Dealing with the Antitrust Authorities

• Pages: 205-222

205

CHAPTER VIII

DEALING WITH THE ANTITRUST

AUTHORITIES

A. Somebody from the Department of Justice (or Other

Government Agency) Just Called. What Should I Do?

The proper response to any government inquiry depends on the

nature of the inquiry itself. There are any number of situations in which

an individual or company might be contacted by someone from the

government. The contact could, for example, involve the surprise

execution of a search warrant in a criminal investigation, a demand for

information related to a civil investigation, an attempt to gather

information about the company as part of an agency study of an industry,

or an informal contact to gather information about a transaction between

other companies with which your client may do business or compete.

Depending on the situation, your client’s response could be completely

voluntary, or it could be compell ed by law (with significant civil and/or

criminal sanctions resulting from a failure to respond or a failure to

respond truthfully).

The government may commence an investigation based on

information obtained from a variety of sources, including competitors,

news reports, premerger notification filings, state agencies, and private

litigation.1Care is required in responding to any contact from a

government investigator (no matter how informal or friendly the contact

might seem) because the possible consequences of an inappropriate or

careless response are serious. Until the full context of a government

inquiry is understood, an accurate evaluation of the matter or decision on

the appropriate nature of your response may not be possible.

Criminal Investigations. Antitrust violations may be prosecuted both

criminally and civilly under the Sherman Act. The Department of Justice

1. U.S. DEP’T OF JUSTICE,ANTITRUST DIVISION MANUAL III-6 [hereinafter

AT MANUAL]. The AT MANUAL is available from the Government

Printing Office and, by chapter, in .pdf format at http://www.justice.gov/

atr/public/divisionmanual/index.html.

206 Frequently Asked Antitrust Questions

(DOJ), as part of the executive branch, is the only federal agency with

the constitutional authority to pursue criminal prosecutions under the

Sherman Act. Criminal penalties under the Sherman Act are substantial.

The current maximum Sherman Act corporate fine is $100 million per

violation, and the maximum individual fine per violation is $1 million.2

In addition, the maximum prison term is 10 years per Sherman Act

violation.

A surprise search warrant served in connection with an antitrust

investigation is extremely serious and means that the government has a

strong suspicion, and probably some evidence as well, of criminal

conduct. The DOJ and state attorneys general use search warrants to

obtain documents, electronic files, and physical items from corporations

and individuals either for use in a grand jury investigation or in support

of an indictment when there is probable cause to believe that the seized

items are evidence of the commission of a crime. Federal Rule of

Criminal Procedure 41 governs the procedures for search warrants. The

publicly available DOJ Antitrust Division Manual describes the

circumstances in which the DOJ will use search warrants to gather

evidence and procedures relating to their use.3Receipt of a search

warrant or grand jury subpoena may indicate that your company, another

company, or certain individuals are under investigation for antitrust

violations.

Counsel must immediately take charge of the company’s response to

the government in such criminal investigations. When the DOJ serves a

search warrant, an in-house lawyer or outside counsel should go to the

site of a search as soon as possible to ensure that the search is properly

conducted. He or she should confirm the validity of the search warrant,4

obtain identification of all of the individuals conducting the search,

object if the scope of the search is beyond that authorized by the search

2. U.S. DEP’T OF JUSTICE,PRICE FIXING,BID RIGGING,AND MAR KET

ALLOCATION SCHEMES:WHAT THEY ARE AND WHAT TO LOOK FOR -AN

ANTITRUST PRIMER,available at http://www.justice.gov/atr/public/

guidelines/211578.htm.

3. See AT MANUAL,supra note 1, at III-96-III-97.

4. FED.R.CRIM. P. 41. In general, the search warrant must be validly issued

by competent judicial authority, must describe with particularity the

property to be seized, state that the property is evidence of a specified

criminal offense, provide an exact description of the location to be

searched, and note the period of time within which the search is to be

executed.