Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

The DoJ has primary authority for prosecuting criminal violations of the Sherman Act. Criminal prosecutions are limited to traditional per se offenses of the law, which typically involve price-fixing, customer allocation, bid-rigging or other cartel activities. Violations of Section 1 or 2 of the Sherman Act are felonies punishable by a fine of no more than US$ 100 million for a corporation or US$ …

Criminal sanctions

   Section 16 of the Clayton Act empowers any person threatened with injury by a violation of the Sherman or Clayton Acts to seek injunctive relief in the Federal courts. A preliminary injunction may be granted where the plaintiff demonstrates a threat of significant harm to it if the relief is not granted; this is in contrast to actions for damages brought under Section 4 of the Clayton Act which require a showing of actual injury to business or property.

  Courts have considerable latitude in fashioning permanent injunctions, including, for example, orders to continue supplying, or orders prohibiting the termination of a distributorship. Divestiture (requiring a monopolist to sell off most of its assets to separate firms that will proceed to compete in the market) is also a potential remedy in monopolization cases under Section 2 of the Sherman Act, both in cases brought by the Government or by private parties.

Cease and desist orders

Section 4 of the Clayton Act (15 U.S.C. § 15) entitles any person who is injured in his or her business or property by reason of a violation of the Sherman or Clayton Acts to sue for treble damages, that is, three times the damages actually sustained. Like private plaintiffs and State and local Governments, the United States can recover treble damages. However, the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (ACPERA) provides for an exception to this rule for corporations participating in the DoJ's leniency program. Private plaintiffs are henceforth limited to obtaining single damages, as long as the undertakings in question are cooperating with the plaintiffs in civil antitrust suits.

Treble damages

Section 5(l) of the FTCA authorizes the FTC to bring actions in Federal District Court for civil penalties of up to US$ 21,958 per violation of its cease and desist order or, in the case of a continuing violation, US$ 40,654 per day.

The District Court's role in such actions is not to consider de novo whether the conduct underlying the order is unlawful; its role is solely to determine whether the defendant's conduct violated the terms of the FTC's cease and desist order and, if so, the amount of the penalty to be imposed. The District Court has broad discretion in setting the amount of the penalty after taking into account the good or bad faith of the defendant, the injury to the public, the defendant's ability to pay, the desire to strip the defendant of the benefit of the violation, and the necessity of vindicating the authority of the FTC.

The FTC is likewise authorized under Section 5(m) to institute an action for civil penalties against anyone who knowingly violates a FTC rule or engages in a practice resulting in a cease and desist order (15 U.S.C. § 45(m)).

Fines

The DoJ has primary authority for prosecuting criminal violations of the Sherman Act. Criminal prosecutions are limited to traditional per se offenses of the law, which typically involve price-fixing, customer allocation, bid-rigging or other cartel activities. Violations of Section 1 or 2 of the Sherman Act are felonies punishable by a fine of no more than US$ 100 million for a corporation or US$ 1 million for an individual, and/or by imprisonment not exceeding 10 years. These fine maximums reflect the increases set forth in the Antitrust Criminal Penalty Enhancement and Reform Act, bringing criminal penalties in line with those for other Federal white collar crimes. Moreover, “if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss [...]” (18 U.S.C. 3571(d)).

All Federal case sentencing is subject to the Sentencing Reform Act of 1984 which requires that the court apply the Sentencing Guidelines established by the US Sentencing Commission.

A violation of Section 3 of the Clayton Act constitutes a misdemeanor punishable by fines of up to US$ 5,000, imprisonment for not more than one year, or both (15 U.S.C. § 13a). Section 3 of the Robinson-Patman Act imposes criminal penalties for territorial price discrimination or charging unreasonably low prices for the purposes of destroying competition. Section 3 is only enforceable in criminal cases brought by the Department of Justice; neither a private party nor the FTC is entitled to challenge discriminatory pricing under Section 3. In practice, Section 3 has rarely been enforced and no criminal prosecutions have been brought under this Section since the 1960s.

It is also a criminal offense to intentionally withhold, misrepresent, conceal, destroy, alter or falsify any documentary material or testimony that is the subject of a civil investigative demand (15 U.S.C. § 57b-1(e)).

Where a company is criminally liable for infringement of the antitrust laws, individual directors, officers or agents of the convicted firm may be punished by a fine of up to US$ 5,000, imprisonment for not more than one year, or both (15 U.S.C. § 24).

In July 2019, the DoJ issued a Guidance paper on the Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations. The DoJ thereby expressly states that contrary to its previous policy, it will take account, at the charging stage, of compliance programs as a ground for reduction of the proposed fine. The existence of a compliance program will also be taken into account when considering whether or not the prosecutors should enter into a Deferred Prosection Agreement (DPA) with an undertaking.

