Cartels 2024 Comparisons

The following chapter featured in the 2023 Cartels guide and is awaiting update from the firm.

The primary statutory base for challenging cartel behaviour or effects is the Sherman Act. The Sherman Act of 1890 prohibits “every contract, combination or conspiracy in restraint of trade or commerce among the several states”. This law makes it illegal for businesses to collude with one another to fix prices, allocate customers or markets, or agree to engage in other anti-competitive behaviour. 

The Department of Justice’s Antitrust Division (DOJ or the “Division”) and the Federal Trade Commission (FTC) are the enforcement agencies responsible for enforcement of the federal antitrust laws. Each agency has a different jurisdictional focus and authority, although some areas overlap.

The DOJ Antitrust Division is responsible for criminal antitrust enforcement. It has jurisdiction to investigate and prosecute criminal antitrust violations, such as price-fixing and bid-rigging conspiracies. Individuals and companies found guilty of criminal antitrust violations can face significant fines and imprisonment. The maximum criminal fine for an individual is USD1 million and the maximum prison term is ten years. Corporations can face fines of up to USD100 million or twice the gain or loss resulting from the antitrust violation, whichever is greater.

In theory, the FTC can challenge cartel offences but generally does not, given aggressive enforcement by the DOJ and DOJ’s power to bring criminal prosecutions. Similarly, the attorneys general of individual states have the power to investigate and challenge cartel conduct but generally focus on other types of antitrust offences and historically have not pursued criminal cartel prosecutions.

There is a private right of action to challenge cartel conduct in the United States. Private parties may bring civil lawsuits seeking damages or injunctive relief for harm suffered as a result of antitrust violations. However, private actions must meet certain conditions before they can proceed. These include the following.

• Antitrust Violation: The plaintiff must prove that the defendant engaged conduct in violation of the antitrust laws, such as price fixing or bid rigging.
• Standing: The plaintiff must have suffered an injury caused by the defendant’s anti-competitive conduct. The injury must also be of the type that antitrust laws were designed to prevent, such as higher prices or reduced output.
• Causation: The plaintiff must be able to demonstrate a causal link between the antitrust violation and the injury suffered.
• Damages: The plaintiff must demonstrate that they suffered damages as a result of the antitrust violation, such as lost profits or overcharges.

Private actions seeking damages for price-fixing and other cartel conduct under the federal antitrust laws; ie, for Sherman Act violations, are reserved for direct purchasers of the allegedly price-fixed product. Indirect purchasers; eg, buyers of goods containing a price-fixed component, can seek damages under the antitrust laws of certain states but not under federal law. While federal antitrust law does not permit indirect purchaser damages claims, indirect purchasers can bring state law damages claims in federal court.

The Sherman Act prohibits “every contract, combination, or conspiracy in restraint of trade or commerce among the several states”. Subsequent court decisions have clarified that the Sherman Act prohibits agreements between competitors to fix prices, allocate markets or rig bids.   

For example, in the case of United States v Socony-Vacuum Oil Co, the Supreme Court held that agreements between competitors to fix prices or allocate markets are per se illegal, meaning that they are presumed to have anti-competitive effects and do not require a full analysis of market impact.

The courts have classified the following conduct as per se unlawful: price fixing among competitors, bid rigging or collusive bidding, output restrictions or production limitations, market allocation or customer allocation, certain group boycotts or concerted refusals to deal, and certain agreements to limit competition as to product characteristics or quality and advertising or promotional activities.

There are no industries or sectors that are exempt from scrutiny for cartel conduct under the antitrust laws. However, there are certain activities or practices have been held to be exempt on the basis of constitutional principles or because there is a limited statutory exemption. For example, group efforts to exercise their right to petition (or lobby) government officials under the First Amendment of the United States Constitution are exempt from antitrust regulation under the Noerr-Pennington Doctrine. Similarly, certain activities related to collective bargaining by labour unions are exempt from antitrust scrutiny under the National Labor Relations Act. 

The statute of limitations for criminal cartel violations is five years. The statute typically starts running from the last unlawful act, although this can potentially be extended where the unlawful agreement continues to be in effect. If the last act occurred within five years of the commencement of an action, all prior acts in furtherance of the cartel are actionable even when they occurred more than five years prior. Tolling and related doctrines are generally not available in criminal cartel cases.

