RELATED UPDATE: DOJ Secures Guilty Plea in First Section 2 Prosecution in Decades (November 2, 2022)
The U.S. Department of Justice’s Antitrust Division previewed on March 2, 2022, a potentially dramatic shift in its enforcement of Section 2 of the Sherman Act, which prohibits monopolization, attempted monopolization and conspiracies to monopolize.
Speaking at a national conference on white collar crime, Deputy Assistant Attorney General Richard Powers told attendees that the Antitrust Division was prepared to bring criminal charges in Section 2 cases, though he stopped short of making a formal policy announcement. Echoing recent remarks from Jonathan Kanter — confirmed in November 2021 as assistant attorney general for antitrust — Powers made clear the division’s intent to use all available enforcement “tools” to combat unlawful monopolistic behavior. Among those tools, according to Powers: The Sherman Act draws no distinction between criminal and noncriminal violations, making Section 2 violations just as much a felony as Section 1 violations.
Though criminal enforcement of Section 2 is not without precedent — a point Powers underscored in his remarks — the Antitrust Division’s practice for decades has been to pursue only civil remedies in Section 2 cases, reserving criminal enforcement for Section 1. Yet with “market concentration and consolidation” increasingly prominent in the “public discourse,” Powers observed, enforcement methods must rise to meet the moment. When might this include criminal charges? Powers offered little guidance in his remarks, noting only that the Antitrust Division would let “the facts and the law” guide the way.
Whether a more formal policy statement is forthcoming remains to be seen. The Antitrust Division took that approach in 2016, when it announced its intent to begin treating horizontal agreements not to hire — “no poach” conspiracies — as criminal violations of Section 1. In that instance, the division released its Antitrust Guidance for Human Resources Professionals, formalizing the policy and providing notice to those potentially impacted. Criminal charges indeed followed, though not as quickly as many had expected. The Antitrust Division’s recent rhetoric suggests it may not wait as long this time before putting criminal “tools” to work in Section 2 cases.
The impact of such a shift could be far-reaching. Section 2 typically requires some measure of market power, coupled with exclusionary conduct. But what this means in context varies widely and, of course, hinges on how a given “market” is defined.
This uncertainty only underscores the vital need for a robust antitrust training and compliance program. If you would like to discuss ways to bolster your company’s efforts in this regard, please do not hesitate to reach out to any of these authors.