Adaption of antitrust compliance program to the local regulatory environment Vladimir Sayenko Partner March 2016

What is antitrust compliance? What is compliance? Compliance means respecting the law. In the competition field, it means business proactively respecting competition rules. The primary benefit of an antitrust compliance program is to avoid or catch quickly anticompetitive conduct within the company. The “United States Sentencing Guidelines” specifically identify an effective compliance and ethics program as a basis for reducing a company’s “culpability score,” and therefore, the company’s ultimate criminal fine and penalties. (U.S. v. KAYABA INDUSTRY COMPANY, September 2015) A consulting firm that provided services to the cartelists can be liable, even if it is not present on the market where the infringements were committed (the Court of Justice decision in the Heat Stabilisers cartels case Commission v AC-Treuhand AG of 22 October 2015)

Antitrust investigations Classification of antitrust compliance risks Antitrust investigations Provision of inaccurate information Failure to meet deadline false substance Anticompetitive concerted practices cartels verticals parallel behavior bid riding Abuse of dominant position price fixing entry/exit market barriers Unfair competition misleading advertisement parasitic copying Merger control failure to obtain merger clearance post-closing risks Private Damages Claims

Risk zones by staff category Anticompetitive concerted practices Abuse of dominant position Unfair competition Merger control Provision of inaccurate information Senior management √ Legal department Sales department Marketing department Administrative staff

. Compliance workflow Starting point In-house v external counsel: Acknowledgment of violation Leniency procedure Regulator consultations, comfort letters Normal Collection of feedback, proactive monitoring and audits In-house v external counsel: most civil law countries do not protect communications between corporations and their in-house lawyers! Introduction or update of compliance policy, regular employee education . Compliance due diligence Starting point Activity

Review of correspondence Interviews with managers Competition Compliance Due Diligence Due diligence report Review of documents Review of correspondence Safety Winter is coming… Interviews with managers Mock dawn raids

Compliance embedded as company culture and policy Fundamental principles of antitrust (with local adaptation): no price fixing no customer allocation no market allocation, no bid rigging Other Market Players Interaction Communication with the Regulator Code of conduct: Reporting of all contacts with competitors Participation in industry associations Anonymous hotline to report violations No retribution against whistleblowers No destruction of evidence Dawn Raid Defense

Employee Education Top Managers Legal department Heads of departments Sales department Marketing department Other departments

Preliminary conclusions Formal consultations with regulator Preliminary conclusions (comfort letters) Abuse of dominant position Cartels and other concerted practices Concentration Unfair competition

Leniency conditions Leniency Procedure First to apply Not the initiator Termination of violation Cooperation with Regulator

Acknowledgment of Violation Fine Anticompetitive concerted practices up to 10% of revenue Abuse of dominant position Unfair competition up to 5% of revenue Merger control temporary amnesty cap: EUR 4000 until mid-September 2016 Provision of inaccurate information up to 1% of revenues EUR 530 to EUR 5300 until mid-September 2016 Fining Guidelines (Recommendations) dated 15 September 2015 and 16 February 2016

Judicial Review No judicial review on merits Fining guidelines are not mandatory AMC is always right: wins vast majority of cases Judicial reform: Commercial v. Administrative Courts

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