Monopolists Going "Directly To Jail?" DOJ Announces Intent To Criminally Prosecute Section 2 Violations

• Published date: 10 March 2022
• Subject Matter: Anti-trust/Competition Law, Antitrust, EU Competition , Cartels, Monopolies
• Law Firm: Morrison & Foerster LLP
• Author: Ms Lisa M. Phelan, Megan E. Gerking, David J. Shaw and Rob Manoso

In the latest sign of the Biden administration's aggressive antitrust enforcement agenda, on March 2, 2022, while speaking on a panel at the ABA White Collar Crime Conference in San Francisco, Deputy Assistant Attorney General Richard Powers remarked that the Department of Justice's ("DOJ") Antitrust Division ("Division") is prepared to bring criminal charges for violations of Section 2 of the Sherman Act. Section 2 prohibits single-firm conduct that creates or maintains monopoly power. In response to questions regarding the DOJ's willingness to bring criminal charges in monopolization cases, Powers noted that the DOJ would bring criminal charges "if the facts and the law lead us to the conclusion that a criminal charge based on a Section 2 violation is warranted." Principal Deputy Assistant Attorney General Doha Mekki later echoed Powers' statements when speaking at a lunch at the conference.

Any such charges would be a significant departure from modern DOJ criminal antitrust enforcement policy and practice.

DOJ Has Not Pursued a Criminal Monopolization Case in More Than 50 Years

Although Section 2, on its face, makes it a felony "to monopolize, attempt to monopolize, or conspire to monopolize any part of trade or commerce," the DOJ has not brought a criminal case solely under Section 2 in more than 50 years. The last criminal indictment brought solely pursuant to Section 2 was in United States v. Empire Gas Co.,¹ a 1972 case involving alleged physical destruction of a competitor's assets, which the government argued was part of an attempt to monopolize retail sales of liquid petroleum in parts of Missouri. Nonetheless, Empire was acquitted and later found not liable in a subsequent civil monopolization action by the government.²

Despite a number of high-profile civil monopolization cases in the past few years, the DOJ has not pursued, or publicly signaled that it would pursue, criminal charges.

Pursuing Section 2 Cases Criminally Would Be a Significant Change in DOJ Policy and Practice

Division practice and policy statements further underscore the extent to which the DOJ's announcement would represent a major shift in enforcement policy in Section 2 cases. The DOJ generally reserves criminal prosecutions to the most egregious anticompetitive conduct that violates Section 1 of the Sherman Act: agreements involving price-fixing, bid-rigging, or customer/market allocation.³ This policy has been in place for years. In a 2003 speech calling for a tougher...