When will a corporate officer be charged with a criminal violation of the American antitrust laws?

Paying treble damages is not the only severe penalty the American antitrust enforcers can impose on those who violate the Sherman Antitrust Act and other provisions of federal antitrust laws. The United States has always made criminal enforcement of antitrust violations, particular of the Sherman Act, an important part of its efforts to protect competition.

In fact, as part of their current efforts to aggressively protect competition the antitrust enforcers are increasingly levelling a criminal charge against individual corporate officers. While both the Federal Trade Commission and the Antitrust Division of the United States Department of Justice are responsible for civil antitrust enforcement, only the Antitrust Division is responsible for criminal enforcement.

While any violation of any antitrust law could in theory lead to a criminal charge, the Assistant Attorney General, who heads the Antitrust Division, is far more likely to allege a criminal violation of the key business practices which the Sherman Act prohibits. The list of business practices which can be a criminal antitrust violation is therefore similar to those which are pre se violations of the Sherman Act.

If a corporate officer, among other things, fixes prices, rigs bids or allocates markets he or she should greatly fear that the Assistant Attorney General and the Antitrust Division will one day charge him or her with a criminal antitrust violation. Attempted monopolization is another possible criminal violation which the Assistant Attorney General and the Antitrust Division could allege. A corporate officer could also face a criminal case if the Assistant Attorney General believes that the corporate officer engaged in a criminal conspiracy to commit one of these crimes. Further, individual defendants can face criminal liability for committing a similar white collar crime, such as fraud and securities fraud, or money laundering, and find that the Assistant Attorney General has added to the government’s enforcement efforts by also claiming that the corporate officer also committed a criminal antitrust violation.

The antitrust enforcers also cooperate while investigation possible criminal anticompetitive conduct. Thus individual defendants could face a criminal penalty for lying to the Federal Trade Commission if the FTC were, for example, conducting a civil investigation pursuant to the Federal Trade Commission Act. The Federal Trade Commission could also supply any information it obtained while enforcing the FTC Act to the Antitrust Division for possible criminal prosecution.

Antitrust penalties

The criminal penalties for violating the federal antitrust law are substantial. A district court could impose penalties of:

• Ten years in prison on an individual.
• A corporate fine of $100 million, or double the loss or gain from the criminal violation.
• An individual fine of the greater of $1 million, or double the loss or gain from the criminal violation.

Antitrust policy

To encourage competitors to report a criminal antitrust violation the Antitrust Division maintains a leniency program. Under this program the first participant in a criminal conspiracy to report the criminal anticompetitive conduct may well avoid serving any prison time whatsoever. Given this great incentive, conspirators often conclude that they are better of describing their white collar crime to a district court judge than spending time in prison. Knowing this, no corporate officer who has committed a criminal antitrust violation, or who is part of a criminal conspiracy in the United States to do so, should ever feel safe.