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Category: Criminal

Senate Passes the Criminal Antitrust Anti-Retaliation Act, and Takes Another Shot at Increased Protections for Whistleblowers

On November 15, 2017, the United States Senate passed the Criminal Antitrust Anti-Retaliation Act of 2017 (“CAARA”). This Act would amend the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (“ACPERA”), and would provide a civil remedy to persons fired or otherwise discriminated against for reporting potential criminal violations of the antitrust laws.

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E-Commerce Company Custom Wristbands Admits to Price-Fixing

The Department of Justice Antitrust Division recently announced that California-based Custom Wristbands Inc. (d/b/a Kulayful Silicone Bracelets, Kulayful.com, Speedywristbands.com, Promotionalbands.com, Wristbandcreations.com, and 1inchbracelets.com) (“Custom Wristbands”) and its top executive Christopher Angeles agreed to plead guilty for conspiring to fix prices for wristbands and other customized novelty products sold online.

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Antitrust Division’s Spring Update 2017: Insights Regarding DOJ’s Enforcement and Policy

The Antitrust Division recently issued its 2017 annual spring update.

The update emphasizes the Division’s recent litigation victories, particularly in the merger context.  In his introductory remarks, Assistant Attorney General Brett Snyder noted the Division’s litigation docket is more active—on both the civil and criminal sides—than it has been in recent years.

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The Government Seeks to Intervene in its Third Generic Drug Price-fixing Lawsuit

Since we last reported on the state and federal government’s generic drug pricing investigations and litigations (click here to read more), the U.S. Department of Justice (“DOJ”) has obtained its first guilty pleas.  On January 9, 2017, Heritage Pharmaceutical Inc.’s former CEO and its former president (the defendants are brothers-in-law) pleaded guilty to manipulating the prices of and divvying up customers for an antibiotic, doxycycline hyclate, and a diabetes medicine, glyburide.  The defendants are scheduled to be sentenced on September 28, 2017, and they face up to ten years of imprisonment.  The government’s filings in other lawsuits make clear that the defendants’ sentencing was delayed until the defendants complete their cooperation with the government.

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DOJ and State AG Investigations Into Generic Pricing Lead to Suits Against Manufacturers and Employees

As we have previously reported, (click, here, here, here, and here to read more), generic drug manufacturers have recently come under intense scrutiny from state and federal regulators for their price hikes.  Last week, the Department of Justice and twenty state attorneys general instituted criminal and civil proceedings in connection with alleged generic drug price manipulation.

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Spring Update: Insights Regarding The Antitrust Division’s Recent Activity

The Antitrust Division recently issued its 2016 annual spring update. Taking advantage of modern technology, Bill Baer—now the Acting Associate Attorney General serving in the DOJ’s third-highest ranking position—prepared video remarks for your viewing pleasure.  (Still, most of the Division’s updates were included in written commentary.)  Renata B. Hesse now serves as the Principal Deputy Assistant Attorney General responsible for overseeing the Antitrust Division.

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Hitachi Chemical to Plead Guilty to Price-Fixing

The Department of Justice ("DOJ") announced this week that Hitachi Chemical Co. will plead guilty to a criminal charge for conspiring with competitors to fix the prices of electrolytic capacitors sold in the United States and elsewhere. The Tokyo-based company will pay an undisclosed fine and has agreed to cooperate with the DOJ's investigation.

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DOJ to Executives: We’re Watching You

We’ve previously written about how the Yates Memo announced an increased focus on individual accountability, and that the DOJ’s broader focus on individual accountability would likely encourage the Antitrust Division to increase its efforts to prosecute individuals for antitrust violations.

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What Does the Yates Memo Mean for Antitrust Cases?

Just over two months ago, the United States Department of Justice made waves when a memorandum from Deputy Attorney General Sally Quillian Yates (the “Yates Memo”) announced an increased focus on individual accountability to combat corporate misconduct.  The Yates Memo explains DOJ’s view that individual accountability is important because it deters future illegal activity, incentivizes changes in corporate behavior, ensures the proper parties are held responsible for their actions, and promotes the public’s confidence in the justice system. 

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The DOJ’s Airline Investigation: A Primer

Last month, the Associated Press was the first to report that the DOJ is investigating whether American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines have engaged in collusion.  Since that time, there has been much speculation in the press about the DOJ’s investigation.  But given that the investigation is not a public proceeding, what do we really know?

