Home – Antitrust Compliance: Emerging Risks & Best Training Practices

Antitrust Compliance: Emerging Risks & Best Training Practices

Given the choice between attending antitrust compliance training and being pushed down a flight of stairs, is the question not how many employees will head for the stairwell, but who will get there first?


If you answered yes, we may have a solution. When inviting them to training, make sure you use the phrase “criminal liability.” As in their criminal liability. 


That was the suggestion at an April 9 LexisNexis® Webinar featuring panelists who regularly confront antitrust investigations and litigation. The panel comprised Lori Beardell, corporate counsel with DuPont Legal in Wilmington, Del.; Timothy (Ty) Carson, counsel in Crowell Moring’s Washington, D.C. office; and Chong S. Park, partner in Steptoe’s Washington, D.C., office. The speakers offered strategies for managing risk by improving antitrust compliance at all levels. Using training to help avoid common and emerging pitfalls and abiding by the Ten Commandments for Document Creation and Retention are among the strategies the speakers advocated.


Park outlined some typical antitrust danger zones. Some are well-known, such as agreements on:

  • Price
  • Output
  • Allocation of markets, products or customers
  • Other less-obvious ones include agreements on capacity planning and make-or-buy


Additionally, Park noted that not all potential restraints on trade are as obvious violations as price fixing and bid rigging. Tying, exclusive dealing, resale price maintenance and price discrimination also make the list, as do the newest danger zones for increased scrutiny—intellectual property and patent enforcement and most-favored-nations clauses in contracts.


With so many potential problems, several compliance training approaches are necessary, from basic to specialized. Park said training should include a mix of substantive law and the process of how to identify and resolve potential antitrust conflicts. Ideally, training should be tailored to the audience, with different presentations that address the various jobs and their risk profiles.


Sales and marketing teams often use more colorful—and problematic—language such as “dominate” within three words of “market.” To ensure compliance from this group, education should include messages of consistency regarding:

  • Document creation and communications
  • Various points of exposure—to customers and to competitors
  • Representations, promises and market activity
  • Handling information such as price increase announcements


Data sharers such as scientists and engineers prefer accurate and precise data, and they like to share it. Training, which can be coordinated with intellectual property counsel, should include information on:

  • Communications with other company technical teams
  • Different arenas—standard setting groups, technical working groups
  • Antitrust concerns that may overlap with IP protection/trade secrets concerns


Senior executives have the ability to wreak the most havoc because they are unpredictable and have decision-making authority. They are not easily trained or advised. A succinct “elevator speech” might include discussion of:

  • The importance of their participation
  • How they can be part of the process, for example by sending antitrust reminder emails
  • Tailored training
  • The ripple effect of regulatory investigations

The consensus among the panelists is that in order to have effective compliance training, counsel really must have buy-in from top management—for company-wide training and their own individual training. “Mandatory training is not really high on folks’ list as an everyday opportunity or activity,” Park said. “But with respect to managing risk and potential liability to a company, it’s critical.”


Park advocated two approaches:

  1. The “scared straight” approach makes it clear that there are very serious consequences for antitrust liability. It is particularly effective for senior managers. “I often joke that orange is a fall color, and some people are not fall colors,” Park quipped. “Orange, which happens to be the color of prison jumpsuits, doesn’t look particularly good on folks. That tends to catch people’s attention.”
  2. The “teaching them to catch fish” approach enables stakeholders to identify, by themselves, potential risks and elevate them to the attention of appropriate senior managers.


How do you find time for training in an already full work day? Capitalize on even the smallest opportunity, the speakers agree. Some companies use flash cards that include the dos and don’ts of communications with other companies, suppliers and customers. Others have hotline numbers that are separate phone numbers to in-house counsel that simplify the process of elevating compliance questions.


Beardell suggested that, in addition to building training time into the schedule, counsel take a moment to discuss a real-life scenario at the end of a meeting, when a potential conflict may have come up.


One useful tool is compliance auditing. Beardell said an outside company looks at emails, trade association memberships and other documents for red-flag words. They gather examples that then can be sent to employees a few times a year as reminders of improper language. She also suggested presenting at training sessions, clients who have been deposed as part of a compliance investigation or litigation. They are the most effective because they are real-life examples of what can go wrong.




When a company undertakes a new activity that has potential antitrust implications, Park said it helps counsel to clarify the conflicts by asking “minesweeper” questions:

  1. Why are you doing/proposing this?
  2. What is the purpose of this agreement/conduct?
  3. What effect will this have on:

    a. the company
    c. industry
    d. consumers

  4. The answers often set off alarm bells. Park said some troublesome responses he has encountered include:
    a. "to block competition"
    b. "to stabilize prices"
    c. "to flex our muscle and use our market power"

“If the answers tend to raise a hair on the back of your neck, that’s an indication that some more investigation is merited,” Park said.


Emerging Antitrust Areas


More and more, companies encounter litigation and investigations relating to whether or not standards for a patent are being enforced appropriately. Park predicted more legal battles about intellectual property that will result in more focus on the intersection between IP and antitrust.


In healthcare, hospital contracts are increasingly being scrutinized and pharmaceutical manufacturers are being hit for paying to delay the release of generics, he said.


