Compliance & Competition Policy
International Experiences
Mona Chammas
OECD Competition Division
São Paulo, Brazil – 28 August 2014
OECD Competition Committee Sources
OECD Roundtable 2011:
Promoting Compliance with
Competition Law
-
Issues paper
24 country contributions
Expert papers
Summary of discussion
http://www.oecd.org/daf/competition/Promotingcompliancewithc
ompetitionlaw2011.pdf
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OECD Competition Committee Sources
OECD Hearing 2014: ICC Antitrust Compliance
Toolkit
- Summary of discussion (forthcoming)
- ICC Toolkit: http://www.iccwbo.org/Advocacy-Codes-and-Rules/Areasof-work/Competition/ICC-Antitrust-Compliance-Toolkit/
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Compliance Policy: 2 Questions
Compliance
Ex ante
Ex post
Should competition
Should CP be
agencies promote
considered when
compliance?
infringement occurs?
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1. Should competition agencies
promote compliance? (ex ante)
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1. Should competition agencies promote
compliance? (ex ante)
No consensus across jurisdictions whether and how
competition agencies should promote compliance.
OECD: To promote competition compliance,
understand drivers of non-compliance
• If awareness issue: increase transparency, training, advocacy
• If cost/benefit ratio: strengthen enforcement, sanctions
• If believe can hide: reinforce detection, leniency
• If culture issue: raise morality, publicity, sense of wrongdoing
• If market structure: industry monitoring, radars, reforms
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1.a. Traditional approach
Key aspects:
• Enforcement and transparency
deter and educate
• Specific v. general deterrence
• No specific compliance promotion policy, tool or reward
• Each company’s responsibility to ensure own compliance
• May impose CP in remedies/commitments
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1.a. Traditional approach (cont’d)
Open questions:
• Is no CP reward policy reason not to promote compliance?
• Dialogue can be win-win
• What sanctions deter effectively?
- Corporate v. individual, admin v. criminal, punishment v. damages
- Criminal sanctions as most effective v. unwarranted?
- Criminal in 17 of 34 OECD jurisdictions but limited enforcement
- Efficiency if likelihood of detection and prosecution
- Alternative individual sanctions: admin fines / prof disqualification
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1.b. Proactive approach & innovate tools
• Online/paper educational tools (Q&As, videos, cartoons)
• Reach out to and train businesses
• Advisory opinion upon legal change
• Ethical investment funding
• Grow moral sense: media exposure, reputation harm
• Compliance certificate / institute / events
• Cooperation with trade associations
• Divestiture from financing plan
• Special injunction system for SMEs
• Involve shareholders in compliance culture
• Encourage compliance programs (CP)…
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Encourage compliance programmes
Scope of CP:
• CP main focus: cartels = hard core / per se offences
• Growing business concern/awareness re unilateral conduct
(complex, high fines, few per se offences) + merger due dil.
• What is bad + WHY is bad
Types of CP:
• Substantive CP: do’s & don’ts to avoid infringement
• Procedural CP: do’s & don’s to detect, cooperate, leniency
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Encourage compliance programmes (cont’d)
Trends:
• Cross-field compliance requirements increase:
E.g. antitrust, anti-corruption, tax, trade, safety, health, environment,
conflicts of interests (COI), etc.
• Consolidation/centralisation of CP
good corp governance
versus
• Limited resources: keep antitrust on top of CP?
• No coherence across (i) competition agencies, (ii) various
field policies
good public governance?
E.g. OECD Anti-Bribery and COI Compliance Toolkits ≠ Antitrust
OECD horizontal compliance initiative
compliance policy synergies
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Encourage compliance programmes (cont’d)
Conditions for successful CP:
• No « one size fits all »: industry and country specific
• General agreement over « 5 Cs »:
i.
Commitment & leadership
ii. Culture
iii. Compliance know-how and organisation:
Risk identification – assessment – mitigation
iv. Controls
v.
Constant monitoring and improvement
• ICC Toolkit:
i.
Int’l guidance by business for business
ii. Further adaptation for SMEs
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2. Should CP be considered in
assessing/sanctioning antitrust
violation? (ex post)
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2. Should CP be considered in assessing/sanctioning
antitrust violation? (ex post)
Most competition agencies: CP neutral or mitigating factor
Exceptionally: CP aggravating factor
Neutral
•
•
•
•
•
•
•
Why reward failing CP?
CP for own good
Leniency/settlement discount
Reward encourages cartel
Reward encourages sham CP
Burden/complex assessment
Unease SMEs v. large companies
(May still impose CP as remedy)
E.g. EU, US
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2. Should CP be considered in assessing/sanctioning
antitrust violation? (ex post) (cont’d)
Reward: mitigating sanction
•
•
•
•
•
•
•
Strongest CP promotion tool
Distingush genuine v. sham CP
BoP on company
CP allowed detection / reporting
CP avoids other harm (past/future)
CP monitoring / improvement
Condition for leniency / settlement
Punish: aggravating sanction
• Sham CP / knowingly wrong
…Incentive for no CP/ignorance?
Rare: EU case (CP + recidivism)
E.g. Canada, France, Korea, Mexico,
Norway, Singapore, UK.
Mitigation alternative: switch from corp
to indiv sanction (rogue employee)
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Compliance policy: what’s next?
Open questions:
1. What is a good CP? Should agency establish CP conditions?
2. Substantive & geographic scope of CP effectiveness?
What if fails in a country, not in another? Why?
3.
Agency cooperation on CP assessment/reward/sanction?
Next steps:
1. Encourage ex post evaluation of antitrust decisions (OECD
Guide)
2. Share best practices /common challenges int’ly (OECD, ICC)
3. Increase compliance policy coherence: horizontal / vertical
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Thank you!
Q&As
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