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The Government’s Generic Price-Fixing Investigation Targets Allergan’s Actavis Unit

This is our fourth post on the DOJ’s expanding investigation into possible price fixing by generic drug manufacturers.  Since our last update, the DOJ has subpoenaed Allergan Plc’s Actavis unit.  In its August 6, 2015, 8-K, Allergan disclosed that it had received a subpoena from the DOJ “seeking information relating to the marketing and pricing of certain of the Company’s generic products and communications with competitors about such products.”  As the fourth largest distributor of pharmaceuticals in the U.S., Allergan is the largest company that has been targeted by the DOJ.

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FTC Commissioner Wright and D.C. Circuit Judge Ginsburg Criticize Second Circuit’s Actavis Ruling

We have been following developments in People of the State of New York v. Actavis, the New York Attorney General’s “product hopping” suit against Actavis and its subsidiary, Forest Laboratories LLC (together, “Actavis”).  Now, an FTC Commissioner and a D.C. Circuit Judge have weighed in as well—and they are criticizing a key portion of the Second Circuit’s ruling. 

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Senators Reintroduce Bill to Protect Antitrust Whistleblowers

On July 22, 2015, the Senate unanimously passed a bill that aims to protect whistleblowing employees who report antitrust violations from retaliation by their employers.  The Criminal Antitrust Anti-Retaliation Act of 2015 would prohibit employers from retaliating against an employee, contractor, subcontractor, or agent who provides information regarding possible violations of criminal antitrust law to either the employer or the Department of Justice.  

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New UK Competition Watchdog Loses First Cartel Trial; Vows to Remain Vigilant

We previously noted that the UK’s new competition regulator, the Competition and Markets Authority, has indicated that cartel enforcement will be one of its top priorities, hoping to “open as many new criminal cartel investigations as possible” in 2015-2016.  However, the agency announced this week that its first trial in this area, concerning cartel conduct in the market for galvanized steel water storage tanks, has resulted in an acquittal.

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Supreme Court Surprises the Antitrust World with Denial of Cert in Motorola and AU Optronics

Today the United States Supreme Court denied certiorari in two cases, Motorola Mobility LLC v. AU Optronics et al. and Hsiung and AU Optronics Corp. America Inc. v. United States, declining to resolve a closely watched circuit split on the applicability of the Foreign Trade Antitrust Improvements Act (“FTAIA”) in regulating foreign conduct.  

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AU Optronics Files Petition for Certiorari with SCOTUS

AU Optronics Corp. (“AUO”) filed a petition for a writ of certiori in Hui Hsiung, et al. v. United States of America on March 16, 2015, seeking Supreme Court review of the Ninth Circuit’s 2014 decision that upheld the convictions of AUO and its former executives for their participation in a global cartel to fix the price of liquid crystal display (“LCD”) panels.  The United States Department of Justice, Antitrust Division, which had tried AUO and its former executives in the district court in San Francisco, filed its brief in opposition to the petition on May 15, 2015, and petitioners filed a reply on May 22, 2015.  

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DOJ Criminal Cartel Enforcement: Six-Month Summary, Part II

This is the second installment in our coverage of the DOJ’s recent criminal cartel enforcement actions.   Over the last six months, more than fifty individuals have pleaded guilty as a result of the DOJ’s antitrust investigations into real estate bid rigging.

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Generic Pricing Investigations Expand: Par Is Subpoenaed and the OIG Launches Its Own Investigation

Since we last reported on the generic pricing investigations, the investigations have expanded. Par Pharmaceutical Companies, Inc. disclosed in its March 13, 2015 Annual Report that it had received a December 5, 2014 subpoena from the DOJ’s Antitrust Division that sought “communications with competitors regarding [Par’s] authorized generic version of Covis’s Lanoxin® (digoxin) oral tablets and [Par’s] generic doxycycline products.”

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Six-Month DOJ Criminal Cartel Summary, Part I: Auto Parts

Today we bring you the first part of our second biennial update on DOJ criminal actions in the cartel area.  This has been a busy six months for the Antitrust Division, so we are breaking this update up into installments.  Today, we look at auto parts.  

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First E-commerce Price Fixing Prosecution Yields Swift Guilty Plea

In what it is calling the Antitrust Division’s “first criminal prosecution against a conspiracy specifically targeting e-commerce,” the Department of Justice has announced that an individual has agreed to plead guilty to charges that he conspired to fix the prices of wall posters sold online through Amazon Marketplace.  The matter is United States v. Topkins, No. 15 Cr. 201 (N.D. Cal.).

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New UK Competition Watchdog Sets Its Sights on Cartels

The UK’s Competition and Markets Authority (CMA) recently released its Annual Plan for 2015/2016.  The Plan announces the CMA’s enforcement priorities for what will be the second year since the new organization assumed its role.

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March Madness for Foreign Companies: Supreme Court asked to resolve Circuit Split on Reach of FTAIA

The Supreme Court has been urged to resolve a circuit split concerning the reach of the Foreign Trade Antitrust Improvements Act (FTAIA) to foreign conduct that may affect U.S. commerce. Motorola this week filed a petition for certiorari in a Seventh Circuit case interpreting the FTAIA as barring Sherman Act claims arising out of the foreign conduct of an alleged liquid crystal display (LCD) panel cartel. 

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Generic Drug Price Hike Investigations Target Lannett

Since we last reported on state and federal investigations into recent generic drug price increases, the investigations have moved forward against Philadelphia-based Lannett Co. On November 20, a Senate healthcare subcommittee convened a hearing to address why the prices of certain generic drugs had skyrocketed. 

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DOJ Antitrust Head Stresses “Front-End Guidance” and Structural Remedies

Bill Baer, the Assistant Attorney General in charge of the DOJ Antitrust Division, spoke about the DOJ’s antitrust enforcement priorities last Friday, February 6, at a speech in Miami. AAG Baer emphasized three priorities: exercising patience with market flux due to new disruptive new industry sectors, giving meaningful guidance to the business community, and crafting structural remedies as part of their merger enforcement efforts.  

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Are Antitrust Compliance Programs Protected by Attorney-Client Privilege?

We’ve previously written about the components of effective antitrust compliance programs and the potential benefits corporations may achieve by adopting them. In drafting compliance programs, however, corporations should be aware that the attorney-client privilege may not protect a compliance policy from disclosure in litigation.

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Public Outcry Over Generic Price Hikes Spurs Criminal Investigations

Drug manufacturers Impax Laboratories and Lannett Company have come under public scrutiny and, more recently, criminal investigation for their recent generic drug price increases.  The companies disclosed in recent SEC filings that the U.S. Department of Justice has issued grand jury subpoenas to Impax and Lannett employees seeking information related to their communications with competitors concerning “the sale of generic prescription medications.”   

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Motorola Oral Arguments Today – Will the Seventh Circuit Revise Its Interpretation of the FTAIA, and If so, How?

Today the Seventh Circuit Court of Appeals hears oral argument from the parties and amicus curiae the United States concerning the reach of the Foreign Trade Antitrust Improvements Act (“FTAIA”), 15 U.S.C. § 6a, in Motorola Mobility LLC v. AU Optronics.  Last March, as we’ve written previously, the court ruled against Motorola in an interlocutory appeal concerning the FTAIA’s application to offshore components manufacturers.  The court subsequently withdrew its opinion, denied a petition for en banc review, and ordered oral argument.

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DOJ Criminal Cartel Enforcement: Six-Month Summary

This is the first in what we expect to be a series of updates on DOJ criminal actions in the cartel area.  Here, we look at highlights over the last six months in the DOJ’s investigations of the auto parts industry, LIBOR, and municipal real estate auctions.  

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FTC Competition Priorities

FTC Commissioner Julie Brill discussed the agency’s competition and consumer protection priorities in her keynote address last Thursday at the ABA’s Antitrust Fall Forum at the National Press Club in Washington. Brill led off with an ode to the antitrust ideals of the Progressive Era – with plenty of references to Justice Brandeis – and focused primarily on health care efforts, emphasizing that the FTC and the Affordable Care Act have the same goals of “promoting high quality and cost-effective health care.”

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Developments in the Capacitor Cartel Litigation: Class Counsel Appointed and the Antitrust Division Intervenes

In July, we wrote about two putative class action lawsuits alleging that Panasonic, Samsung, and other electronics manufacturers had formed a cartel to boost prices of certain electronic capacitors. Since then, the cases have been consolidated, interim lead co-counsel have been appointed, the Antitrust Division has confirmed its own investigation, and the court has set a preliminary case schedule.

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Yes, Compliance Programs Still Matter

On September 29, 2014, we asked: "Does a Compliance Program Matter to U.S. Antitrust Enforcers?" After concluding that compliance programs still provide tangible benefits, we offered five factors that companies should consider as they develop their own programs.

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Does a Compliance Program Matter to U.S. Antitrust Enforcers?

Over the last month there have been a number of speeches from high-ranking executives at the Antitrust Division of the United States Department of Justice regarding antitrust compliance programs.  After reviewing these remarks, in-house counsel may ask whether it is necessary and/or cost-effective to implement and enforce a robust antitrust compliance program at their company if the return on investment is low.  While having an antitrust compliance program in place may not prevent a company from being charged with an antitrust violation in the first place, a compliance program does increase the likelihood of early detection of such violations, which in turn provides a substantial benefit if the company would like to apply for leniency under the Division’s leniency program and the company needs to be the first in the door.  

