Client Alert

Race to Self-Report: U.S. Department of Justice Antitrust Division Updates Leniency Program and Revises FAQs, Including Requirement to Promptly Report Wrongdoing

13 Apr 2022

On April 4, 2022, the U.S. Department of Justice Antitrust Division (the “Division”) announced noteworthy updates to its Corporate Leniency Program as well as its frequently asked questions (“FAQs”) that explain the Program, all of which were intended to reaffirm the Division’s “commitment to transparency, predictability, and accessibility in antitrust enforcement.”  The Leniency Program, which has generally remained unchanged in its requirements since its inception in 1993, allows the first company and/or individual involved in a criminal antitrust violation to self-report and avoid criminal fines and imprisonment, if the company or individual fully cooperates with the Division’s investigation and meets all other program requirements.

These latest modifications to the written policy and FAQs reflect changes in practice that applicants have observed in recent years, and have the potential to make it more challenging for a company that applies for leniency to meet the criteria. The Leniency Program still remains a unique opportunity for a company that engaged in per se criminal antitrust conduct to potentially avoid prosecution for itself and its executives but, when such conduct is uncovered, companies now must move even more quickly to carefully evaluate their potential for a successful application. 

Key Updates

Although the general contours of the program remain unchanged, there are several key updates:

  • Leniency applicants must now promptly self-report wrongdoing, and a broader group of company employees is to be held responsible for this prompt reporting.
  • Applicants must undertake remediation.
  • The policy raises the bar for restitution, requiring parties to use their “best efforts to make restitution to injured parties.”
  • There is an increased focus on individual applicants, including new content to address how an individual can proceed through the program on their own (including if their employer decides not move forward after securing a leniency marker).
  • The new FAQ’s include a new section on the benefits of self-reporting even when leniency is unavailable.

Companies Must Promptly Report Wrongdoing

Companies must report their conduct “promptly,” or at the “first indication” of possible wrongdoing. The FAQs provide some guidance on when a prospective applicant is considered to have discovered wrongdoing, and thus when companies are on the clock to self-report.  

Although there is not a set standard of “promptness,” the Division will make this assessment on a case-by-case basis, assessing the facts and circumstances of the conduct and the size and complexity of the company.  

Applicants have some leeway to conduct a “preliminary internal investigation in a timely manner” to understand what happened. But, if they subsequently choose not to report their conduct to the Division, they risk jeopardizing a later leniency application. Specifically, “an organization that confirms its involvement in illegal activity and then chooses not to self-report until later learning that the Division has opened an investigation will not be eligible for leniency.” 

Corporate applicants are now considered to have discovered the (potentially) illegal conduct once an “authoritative representative of the applicant for legal matters” is informed of the conduct. Under the prior FAQs, a corporation was deemed to have discovered the conduct once either the board of directors or company counsel, either internal (interpreted to mean the General Counsel) or external, was informed of the conduct. The new FAQs do not identify parameters for who can be an “authoritative representative,” but explicitly expand the responsible group to include compliance officers.

In announcing the updates, Assistant Attorney General Jonathan Kanter’s remarks suggest that “authoritative representative” could also include senior executives, as he emphasized that “[c]orporate boards and executives, and the counsel advising them, should understand that sitting on their hands after detecting an antitrust crime will have real ramifications – losing out on leniency means severe consequences.” 

Given the increased focus on promptness, this is a good time for companies to reassess their antitrust compliance training efforts to ensure that its in-house counsel, compliance officers, board of directors, and senior executives are well-informed regarding the types of conduct that could be pursued as criminal antitrust violations.

