Overview of Current Cartel Investigations

Several active US Department of Justice (DOJ) investigations resulted in criminal charges against individual executives in the second quarter of 2018. The DOJ's total criminal fines collected continued to run significantly below the pace that had generated billion-dollar plus annual highs in 2014 and 2015, as DOJ put the massive auto parts and large foreign exchange fines further into its rear view mirror. At the current pace, DOJ's annual fines for 2018 will likely end around $300 million. In the EU, the European Commission rendered one cartel decision in the second quarter of 2018, imposing fines on eight Japanese manufacturers of capacitors.

US Developments

  • In the Packaged Seafood investigation, a federal grand jury in May indicted the president and CEO of Bumble Bee Foods, LLC, for his alleged role in price-fixing of shelf-stable tuna from 2011 to 2013.
  • In the Foreign Currency Exchange investigation:

    • On May 10, 2018, a federal grand jury in the Southern District of New York indicted a former JPMorgan Chase currency trader for conspiring to fix prices and rig bids and offers for Central and Eastern European, Middle Eastern and African currencies (CEEMEA) from October 2010 through at least July 2013.
    • In a separate case in the Southern District of New York, on May 4, 2018, the DOJ defeated a defense motion to dismiss on jurisdictional grounds. The defendants had argued unsuccessfully that their conduct in bid-rigging the Euro/US dollar foreign exchange spot market was "wholly foreign" and outside the reach of the US antitrust laws, but the court disagreed.
  • DOJ Assistant Attorney General Makan Delrahim reiterated that the DOJ will criminally investigate and prosecute so-called naked wage-fixing and no-hire / no-solicit agreements among employers. AAG Delrahim's statement underlined an Obama-era policy informing human resources professionals that such agreements would be treated as analogues to criminal price-fixing and market allocation. The DOJ brought its first case since the policy had been announced, reaching a civil settlement with two firms, Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp., for allegedly agreeing not to recruit and hire each other's employees. In announcing the settlement, DOJ specified that the matter had been handled civilly, rather than criminally, only because the conduct had ceased at the time the 2016 policy guidance was announced.
  • On April 9, 2018, the DOJ held a public roundtable on criminal antitrust compliance in Washington, DC. The panels consisted of in-house counsel, private counsel and representatives from agencies from other jurisdictions. The panelists expressed a broad consensus in favor of the DOJ's changing its current policy and granting credit at sentencing to defendants who maintained robust compliance programs before the violation occurred. In response, Principal Deputy Assistant Attorney General Andrew Finch has indicated that the Division is re-examining its policy against such credit, and that changes will likely be made. Those in favor of granting compliance credit argue that it would increase deterrence.

EU Developments

  • On March 21, 2018, the European Commission imposed fines on eight manufacturers of capacitors.
  • On March 22, 2018, the Commission published updated cartel statistics. In 2017, the Commission imposed a total amount of cartel fines close to €2 billion. In 2018, the Commission has so far imposed cartel fines of approximately €801 million.
  • On April 24, 2018, the Commission conducted unannounced inspections in the metal packaging sector.
  • On May 30, 2018, the European Parliament and the European Council reached a provisional agreement on a directive that would harmonize powers of national competition authorities in the EU, notably concerning dawn raids, fines and leniency.
  • The Commission is believed to be close to sending a statement of objections to companies in the biofuels sector for conduct concerning ethanol benchmarks.

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Cartel Snapshot – June 2018

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