On a recent webcast, I spoke with Michael Horowitz, a commissioner with the United States Sentencing Commission (USSC) and Eric Morehead, the assistant general counsel at the USSC. The topic of discussion was antitrust.
The entire webcast can be found at OCEG.
As always, it was an interesting session where Mr. Horowitz outlined the key dimensions of criminal antitrust (essentially price fixing) and contrasted these issues with civil antitrust issues (such as monopolistic behavior).
A real gem came at the end of the session during the audience Q&A. One participant asked how organizations should structure their compliance training to address antitrust issues. Specifically, they wanted to know where to "draw the line" when it comes to who should be trained.
Mr. Horowitz provided some very insightful advice. While it would be unusual for, say, an executive assistant to engage in product pricing or negotiating activities they should still be trained. The reason being that these are the individuals who book travel and arrange meetings for people who DO engage in pricing and negotiating activities. In fact, often, executive assistants are called as witnesses in antitrust cases.
Mr. Morehead provided some excellent details about how antitrust is addressed in the U.S. Federal Sentencing Guidelines and some statistics about prosecution. A summary follows:
- Base Offense Level is 12
- Non-Competitive bidding increases the offense level
- The “Volume of Commerce” also can adjust the Offense Level upward from 2 to 16 levels
- Special instructions for fines – individuals to pay a fine equal to one to five percent of the “volume of commerce”, but never less than $20,000.
- Special instructions for sentencing organizations
Volume of Commerce
- The “volume of commerce done by” the defendant in “good or services that were affected by the violation”
- Cumulative amount that can cover multiple counts or conspiracies
- Amount is the commerce affected by the conspiracy
2005 Amendments
- Base Offense Level was increased from 10 to 12.
- Volume of Commerce Table was enhanced – range went
from $ 400,000 - $ 100,000,000
to $1,000,000 - $1,500,000,000 - The adjustments for volume of commerce also increased from a prior maximum of 7 levels to a new maximum of 16 levels, reflecting a new maximum enhancement of for volume of commerce.
- These changes reflected the Antitrust Division’s experience of uncovering larger dollar conspiracies and also fostered greater proportionality between antitrust sentencing guidelines and fraud offense guidelines.
Individual Sentences
In FY 2003 In FY 2006
Mean 7.2 Months 8.2 Months
Median 4 Months 9 Months
Number 12 Cases 12 Cases
Organizational Sentences
In FY 2003 In FY 2006
Mean $6.2 MM $46.5 MM
Median $2.7 MM $1.1 MM
Number 10 Cases 15 Cases
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