Distribution, Competition, and Antitrust / Intellectual Property (IP) Law

U.S. Criminal Antitrust Enforcement in 2012 Was Robust

The U.S. DOJ recently reported its 2012 enforcement statistics.  In FY 2012, the Antitrust Division recovered over $1.1 billion (yes, billion with a “b”) in criminal fines.  See here.  That figure does not include alternative penalties, disgorgement, and restitution — e.g., the more than $200 million secured for state and federal agencies in the municipal bonds investigation.  So all told, DOJ recovered over $1.3 billion in 2012.  This appears to be an all-time record (at the least, it’s the highest number since 2003).

The link above also reveals that the average prison sentence for individuals has been steadily increasing (up to 25 months for the 2010-2012 period). 

Interestingly, although total fines were at a record level, the number of criminal cases dropped — from 90 in 2011 to 67 in 2012.  But that appears to be statistical noise;  in most years since 2003, the number of cases has fluctuated between 32 and 72.

Two companies account for the lion’s share of the 2012 fines: Yazaki Corporation (auto parts) — $470 million, and AU Optronics (LCD screens) — $500 million.  Furukawa Electric Co. (automotive wire harnesses) was fined $200 million.   See here.

Price fixing is not cool.

What To Do With a DOJ Antitrust Subpoena

My article on the ten things to do if you ever receive a DOJ antitrust subpoena is now up over at InHouse Blog.

Archer Daniels Midland Price-Fixing Video from “Fair Fight in the Marketplace”

I recently stumbled upon this YouTube video from “Fair Fight in the Marketplace.”  This segment shows the real story of the Archer Daniels Midland (ADM) price-fixing case, the basis for the movie “The Informant!“, and includes excerpts from the actual FBI undercover footage of conspiracy meetings shot by Mark Whitacre, played by Matt Damon in the movie.

From the YouTube description: “Fair Fight in the Marketplace provides an engaging look at our antitrust laws that give protection to both American consumers and businesses. The half-hour program also considers a more fundamental question: can a set of regulations created by the Sherman Act at the end of the 19th century be relevant in todays era of digital technology and high-speed communications?

Hosted by NPR and Fox News commentator Mara Liasson, the program provides a short, colorful history of the antitrust laws in America and features three recent case studies.”

Archer Daniels Midland Segment from Fair Fight in the Marketplace

Much of the ADM conspiracy took place overseas.  In related news, the recently convicted AU Optronics Corp. executive apparently intends to appeal his conviction on the basis that, among other things, the Sherman Act doesn’t reach the foreign activity at issue in his case.  (Although he apparently will now file his appeal without former acting Solicitor General Neal Katyal.  Katyal was previously the lead counsel for the Guantanamo Bay detainees in the Supreme Court case Hamdan v. Rumsfeld, which held that military commissions set up by the Bush administration to try detainees at Guantanamo Bay violate both the UCMJ and the four Geneva Conventions, so he probably would have had some interesting things to say about extraterritoriality.)

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New Download Available — Ten Things To Do When Your Company Receives a DOJ Grand Jury Subpoena

Downloads

I’ve posted a new file in the Downloads section — a short paper on “Ten Things To Do When Your Company Receives a DOJ Grand Jury Subpoena.”  This is a somewhat newer version of my “Nine Things To Do” article.  It covers many of the same basic points in a slightly more concise way.

If you haven’t checked out the Downloads section yet, now’s a good time to do so.  Just click the Downloads navigation button in the menu bar above.  Or you can click here.

Reminder: the DOJ Has Criminal Antitrust Enforcement Powers Beyond Price Fixing

On May 3, the U.S. DOJ announced that an executive of South Korean-based Hyosung Corporation agreed to plead guilty and to serve time in a U.S. prison for obstruction of justice charges in connection with an automated teller machine (ATM) merger investigation conducted by the Antitrust Division, the Department of Justice announced today.

According to a two-count felony charge filed in the U.S. District Court in Washington, D.C., Kyoungwon Pyo, in his role as senior vice president for corporate strategy of Hyosung Corporation, an affiliate of Nautilus Hyosung Holdings Inc. (NHI), altered and directed subordinates to alter numerous existing corporate documents before they were submitted to the Department of Justice and the Federal Trade Commission (FTC) in conjunction with mandatory premerger filings. The department said that Pyo’s actions took place in or about July and August 2008. At the time, the department was investigating Korea-based NHI’s proposed acquisition of Triton Systems of Delaware Inc. NHI abandoned the proposed acquisition of competitor Triton Systems before the Antitrust Division reached a decision determining whether to challenge the transaction.

After receiving the premerger filings, the Antitrust Division opened a civil merger investigation of the proposed acquisition. The department said that in or about August and September 2008, Pyo falsified additional documents in response to a document request from the Antitrust Division with the intention of impairing their integrity and availability for use in an official proceeding. The department said that, among other things, the alterations misrepresented and minimized the competitive impact of the proposed acquisition.

NHI was previously charged with obstruction of justice, which carries a maximum criminal fine for a corporation of $500,000 per count.  In October 2011, NHI pleaded guilty and paid a $200,000 criminal fine for its role in the obstruction of justice charges.  According to Pyo’s plea agreement, which is subject to court approval, Pyo has agreed to serve five months in prison.

Moral of the story: it is vitally important when dealing with the U.S. DOJ to maintain the utmost level of transparency and candor.

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