Criminal Antitrust: The Continuing Risk

While everyone is focused on anti-corruption enforcement and compliance issues, global antitrust enforcement continues as a significant risk.  Over the last few years the most important trend has been the rising role of European antitrust enforcement against cartels and imposition of higher fines.  Even with this steady rise in European enforcement, US criminal antitrust enforcement has returned in 2011 from a slower 2010.   The pace of US criminal antitrust fines are expected to set new records.

The more important trend is the continuing global coordination of antitrust enforcement.  Global cartel activity has challened enforcement agencies to coordinate thier own efforts.  The regulators are now catching up. 

In particular, the Antitrust Division has demonstrated cooperation with competition authorities in Europe, North America, Asia, Australia and New Zealand, South America and Africa, on a range of investigations involving auto part suppliers, air cargo, submarine and land cables, and liquid crystal displays.
Last year, the Antitrust Division secured $550 million in criminal fines.  This did not reflect a change in commitment but the cycles of criminal prosecutions and grand jury investigations.  For the current year, the Antitrust Division is on a pace to exceed this amount.

This calculation does not even include recent civil settlements reached by the Antitrust Division and the SEC in the municipal bonds investigation.  When those settlements are included then the Antitrust Division
will exceed $1 billion, the highest amount in any one year since the banner year in 1999. 

The average prison sentence for individual defendants in FY 2010 was 30 months and the percentage of cirminal defendants receiving sentences of incarceration was near 80 percent.  These trends are consistent with past years.  An individual defendant in the concrete mix conspiracy was sentenced to 48 months incarceration, whcih tied the record for the highest amount ever imposed.

The Justice Department has demonstrated that it will impose tough sentences on foreign nationals.  Since 1999, nearly 50 foreign nationals have received jail sentences.  The Antitrust Division increasingly is seeking and obtaining aggressive pre-trial release conditions for foreign nationals charged with criminal antitrust offenses. In recent cases, the Justice Department opposed pre-trial releasae of defendants who wished to return to Taiwan pending their criminal trials.  The court has required that the defendants to stay in the US while awaiting trial. 

For compliance officers, antitrust continues to be a major risk.  The FCPA gets all the press attention but global comapnies need to be vigilant when it comes to possible antitrust violations.