AAI Releases Recommendations on Cartel Enforcement

Feb 27 2017
AAI Announcements

Today, the American Antitrust Institute (AAI) released the cartel chapter of its forthcoming Transition Report on Competition Policy to the 45th President of the United States. The chapter is entitled American Cartel Enforcement in Our Global Era.  This release is part of a series of previews in which the AAI will make select chapters of the transition report available for download in advance of the report’s publication. 

“The need for strict anti-cartel enforcement has always enjoyed bipartisan consensus in the antitrust community,” said AAI President Diana Moss, “and it’s clear we can do more to support this important mission.” The cartel chapter provides a detailed empirical analysis of cartel enforcement trends dating back to 1990 and makes a variety of policy recommendations that will help foster optimal deterrence, improve scholarly understanding of cartel behavior, and better protect consumers from what remains a growing threat. The Transition Report’s editor, AAI Associate General Counsel Randy Stutz, said, “This chapter is particularly valuable for putting U.S. cartel enforcement in a global perspective and shedding important light on the evolution of modern cartels, which continue to cause massive harm on an international scale.”  

The cartel chapter makes a variety of recommendations to better deter cartel conduct by improving detection, prosecution, and punishment, including the following:

  • The U.S. Sentencing Commission should revisit the assumption in its Organizational Guidelines that cartel overcharges are typically 10% of affected sales or, indeed, total market sales. The presumption should be raised to at least 20% for North American cartels and 30% for international cartels.
  • Congress should raise the Sherman Act maximum corporate fine for criminal price fixing to $1 billion and the Sherman Act maximum fine for individuals to $10 million.
  • Congress, or the Antitrust Division of its own accord, should institute whistleblower rewards in cartel cases akin to those made available in qui tam civil suits under the False Claims Act, and the administration should support legislation protecting cartel whistleblowers from retaliation from their employers for reporting wrongdoing.
  • After securing criminal convictions, the Antitrust Division should routinely inquire about, and publicly report on, details concerning how cartels were able to collude and sustain their collusion. It should also consider requiring, in sentencing agreements, that defendants turn over simple post-conviction reports for five years on their production costs, sales, and prices in the affected market.
  • The Division should receive a budget increase earmarked for its program to help educate foreign antitrust authorities in how to design effective leniency programs, impose appropriate monetary sanctions, implement criminal provisions in their antitrust laws, and improve their anti-cartel enforcement generally.

Visit the Transition Report section of the AAI website for a free download of the entire chapter and links to the AAI’s related work.  

The AAI Presidential Transition Report makes policy recommendations based on the AAI's mission of promoting competition that protects consumers, businesses, and society.  The Report is one way the AAI serves the public through education, research, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy. 

Randy Stutz, Associate General Counsel, American Antitrust Institute
(202) 905-5420

Diana Moss, President, American Antitrust Institute
(202) 536-3408