Why Bother with Corporate Compliance?

compliance lawyer Taiwan

Last month, Dutch telecom company, VimpelCom Limited, agreed to pay $795 million in penalties to U.S. and Dutch authorities for bribing government officials in Uzbekistan, in violation of the U.S. Foreign Corrupt Practices Act (“FCPA”) and Dutch law. VimpelCom’s CEO is facing criminal charges, government forfeiture actions were launched to recover hundreds of millions of dollars, and an independent monitor was appointed to supervise the company for at least three years.

While that case sounds egregious, massive penalties for corporate bribery are common. In recent years, Siemens AG was fined $800 million in the U.S. and $800 million in Germany for paying bribes in Argentina; Alston SA was fined $774 million for bribery in several countries; a Chinese court fined GlaxoSmithKline $500 million for bribing doctors in China; BAE settled bribery charges for $400 million; Alcoa for $380 million and Hewlett-Packard for $108 million. Continue reading

Seminar on Antitrust Investigations, Litigation & Compliance

On January 23, 2015, at Soochow University, Taipei, Taiwan, I was proud to deliver a presentation on “Developing and Implementing an Effective Antitrust Compliance Program,” as one of several speakers discussing “Best Practices for Avoiding and Resolving Global Antitrust Investigations and Litigation,” sponsored by the Taiwan Technology Industry Legal Officers Association (TILO).

HERE is the handout for my presentation and below are a few photos from the event. Continue reading

Why Bother with Corporate Compliance?


Corporate bribery is in the headlines. Last week, the media was reporting accusations that Hong Kong’s top government official took $6.4 million in bribes from an Australian engineering firm. Before that, a top official in China’s central planning commission admitted taking $5.8 million in bribes from Toyota and other companies, and a Chinese court fined GlaxoSmithKline (“GSK”) $500 million for bribing doctors. Before that, Alcoa settled bribery charges in the U.S. for $380 million, while Hewlett-Packard settled charges for $108 million.

Each time, the news is followed by a flurry of articles from corporate compliance experts urging companies to take ethics and compliance more seriously, including obtaining full support of the CEO and Board, assigning oversight responsibility to high-level personnel, allocating resources, implementing policies and procedures, providing regular education and training, incentives and discipline, performing continuous auditing, monitoring and fine-tuning, and responding promptly to any violations.

Some may feel that’s a bit much, that, “Our company values ethics and integrity, but can’t afford a full-blown compliance program.” In truth, most global companies can’t afford not to implement such measures, and it’s not just about bribery. Below are some reasons why companies should honestly assess their compliance programs and make earnest efforts to plug any gaps. Continue reading

When is Foreign Patent Licensing Subject to U.S. Antitrust Law?

confused-lawyerPatent law and antitrust law have long had an uneasy relationship. A patent is a legal monopoly, but antitrust law favors market competition and abhors monopolies. Consequently, U.S. courts have struggled for over a century to define reasonable boundaries between the two disciplines.

In the U.S., the Sherman Antitrust Act is at the core of most antitrust litigation. In the early years of the Act, patents were seen as almost immune from its reach, with the Supreme Court stating a general rule of, “absolute freedom in the use or sale of rights under the patent laws. . . The very object of these laws is monopoly.” E. Bennett & Sons v. National Harrow Co., 186 U.S. 70 (1902). But laws evolve and today courts usually apply a “rule of reason” approach when evaluating whether conduct unreasonably restrains competition, with the Supreme Court declaring “patent and antitrust policies are both relevant.” FTC v. Actavis, 570 U.S. 756 (2013).

Globalization further complicates matters. While a patent basically confers rights only within the country in which it is granted and the doctrine of comity disfavors interfering in the affairs of other nations, global manufacturing and sourcing of components, “is increasingly common in our modern global economy, and antitrust law has long recognized that anticompetitive injuries can be transmitted through multi-layered supply chains.” Lotes Co., Ltd. v. Hon Hai Precision Industry Co., Ltd., No. 13-2280 (2d Cir. 2014).

However, the test for application of the Sherman Act to foreign parties and foreign conduct has become increasingly clear, in particular with several U.S. cases decided earlier this year, one of which involved allegations of egregious patent licensing conduct in China. Continue reading

$500 Million Price-Fixing Sentence Affirmed against AU Optronics

illegalLast week the Ninth Circuit Court of Appeals affirmed criminal convictions against AU Optronics (“AUO”), a Taiwanese maker of Thin-Film Liquid Crystal Display (“TFT-LCD”) panels, its U.S. subsidiary and two of its top executives, for illegal price-fixing that resulted in prison sentences of thirty-six months for each of the individuals and a $500 million fine for AUO. The case offers many stark lessons to global manufacturers whose employees may communicate with competitors about the pricing and supply of their products.

