of all types. Corporate fines can be high, but regulators increasingly see potential personal liability, including imprisonment for certain practices, as the most effective deterrent.

The best defence for a company and its employees against competition law risk is the introduction and maintenance of an effective competition law compliance programme. Indeed, regulators assume that well run companies will have such a programme in place. One of the key benefits of a programme is that, if it results in an infringement being found, the company and its employees may be able to take advantage of whistleblowing or “leniency” procedures, which provide full or partial immunity from regulatory action.

There have been recent developments from two of the EU’s leading competition law regulators which relate to the importance of competition law compliance programmes in the EU generally and to the characteristics of a robust and effective compliance programme.

France: The Autorité de la Concurrence Summarises its View of an Effective Compliance Programme

On 14 October 2011, the French regulator launched a consultation exercise which in part concerns draft guidance on competition law compliance programmes. Its press release announcing the consultation refers to the “added value” of such programmes, being that they:

“…play a preventive and educational role [and] can also be key in helping the company’s board to detect antitrust offences and to deal with them, in particular by swiftly submitting a leniency application to the Autorité de la concurrence”.

The Autorité de la concurrence summarises what it sees as the key components of a robust and effective programme as follows:

• a firm, clear and public commitment by the entire board and management to comply with competition law and to support the company’s compliance programme;
• empowering someone, within the organisation, in charge of implementing and overseeing the compliance programme, with the necessary autonomy and means to fulfil this role;
• developing an effective information, training and awareness toolkit in order to spread and maintain a competition culture at all levels, from the top management to each member of the staff of the company;
• setting up effective control, audit and warning mechanisms; and
• implementing follow-up and sanction measures in the event of any detection of a violation of competition rules or of a breach of the company’s compliance programme.

UK: The Office of Fair Trading Continues its Support for Compliance Programmes, Including Through Fine Reductions

The UK regulator is also an advocate of competition law programmes and has published its own detailed guidance on the issue, including specific guidance for directors on their responsibilities under competition law. This support was re-emphasised on 26 October 2011, when the Office of Fair Trading (OFT) published for consultation a revised version of its fining guidelines in competition law cases. This provides an enhanced explanation of the relevance of competition law compliance programmes to its fining decisions. In short, “…evidence of adequate steps . . . may be treated as a mitigating factor [in setting the level of fines]” (but the existence of a programme will only be an aggravating factor in exceptional cases).

The OFT, unlike the European Commission and other authorities in Europe (including, for the moment, the Autorité de la concurrence), is therefore prepared to recognise adequate compliance programmes when setting the level of fines. This provides another reason for introducing a suitable programme.