Author: Steven Cernak
The Department of Justice’s challenge of certain Google actions raises interesting antitrust questions. But during the first week of the trial, the biggest issue seemed to be one aspect of Google’s antitrust compliance program. Some commentators were shocked to discover that Google’s lawyers advised the employees to avoid certain hot-button antitrust terms like “leverage” or “dominance.” Those of us who have implemented antitrust compliance programs for decades were shocked that anyone could be shocked by these ordinary compliance tactics. Below, I explain how such tactics can help meet the two goals of compliance programs.
Goal 1: Follow the Law
The first goal of compliance programs, obviously, is to help companies comply with the law. Everything else being equal, companies would prefer to avoid the real and reputational costs of being known as a law breaker. But complying with a law is not always easy. Sometimes the law is not clear — for example, Sherman Act Section 2 is very short but the actions that constitute monopolization are unclear at best. Sometimes the law, or its interpretation, changes — again, Section 2 is a good example as its interpretation has changed from 1960 to 2000 to today. Finally, the businesspeople who receive the training might be experts in business but definitely are not experts in all the laws that affect them. So, their lawyers must accurately, succinctly, and memorably tell them how to comply with the laws and then let them get back to their day jobs.
A list of words to avoid can be accurate, succinct, and memorable. The sales chief might not understand or remember all the intricacies of tying law but she might remember to ask for advice before using it in a memo or requiring the purchase of a second product before allowing sales of a wildly popular product.
Goal 2: Be Seen as Following the Law
Even if the compliance program does not work perfectly and the government or a private plaintiff accuses the company of violations, the compliance program can still help. For example, DOJ has started to give a company credit for a good, but not perfect, compliance program in its investigations and sentencing decisions.
More generally, a good program, perhaps even including a list of phrases to avoid, can also help the company explain to investigators, judges, or juries why its actions did not violate the law. During any investigation or trial, the lawyers will need to explain both those actions and the words used to describe them. Usually, the fewer explanations needed the better. So having the businesspeople avoid certain hot-button phrases, while still honestly getting their jobs done, will reduce the number of explanations necessary and ease the defense burden. The lawyers will still be forced to explain why a requirement to buy product B to get defendant’s wildly popular product A is not anticompetitive. But their burden will be eased if they do not also need to explain what some low-level marketing specialist meant two years ago in an email that suggested the company “leverage our dominance.”
As a result, the standard compliance advice is to be clear and honest in what you write. Will you remember six months or three years from now why you used that phrase? How will that phrase look on the front page of the [New York Times/Wall Street Journal/Automotive News/government’s brief]? To make that advice even clearer and more memorable for the businesspeople, sometimes the compliance program will give examples, even long lists, of words and phrases that will be difficult to explain and so should be avoided.
Why Such Advice Can Be Necessary
Now, that list of “forbidden words” cannot be the entire compliance program. As compliance specialists have known for a long time — and as the DOJ has made clear — multiple elements of a program must work together to create a “culture of compliance.” Merely avoiding certain words is unlikely to help if, say, the CEO mocks the need for such compliance programs or they are otherwise seen as merely “check the box” exercises foisted on busy workers by a busybody legal department.