For private actions brought by plaintiffs, the statute of limitations is typically four years and is also generally calculated from the last unlawful act. Unlike in criminal cases, tolling is generally available in civil lawsuits alleging price-fixing and related offences. Most notably, courts frequently find that cartels, which are by their nature secret, are fraudulently concealed such that the statute of limitations starts running when the cartel is uncovered even if the underlying unlawful acts took place more than five years prior.

The primary jurisdictional limitation in cartel cases comes from the Foreign Trade Antitrust Improvements Act (FTAIA). The FTAIA provides that US antitrust laws do not apply to conduct involving foreign commerce unless the conduct has a direct, substantial and reasonably foreseeable effect on US commerce. In practice, courts have generally found that cartel conduct occurring outside the US falls within US jurisdiction where the cartelists sold price-fixed products into the US.

Principles of comity in the United States are mainly established through case law. In antitrust cases, comity may be invoked when a court is asked to recognise and enforce a judgment or order from a foreign jurisdiction.

The application of comity is within the discretion of the courts or relevant government agency. United States courts will generally defer to foreign judgments if the foreign court had jurisdiction over the parties and the dispute, and the judgment is not contrary to United States public policy. Courts will also usually require that the foreign judgment is final and conclusive, and that the foreign court applied principles of due process and fair procedure.

The Biden Administration has continued aggressive rhetoric regarding cartel enforcement that has been typical of presidential administrations of both parties, while simultaneously implementing one of the most aggressive civil antitrust enforcement programmes in recent memory. 

On the cartel front, the Administration has been particularly active in pursuing cases affecting labour markets. This includes so-called no-poach cases, or alleged agreements between competing employers not to hire away each other’s employees, and alleged wage-fixing agreements. Despite bringing multiple cases, the DOJ has failed to secure convictions for these antitrust offences at trial, which casts doubt on the continuing viability of the DOJ’s labour market enforcement effort. 

In addition, the Biden administration has placed increased emphasis on digital markets, healthcare and climate change issues, although enforcement has, to date, focused on non-cartel offences.

The DOJ receives information about potential anti-competitive conduct from a variety of sources. These include companies self-reporting potential violations through the agency’s Leniency Program, as well as complaints from third parties such as whistle-blowers, competitors or customers. DOJ prosecutors also look for indications of cartel conduct in news reports, industry developments or civil case filings.

After learning of a potential criminal violation, the DOJ will open an investigation. In case of a leniency application, initial investigatory steps generally include accepting proffers of evidence from counsel representing the applicant, review of related evidence presented by the applicant, and interview of key witnesses. 

The key next step is generally the issuance of subpoenas to companies who participated in the alleged cartel. In some cases, these may be immediately preceded by dawn raids or drop-in interviews at the homes of individuals the DOJ believes may have participated in the conduct or have been aware of that conduct.

The DOJ sometimes conducts dawn raids, sometimes with the assistance of the FBI, at the beginning of an investigation. The DOJ must obtain a search warrant from a court before it can carry out a dawn raid. 

The obligations of a company or individual faced with a dawn raid or surprise visit include: permitting investigators to enter premises and conduct the search; providing access to any relevant documents, including physical and electronic documents; and providing access to any computer systems or networks that may contain relevant information.

There are restrictions on dawn raids, most notably the requirement that the investigators obtain a search warrant from a court. Access to computers and emails may be limited to documents and communications relevant to the specific subject matter of the investigation, and the seizure of relevant documents must be done in accordance with the search warrant and applicable law.

A court order to enforce compliance can be obtained to address a refusal to co-operate. Companies can obtain copies of documents that are seized during the search, but the process of obtaining these copies can be protracted.

Investigators cannot legally compel any individuals to sit for interview or answer questions about the underlying conduct. The right of individuals not to answer questions (the right to remain silent) is a constitutional right protected by the Fifth Amendment. Nevertheless, if individuals choose to respond to investigators’ questions, they must respond truthfully to avoid potential liability for obstruction of justice.

In the United States, companies and individuals have an obligation to prevent or avoid spoliation of potentially relevant information as soon as they become aware of, or reasonably anticipate, an investigation or litigation. This obligation includes taking reasonable steps to preserve relevant information, including physical and electronic documents, data and other information that may be subject to discovery or subpoena requests. Failure to preserve relevant information can result in sanctions or adverse inferences against the party that failed to preserve the information, as well as criminal obstruction of justice charges.

Individuals in US legal proceedings have a right to counsel. If an individual agrees to sit for a DOJ interview, the individual has a right to be represented by counsel during the interview. There are no formal rules governing the specific scope of counsel’s participation in a DOJ interview. Individuals who sit for a DOJ interview generally do so voluntarily, which also generally means that interruptions or obstructive conduct by counsel is not consistent with his client’s interests. Nevertheless, and consistent with the client’s constitutional rights, counsel can advise his client to assert his or her Firth Amendment privileges and not to respond to the DOJ’s questions.

