The Italian Competition Authority’s guidelines on compliance programs
Guidelines on antitrust compliance programmes
On October 4, the Italian Competition Authority, ICA (Autorità Garante della Concorrenza e del Mercato), issued the guidelines on antitrust compliance and specifically on the programmes companies may draw up to comply with competition laws and regulations.
Right after their publication, these guidelines shall immediately apply to all the investigations carried out by the ICA pursuant to art. 14 of the l. 287/1990.
The guidelines are meant to provide guidance as to the content of an antitrust compliance programme, as well as information concerning the impact (and the benefits) the implementation of such programmes might have in case a company is facing an antitrust investigation. In fact, the benefits of the implementation of an antitrust compliance programme go beyond a competition for competition’s sake approach and companies implementing compliance programmes may actually be awarded mitigation and get a substantial reduction in the amount due in the event an antitrust investigation led to a fine.
In general, with these guidelines (and the relating rewards) ICA wishes to bring about a cultural shift from brinkmanship to compliance, luring companies from a world that considers competition law-related obligations only under a liability profile to a business environment that embeds antitrust as company culture.
The making of a compliance programme
First off, a compliance programme must be effective and therefore must always be grounded in an accurate analysis of the company’s actual antitrust risk profiles and be of course consistent with the size, the nature and the reach of the undertaking as well as provide for all the resources and personnel necessary to its implementation. Furthermore, a compliance programme should comprise staff training, risk management policies and reporting procedures designed to help employees withstand possible undue influences and put them in condition to work confidently and compliantly.
To get an idea of the types of issues the programme should address, for example, a company participating in trade associations should demonstrate that it implemented measures to prevents its representatives or employees from entering into potentially anti-competitive discussions with other member companies; or again, a company regularly taking part in tender processes or procurement procedures should adopt guidelines and/or policies to avoid ambiguously reaching out to competitors or to the contracting authority.
In more detail, the company should identify the persons in charge of the implementation of the programme, the powers they are endowed with as well as provide any document developed in the process and relating to, for instance, training sessions for the employees and, in general, anything suitable to demonstrate (with emails, reports and the like) that the programme was actually implemented as well as that is an integral part to the company’s operations.
In this respect, it would also be advisable to adopt “carrot-and-stick” policies to reward compliance and sanction noncompliance along with effective reporting and whistle-blowing mechanisms. Of course, considering that companies may decide whether adopting such programmes or not, they are all the more free to arrange their own programme determining in detail its contents. In this regard though, the guidelines do not only set out drafting criteria, but are also the reference to define the minimum threshold a compliance programme must exceed to grant the possibility company is awarded mitigation.
How to be awarded mitigation
In order to be awarded mitigation, a company must reach out to the ICA within 6 months of the opening of the investigation (of course even before that, although self-reporting is not likely), submitting a report containing information apt to clarify the reasons the programme should be considered - at least formally - adequate to fulfil its purpose along with documents showing the effective and actual commitment to its implementation.
Likewise, any changes in the programme operated after the onset of the investigation shall be promptly communicated to the ICA within that same timeframe (on this aspect, it is not clear whether the company may liaise directly with the ICA and possibly base changes and last-minute tweaks in the programme on its feedbacks) and, in general, the information provided shall be updated to show the ICA the most complete picture possible.
What mitigation could be achieved
If a company implemented a compliance program prior to an investigation of the ICA, the actual extension of the mitigation that the company could achieve eventually depends on whether the programme at hand has been deemed (i) effective, (ii) not manifestly inadequate, or (iii) manifestly inadequate by the ICA.
(i) A programme is deemed effective whenever it has timely led to identify and discontinue an illicit conduct prior to the service of an antitrust investigation notice. The companies that have implemented such a programme, along with those companies entitled to apply for leniency under article 15, section 2-bis of the l. 287/1990 - at the discretion of the ICA - may benefit from a 15% reduction in the prospective sanction the ICA decides to inflict;
(ii) A programme that - upon provision of the appropriate supporting documentation by the company - does not appear to be manifestly inadequate, though failed to timely identify and discontinue illicit conducts, might entail to a reduction in the sanction up to 10%, provided that the company which implemented it addressed the faults thereof and aptly filled the existing gaps;
(iii) If the programme adopted prior to the investigation is deemed manifestly inadequate, the company will be entitled to a reduction only in case it implements a compliance programme anew (see next paragraph).
Indeed, if a company implements an adequate compliance programme from scratch after the onset of the investigation, it might be still entitled to a 5% reduction on the sanction provided that it had effectively started implementing it and that the ICA had the possibility to assess such effectiveness. This reasoning also applies to recidivist companies, but only if they have not taken advantage of the 5% reduction yet.
Paper compliance is not enough (and sometimes even detrimental)
Not every compliance programme is worth being awarded a reduction in the sanction, on the contrary, under certain (and very) specific circumstances, a compliance programme can even backfire. Indeed, whenever a company uses a compliance programme to try and conceal a misconduct, to mislead the ICA or even to hinder its investigation procedures, this circumstance may be considered as an aggravation by the ICA when determining the entity of the sanction imposed.
In conclusion, any company implementing an adequate compliance programme is eligible to a reduction in the sanction that the ICA may decide to inflict, the only exception being the case in which the company had implemented a compliance programme pursuant art. 14-ter of l. 287/1990, that is if mandated to by the Authority, or used the compliance programme not to prevent misconducts, but for the very opposite purpose.