Remediation & Restitution

The new FAQs establish heightened obligations for applicants to remediate harm and provide restitution to victims. Before receiving a conditional leniency letter, an applicant must (1) remediate the harm caused by their conduct, (2) develop a compliance program, and (3) provide a plan for restitution. The bar for sufficient remediation has also been raised by the new FAQs. Any efforts must be specifically tailored to the type of harm caused by the illegal activity. For example, if the applicant participated in a no-poach conspiracy, the remediation must address the harms caused by reduced worker mobility. The FAQs also allow the Division to consider the extent to which the applicant disciplined or terminated employees involved in the conduct when evaluating remediation.

Similarly, the FAQs now place a greater emphasis on making restitution a part of securing leniency, unless doing so is actually impossible because it would bankrupt the applicant, the victim no longer exists, or other similar circumstances.  Specifically, applicants must now provide a “concrete, reasonably achievable plan” for restitution in order to receive a conditional leniency letter. Applicants must also pay restitution before receiving unconditional leniency.

The practical effects of these changes remain unclear. To borrow from the Division’s example, it is difficult to see how a single leniency applicant in a no-poach conspiracy could on its own remediate the purported harm caused by “restrictions on labor mobility” across an industry. In addition, it is unclear to what extent an applicant must proactively identify “victims” so that it can create a “concrete” plan for restitution in order to obtain a conditional leniency letter, particularly in instances where follow-on civil litigation has not yet been filed or the “victims” cannot otherwise be identified. 

In an apparent attempt to ameliorate the more stringent requirements, the FAQs now include an expanded discussion of Antitrust Criminal Penalty Enhancement & Reform Act (ACPERA). Under ACPERA, a company that both cooperates with the Division to receive leniency and works with private civil plaintiffs can receive reduced liability in civil antitrust litigation concerning that same conduct. Although ACPERA’s benefits are not technically part of the Leniency Program, the new FAQs go out of their way to explain how applicants can take advantage of such benefits. This expanded section on ACPERA reinforces the Division’s expectations that applicants be prepared to resolve civil claims with plaintiffs as part of satisfying their restitution obligations.

Increased Focus on Individual Whistleblowers

Many of the revisions are designed to make the leniency program more approachable for individual applicants. Indeed, the first question now expressly states that a prospective leniency applicant does not need a lawyer. Similarly, there is a new question on the protections provided by the Criminal Antitrust Anti-Retaliation Act, the 2019 statute that provides whistleblower protections for employees who report their employer’s criminal antitrust violations. The FAQ even outlines how an individual may proceed as a leniency applicant even if a corporate applicant—including their employer—withdraws its marker.

Of course, the FAQs also ratchet up the stakes for individuals to report violations. “Individuals are in a race with one another—both others at their employer and those at other organizations participating in the conspiracy. If any of those individuals applies for leniency, other participants that lose the race will face criminal prosecution for their unlawful conduct.” The fact that it takes the Division 82 FAQs to attempt to explain its Leniency Program raises serious questions about whether an individual or company would be wise to try to navigate through the Program without specialized legal advice.

Sticks & (Some) Carrots

Not all of the changes have made the program more demanding. The FAQs now include a new section on benefits of self-reporting by companies unable to obtain leniency. Even if not the first in the door, companies may receive cooperation credit for timely and voluntary disclosures, including reduced fines, a reduced sentence under the guidelines, and even “a disposition short of a criminal conviction,” especially where the applicant has invested significant effort in developing a compliance program to identify and promptly self-report. This revision aligns the FAQs with the Division’s “Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations,” which was published in 2019 and outlines the criteria the Division considers during the charging and sentencing phases of criminal antitrust investigations.

The Program is less forgiving for individuals in such circumstances. Releases of individual liability in a corporate resolution are only available in “extraordinary circumstances.” But individuals may receive an individual non-prosecution agreement if they provide voluntary and valuable cooperation early on in an investigation.


The Division appears to be holding corporate applicants to a higher bar in order to receive leniency. Applicants must seek leniency quicker, admit to conduct with specificity, and devote greater resources to compensate for their prior actions. It is an open question whether, on balance, these revisions will lead to more applicants coming forward or chill participation in the Leniency Program.

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