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We learned back in the 1960s that some antitrust compliance programs can
come back and bite you. Many companies had their counsel conduct “classes”
on the subject of the antitrust problem du jour, usually price fixing, as
nothing else lends itself to that approach.
The gambit was worse than useless, because everyone knew that price fixing
was illegal, and everyone who was engaged in the various nuances of price
manipulation knew exactly what was being done. It was, therefore, obviously
intentional, and the compliance program was made to look contrived and
phony. The existence of a compliance program coupled with obvious evidence
of price fixing was usable as evidence that the company wasn’t serious about
compliance. It allowed inferences of concealment, and nothing extends
statutes of limitations on claims like evidence of intended concealment.
Trade shows have always been where competitors gather after the official
programs, over cocktails, and discuss the undiscussible. Sales people’s
expense account reports for the attending competing companies showed all the
“right” people in attendance at the same place at the same time. Add to that
a seeming regularity of consciously parallel price movements at a short
period after the trade show, the presence of competitors’ price lists in
company files, and you have the stuff needed by investigators and
prosecutors to cause participants to roll over in exchange for personal
immunity. Stories about getting the price lists from customers and not from
the competitors themselves are treated with incredulity.
Participants in collusive pricing behavior know full well what they are
doing, including all the nuances, winks of eyes, nods, recitations of signal
remarks, rotating order of low bidding patterns, and every other jail house
lawyer story.
The only thing that ranks with exculpatory stories that are transparent as
the wrong things to do would be doing after the fact pricing studies hoping
to show the absence of pricing patterns. The government has already done
that as part of its investigation, and the post hoc pricing study done by
the competing companies always show what the government study showed. It is
the creation of adverse evidence and there are serious problems with
destroying the study after it has been completed.
For these and many other reasons, companies should consult with experienced
antitrust counsel before considering any antitrust compliance programs for
themselves.
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