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Antitrust Laws

Are You at Risk for Breaking Antitrust Laws and Creating a Cartel?

By Farzad Barkhordari Jun 21, 2016

antitrust cartels

Complementary and secondary markets make easy targets for antitrust enforcement agencies. Why? Because under the Antitrust Division’s corporate leniency program, a company prosecuted for participating in one cartel can obtain a discount on its fine by reporting a new cartel to the agency, provided that it is the first company to do so. It’s like a new customer referral discount for price-fixers.

An example of this involved several multi-national electronics companies, many of whom were implicated in each of three separate investigations involving three different electronics components: DRAM, LCD, and cathode ray tubes. The initial investigation spawned two additional investigations in complementary markets that produced over $2 billion in criminal fines.

How to Avert the Effects of Related Market Investigations

Armed with these facts, in-house counsel should take the following steps to avert the snowball effect of related market investigations:

Know the Business

Invest time to understand how, where, and with whom your company participates in the marketplace. Diversified companies may need to divide this task among several members of the legal department who routinely communicate.

Keep Current on Antitrust Enforcement

Use the WSJ and agency websites to assess whether your company is a participant in a related market at risk for antitrust investigation. If you don’t have time to keep current, task outside counsel with keeping you up to date.

A Related Market Is Under Investigation. Now What?

If a related market is under investigation, in-house counsel should:

  • IDENTIFY high risk relationships with parties under investigation (competitor, supplier, channel, common trade association members, development partner, etc.);
  • AUDIT bids, contracts, and planning documents between your company and these parties;
  • REVIEW company policies and procedures for similarities to those under investigation;
  • EDUCATE your employees about the problematic conduct in the related industry; and
  • DIRECT them to identify similar red flag behavior in your company.

It’s a Race to the DOJ’s Doorstep

If you discover suspicious conduct or documents, gather your decision-makers ASAP to analyze your options based on the scope of your company’s business, evidence of the alleged conduct, impact of disclosure in other countries, etc. With $100s of millions or more in fines at stake, it’s also probably a good time to let the business know that other company executives, even friends, will stab them in the back to get to the door first.

Train Your Employees to Spot and Prevent Violations Before They Arise

Hopefully, your compliance program and antitrust training is strong enough that you won’t need to worry about racing to DOJ’s doorbell. The goal of antitrust training is not to make your company’s employees experts in antitrust. The goal is to make them expert issue spotters.

Workplace Answers’ courses, including the Antitrust & Fair Competition course, are built with this goal in mind. The course uses dozens of scenarios and business “trigger” language to coach your employees how to identify and avoid the situations and conversations that trigger the creation of a cartel. 


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