Practical guidelines for designing and implementing a successful compliance program
In the last few years, the ever-increasing fines imposed by the French Competition Council (renamed Competition Authority as from January 1, 2009) on economic operators for non-compliance with competition and antitrust laws have led companies to spontaneously design and implement internal detection tools to prevent such violations and, as the case may be, obtain a reduction of the penalties imposed.
These internal procedures are referred to as “compliance programs”. Most of the time, economic operators set up such programs only after a violation is established, thereby trying to benefit from the leniency of the competent Competition Authorities and obtain a reduction of the fine (generally between 10% and 25%) in return for specific commitments taking the form of a compliance program.
More and more companies, however, become aware that their best interest is to set up such programs upstream to minimize the risk of complaints, disputes and litigation. It is true that companies are strongly encouraged to go down this path by the French Competition Authority itself as the latter has been praising the benefits of compliance programs very actively (see “Compliance, éloge de la conformité” in the Competition Council’s 2007 annual report; see also the report entitled “The state of affairs and perspectives of compliance programs” recently released by Europe Economics at the request of the Competition Council).
Compliance programs refer both to the instruments set up within companies to ensure compliance with applicable competition and antitrust laws, to the specific mechanisms put in place to detect possible competition law violations and to the measures taken to remedy non-compliance.
In its last report, the Competition Council considered that a compliance program with every guarantee of preventive and curative effects must contain 5 key elements:
- “management’s proclaimed concern with integrating, in all aspects of its general policy and of the company’s objectives, compliance with laws and regulations”; there must be a permanent effort on raising awareness on applicable competition rules and, therefore, a strong investment on the part of the management;
- “the implementation of control and monitoring mechanisms”;
- “the introduction of policies and procedures aimed at preventing and detecting unlawful or unacceptable behavior, of which all the company’s staff should have knowledge”; among all the reporting procedures that exist and must be made available to all staff members, the most spread is indisputably the “whistleblowing” system. This system enables employees to report in full confidentiality their colleagues’ allegedly law- or corporate policy-breaching behavior to human resources managers, to an internal audit committee, to a mediator especially appointed for this purpose or to an external company. The information can be reported through a toll-free phone number, by post or to a dedicated Internet portal available 24/7.
- “the introduction of regular training adapted to the context in which the company and its employees operate”;
- “the existence and implementation of disciplinary actions in case of non-compliance with the program”.
As an illustration of what can be concretely implemented in terms of compliance programs, the chart hereafter sets forth – on the basis of the last decisions of the French Competition Council/Authority – the different types of commitments included in compliance programs that companies operating in different sectors of activity have proposed in the framework of the infringement procedure initiated against them.
Whether they are rather standard or innovative, compliance programs do not always require heavy investments. It is indeed often possible to optimize resources (both material and human) as well as internal mechanisms and pre-existing procedures in order to prevent and detect violations of competition and antitrust laws.
French Competition Council/Authority’s decision
Control and monitoring mechanisms
Reporting and Detection procedures
Decision 07-D-21 dated June 26, 2007
|10 companies fined for a global amount of 18.25 M€ for customer sharing and concerted practices on prices|
|Decision 07-D-02 dated January 23, 2007 Veolia Propreté & Sita France|
Fine of 1.4 M€ for cartel in the sector for the collection and the treatment of waste in Seine-Maritime
|Decision 07-D-33 dated October15 , 2007 France Telecom||Fine of 45 M€ for abuse of dominant position and restraint of competition through France Telecom’s subsidiary called Wanadoo||Information provided to staff members on sanctions that may be imposed in case of non-compliance with applicable competition rules|
|Decision 08-D-32 dated December 16, 2008|
Arcelor Mittal Group, KDI, Descours & Cabaud, FFDM
|11 Steel Trading Companies and 1 Professional Union fined for a global amount of 575.4 M€ for cartel in the steel industry|
|Decision 09-D-05 dated February 2, 2009 – Adecco France, Vediorbis, Adia, Manpower France Holding, Manpower France||Fine: 94.4 M€ for anticompetitive market sharing in the temporary employment sector|
Our lawyers are at your disposal to assist you in elaborating and setting up adapted compliance programs, taking into account any internal procedures already in place.
 In 2007, the global amount of fines imposed by the Conseil de la concurrence reached 221 M€, which represents more than 3 times the average amount of the past three years. On December 16, 2008 the Competition Council imposed the highest fine since its creation in 1986: 575 M€ to 11 steel trading companies (302 M€ for the Luxembourger company ArcelorMittal because of three of its trading subsidiaries’ practices). A fine reduction of 17% has, however, been granted, ArcelorMittal committing to “take matters of this nature extremely seriously and have a rigorous global compliance program in place to combat anticompetitive practices”.