Individuals may choose to obtain separate counsel, particularly if there is a potential for a conflict of interest between the individual and the company. In some circumstances, the company may even be required to advise employees to obtain separate counsel, particularly when there is a risk that the interests of the individual and the company may diverge.

Companies will often pay for separate counsel for their officers and employees. Because of the high cost of competent counsel in the US, this enables individuals to secure effective representation that may otherwise be cost prohibitive. Companies generally benefit when their employees are represented by competent counsel for multiple reasons, including protecting the rights and interest of their employees and facilitating effective joint defence efforts.

During the initial phase of an enforcement action, defence counsel generally focus on obtaining a quick understanding of the underlying facts and evidence to being developing an effective defence strategy. This generally involves interview of key individuals as soon as an investigation starts or evidence of a potential violation surfaces. It also involves speedy preservation, collection and review of relevant documents.

The DOJ is able to obtain documentary evidence or testimony in the course of an investigation of alleged cartel behaviour by issuing subpoenas or obtaining search warrants from a court. Leniency applicants may also provide documents and testimony as part of co-operation obligations. Non-documentary information, such as witness testimony or expert opinions, may be obtained by enforcement agencies through interviews. The DOJ may also obtain sworn testimony from witnesses through the grand jury, a group of citizens who must approve all decisions by the DOJ to bring formal criminal charges against a defendant.

Procedural and substantive requirements vary depending on the specific means used to obtain evidence, but in general, the DOJ must comply with constitutional protections against unreasonable searches and seizures and ensure that the scope of their requests or searches is reasonable and proportionate to the investigation at hand. Defendants may seek redress from a court if they believe the DOJ is exceeding its authority or violating their constitutional or legal rights.

As a general rule, the DOJ’s ability to obtain documents or other evidence is limited to its jurisdiction and thus generally it does not have the power to compel companies to produce evidence located outside the US. Documents located on the cloud present issues that are not well settled, but the DOJ faces similar hurdles for documents stored exclusively on servers located outside the US.

The DOJ’s ability to compel production of foreign evidence in criminal cartel cases is more limited than the ability of US plaintiffs to obtain production, where US courts apply a possession, custody or control of the standard even for foreign-located documents. However, once documents originally located outside the US are brought to the country (including territories and possessions), they come within the DOJ’s reach and their production can be compelled. This can include the case where documents are brought into the US after a court compelling production in civil proceedings.

As a practical matter, companies subject to cartel investigations will often produce foreign-located documents to demonstrate general co-operation, to demonstrate lack of involvement in illegal activities, or on the expectation that the documents will be brought into the US in the future as a result of civil discovery.

US laws provide strong attorney-client privilege and related protections for communications with both outside and in-house counsel as well as materials prepared by counsel in anticipation of litigation.

The attorney-client privilege protects confidential communications between attorneys and their clients made for the purpose of seeking or providing legal advice. Communications with in-house counsel are generally protected under the attorney-client privilege if the communications were made for the purpose of seeking or providing legal advice. Work product doctrine also protects documents and materials prepared in anticipation of litigation or for trial by or for a party or its representative.

There are other privileges recognised in the United States that may be pertinent to a cartel investigation. For example, the Fifth Amendment to the United States Constitution provides a privilege against self-incrimination, which can be asserted by an individual in response to questioning by government authorities. Corporations, however, do not have a Firth Amendment privilege.

Legally, failure to comply with a request for information or an investigative subpoena can result in the agency seeking a court order to compel compliance. If a court order is issued and the individual or firm still refuses to comply, they may be held in contempt of court, which could result in fines or imprisonment.

Practically, non-cooperation can harm the individual or firm’s relationship with the agency and may lead to a more aggressive investigation and hardened agency positions.

It is generally advisable for individuals and firms to co-operate with enforcement agencies to the extent required by law and to work with legal counsel to ensure that their rights are protected throughout the investigation process.

In the United States, parties are generally able to protect confidential or proprietary information from disclosure to third parties under certain circumstances.

For example, parties may assert claims of attorney-client privilege or work product protection to protect communications or documents from disclosure if they were created for the purpose of seeking or providing legal advice or in anticipation of litigation.

