Rebirth of the Antitrust Movement: 7 Essential Components of an Effective Compliance Program

By: Kemahl Franklyn

The U.S. Department of Justice (DOJ) and a bipartisan multistate coalition have filed lawsuits this year against Live Nation Entertainment — the parent company of Ticketmaster — for alleged monopolistic practices. The goal of this aggressive antitrust enforcement action from the DOJ is to break up the company and free up competition in the live events industry.

“Live Nation’s ‘take rate’—the sum of the various cuts of fees and payments it takes through contracts across the concert industry — as the dominant intermediary is higher than it would be in a marketplace without Live Nation’s anticompetitive scheme,” the complaint said.

The Live Nation litigation is just the latest example of a sea change in U.S. antitrust enforcement.

Recalibrating Antitrust Risk

American corporate executives have witnessed a sharp pivot in recent years with respect to antitrust enforcement policy, led by Lina Khan, chair of the Federal Trade Commission (FTC), who was sworn in on June 15, 2021.

Antitrust is where the law meets the economic markets. It is the set of rules controlling the exercise of private economic power, addressing key business decisions such as what actions companies may or may not take to increase market share and size. The legislative foundation for antitrust enforcement was laid more than a century ago by The Sherman Act and The Clayton Act.

The rebirth of the antitrust enforcement movement is forcing businesses to suddenly recalibrate their risk profiles with respect to DOJ guidance. Having in place an effective antitrust compliance program is more important in 2024 than it has been in decades.

7 Essential Components

There are certain components that are essential to the creation and maintenance of an antitrust compliance program. These essential elements have been compiled and clearly articulated in a practice note published by Lexis Practical Guidance, “Antitrust Compliance: Drafting Policies and Procedures,” which was contributed by Douglas Tween, an antitrust partner at Linklaters LLP.

The practice note identifies seven components derived from recent DOJ guidance, as well as best practices observed across a wide range of U.S.-based and foreign domiciled companies:

1. Senior management leadership, support and responsibility
   The company should assign overall responsibility for overseeing antitrust compliance to one or more high-level executives within the organization. Senior management should be fully committed to the compliance program and involved in its implementation by supervising its execution to a reasonable extent.

2. Integration of antitrust compliance into corporate culture
   The key to any successful antitrust compliance program is to reach the stage where the required conduct under the program is a key part of the company’s culture. A successful antitrust compliance program should reinforce and reflect an ethical corporate culture that goes beyond avoiding sanctions. It is intended as a central guide and reference for all employees in their day-to-day decision making.

3. Design and content tailored to industry
   The written policy or statement component of an antitrust compliance program should align with the contours of the company’s specific business and industry. Potential high-risk areas to focus on include controls for trade associations and conferences, safeguards for information exchange activities and communication controls to flag suspicious conduct.

4. Communication and training
   Antitrust violations often happen because of a lack of awareness. It is therefore very important to provide all employees with periodic antitrust compliance training. The goal is to implement adequate training and communication so that employees can “do business confidently insofar as they are clear on what is and is not permissible and can resist pressures more effectively, where these are internal or external.”

5. Reporting
   To detect any violation of the antitrust compliance program, employees must be able to report actual or suspected antitrust misbehavior easily and discreetly. An effective program has in place reporting mechanisms that employees can use to report suspected violations anonymously and confidentially without fear of retaliation.

6. Continuous monitoring, auditing and evaluation of the program
   It is also important to implement sufficient mechanisms and devote sufficient resources (both funding and personnel) to monitor, audit and review adherence to the antitrust compliance program on an ongoing basis. Implementing an evaluation and auditing regime will keep the program updated, detect loopholes and improve it where necessary.

7. Incentives, disciplinary procedures and remediation
   An effective antitrust compliance program should influence employee behavior using both incentives and deterrence tactics that ensure the program is integrated well into the operations and workforce. Soft incentives might include personal encouragement or recognition, such as commendations from senior management; tangible incentives might include monetary rewards or the utilization of compliance criteria in personnel evaluations that impact compensation.

Resources for Legal Professionals

LexisNexis offers a breadth of antitrust law resources to help guide legal practitioners with developing and maintaining effective antitrust compliance programs, such as:

• Antitrust Compliance Policy Drafting and Implementation: How-To Video
• Antitrust Compliance Resource Kit
• Antitrust Compliance Policy Manual
• Monopoly Power Antitrust Risk Assessment Checklist
• MLex Antitrust News and Law360 Competition
• Caselex Merger Control Intelligence

Click here for a free trial of Lexis Practical Guidance.