Initially, AUO was one of several leading TFT-LCD manufacturers indicted in the Northern District of California for conspiring to fix prices for TFT-LCDs in violation of the Sherman Antitrust Act, based on a series of meetings that took place between the alleged conspirators. In the meetings, the defendants discussed prices at which they would sell TFT-LCDs to their U.S. customers, including Dell, Compaq and HP.

AUO was the only accused company to take the case to trial, with rivals including LG Display, Chunghwa Picture Tubes, Chi Mei Optoelectronics and Sharp Corp. all pleading guilty and paying a total of more than $890 million in fines. At trial, the jury found AUO and its executives guilty and imposed the $500 million fine. The Ninth Circuit affirmed the AUO convictions and fine. While the decision addresses many points, a few are particularly noteworthy. Continue reading

Seventh Circuit Vacates Motorola Mobility v. AU Optronics

The extent to which U.S. antitrust law liability may be imposed on foreign parties for foreign conduct remains somewhat uncertain, as the Seventh Circuit Court of Appeals just vacated its March 27 decision in Motorola Mobility, LLC v. AU Optronics Corp. and agreed to re-hear plaintiff’s case against several Asian companies for alleged violations of the Sherman Antitrust Act based on activities that took place in Asia.

Motorola Mobility filed the underlying lawsuit in the U.S. District Court for the Northern District of Illinois, alleging that several foreign manufacturers of liquid-crystal display (“LCD”) panels, including Samsung, Sharp and AU Optronics allegedly engaged in illegal price-fixing that caused plaintiff to pay higher prices for the panels than it should have. The district court dismissed most of plaintiff’s antitrust claims and, in March, the Seventh Circuit affirmed on the grounds that plaintiff failed to meet the criteria required by the U.S. Foreign Trade Antitrust Improvements Act (“FTAIA”). Continue reading

Microsoft to Close Nokia Deal by Friday


Microsoft announced it will complete its US$7.5 billion acquisition of Nokia’s cellphone business by Friday, April 25, including over 30,000 staff, a wide range of devices and Nokia’s CEO, who will report directly to Microsoft’s CEO.

The transaction will allow Microsoft to compete directly against Apple, Samsung and other cell-phone makers and allow Nokia to focus on generating revenue from its extensive patent portfolio.

Chinese antitrust regulators finally gave their approval to the deal earlier this month, while South Korea’s regulators still haven’t given their approval, but the parties claim approval from Korea is not required to close the deal. Continue reading

Wage-Fixing Suit v. Tech Giants Moving Forward to Trial

wage-fixing suitDefendants Adobe, Apple, Google, Intel, Intuit, Lucasfilm and Pixar lost an attempt to dispose of by summary judgment a wage-fixing lawsuit filed against them by 64,600 engineers, designers, quality analysts, artists, editors, and system administrators employed by the seven companies.

In the fascinating class-action lawsuit, the plaintiffs contend the defendant tech companies colluded to not hire employees away from each other, thereby reducing competition and lowering wages. On Friday, US District Court Judge Lucy Koh quashed the plaintiffs’ motion for summary judgment, so the case will move forward to trial.

Read more about the case HERE

Refusing to Testify in Civil Depositions based on the Fifth Amendment

“You have the right to remain silent. Anything you say can and will be used against you in a court of law.” We’ve all heard those words a thousand times in crime dramas, as the cops handcuff the bad guy and haul him away. Most lawyers recognize that as part of the Miranda warning, uttered by police in criminal cases to avoid violating the suspect’s rights under the Fifth Amendment to the U.S. Constitution.

What many don’t know, especially here in Asia, is the Fifth Amendment may also provide a valid excuse – even for foreign citizens – to avoid testifying in a U.S. civil lawsuit. On its face, the Fifth Amendment appears to be limited to criminal cases. It states that no person “shall be compelled in any criminal case to be a witness against himself.” However, courts have long held that the Fifth Amendment privilege “can be asserted in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory.” Kastigar v. United States, 406 U.S. 441, 445 (1972).

Consequently, it is not uncommon for witnesses in civil lawsuits to refuse to answer deposition questions based on that privilege, so long as the testimony could possibly lead to criminal liability. At first, the tactic may seem an easy way out for the witness. However, there are serious risks to invoking – or not invoking – the privilege, so anyone for whom the subject may be relevant should consult with experienced Fifth Amendment counsel. Continue reading