In addition, parties may seek protective orders from the court to limit the disclosure of confidential proprietary information during the discovery process or in response to requests for information from the enforcement agency. However, the practical ability to shield confidential or proprietary information from DOJ is limited because, as a government agency, DOJ is generally not in a position misuse such information against a company.

Third parties may also seek protection for confidential or proprietary information, such as through confidentiality agreements or protective orders.

Defence counsel for the target of a cartel investigation may raise legal and factual arguments at various stages of the investigation, including during meetings with the enforcement agency and in some cases in written submissions.

Typically, counsel representing a company subject to a cartel investigation will provide multiple proffers to the DOJ, summarising the relevant evidence and ultimately argue that the evidence does not provide a basis for the DOJ to pursue prosecution. Proffers are generally provided orally. Written submissions are rarer in criminal cartel matters but can also be used to underscore key points or provide more comprehensive analysis of relevant legal issues. Counsel will often also make witnesses available to the DOJ for interviews as part of the advocacy process to give the DOJ an opportunity to hear directly from knowledgeable individuals whose testimony may support a DOJ decision to forego prosecution.

Companies are generally well served by early engagement with the DOJ. As a result, counsel should work quickly to conduct an internal investigation to understand the facts, collect key evidence and interview key witnesses so that it can begin making proffers and advocating its client’s position on the merits with the DOJ quickly.

The DOJ maintains an active Leniency Program that generally makes immunity from prosecution available to the first company that self-reports a criminal antitrust violation and potentially its employees and officers.

To obtain leniency or immunity, a cartel participant must come forward with information and evidence about the cartel that is not already known to the authorities. The participant must also end its participation in the cartel and take steps to ensure that its employees and executives do not engage in similar anti-competitive conduct in the future. To secure leniency, the applicant must co-operate in the DOJ investigation, continue to provide evidence, and make witnesses available for DOJ interviews. The applicant must also ultimately admit that it engaged in a criminal antitrust violation.

The first participant to come forward and satisfy the requirements of the leniency programme may be granted full immunity from prosecution, including criminal fines and jail time for covered co-operating executives and employees. Leniency is not available for other companies although generally companies that are not “first in” can obtain better treatment from the DOJ through early and full co-operation.

A company can apply for a “marker” under the DOJ’s Corporate Leniency Policy. The marker provides the company with a limited period of time to gather the necessary information and evidence to satisfy the leniency requirements. The marker protects the company’s place in line for leniency while it conducts its internal investigation.

The DOJ has a strong record of granting leniency to co-operating parties, and the programme has been successful in uncovering cartels and prosecuting participants.

In the United States, there is no separate amnesty regime distinct from the leniency programme. As mentioned above, the Antitrust Division of the Department of Justice operates a leniency programme that offers immunity to corporations and individuals who self-report their involvement in cartel activity, co-operate fully with the investigation, and meet other conditions.

As a practical matter, the DOJ will generally interface with company counsel to obtain documents or testimony from employees who are not separately represented and with individual counsel for employees who are separately represented.

The DOJ can seek information directly from company employees through various means, such as issuing subpoenas, conducting interviews or requesting voluntary co-operation.

If the DOJ chooses to issue a subpoena, it must comply with procedural requirements, such as providing notice to the recipient and allowing an opportunity to challenge the subpoena in court.

Voluntary co-operation may also be requested by the investigating authority, but the employee has the right to refuse to co-operate. If an employee decides to co-operate, they may be represented by counsel during any interviews or discussions with the investigating authority.

The DOJ can and does, as a matter of course, seek documentary information directly from the target company generally through a grand jury subpoena. A subpoena seeking the production of documents and other evidence is generally one of the early steps in an investigation and sets the stage for document searches and productions that can be large in volume and scope and can take months to complete.

Grand jury subpoenas are subject to grand jury secrecy rules and require a court order for a recipient to challenge or quash the subpoena.

The DOJ can seek information from foreign entities indirectly by serving subpoenas on their US-based operations or subsidiaries, but the DOJ’s ability to obtain foreign-located evidence is limited as discussed above. The DOJ may also seek evidence letters rogatory and other forms of international co-operation, but this process can be protracted and is rarely used in cartel investigations.

The Antitrust Division also has various other co-operation agreements with foreign competition authorities, such as the European Commission and the Canadian Competition Bureau. These agreements enable the authorities to share information and co-ordinate enforcement actions. One notable benefit of international co-operation is the ability of agencies, including the DOJ, to co-ordinate dawn raids or the timing when their investigations become public or overt. Because of specific evidentiary rules in US criminal proceedings and limitations on the DOJ’s extraterritorial jurisdiction noted above, the DOJ generally does not obtain evidence from other agencies through co-operation agreements or otherwise.

