Working Papers of the Institute of Management Berlin at the Berlin School of Economics (FHW Berlin) 42
Competition is a basic mechanism of the market economy. It improves the allocation of goods and factors of production, promotes innovation, and pushes down prices. However, there is hardly a week passing by without news from the German or European competition authorities exposing new offences against the Antitrust laws. To violate the Antitrust laws may lead to major consequences both for the company and for the managers involved. In 2007, the European Commission charged fines from 45 companies amounting to 3.3 billion Euros. Besides the financial damage, companies had to face other negative consequences such as the loss of image and reputation, a negative influence on ratings and stock exchange values as well as internal and external costs relating to the official Antitrust investigation and possible private damage compensation lawsuits. Employees involved must not only take into account a loss of reputation and in-house position but even an immediate working contract termination. Furthermore, German authorities can fine individuals too, and executive managers can be held responsible for offences against the duty to supervise their employees' actions. Companies should protect themselves and their employees against those dangers by implementing compliance-programs. The contents of such programs are elaborated in detail. Thus, violations to the antitrust law that are caused by a lack of information or the ignorance of the juridical guidelines can be avoided. Moreover, compliance-programs can lead to an early revealing of deliberate infringements, so that the company can benefit from the so-called leniency policy. The measures of a compliance-program should take into account not only the specific juridical obligations, but also be tailored to the specific determining factors of the company to proactively protect itself from negative consequences of antitrust violations.