Where Antitrust Issues May Arise

In my practice, I have represented many corporations which have been the targets of federal grand jury investigations of "hard core " antitrust violations (bid-rigging, price-fixing , or market allocation schemes). The industries in which I have represented clients who were indicted for or charged by information with criminal antitrust violations shared the following characteristics:

They involved products which were fungible and were not differentiated by advertising or brand loyalty; for example, asphalt road paving, rebar steel , chain-link fence, school milk and metal building insulation.

Demand for the product was declining and excess production capacity existed.

A relatively few competitors in a region controlled most sales. The competitors had frequent opportunities to meet, often at trade shows and industry conventions.

Individuals with control over regional pricing decisions believed that stable market shares could be achieved by reducing production and raising price levels, and that they could detect and punish "cheating."

Fortunately, I have represented many clients who participated in industries which shared many of the foregoing characteristics and who were not charged with criminal antitrust violations. In those cases, the coordinated activity that prosecutors observed was simply "oligopoly pricing" by a few competitors who had access to excellent , readily available market intelligence and who understood how their competitors perceived and responded to their pricing decisions. I have also represented many clients in private antitrust lawsuits in which plaintiffs claimed to be injured by parallel behavior of participants in oligopoly markets.

For years , I have represented clients who bought or sold products in industries in which participants were ignorant of, or, in any event, ignored the RPA. For example, sellers of products in many industries offer discounts which are based entirely on quantity purchased, with price breaks set at arbitrary levels; for example, x% off for 50,000 units; y% off for 250,000 units. The sellers make no effort to determine whether these price differentials are justified by costs savings and explain that "everyone in the industry does it this way." Unfortunately for them, the RPA does not recognize an "everyone does it" defense.

Experience has taught me that antitrust violations can be deterred, or at least detected early, if a corporate employer is committed to educating its employees about complying with antitrust laws. In today's business environment, hard core antitrust violations rarely result from ignorance of the law. Most business executives know, for example, that they cannot agree with their competitors on the prices or price levels at which they will sell their products.

In my experience, price-fixing schemes were concocted by rogue employees, who knew that their actions were illegal and also violated written policies of their employers . In such cases, a co-worker who was trained in antitrust compliance and who understood his responsibility to report suspicious conduct to a designated compliance officer could have saved his employer millions of dollars in fines , damages and attorney's fees. The financial consequences of not adopting and implementing an antitrust compliance program far exceed the cost of conducting regular seminars in antitrust compliance for executives, managers and employees who are involved in pricing, credit and production decisions and in sales.