The DOJ typically co-operates with enforcement agencies in foreign jurisdictions in international cartel cases. This is often done through mutual legal assistance treaties (MLATs) and other forms of international co-operation.

The primary effects of co-operation with other agencies in cartel investigations include co-ordinating the timing of when investigators go over, including by co-ordinating dawn raids. The DOJ can also communicate generally about the investigation after it is initiated, but its ability to obtain and share evidence is limited by grand jury secrecy rules and evidentiary rules in the US.

In the United States, criminal cases for cartel conduct are typically brought by the DOJ in federal court. The process of bringing a criminal case usually begins with an investigation by the DOJ’s Antitrust Division. If the Antitrust Division concludes that there is sufficient evidence of cartel conduct, it may seek to bring criminal charges against the individuals and companies involved.

The DOJ will typically seek an indictment from a grand jury, which is a group of citizens who are convened to hear evidence presented by the government and decide whether there is probable cause to believe that a crime has been committed. If the grand jury returns an indictment, the case will proceed to trial in federal court.

Defendants in criminal cases have the right to access information in the hands of the government through the discovery process, which allows them to request and review documents and other evidence that the government plans to use at trial. The DOJ is required to provide defendants exculpatory evidence in its possession. This includes evidence that is favourable to the defendant that may reduce the defendant’s exposure, or that may go against the credibility of unfavourable witnesses. Defendants also have the right to request information from third parties that may be relevant to their defence.

Before trial, there are several pretrial procedures that may apply, including motions to suppress evidence obtained in violation of the defendant’s rights, motions to dismiss the case for lack of evidence and plea negotiations.

The DOJ generally prosecutes cartel offences criminally, but does have the power to file civil complaints instead. The DOJ can file civil complaints for federal antitrust offences, including cartel conduct, in federal court. Civil proceedings are governed by civil procedure rules that include pretrial discovery that enables the DOJ to seek documents and other information from defendants after the filing of a complaint. The DOJ can also issue civil subpoenas before proceedings with a complaint and federal court discovery. Unlike in criminal cases, the DOJ can also seek formal deposition testimony through civil discovery.

In cartel matters, private civil litigation is more common than litigation against the government. Consistent with the comment above, civil litigation involves extensive discovery, including document productions and depositions. 

Discovery allows defendants to seek evidence and information from plaintiffs, including government plaintiffs, and third parties. 

Civil cases can be tried in front of a judge or jury, although plaintiffs generally prefer juries and exercise their rights to jury trials more often than agreeing to proceed with bench trials.

Enforcement actions involving cartels are generally brought against multiple parties in a single proceeding, particularly when the alleged conduct is widespread and involves multiple companies or individuals. In such cases, the enforcement agency may seek to join all the parties in one proceeding to facilitate the efficient resolution of the case.

However, in some circumstances, parties may be able to obtain separate trials. For example, if there are significant differences in the level of involvement or culpability of the parties, a court may order separate trials to ensure fairness and avoid prejudice. Similarly, if one or more parties are likely to assert their right to remain silent or privilege against self-incrimination, the court may order separate trials to prevent the jury from drawing adverse inferences against the other parties.

In general, the decision to grant separate trials is within the discretion of the court and will depend on the specific circumstances of the case.

In the United States, the burden of proof in a criminal case is beyond a reasonable doubt, meaning the government must prove each element of the offence charged beyond a reasonable doubt. In civil cases, the burden of proof is a preponderance of the evidence, meaning the plaintiff must prove that it is more likely than not that the defendant engaged in the alleged wrongdoing.

At trial, the finder of fact is either the judge or the jury. Defendants in a criminal case have a right to a trial by jury. Nevertheless, a criminal case may be tried to a judge if a defendant waives the right to a jury trial and the prosecutor agrees to proceed in front of a judge. Plaintiffs and defendants have a right to a jury trial in civil trials and both parties must also agree to waive their rights before proceeding with a bench trial.

The judge or jury listens to the evidence presented by both parties and determines the facts of the case. The judge then applies the relevant law to those facts to make a decision and enter a judgment.

In the United States, evidence obtained in one proceeding can generally be used in other proceedings, subject to certain limitations. These can include demonstrating authenticity and providing an opportunity to challenge the evidence or develop evidence to counter it if introduced at trial. For example, a defendant can seek to exclude deposition testimony from another proceeding if it was not involved in that proceeding and did not have an opportunity to object and ask questions during the deposition. Moreover, evidence obtained through illegal means, such as wiretaps conducted without proper authorisation, is generally not admissible in court.

