Criminal Enforcement of Section 2 of the Sherman Act: An Empirical Assessment

• Author: Daniel A. Crane
• Position: Frederick Paul Furth, Sr. Professor of Law, University of Michigan
• Pages: 753-778

CRIMINAL ENFORCEMENT OF SECTION 2 OF THE

SHERMAN ACT: AN EMPIRICAL ASSESSMENT

D

ANIEL

A. C

RANE

*

In early 2022, the new leadership of the Justice Department’s Antitrust Di-

vision made waves by announcing that the DOJ would consider bringing

criminal cases for monopolization under Section 2 of the Sherman Act. This

dramatic change in policy—Section 2 has not been criminally enforced in

decades—was first announced in a speech in March by Deputy Assistant At-

torney General Richard Powers,

1

asserted again a month later in another

speech by Assistant Attorney General Jonathan Kanter,

2

and then confirmed

in an updated Antitrust Division Manual released in April.

3

If the point was to get the attention of the defense bar and the companies

they represent, these bombshell announcements succeeded. Defense-oriented

law firms rushed to release a slew of client alerts, warning of a “significant

departure from modern DOJ criminal antitrust enforcement policy,”

4

and a

* Frederick Paul Furth, Sr. Professor of Law, University of Michigan. Many thanks to Shay

Elbaum and the research team at the University of Michigan Law Library for copiously pulling

together the database of cases from which this article’s findings are drawn. Wesley Ward pro-

vided excellent research assistance.

1

Kathryn Hellings & Daniel Shulak, Head of DOJ Criminal Antitrust Unit Says that Crimi-

nal Monopolization Cases May Be on the Horizon, H

OGAN

L

OVELLS

:E

NGAGE

(Mar. 3, 2022).

2

Jonathan Kanter, Assistant Att’y Gen., U.S. Dep’t of Justice Antitrust Division, Opening

Remarks at 2022 Spring Enforcers Summit (Apr. 4, 2022).

3

Compare U.S. D

EP

’

TOF

J

USTICE

, A

NTITRUST

D

IVISION

M

ANUAL

§ 7-2.200 (2022) (“[The

Justice Department] may also bring, and has brought, criminal charges under Section 2.”), with

U.S. D

EP

’

TOF

J

USTICE

, A

NTITRUST

D

IVISION

M

ANUAL

§ III-12 (2015) (“In general, current Divi-

sion policy is to proceed by criminal investigation and prosecution in cases involving horizontal,

per se unlawful agreements such as price fixing, bid rigging, and customer and territorial

allocations.”).

4

Sydney Cooper et al., Monopolists Going “Directly to Jail?” DOJ Announces Intent to

Criminally Prosecute Section 2 Violations, JDS

UPRA

(Mar. 9, 2022), www.jdsupra.com/

legalnews/monopolists-going-directly-to-jail-doj-3688936.

753

754

A

NTITRUST

L

AW

J

OURNAL

[Vol. 84

“surprising”

5

and “significant policy shift”

6

with “far-reaching” implications.

7

And, although the Justice Department has not yet identified possible targets, it

is no secret that the Biden administration has ongoing monopolization cases

against Google and Facebook, has investigations open as to other Big Tech

companies as well, and generally takes the position that Section 2 has been

dramatically underenforced and that a reckoning is due.

8

Whatever the administration’s plans, and whatever the policy considera-

tions of bringing criminal monopolization cases, it is clear that historical pre-

cedent will play a considerable role in arguments for and against a renewed

regime of criminal enforcement. In response to assertions that criminal Sec-

tion 2 enforcement would constitute a dramatic break with precedent, the ad-

ministration answers that criminal monopolization enforcement was once

standard practice and that the last several decades of non-enforcement are the

aberration. In a June 7, 2022 speech, Deputy AAG Powers defended the pos-

sibility of bringing criminal monopolization cases as “‘not a novel idea or

theory’” but one that represents a revival of previous agency practice.

9

He

added: “Historically, the antitrust division did not shy away from bringing

criminal monopolization charges when companies and executives committed

flagrant offenses intended to monopolize markets . . . and by my count, the

Justice Department has brought over 100 criminal monopolization cases.”

10

So, what exactly is the historical record on criminal Section 2 enforcement?

Surprisingly, there is no source authoritatively compiling the record. In con-

trast to Mr. Powers’ assertion of over 100 cases, a study in 2002 reported 87

criminal monopolization cases, without providing any significant detail about

them.

11

Estimates of when the last criminal monopolization case was brought

have varied, with one scholar asserting that “[t]he last major criminal monop-

5

Lindsey Olson Collins & Ann M. O’Brien, Antitrust Division Announces Newfound Intent

to Pursue Monopolization Cases Criminally, B

AKER

& H

OSTETLER

(Mar. 4, 2022).

6

Hellings & Shulak, supra note 1 (“Powers’ statement represents a significant Antitrust Divi-

sion policy shift[.]”).

7

Nicholas J. Giles et al., DOJ Signals Intent to Bring Criminal Charges for Monopolization,

M

C

G

UIRE

W

OODS

(Mar. 7, 2022).

8

See Exec. Order No. 14036, 86 Fed. Reg. 36,987 (July 9, 2021) (“Promoting Competition in

the American Economy”).

9

Michael Acton, US DOJ’s Exploration of Criminal Charges for Monopoly Breaches Fol-

lows Decades of Underenforcement, Powers Says, M

LEX

(June 7, 2022).

10

Id.

11

Robert W. Crandall, The Failure of Structural Remedies in Sherman Act Monopolization

Cases, 80 O

R

. L. R

EV

. 109, 115–16 (2001) (“To construct the database of monopolization cases,

I assembled all the relevant cases from the CCH Abstracts from 1890 to 1996. Of the more than

4,000 entries, I found 423 cases for which sufficient information was available and that met the

initial criteria—a consent decree or a finding against the defendants in a monopolization case

brought by the government. Of the 423 monopolization cases, eighty-seven were criminal cases

and 336 were civil cases. All eighty-seven criminal cases resulted in monetary fines.”).