In 1993, the DoJ issued a Corporate Leniency Policy setting forth the conditions under which it would grant leniency to undertakings involved in an antitrust violation. A Leniency Policy for Individuals was adopted in 1994. Finally, in 2017 the DoJ revised its Frequently Asked Questions (FAQ) paper providing guidance on how the leniency program is implemented. In April 2022, the DoJ amended its Leniency Policy (now codified at § 7-3.300 of the Justice Manual) to clarify that prompt self-reporting is a formal condition of eligibility. In April 2024, further guidance was issued to specify how companies can meet this condition, particularly in the context of mergers and acquisitions (M&A). The updated policy is now more stringent than the general “safe harbor” for post-acquisition disclosures under Justice Manual § 9-28.900, and has significant practical implications for transactional due diligence and deal timing. Concerning corporate leniency, the DoJ considers, inter alia, how early the corporation came forward and whether it was an originator of the antitrust violation. Type A leniency, which gives immunity from prosecution where an applicant is the first to approach the DoJ before an investigation is initiated, will be granted if the following six conditions are met:

- at the time the corporation comes forward, the Antitrust Division has not received information about the illegal activity from any other source;

- the corporation takes prompt and effective action to terminate its participation in the activity;

- the corporation reports the wrongdoing completely and cooperates throughout the investigation;

- the confession is a corporate act, rather than the act of isolated individuals (which would be considered separately);

- the corporation makes restitution to injured parties where possible; and

- the corporation was not the originator of or did not coerce other parties to take part in the illegal activity.

Type B leniency, which gives immunity from prosecution where an applicant is the first to approach the DoJ after an investigation has begun, will evaluate the request for leniency under an alternative seven-part test. The alternative test examines if the following conditions are met:

- the corporation is the first to come forward and qualify for leniency with respect to the conduct at issue;

- the Division does not at that time have evidence likely to result in a sustainable conviction;

- the corporation takes prompt action to terminate its participation in the activity;

- the confession is a corporate act, rather than an individual confession;

- the Division determines that granting leniency would not be unfair to others given the nature of the illegal activity, the role of the corporation, and timing of its confession.

The April 2022 policy change implemented an additional condition for leniency. In addition to the hereinabove conditions, a leniency applicant must also “upon its discovery of the illegal activity, promptly report it to the Antitrust Division”.

In M&A contexts, time is critical. If anticompetitive conduct (such as cartel activity) is discovered at the target company before closing, the acquiring firm may itself seek leniency. However, if the conduct is uncovered only after closing, the acquirer must rely on the six-month post-closing “general safe harbor” window, during which it may still apply for leniency — but under the standard Type A or B framework, without benefiting from any presumption of immunity. Therefore, to benefit from the safe harbor mechanism in M&A transactions, the conduct must be reported before closing, and parties must be prepared to delay signing or completion of the transaction.

The DoJ has established a specific coordination procedure with the FTC for such cases. Where the acquiring company seeks leniency for cartel conduct discovered during M&A due diligence, three cumulative conditions must be met:

The applicant must satisfy all substantive requirements of the Leniency Policy, including prompt application (marker), full cooperation, and restitution;

The illegal conduct must be voluntarily disclosed to both the DoJ and the FTC (if the FTC is reviewing the transaction under HSR);

The parties must enter into a timing agreement with both agencies, which (i) suspends the running of the HSR waiting period until either the conditional leniency letter is issued or the marker expires, and/or (ii) commits the parties not to close the transaction before a date set by the DoJ (and by the FTC where applicable).

This framework ensures procedural coordination between the DoJ's criminal enforcement and the FTC's merger control process, but it also imposes strict discipline on transaction timelines and information flows. It reinforces the necessity for enhanced antitrust due diligence and contractual flexibility in M&A transactions where antitrust exposure is suspected.

If a corporation qualifies for leniency, corporate directors, officers and employees who cooperate and admit their involvement in the illegal antitrust activity may obtain immunity from criminal prosecution. Such individuals may alternatively be eligible for immunity from criminal prosecution under the 1994 Leniency Policy for Individuals, where individuals approach the Department on their own behalf rather than on behalf of their organization. Leniency also ensures that the corporation is only liable for single damages in civil suits, thereby removing a disincentive for undertakings to act as whistle-blowers in antitrust matters.

Leniency

In July 2019, the DoJ announced that it would allow prosecutors to make use of deferred prosecution agreements (DPAs) to terminate criminal antitrust investigations. The DPAs, primarily used in the field of fraud and bribery, are agreements between undertakings against which charges have been filed and the prosecutor, whereby in exchange for full cooperation during a criminal investigation, said charges will be dropped at the end of proceedings. DPAs are expected to be an alternative incentive for undertakings participating in cartels to report the infringement to the authorities. From the undertakings' point of view, the advantage of DPAs is that contrary to leniency applications they do not entail any obligation to plead guilty to the infringement.

Global Competition Law

1463. Criminal sanctions

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

1463. Criminal sanctions

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise