Quarterly Cartel Catch-Up: Recent Developments In Criminal Antitrust For Busy Corporate Counsel ‒ Fall 2019

Author:Ms Lisa M. Phelan, Daiske Yoshida, Tomohiko Kimura, Megan E. Gerking, Rob Manoso, Mary Kaiser, Aniek Schadd, Theresa Oehm, Arvind Miriyala and Bonnie Lau
Profession:Morrison & Foerster LLP

Below we summarize significant cartel enforcement developments from U.S. and other antitrust enforcers in recent months, including: the Department of Justice Antitrust Division's (the "Division") review of its International Guidelines in an effort to increase global coordination; the latest corporate sentence in the Division's packaged seafood industry probe that comes as one executive awaits trial; the European Commission fines imposed against participants in an alleged canned vegetable cartel; and Japan's antitrust enforcer uncovers evidence of cartel conduct during a merger review. These stories and more are in this latest edition of the Quarterly Cartel Catch-Up.

Assistant Attorney General Delrahim Announces Review of Antitrust Division's International Guidelines

Key Point: Announcement underscores the Division's commitment to continued coordination with international antitrust enforcers to achieve consistent, business-oriented outcomes.

On September 12, 2019, Assistant Attorney General of the Division Makan Delrahim announced a review of the Division's International Guidelines during a speech at the 46th Annual Fordham Competition Law Institute Conference on International Antitrust Law and Policy. Delrahim stated that the review reflects the importance of comity in international competition enforcement and the symmetry expected from foreign enforcers. According to Delrahim, comity among antitrust enforcers is necessary to minimize the burden on businesses and to avoid international politicization of antitrust disputes, but should not be equated with deference to foreign interpretation. In this regard, he identified the European General Data Protection Regulations (GDPR) and measures to require global licensing of U.S. patents as broad remedies that limit the Division's ability to reach a different conclusion and risk harming American consumers.

But Delrahim stressed that the Division's role is not to play "international antitrust cop" where U.S. commerce is not affected, and cautioned against use of U.S. antitrust laws "to expand their sphere of influence." Instead, to achieve consistency in antitrust enforcement around the globe, the analysis should be based on objective rules and economic principles, rather than political considerations. Therefore, Delrahim explained, the Division should only defer after a "full and fair investigation," and considering "any history of discrimination in favor of its own domestic companies or against foreign companies."

Historically, the Division has actively participated in international efforts to coordinate both antitrust policy and investigative matters. For example, the Division contributes to the Organisation for Economic Co-operation and Development (OECD), an intergovernmental organization that promotes international cooperation and policy development in a number of areas, including competition. The Division is also a member of the International Competition Network (ICN), which was established in 2001 to facilitate international cooperation and uniformity in competition policy and has grown to include more than 140 member agencies today. Apart from its policy efforts, the Division works to coordinate cartel enforcement in individual matters.

StarKist Co. Receives Statutory Maximum $100 Million Fine for Canned Tuna Price Fixing Scheme, While Former Bumble Bee Foods CEO Prepares for Trial

Key Point: Courts may be undeterred by claims of financial hardship when it comes to imposing penalties for cartel conduct.

On September 11, 2019, U.S. District Judge Edward M. Chen sentenced StarKist Co. to pay a $100 million fine for its participation in a conspiracy to fix the prices of canned tuna sold in the United States from as early as November 2011 to as late as December 2013. Judge Chen imposed the statutory maximum fine, finding that StarKist failed to prove that its financial circumstances warranted a lower penalty. StarKist had claimed that a large fine could lead to layoffs and a plant closure as well as undermine its ability to settle claims with purchasers in ongoing private litigation. The company asked for a reduced fine, based on provisions of the U.S. Sentencing Guidelines that allow for a reduction when the Guidelines-based fine would substantially jeopardize the continued existence of a company. Instead, the court accounted for StarKist's claims by structuring StarKist's payments over a five-year period. The court also sentenced StarKist to 13 months of probation, but declined to order the company to pay restitution since it has been actively settling civil claims. StarKist has agreed to cooperate in the...

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