Dear Readers,
Competition authorities worldwide investigate and prosecute antitrust infringements criminally. The U.S. Department of Justice, in particular, has famously imposed substantial fines and prison sentences against alleged conspirators, including those located abroad.
These efforts are often coordinated with other competition authorities, as many investigations are global in scope. These efforts have recently been magnified: the Department of Justice has launched a so-called Procurement Collusion Strike Force, which seeks to identify and prosecute criminal antitrust conduct in the government procurement sector.
Given the far-reaching consequences of criminal prosecutions for the companies and individuals involved, criminal antitrust enforcement inevitably raises significant questions of legal principle, alongside significant practical questions, notably with regard to individuals’ willingness to participate in disclosure and leniency programs, where their interests may diverge from that of the companies that employ them. The articles in this edition of the Chronicle assess recent developments in the U.S. and worldwide, both on their own merits and in terms of how they interact with other aspects of antitrust law and policy.
Richard Powers & Alison Goldman open by assessing recent revisions announced by the Antitrust Division of the U.S. Department of Justice to its leniency policy. In addition to giving greater context about an applicant’s obligations under the policy, the revisions require leniency applicants to promptly self-report misconduct, as well as to use best efforts to remediate the harm caused by the illegal activity before receiving a conditional leniency letter. These changes come against a background shift in the corporate enforcement landscape and at a time when the Division’s aggressive corporate enforcement strategy has been backed with significant resources. This article offers impressions on what companies and counsel can expect as a result.
Ann O’Brien notes a wave of novel and aggressive criminal no-poach cases being brought by the Antitrust Division of the U.S. Department of Justice. The Antitrust Division has revitalized its use of Section 2 of the Sherman Antitrust Act to criminally prosecute monopolization, something the Division has not done in over 40 years. These cases raise many questions for companies and the counsel who advise them. Is the mere invitation to collude now a prosecutable criminal offense? How will the U.S. Sentencing Guidelines, which lacks a section explicitly governing criminal monopolization, apply in these cases? These trends underscore the importance of antitrust compliance programs for companies and executives alike.
Katie Hellings, Dan Shulak & Doug Tween further discuss major changes in policies and procedures at the U.S. Department of Justice Antitrust Division. In the authors’ view, these changes have led to uncertainty and shaken the trust between defense attorneys and prosecutors, affecting the advice defense attorneys provide to their clients in Division investigations and prosecutions. They note a significant uncertainty perceived by the antitrust bar as to the Division’s intentions, which, in their view, does a disservice to potential targets who face life-altering consequences as a result of the Division’s enforcement decisions, and makes the Division’s activity less successful.
In turn, Roxann E. Henry argues that the current criminal enforcement initiatives of the U.S. Department of Justice Antitrust Division risk taking it into territory that will likely trigger constitutional scrutiny of the criminal use of the Sherman Act. In her view, review by the Supreme Court would likely eliminate criminal antitrust enforcement powers given the void-for-vagueness doctrine and the constitutional guarantees of due process, separation of powers and the right to a jury trial.
Carsten Reichel turns to the specific question of bid rigging and other offenses relating to procurement fraud. While these are nothing new in the history of the Antitrust Division’s criminal enforcement efforts, the Division’s prioritization of these offenses changed in late 2019, in particular with the founding of the Procurement Collusion Strike Force (“PCSF”). The PCSF is poised to play a prominent role in U.S. cartel enforcement and maintain the Division’s enforcement focus on public procurements in the coming years. This article analyzes the PCSF’s development and progress to date and assesses the initiative’s progress in its mission to “detect and deter” violations.
David N. Kelley, Andrew S. Boutros & D. Brett Kohlhofer analyze the recent series of revisions to the Department of Justice’s policies addressing how prosecutors evaluate and treat, and resolve cases against, corporate defendants in criminal matters. The policy updates are an effort to provide greater transparency and predictability for corporate defendants to incentivize self-disclosures and cooperation. The updates also highlight the continued emphasis on bringing cases against executives — and the expectation that companies help DOJ to do so. The Department-wide changes come at a time when the Antitrust Division has been particularly active. The article summarizes core aspects of the Antitrust Division’s Leniency Program, while also outlining key Department-wide updates. It also examines the interplay between the Department-wide policy updates, which emphasize individual culpability, and the Antitrust Division’s immunity policies as to executives under its decades-old Leniency Program.
Finally, taking an international perspective, Gabriela Costa Carvalho Forsman analyzes how Brazilian practitioners face a dilemma regarding conflicting labor and criminal provisions arguably applicable to employees under internal investigations regarding, on one hand, employee cooperation obligations and, on the other hand, privilege against self-incrimination. The paper sheds light on the Brazilian experience regarding internal investigations into misconduct and the interplay between resolution applicants and public authorities; and analyzes theories regarding the enforceability of privilege against self-incrimination within internal investigations.
Criminal antitrust enforcement is as old as the Sherman Act itself. Recent moves by the Department of Justice remind the antitrust (and business) communities of this home truth. The articles in this Chronicle place recent developments in context and will provide vital guidance to practitioners and businesspeople alike in the evolving enforcement environment.
As always, many thanks to our great panel of authors.
Sincerely,
CPI Team
