Under the antitrust microscope: steps to avoid increasing scrutiny and penalties.

• Author: Stewart, Jeremy
• Position: Legal Brief

Criminal prosecutions and punishments for corporate executives involved in antitrust violations are on the rise. In the 1990s, the U.S. Department of Justice (DOJ) prosecuted on average only one individual for every company it prosecuted for antitrust violations. In the last five years, the DOJ prosecuted almost three times as many individuals (352) as corporations (123). But a growing chance of prosecution is not the only risk to corporate executives.

Monetary fines and prison sentences for individual antitrust offenders also are growing in size and frequency. The average prison sentence for antitrust offenders in the last five years was 24 months, triple the eight-month average in the 1990s.

For example, both the president and executive vice-president of a Taiwanese manufacturer of LCD screens currently are serving 36-month jail sentences for their involvement in the LCD price-fixing cartel--the longest U.S. antitrust sentences imposed against foreign nationals. And executives involved in the coastal shipping cartel recently were sentenced to 60 months and 48 months in prison--the longest sentences ever imposed in the United States for antirust offenses.

This upward trend in scrutiny and punishment for individual antitrust offenders is likely to continue. In September 2015, the DOJ published a memorandum, known as the Yates Memo, that signaled a new level of commitment to holding all white-collar criminals accountable and called on all DOJ investigators and prosecutors to "focus on individual wrongdoing" and "on building cases against individual wrongdoers."

Following the Yates Memo, a DOJ antitrust official in February 2016 announced the DOJ Antitrust Division's increased emphasis on individual accountability and to "holding accountable the highest-level culpable executives at conspirator companies."

The Antitrust Division's increased commitment is based on two key beliefs: (1) that "compliance with antitrust laws must be ingrained in a corporation's culture--one that is established from the top down;" and (2) that "prison time for individuals [i]s the single most effective deterrent to the temptation to cheat the system and profit from collusion," even more than the billions of dollars in fines imposed by the DOJ on corporations and their employees.

Antitrust compliance is becoming much more personal for corporate executives and employees. However, the risks of a criminal antitrust violation can be minimized by adopting and following a...