Daniel Sokol, Sep 28, 2011
In the past few years, companies around the world have spent an increasing amount of resources addressing issues broadly classified as compliance. In the area of bribery there has been significant enforcement with strong financial and behavioral penalties under the U.S. Foreign Corrupt Practices Act (“FCPA”). The United Kingdom has introduced a new anti-bribery regime this year, which has increased companies’ awareness of the possible negative impact from breaking the law. Similarly, corporate governance legislative initiatives, such as Sarbanes-Oxley and Dodd-Frank, have transformed the compliance landscape for many companies.
During this same period, there have been significant theoretical and empirical contributions as to the effects on a firm’s performance of various corporate governance measures designed to reduce criminal behavior on the part of firms and individual managers. Quite a bit of this literature has focused on improved detection of wrong-doing. Given these changes, it is surprising that U.S. antitrust has not been on the cutting edge of compliance and detection. Antitrust’s primary contribution has been the introduction of leniency programs around the world. In many ways leniency is effective in destabilizing existing cartels. However, it may be, in some cases, that leniency may actually strengthen certain cartels. Moreover, leniency may not be going after the right kinds of cartels-the worst offenders in terms of overcharges-and