The case demonstrates that failure to adopt a serious, credible and effective compliance program can come at a high price.
On March 6, 2023, the National Economic Prosecutor’s Office (FNE) filed an injunction before the Court for the Defense of Free Competition (TDLC) against a well-known laboratory convicted of collusion in 2018, which was also obliged to implement a free competition compliance program.
This requirement is due to the fact that the laboratory would have executed late and failed to comply with what was ordered by the court, increasing the probability of occurrence of facts that contravene the legal provisions on free competition, which may affect customers and / or final consumers.
Specifically, the FNE seeks a declaration of non-compliance with the judgment and the imposition of a fine of 1,100 million Chilean pesos (USD 1.4 million).
This action reminds us that the decisions of the TDLC regarding compliance programs are supervised by the FNE, through the Compliance Oversight division, as such measures imposed by the court are intended to mitigate the risks of infringement of free competition rules and prevent the commission of offenses of this nature.
In this sense, although the establishment of compliance programs is voluntary, there are scenarios in which their implementation is mandatory, as was the case of the condemned laboratory. The court defined that the program should contain, as a minimum, the elements established in the FNE’s Compliance Program Guide, however, with respect to certain obligations, the judgment raised the standards suggested by that document. Some of these reinforced standards are the following:
- The commitment of senior management to the compliance program through the establishment of a Compliance Committee.
- The figure of an autonomous and independent Compliance Officer to ensure compliance with antitrust regulations and to report to the Board of Directors on his or her duties.
- Annual training on antitrust matters for the company’s senior executives and board of directors and others as deemed necessary by the compliance officer.
- Obtaining statements from senior executives of the company, indicating that they are not aware of any violation of the laws that protect free competition.
It is relevant to mention that, although these programs do not constitute an exemption from liability for the infringement of the rules established in defense of free competition, they imply other benefits, such as: (I) the possible reduction of fines; (II) the early exercise of the leniency process or (III) the possibility of reaching out-of-court settlements.
However, it should be noted that, in the case of compliance programs imposed by the judicial authority, their establishment is not only an obligation, but also an obligation associated with a conviction, and therefore cannot unilaterally modify the obligations imposed, as the FNE alleges in its injunction.
The aforementioned case shows us that, although it is extremely beneficial for any company to voluntarily implement a compliance program on antitrust matters, its correct adoption is critical for the antitrust authority when it is a court-ordered obligation. Failure to adopt a serious, credible and effective compliance program can come at a high price.
For more information on these topics, please contact:
Francisca Franzani | Director, Compliance Group | ffranzani@az.cl
Matías Edwards | Senior Associate | medwards@az.cl
Constanza Delgado | Associate | cdelgadov@az.cl
Jaime Viveros | Associate | jviveros@az.cl