Evidence proffered by an applicant for leniency or obtained from another jurisdiction can also be used in other proceedings, again subject to certain limitations. However, the DOJ must follow strict rules for evidence used in criminal proceedings and generally cannot obtain evidence from other jurisdictions.

In the United States, the Federal Rules of Evidence govern the admission and exclusion of evidence in federal court proceedings. Similarly, each state has its own set of rules governing the admission of evidence in state court proceedings. These rules govern the admissibility of evidence at trial, including witness testimony, documents, physical evidence and other types of evidence.

The rules of evidence are designed to ensure that only reliable and relevant evidence is presented at trial, and to prevent the introduction of evidence that is unfairly prejudicial, confusing or misleading. The rules also provide for various exceptions and privileges that allow certain types of evidence to be excluded, such as attorney-client privilege, doctor-patient privilege and spousal privilege.

Retained experts, including economists, can play an important role in cartel investigations and related proceedings. Economists may be retained to analyse market structure, market power, pricing behaviour and damages. Other experts, such as accountants, may be retained to analyse financial records and other data. At times, parties will also retain industry experts.

As a practical matter, experts (including economists) are more often used in private litigations than in criminal proceedings. In private litigations, experts play a key role because their reports are used as key evidence on damages, and damages are a key issue in civil cases but not in criminal cases. In criminal cases, the DOJ may seek to introduce experts where it seeks to base a fine on affected commerce rather than the stature USD100 maximum. In cases where a defendant claims financial inability to pay a penalty, the DOJ and the defendant may retain accountants to analyse the defendant’s finances.

In all cases, the experts are expected to provide impartial and objective analysis based on sound methodology and principles of their respective fields. The rules of evidence and admissibility standards also apply to the expert reports and testimony, and the experts may be subject to cross-examination by opposing counsel.

Some of the most common privileges that are recognised in the context of enforcement proceedings are:

• attorney-client privilege – this privilege protects communications made between a client and their attorney in the course of seeking legal advice.
• work product doctrine – this doctrine protects materials created by an attorney or their agents in anticipation of litigation or for trial preparation.
• Fifth Amendment privilege against self-incrimination – this privilege allows individuals to refuse to provide testimony or produce documents that would incriminate them in a criminal proceeding.

It is possible to have multiple or simultaneous enforcement proceedings involving the same or related facts. For example, there may be a criminal investigation and civil lawsuits brought against the same parties in relation to the same conduct. In some cases, the parties may seek to consolidate or co-ordinate these proceedings, while in other cases they may proceed separately. 

In a typical large cartel matter, there will be a single DOJ criminal proceeding and multiple civil lawsuits, including direct and indirect class actions and claims by individual direct-action plaintiffs. These civil proceedings are typically consolidated for pretrial proceedings, such as discovery, but more likely to proceed with separate trials.

In the United States, investigatory agencies have the authority to bring enforcement actions against companies and individuals engaged in cartel conduct. However, they do not have the authority to impose sanctions directly. Instead, they must bring their cases before a court. The court then has the authority to impose penalties and sanctions if liability is established.

The limitations on the authority of the investigatory agencies include the requirement to follow established procedures for bringing cases to court and proving their case through the presentation of evidence. Additionally, the agencies must adhere to statutory limitations on the types of penalties and sanctions that may be imposed in antitrust cases.

Plea bargaining and settlements are common in United States antitrust enforcement proceedings, including those involving cartel conduct.

The plea bargaining or settlement process can occur at any stage of the proceeding, from the initial investigation through trial. Defence counsel can start laying the groundwork for a plea bargain informally through proffers and presentations to the DOJ early in an investigation. More formal plea bargaining occurs later in an investigation after both sides indicate openness to a negotiated, pretrial resolution.

A plea bargain in a DOJ criminal cartel investigation results in a plea agreement, whereby the defendant agrees to plead guilty in exchange for a specifically negotiated sentence or a set of sentencing parameters that would be presented to the court. In any case, however, the court must approve a plea agreement.

There can be collateral effects in other litigation or government contracting if liability or responsibility is established in cartel cases in the United States. For example, a criminal sentence for a cartel violation, whether pursuant to a plea agreement or verdict at trial, is prima facie evidence of a violation in subsequent civil proceedings. Additionally, a company or its officers may be debarred from government contracting if they are found to have violated antitrust laws. 