Another hot topic is most-favored-nation language in contracts that enforcers view as anti-competition, he said.


Bad Documents and How to Avoid Them


As the government litigates more antitrust cases, bad documents increasingly play a role, Carson said. Bad documents simplify government arguments.


“You can hire economists to explain how consumers or competitors aren’t affected by an action, but a jury hears that and then sees a document that says you’re going to crush your competitor. That’s all they hear,” Carson said.


Where do these documents come from? Antitrust enforcers are very thorough. Carson said they sift through millions of documents and look for the most damaging ones to use at trial. Comments that business lawyers never thought would be read, including email chatter that simply discussed the state of the market, suddenly form the lynchpin in the government’s case.


Documents come in many forms:

  • Online database entries
  • Emails
  • Expense reports
  • Material on flash drives
  • Papers at home
  • Diaries
  • Text messages and voicemails
  • Tweets
  • Facebook and LinkedIn messages and posts


Strategies for avoiding bad documents abound. Beardell suggested using the The New York Times® Test. “Would the person you are talking to want to see their quote or email in The New York Times on the front page above the fold? Are you embarrassed to see what you have written? Would you embarrass the company with what you have written?”


A one-off document might not be enough to show intent, Beardell said, but taken with other documents, a case can be built. “Why make it easy for someone to connect dots? Follow the law and be careful about how you are trying to communicate as a business.”


It is the job of antitrust attorneys and in-house counsel to show executives and employees how their natural language can come back to bite them.


What Thou Shalt Do . . . and Not


The panelists offered corporate listeners the Ten Commandments of Document Creation and Retention

  1. The best way not to have a bad document in your files is not to create one in the first place.
  2. Emails and voicemails are documents; do not say things in jest or that would otherwise embarrass you or the company if made public.
  3. Handwritten notes of meetings or other conversations are documents too, and need not be created or retained without a specific reason to do so.
  4. Be aware that notes, worksheets and drafts, either in hard copy or electronic form, need not be retained unless there is a specific reason to do so.
  5. Focus on the benefits of specific business strategies to your company and your customers; do not speculate about their impact on competitors.
  6. Recognize the constant need to remain competitive, and avoid exaggerations like “dominant” or “control.”
  7. Focus deal analyses on synergies and other pro-competitive effects; do not speculate about price increases.
  8. Limit analyses to business issues; avoid the temptation to practice law by commenting on competition law issues.
  9. Review your working files on an ongoing basis to prevent the build-up of unnecessary paper or electronic files. Once you become aware of a government investigation or lawsuit, however, be sure to retain all relevant documents from that point on!
  10. When in doubt, have Legal review documents in the draft stage.


It is imperative to include pro-competitive language in communications and documents so that investigators find those documents, too, the speakers agreed. Focus on how the activity at issue will improve quality, allow the company to innovate and benefit customers.


“I don’t think that can be emphasized enough, the contemporaneous documentation of the pro-competitive benefits,” Carson said. “It’s just very hard to tell your story if you’re waiting until a challenge to make it.”


Technology Concerns


The abundance of information available online and the number of forums for sharing it poses considerable risks for companies in terms of over sharing and in conducting inappropriate research about competitors.


Carson advocated gathering competitive intelligence from:

  • Public sources, including trade press
  • Customers, but be sure to document this information and maintain it only so long as it has value


He cautioned not to gather competitive intelligence from:

  • Competitors, whether at trade association meetings, other gatherings, or online forums
  • Former employees of competitors
  • Legitimate communications with competitors covered by non-disclosure agreements that limit use of confidential information, such as mergers and acquisitions, toll manufacturing, or other collaborations


Trade association meetings tend to be fertile ground for missteps, Carson said. While they provide ample pro-competitive information, the potential for problems abounds when competitors meet in the same place. He suggested discussing with clients ahead of time what they can and cannot say at a trade association meeting. He often advises sending counsel along to a meeting to flag potentially harmful information.


Social media presents its own dangers. In a survey by Forrester Research of 150 companies that monitor social media, more than 82 percent said they gather competitive intelligence from social media — it was the #1 reason for monitoring. Risks arise due to interaction with competitors and interaction with customers and suppliers.


Beardell said in addition to a strict compliance policy, a company should designate one person to approve all social media posts on behalf of the company.


“It’s easy to blur the line between your personal comment and the comment of the company. Ultimately, people are going to insinuate that you are commenting on behalf of the company,” Carson said.


He said a company must set ground rules for employee participation in online forums, addressing use in both official and personal capacities.


For example:

  • Do not discuss present or future prices or other terms of sale
  • Do not discuss company business or strategic planning information
  • Do not discuss specific customers
  • Do not agree to divide customers or geographic areas


Ensuring Antitrust Compliance at All Levels


Antitrust compliance is an ever-growing, ever-changing beast. Counsel must stay on top of it to protect client interests at every turn. Monitoring and auditing the company’s online presence and internal systems go a long way toward ensuring compliance. Document creation and retention policies, especially in the virtual age, are critical. Even if an investigation goes nowhere, the expense of mounting a defense that involves wading through thousands of 10-year-old documents should be motivation enough to stick to a document retention policy.


In the end, Beardell said, remember that a company is not just managing risk but is adhering to its own code of ethics.