2012 DOJ Criminal Antitrust Results Show Increased Risk For International Businesses And Employees

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The holidays have come early for the Department of Justice’s Antitrust Division. The new fiscal year 2012 statistics for the Division’s accomplishments have been released. The statistics reveal that the Division’s criminal law enforcement efforts have never been more vigorous.

The Division scored record fines in fiscal year 2012. Total fines in 2012 were about $1.13 billion compared to the former record in FY 2009 of about $1 billion. Last year’s criminal fines totaled about $524 million. The record 2012 fines came primarily from the Division’s pursuit of defendants in its long-standing international liquid crystal display (LCD) investigation, and its newer, but even larger, inquiry into price fixing in the automotive parts industry. Both these focus on Asian companies doing business in the United States.

The Division also had a record year in terms of total prison days sentenced. In 2012, that figure increased by almost 45 percent over 2011. Average prison sentences increased only modestly in 2012, to about 25 months, compared to 2010 and 2011. Interestingly, the total number of criminal cases brought by the Division in 2012 actually decreased to 69 from last year’s high of 90 cases.

In short, what all this means is that in 2012 the Division brought bigger, but fewer, cases while getting record fines from corporate defendants. Those corporations sentenced in 2012 were primarily Asian companies. At the same time, it looks likely that there were more individual defendants (as compared to corporate defendants), and more of those individuals got prison sentences than ever before.

It’s difficult to tell, but it may be that even cooperating individual defendants were more likely in 2012 to get prison sentences than in the past. If so, this would have important implications for the Division’s much-touted Leniency Program. That program allows the government to grant amnesty to corporations and individuals self-reporting antitrust violations and those that cooperate early in an investigation. If cooperating defendants are now more frequently getting jail sentences, the incentives to self-report and cooperate early under the Leniency Program in order to avoid being charged at all become that much greater.

In any event, these trends in the new 2012 statistics seem likely to continue. December 11, 2012 saw the first UK arrests in the new price-fixing investigation regarding the London Inter-bank Offered Rate (LIBOR). Prosecutions on this side of the ocean by the Division are surely heading our way. The Division’s Asian auto parts investigation is widely expected to go on for years.

With corporate criminal fines alone topping $1 billion in 2012, companies need to address the risks to their enterprises that non-compliance with antitrust laws produces. The Division’s newest criminal law enforcement statistics underscore the need for effective corporate compliance programs, particularly for those doing business internationally.