Plea bargaining or settlement can potentially mitigate these collateral effects, depending on the terms of the agreement. For example, a settlement agreement may include provisions that allow the company to avoid debarment from government contracting. However, the availability and scope of such provisions will depend on the specific circumstances of each case and the negotiating positions of the parties involved. The primary way to limit the evidentiary value of a plea agreement in subsequent civil cases is to limit the scope of the conduct to which the defendant pleads guilty (eg, the time period of the offence or the products or customers covered).

In the United States, the range of available sanctions and penalties in criminal proceedings for cartel conduct can be severe. Companies and individuals can face fines, imprisonment and other penalties. The fines can be significant and may be based on a formula that takes into account the value of commerce affected by the cartel conduct or statutory maximum of USD100 million per violation for companies, and USD1 million for individuals. Corporate fines based on the volume of affected commerce (twice the loss or gain from the conduct) can often exceed USD100 million.

The United States Sentencing Guidelines provide guidance for judges in determining the appropriate penalties for companies and individuals convicted of cartel conduct. The guidelines take into account factors such as the nature and seriousness of the offence, the level of culpability of the defendant, and the defendant’s co-operation with the government’s investigation. However, the guidelines are not mandatory, and judges have discretion in determining the appropriate sentence.

In addition to fines and imprisonment, companies and individuals can face other sanctions and penalties, such as probation, asset forfeiture and restitution. DOJ typically proposes the amount of fines and penalties to be imposed, but the ultimate decision rests with the judge presiding over the case.

There are also special circumstances under which more severe penalties can be imposed. For example, if a company or individual is found to have obstructed justice or committed perjury during the investigation or trial, the penalties can be enhanced.

The primary sanctions in civil cases brought by private plaintiffs are damages. Civil plaintiffs are entitled to damages equal to triple the losses they prove. Successful plaintiffs are also entitled to attorneys’ fees and costs.

The DOJ generally cannot recover damages in civil cases, unless it seeks to recover for losses sustained by the federal government as a victim of the cartel conduct.

Historically, the DOJ has not given credit to compliance programmes on the theory that a programme was ineffective if a company participated in a cartel. Under recent policy changes, the DOJ will consider a company’s compliance programme as a factor in assessing how to proceed against a corporate defendant. In assessing the effectiveness of the compliance programme, the DOJ considers various factors, such as the company’s commitment to compliance, the resources allocated to the compliance programme, the quality of the programme, the experience and training of the individuals responsible for the programme and the company’s compliance culture.

In antitrust cartel cases, the court may order injunctive relief to prevent further antitrust violations and may also order restitution to consumers who have suffered harm as a result of the violation. However, the DOJ generally does not seek restitution in cartel cases because private plaintiffs generally seek damages in follow-on litigations.

In the United States, both criminal and civil enforcement proceedings may be subject to judicial review or appeal.

In criminal cases, a defendant can typically appeal a conviction and/or sentence to a higher court, such as a federal appellate court or the United States Supreme Court. The standard of review on appeal is typically whether the lower court made an error of law or abused its discretion. It is relatively common for criminal convictions to be appealed.

It is also relatively common for civil judgments to be appealed. The standard of review will depend on the nature of the decision being appealed and the legal issues involved. For example, a district court’s findings of fact will generally be reviewed for clear error, while its conclusions of law will be reviewed de novo.

It is worth noting that in some cases, parties may have the opportunity to seek interlocutory review, which allows for immediate review of a decision by a higher court before the case has concluded. However, such review is typically only available in limited circumstances, such as when the lower court’s decision involves a controlling question of law as to which there is substantial ground for difference of opinion and an immediate appeal from the decision may materially advance the ultimate termination of the litigation.

In the United States, there is a private right of action to seek damages for harm caused by antitrust violations, including alleged cartels. The threshold requirements for such an action generally require that the plaintiff demonstrate antitrust injury, which means injury resulting from conduct that violates antitrust laws and that harms competition.

As discussed above, civil actions carry a lower burden of proof than government actions and focus on proof of damages, which the government does not need to prove in a cartel action.

Private antitrust actions in the United States can be brought as class actions by individuals or companies who can demonstrate harm from the cartel conduct; generally buyers of the price-fixed products.

To bring a class action lawsuit, the plaintiff(s) must meet the requirements of Rule 23 of the Federal Rules of Civil Procedure, which include a numerosity requirement (the class must be so large that joinder of all members is impractical), commonality (there are questions of law or fact common to the class), typicality (the claims or defences of the representative parties are typical of the claims or defences of the class), and adequacy of representation (the representative parties will fairly and adequately protect the interests of the class).

