This week, during a panel discussion at the American Bar Association’s annual National Institute on White Collar Crime, Antitrust Division Deputy Assistant Attorney General Richard Powers sent shockwaves through the defense bar with a surprising revelation. Speaking about the Antitrust Division’s plans for vigorous enforcement, he revealed that the Division intends to use its power to criminally prosecute violations of Section 2 of the Sherman Act, i.e., monopolization cases –something the department has not done in four and a half decades, when antitrust crimes were prosecuted as misdemeanors.[1]
Section 2 makes it unlawful to “monopolize, or attempt to monopolize, or combine or conspire [] to monopolize any part of the trade or commerce.” To unlawfully monopolize, the entity must meet two elements: (1) actual monopolization of the relevant market and (2) anticompetitive conduct. In other words, a monopoly is not unlawful if it is simply the result of a superior product or service, business skill, or happenstance. Monopolization cases include a broad array of potentially anticompetitive unilateral conduct by monopolists, and the Federal Trade Commission and U.S. Department of Justice have traditionally brought such cases sparingly and civilly.
After making this surprising declaration, Powers noted the Antitrust Division has always had the power to go after violations criminally, and while that’s technically true, the reality is that this is a departure from decades of practice.
What Powers’ recent remarks mean for large companies going forward is unclear at this point; it was an especially surprising announcement without further details from the Division about the types of matters it would pursue criminally versus civilly. If the Division is serious about pursuing criminal monopolization cases, we hope and expect it will follow up with additional guidance in the coming months to provide transparency to the bar and business community.
If the Antitrust Division’s willingness to tread new legal ground in the no-poach/labor market arena has taught us anything, it’s to expect the unexpected.[2] Shifting toward criminal enforcement of Section 2 cases may be the start of a second radical departure from the long-standing Antitrust Division practice of prosecuting as criminal conduct only collusion by horizontal competitors firmly recognized by courts as per se violations of the antitrust laws.
[1] Remaly, Ben. “DOJ looking for criminal monopolisation cases.” Global Competition Review, 3 March 2022, https://globalcompetitionreview.com/gcr-usa/department-of-justice/doj-looking-criminal-monopolisation-cases.
[2] BakerHostetler. “Nationalizing Competitiveness and Noncompete Law: Criminal Antitrust and Federal Efforts to Curtail No-Poach and Noncompete Agreements.” The Emerging Era for Noncompetes and Trade Secrets, BakerHosts BH Podcast, O’Brien, Ann, guest host, 26 January 2022, https://www.bakerlaw.com/The-Emerging-New-Era-for-Noncompetes-and-Trade-Secrets-Nationalizing-Competitiveness-and-Noncompete-Law-Criminal-Antitrust-and-Federal-Efforts-to-Curtail-No-Poach-and-Noncompete-Agreements.
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