Apr 25, 2013
CPI Cartel Column edited by Rosa Abrantes-Metz (NYU Stern School of Business)
Introduction by Rosa Abrantes-Metz
Welcome to the April issue of “From Collusion to Competition.” This month’s column has a different format, and it is dedicated to the very important topic of antitrust compliance and corporate governance.
Today’s first article is by Joe Murphy who is the Director of Public Policy at the Society of Corporate Compliance and Ethics. In this article, the author explains that for corporate compliance programs, for antitrust or any other area, one size does not fit all. What suits a large multinational will be out of place in a small company offering only one product or service. What works to fight cartels is different from what works to protect privacy. What is effective in Britain will need modifications to work in Nigeria. So while all effective programs share the core fundamentals (e.g., effective training, an independent and empowered compliance officer, audits, etc.), no one who knows this field would suggest a mindless, cookie-cutter approach to programs. The article reviews how main antitrust enforcers consider (or fail to do so) the existence of antitrust compliance programs for companies found to be involved in cartels. In particular, the author argues that for those who have the difficult work of fighting corruption or cartels, or other forms of business wrongdoing in companies as outside counsel or general counsel, it is clear that a “one size fits all” approach to policy will lead to failure. And that is equally true for governments fighting this type of crime.
One Size Fits All: A Flawed Approach to Company Compliance Programs
Our second article is titled “Antitrust Corporate Governance and Compliance,” and is co-authored by Danny Sokol, Associate Professor at Levin College of Law, University of Florida, and myself. It will be included as a chapter for the upcoming Oxford Handbook of International Antitrust Economics, edited by Roger D. Blair and D. Daniel Sokol. In this paper, Danny and I explore the scholarship on cartel detection, both from within and from outside of antitrust, to better understand internal cartel detection and improved compliance in the antitrust cartel context. To date, most of the development of the literature on cartel detection has focused on the firm level, which should not be surprising since industrial organization studies firms and markets. Antitrust scholarship has not focused as much on compliance and corporate governance within a given firm. Understanding the internal workings of firms would allow for more optimal deterrence, as this understanding would allow for calibrating policy around the incentives within a given firm, its subunits and individuals who work therein, to comply with antitrust law. Both theoretical and empirical work in a number of different fields, including economics, accounting, finance, organizational theory and sociology provide important insights indicating that a firm is not merely a single entity in its actions. Rather, a firm is made up of a number of various components, each of which has its own incentives that shape firm behavior. This chapter reviews both the antitrust and the non-antitrust literatures on compliance and corporate governance to provide a clearer picture of the extant literature and the theoretical and empirical gaps within the antitrust literature to better inform antitrust policy on detecting cartels.
Our paper can be found here.
Last but not least, on April 22 the International Chamber of Commerce (ICC) launched the ICC Antitrust Compliance Toolkit, a practical tool for both small- and medium-sized enterprises and larger companies. The ICC Commission on Competition presented the toolkit during the 5th ICC Roundtable on Competition Policy being held on the sidelines of the annual International Competition Network (ICN) conference in Warsaw. Produced by the ICC Task Force on Antitrust Compliance and Advocacy, the toolkit is a practical response to suggestions by the Office of Fair Trading of the United Kingdom, the Directorate General for Competition of the European Commission and other antitrust agencies. Designed for companies of all sizes wishing to build or reinforce a robust antitrust compliance program, it seeks to complement materials produced by antitrust agencies and other sources of guidance, by focusing on practical steps companies can take internally to embed a successful compliance culture. Anne Riley, Chair of the ICC Task Force on Antitrust Compliance and Advocacy and Group Antitrust Counsel at Shell, presented the tool. “The toolkit is designed by business for business and reflects contributions from antitrust specialists closely associated with in-house compliance efforts around the world. It is hoped that it will assist companies from all sectors and of all sizes, including small- and medium-sized companies (SMEs) to establish an antitrust compliance program suited to their needs, risk profile and resources,” she said.
For more information on this new tool, please click here, or download the pdf here.
This month’s issue is interesting and topical. As always, I hope you enjoy the column!
Rosa M. Abrantes-Metz
