U.S. Policy and Practice in Pursuing Individual Accountability for Cartel Conduct: A Preliminary Critique

• Published date: 01 June 2011
• DOI: 10.1177/0003603X1105600204
• Date: 01 June 2011
• Subject Matter: Article

U.S. policy and practice in pursuing

individual accountability for cartel

conduct: A preliminary critique

BYCARON BEATON-WELLS*AND BRENT FISSE**

The extent of individual accountability for cartel conduct in the

United States, as elsewhere, may be more limited than some might

have one believe. The chances are that individuals responsible for

cartel offenses will not be prosecuted and that corporate fines will not

result in internal disciplinary action being taken against them. Yet

few would disagree with the principle that all who are responsible

for serious cartel conduct should be held accountable. Further

empirical investigation is required in order to test fully the extent to

which the DOJ’s approach to anticartel enforcement achieves

individual accountability. Such an investigation is warranted with

regard to the influence of the U.S. model around the world and the

strength of advocacy by the U.S. authorities as to its merits.

THE ANTITRUST BULLETIN:Vol. 56, No. 2/Summer 2011 :277

*Associate Professor, Melbourne Law School, The University of Mel-

bourne.

** Brent Fisse Lawyers, Sydney; Adjunct Professor, The University of

Sydney; Senior Fellow, Melbourne Law School, The University of Melbourne.

AUTHORS’ NOTE: We are grateful to John Connor, Bob Lande, and Richard Gruner

for helpful responses to our requests for information about aspects of the U.S. system

and to Kathryn Tomasic and Janette Nankivell for research assistance. The usual

disclaimers apply.

© 2011 by Federal Legal Publications, Inc.

I. INTRODUCTION—INDIVIDUAL ACCOUNTABILITY AS A

PARADIGM FOR ANTICARTEL ENFORCEMENT

Individual accountability is a foundation of social control in Western

democracies. Although the contours of the concept of individual

accountability are context-dependent and widely debated, the ortho-

dox principle is that individuals are the quintessential actors in soci-

ety and should be accountable for their actions.1

The U.S. Department of Justice (DOJ) prides itself on having

championed a “global movement towards individual accountability”

for cartel activity through the application of criminal sanctions, par-

ticularly jail time, for individual offenders.2However, with only a

handful of exceptions, the DOJ’s contemporary policy and perform-

ance record with respect to criminal cartel enforcement have escaped

critical scrutiny from U.S. commentators.3Indeed, most tend to lion-

ize the Antitrust Division’s efforts to eradicate cartels from the U.S.

and global economies.4This may be attributed in part to the facially

278 :THE ANTITRUST BULLETIN:Vol. 56, No. 2/Summer 2011

1BRENT FISSE & JOHN BRAITHWAITE, CORPORATIONS, CRIME AND ACCOUNT-

ABILITY ch. 1 (1994).

2Scott Hammond, Deputy Assistant Att’y Gen., U.S. Dep’t of Justice,

Antitrust Div., Charting New Waters in International Cartel Prosecutions,

Presentation to the 20th Annual National Institute on White Collar Crime,

ABA Criminal Justice Section and ABA Center for Continuing Legal Educa-

tion (Mar. 2, 2006), at 2 [hereinafter Hammond, Charting New Waters]; Scott

Hammond, Deputy Assistant Att’y Gen., U.S. Dep’t of Justice, Antitrust Div.,

The Evolution of Criminal Antitrust Enforcement over the Last Two Decades,

Presentation to the 24th Annual National Institute on White Collar Crime,

ABA Criminal Justice Section and ABA Center for Continuing Legal Educa-

tion (Feb. 25, 2010) at 4, 6-9 [hereinafter Hammond, Evolution].

3For exceptions, see John M. Connor, Anti-Cartel Enforcement by the

DOJ: An Appraisal, 5 COMPETITION L. REV. 89 (2008); Maurice E. Stucke, Am I a

Price Fixer? A Behavioural Economics Analysis of Cartels,in CRIMINALISING CAR-

TELS: CRITICAL STUDIES OF AN INTERNATIONAL REGULATORY MOVEMENT ch. 12

(Caron Beaton-Wells & Ariel Ezrachi eds., 2011); D. Daniel Sokol, Neo-Chicago

Antitrust, Cartel Enforcement and Corporate Compliance, ANTITRUST L.J. (forth-

coming).

4As reflected in the observation by two commentators: “People in

the antitrust world disagree about many things, but it is extremely difficult

to find responsible critics who do not applaud the U.S. government’s anti-

impressive statistical record of the Division in criminal antitrust cases

over the last decade. Statistically it has been for many years (and, in

the absence of criminal liability in the European Union, is likely to

remain for many years) the world leader in terms of the number of

criminal cases brought against cartel offenders.5

This article tests in a preliminary way the extent to which individ-

ual accountability is reflected in current U.S. anticartel policy and

practice, focusing on:

• the policy reasons given by U.S. authorities for subjecting individ-

uals to criminal sanctions for cartel conduct (section II);

• the exercise of enforcement discretion with respect to prosecution,

leniency, and plea bargaining in the United States (section III);

• the nature of individual sanctions for cartel conduct in the United

States (section IV); and

• the nature of corporate sanctions for cartel conduct in the United

States (section V).

The analysis is necessarily preliminary. A definitive analysis

would require an empirical investigation of a scale and kind that was

not possible for the purposes of this article. Nevertheless, on even a

preliminary analysis, it is evident that questions hang over the extent

to which individual accountability is in fact pursued or achieved in

anti-cartel enforcement by the DOJ. In the conclusion, we map the

INDIVIDUAL ACCOUNTABILITY :279

cartel program. We strongly agree with this almost-unanimous consensus

and are second to no one in our appreciation of the DOJ’s anti-cartel activity.

In terms of taxpayer dollars well spent, the program surely is one of the most

outstanding in all of government.” Robert H. Lande & Joshua P. Davis, Com-

parative Deterrence from Private Enforcement and Criminal Enforcement of the

U.S. Antitrust Laws, 2011 BYU L. REV. (forthcoming). See also Donald C.

Klawiter, After the Deluge: The Powerful Effect of Substantial Criminal Fines,

Imprisonment and Other Penalties in the Age of International Criminal Enforce-

ment, 69 GEO. WASH. L. REV. 745 (2001); David A. Balto, Antitrust Enforcement

in the Clinton Administration, 9 CORNELL J. L. & PUB. POL’Y61 (1999).

5The decrease in the total number of individuals charged with cartel

violations since the mid-1990s has been attributed to a shift in prosecutions

away from bid-rigging conspiracies and toward large-scale price fixing cartels,

the latter of which tend to have a smaller number of corporations and individ-

uals involved in them than the former. See Connor, supra note 3, at 109–10.