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Increasing Cooperation in International Antitrust Enforcement

As we noted earlier this month, one factor that may contribute to the increase in criminal antitrust fines over the past ten years is the Antitrust Division’s focus on anticompetitive conduct that is international in scope.  Indeed, the Antitrust Division’s chart listing Sherman Act violations yielding a corporate fine of $10 million or more shows that nearly all of the investigations resulting in fines greater than $10 million are international.

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Top Components of Effective Antitrust Corporate Compliance Programs, Part 2

Last week we posted a discussion concerning effective antitrust corporate compliance programs, and provided some factors that in-house counsel should consider in developing compliance programs governing employees’ communications with competitors and dealings with customers and suppliers.  Today we continue that discussion by addressing the relevant factors in compliance programs concerning monopolization and dominance and price discrimination.

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Top Components of Effective Antitrust Corporate Compliance Programs, Part 1

With DOJ’s Antitrust Division and the FTC ramping up antitrust enforcement, it is critical for companies to take a hard look at their compliance programs and update them on a regular basis to avoid potential antitrust violations and discover antitrust malfeasance early on so a company can have the option of self-reporting and applying for leniency under DOJ’s leniency program. The United States Sentencing Guidelines provide guidance to companies in the organization of their corporate antitrust compliance programs; Guidelines considerations include establishing standards and procedures to prevent and detect criminal conduct and monitoring, auditing and periodically evaluating compliance with the program, including providing anonymous or confidential means for reporting potential breaches.  In addition to these threshold requirements, it is important that any antitrust compliance program provide guidance in a number of areas that present potential pitfalls.  Today, we discuss guidance on communications with competitors and dealing with customers and suppliers. 

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Criminal Antitrust Fines: Trends and Recent Developments

Over the past ten years, criminal antitrust fines have increased dramatically:  they totaled only $107 million in fiscal year (“FY”) 2003, but increased to a high of $1.14 billion in FY-2012 and remained relatively steady at $1.02 billion in FY-2013.  As criminal fines increase, companies face increasing exposure for conduct that allegedly runs afoul of the U.S. antitrust laws. What is driving the marked increase in potential penalties?

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Expert Testimony: Additional Insights from AU Optronics

Last month, we were excited to publish our article, The Use of Expert Witnesses for Penalty Determinations in Criminal Antitrust Cases: A Study of United States v. AU Optronics, in Antitrust Magazine.  The article examines the use of expert testimony during the trial in AU Optronics, No. 09-cr-110 (N.D. Cal), and discusses several strategic issues for practitioners to consider in responding to expert testimony in criminal cartel cases.

As luck would have it, just days after our article was published, the Ninth Circuit issued its long-awaited AU Optronics decision addressing the requirements of the Foreign Trade Antitrust Improvements Act (“FTAIA”). 

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Cartel Suits Filed Against Capacitor Manufacturers after Reports of Cooperation with Authorities

A pair of putative class actions has been filed in the past two weeks charging Panasonic, Samsung, and other electronics manufacturers with forming a cartel to boost prices in the sagging market for certain electronics capacitors.  The actions follow press reports that officials in the United States and China are investigating the alleged cartel and that at least one manufacturer, who has not yet been identified, has applied for leniency with the Department of Justice.  

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Welcome to Our Blog

We are pleased to announce the launch of Antitrust Update, Patterson Belknap’s new resource for the latest news and happenings in the antitrust and competition law arena. 

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Navigating the Turbulent Waters of Cross-Border White Collar and Antitrust Issues (Part 2)

Further to our previous post, The Principles of Federal Prosecution of Business Organizations, by contrast, which the Criminal Division and the various United States Attorney’s offices employ to assess corporate liability and determine an appropriate resolution, speak more generally about corporate cooperation with respect to securing the cooperation of corporate executives. 

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Navigating the Turbulent Waters of Cross-Border White Collar and Antitrust Issues (Part 1)

On May 19, 2014, I participated on a panel entitled “Cross-Border Investigations Involving Multiple Agencies” at the New York City Bar Association’s Third Annual White Collar Crime Institute. The moderator of the panel was Bruce Yannett from Debevoise & Plimpton and my co-panelists were Denis J. McInerney, the former chief of the Fraud Section at DOJ; David Meister, the former Director of Enforcement at the Commodity Futures Trading Commission; and Aaron R. Marcu of Freshfields. 

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