Deterrence and Detection of Cartels: Using all the Tools and Sanctions

Published date01 June 2011
Date01 June 2011
Subject MatterArticle
Deterrence and detection of cartels:
Using all the tools and sanctions
The United States applies a diverse array of tools and sanctions to
deter and detect cartels. Because cartel activity is treated as a serious
crime, a formidable array of criminal investigative tools is available,
and convicted individuals are imprisoned. Private damages actions
also yield substantial recoveries. The many tools and sanctions sup-
port each other in various ways, making each significant. But the
claim that private damages actions provide the most important deter-
rent to cartels in the United States ignores the enormous assistance
provided by criminal enforcement, misses much that is critical in
deterring cartels, and mistakenly assigns credit for detecting cartels.
THE ANTITRUST BULLETIN:Vol. 56, No. 2/Summer 2011 :207
* Senior Economic Counsel, Antitrust Division, U.S. Department of
** Deputy Assistant Attorney General for Criminal Enforcement,
Antitrust Division, U.S. Department of Justice.
*** Deputy General Counsel–Criminal, Antitrust Division, U.S.
Department of Justice.
AUTHORS’ NOTE: Jim Fredricks of the Antitrust Division’s Appellate Section
provided helpful comments.
© 2011 by Federal Legal Publications, Inc.
The basic framework for deterring and detecting cartels in the United
States remains that established in 1890 by the Sherman Act: Corpora-
tions that participate in cartels are subject both to criminal fines and
civil actions for damages,1and culpable individuals are subject to
criminal prosecution and imprisonment.2The applicable sanctions,
however, have evolved substantially since 1890, and the arsenal of
enforcement tools has been significantly enlarged in recent decades.
This article details the tools and sanctions used in the United States to
deter and detect cartels and explains how they work together in pur-
suit of a common goal. Even though more than a hundred countries
now have anticartel laws, including many moving in the direction of
the U.S. model, the United States remains the only jurisdiction that
has extensive experience utilizing both incarceration and private
damages litigation.
Cartels have no legitimate purposes and serve only to rob con-
sumers of the tangible blessings of competition. Cartels, therefore, are
not properly redressed with just a liability rule designed to compen-
sate victims.3Rather, participation in a cartel is viewed in the United
208 :THE ANTITRUST BULLETIN:Vol. 56, No. 2/Summer 2011
1Section 7 of the Sherman Act provided that “any person” injured by a
violation of the Act “may sue” in federal court and “recover three fold the
damages by him sustained, and the costs of suit, including a reasonable
attorney’s fee.” Ch. 647, § 7, 26 Stat. 210 (1890). This provision was replaced
by identical language (except for making “three fold” into a single word) in
section 4 of the Clayton Act, now codified at 15 U.S.C. § 15 (2006).
2Section 1 of the Sherman Act declared that “[e]very contract,
combination . . . , and conspiracy, in restraint of trade . . . is a misdemeanor.”
Ch. 647, § 1, 26 Stat. 209 (1890). As highlighted below, violations are now
felonies. See infra note 47 and accompanying text. When the Sherman Act
became law, thirteen of the states already had criminal laws prohibiting
CORPORATION PROBLEMS 342 & n.1 (1929).
3On the basic rationale for criminal prohibitions rather than reliance on
liability rules, see Guido Calabresi & A. Douglas Melamed, Property Rules,
Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV.
1089, 1124–27 (1972).

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