Whereas legislators view legislation on anti-competitive and corrupt practices separately, the origins of such misconduct are surprisingly similar. Engaging in anti-competitive behaviour or bribing one’s way into a large contract are of direct benefit in terms of sales and profit to the business engaging in such acts. For the individual employee, there is an indirect benefit in the form of status gained from the perception of being a successful businessman or woman, bonus payments related to the profitability of illicit deals as financial performance targets are met, or simply the psychological boost to self esteem that can come from the sense of power, derived from the ability to influence markets and counterparts in such manner.
Normally, we associate anti-competitive and corrupt behaviour with deliberate, conscious acts. When this occurs, it is more than a mere question of the interpretation of the law; it is a question of mindset and organisational culture. An act that undermines the integrity of free markets, or intentionally bypasses institutional rules on the functioning of that market, may be either clearly illegal, debatably legal, or tentatively exploitative of a legal loophole. Whereas it may always provide grounds for a lively discussion between lawyers, it is however, always unethical and detrimental to other members of those markets, and ultimately to consumers and the broader members of society. The similarity is striking.
Yet, there is another, important source of misconduct – and it is where there is an accidental infringement of laws due to ignorance, a lack of awareness or even a result of a mistaken respect of local norms and culture. In such cases, we may be facing amorality rather than immorality, but their consequence equally leads to breaches of the law, or loss of reputation. Again, irrespective of whether the offence falls under the legal category of antitrust, or corruption, the causes of such mishaps are so similar.
Further similarity may be found in the price paid by the markets for such deeds: the undermining of confidence, loss of trust in its guardian institutions, and ultimately a reduction in the willingness of investors to assume the higher risks of intransparent markets and decision processes. Similar indeed.
If the cause and effect of anti-competitive or corrupt behaviour are so similar, it is not a leap of faith to understand that the way to combat these behaviours are also very similar. When the business leader sits down with her compliance officer to discuss the management and mitigation of risk arising from anti-competitive behaviours in various parts of the organisation, she would be forgiven for a sense of déjà vu from the anti-bribery and corruption meeting held in a previous week. The measures needed are very much the same. There is a need for awareness, legal education, training, the development of relevant and accessible policies and procedures, controls to capture misdeeds or accidents about to happen. They will discuss the usefulness and implications of putting in place a hotline for legal and compliance advice, or a whistle-blowing mechanism for emergency, career threatening situations. It all seems so similar.
The question asked by ELIG Attorneys-at-law in this article is a good one. Why, given the similarities of cause and effect, is there a disparity in the treatment and handling of mitigating solutions in cases involving anti-competitive practices on the one hand, and bribery and corruption cases on the other hand? Is it possible that the left hand of the law, does not know, understand, or agree with what the right hand is doing? It is, it seems, very possible.
Law is not an exact science – it is an evolving framework seeking to cage a most fluid threat to its desired state of affairs. Case law, increasing complexity of rulebooks, and the subsequent specialisation of legal actors, be they lawyers, barristers or judges, mean that the holistic view – a glance beyond the perimeter fence of one’s subject – is considered a luxury not often afforded. In the search for a better outcome, a more compliant future behaviour, it is not a luxury. That is why this initiative, this article by ELIG takes on an important significance. Both branches of these laws of misconduct, antitrust and anti-corruption, need to understand the similarities existing between them in terms of cause, but also mitigation – and the courts need to seek more than mere justice for past actions. They too need to work for a better future, and encourage market participants to be more effective in protecting the reputation and resilience of the markets in which they operate. One path towards this objective may be found in harmonising and recognising the value of mitigating actions taken by responsible firms seeking to reduce the incidence of misdemeanours and/or breaches of the law.
How mitigation measures, and under what circumstance these should be taken into account when sanctioning a breach can be debated; and should be. One legal view may be that obeying the law is non-negotiable, and misconduct should be punished without mercy. However, in a world of endless complexity and coincidence, how often does a judgement not require a lengthy deliberation? Would it not be a better world where firms are encouraged to invest in compliance programmes to reduce risk caused by poor culture, ignorance or even misinterpretations of corporate intent? In a domain where there is so much similarity of cause and effect, does it not make sense to find harmony?
This blog is based upon my editorial in the Journal of Business Compliance Special Issue of February 2016 entitled "Call for a unified anti-corruption law and competition law programme: Why compliance programmes should be viewed as a mitigating factor". A free copy of this paper may be downloaded for free here.