In the United States, the issue of indirect purchasers or “passing-on” defences is handled through the application of the Illinois Brick doctrine. Under this doctrine, only direct purchasers have standing to sue for damages resulting from an antitrust violation, while indirect purchasers (such as consumers who purchase goods or services from the direct purchaser) do not have standing to bring a damages claim.

However, some states have enacted their own laws that allow indirect purchasers to sue for damages. In those states, indirect purchasers may have standing to bring antitrust claims and seek damages resulting from an antitrust violation.

In private civil actions, the process for hearing and resolving such claims typically involves extensive discovery, including the production of documents and the taking of depositions, followed by trial.

Generally, evidence obtained from governmental investigations or proceedings may be admissible in private civil litigation involving alleged cartels, subject to the usual rules of evidence. In prominent recent matters, some courts have ordered defendants to produce to private plaintiffs in early stages of a case, documents provided to the government in parallel proceedings.

The frequency of completed litigation versus dismissal or settlement in private antitrust cases depends on various factors such as the strength of the plaintiff’s case, the complexity of the legal and factual issues involved, and the resources of the parties. That said, a significant percentage of antitrust cases are resolved through settlement. Timeframes also vary depending on the complexity of the case and pace of the court. On average, private antitrust cases in the United States take several years to reach resolution. However, some cases can be resolved more quickly if the parties reach a settlement early in the litigation process.

Successful attorneys for class action claimants in private antitrust litigation are typically compensated by an amount determined by the court. In the United States, class action attorneys’ fees are often awarded under a “lodestar” method, which multiplies the number of hours spent by an attorney on a case by an hourly rate that is reasonable for the attorney’s experience and skill level. The court may then adjust the lodestar figure based on various factors, such as the complexity of the case, the results obtained and the risk of non-payment. 

Attorneys for direct action plaintiffs who are not part of a class or “opt out” of a class, are compensated based on agreements with their clients which can include traditional hourly fees or contingency fees.

Under the default rule in the United States, each party is responsible for paying their own attorneys’ fees and litigation costs, regardless of the outcome of the case. However, some statutes provide for the award of attorneys’ fees to the prevailing party. For example, in antitrust cases, the Clayton Act allows for the award of attorneys’ fees to the prevailing party.

In the United States, decisions involving private civil litigation can be subject to appellate review. The standard of review is typically deferential to the lower court’s factual findings and legal conclusions, and the appellate court will generally only reverse if it finds that the lower court committed a clear error of law or fact. In some cases, there may be further opportunities for review, such as a petition for rehearing or an appeal to the United States Supreme Court.

Some other items of information that may be pertinent to an understanding of claims involving alleged cartel conduct in the United States are the following.

• The DOJ changed its policy for crediting compliance programmes in 2019. The DOJ’s current policy is reflected in its Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.
• The DOJ and the Federal Trade Commission jointly issued Antitrust Guidelines for International Enforcement and Cooperation in 2017. These guidelines provide insights into how United States antitrust agencies conduct investigations and enforce antitrust laws against international cartels, including co-ordination with foreign agencies, use of leniency programmes, and co-operation with private plaintiffs.
• Private civil litigation in the United States is often subject to the Class Action Fairness Act (CAFA) of 2005, which provides federal jurisdiction over certain class actions with diverse parties and significant amounts in controversy. The CAFA has had a significant impact on the way antitrust class actions are litigated and settled.

There are several written guides relating to cartel conduct and enforcement published by government authorities in the United States, including the following.

• Antitrust Guidelines for Collaborations Among Competitors. These guidelines were published by the Federal Trade Commission and the Department of Justice Antitrust Division in 2020. They provide guidance on how companies can collaborate with each other without violating antitrust laws.
• Antitrust Enforcement Guidelines for International Operations. These guidelines were published by the Department of Justice Antitrust Division in 2016. They provide guidance on how the antitrust laws apply to conduct that occurs outside of the United States. The guidelines can be found here.
• Antitrust Compliance Guidelines for Associations. These guidelines were published by the Department of Justice Antitrust Division in 2019. They provide guidance on how trade associations can avoid engaging in anti-competitive conduct.
• The Sherman Antitrust Act. This is the federal law that prohibits anti-competitive conduct, including cartel conduct.
• The Federal Trade Commission Act. This is another federal law that prohibits anti-competitive conduct. The text of the FTC Act can be found here.