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Powers teases major shake-up of antitrust enforcement with Section 2 criminal charges

By Michael Acton, Khushita Vasant and Max Fillion

Published on March 14, 2022 in Issue 1023

The top criminal enforcer at the US Department of Justice’s antitrust division fired a shot across the bow of top industry executives, warning that the division is ready to prosecute individuals for monopolizing markets.          

According to the DOJ’s own workload statistics, the agency hasn’t secured a criminal conviction against an individual or corporation in a Section 2 case since 1979.

The significance of Deputy Assistant Attorney General Richard Powers’ statement that the department is preparing to dust off this weapon wasn’t lost on his audience at a San Francisco conference.  

“Ok, um, wow,” moderator Daniel Braun of Zuckerman Spaeder LLP said, before turning to Tiffany Rider of Axinn, Veltrop & Harkrider to get her reaction.

“I think there are suitable tools in proportion to the conduct, and so I guess I’d have to see it, but I’d be really surprised if the proper notice would be given to, say, an individual involved with Section 2 to then be prosecuted criminally and be put in jail for that,” Rider said.

“So I think that would be troubling,” she said. “I also think that if it’s because the industry is small, and they have a conspiracy, then there’s something already there for that, then they are in a conspiracy, and it’s Section 1. So it’s not necessary.”

Ann O’Brien, a former acting director of criminal enforcement at the DOJ who was in the audience, told MLex she’s “profoundly confused” by Powers’ statement. In her 20 years at the division, O’Brien said officials never considered bringing criminal Sherman Act Section 2 cases.

“It’s just disappointing to me that such a statement would be made without more guidance provided, so we can advise clients on what they should be doing because it’s very unclear,” said O’Brien, now a partner at BakerHostetler.

She compared the remarks to the DOJ’s announcement of its shift toward prosecuting no-poach agreements as criminal antitrust violations. The policy was announced in 2016, and the first case was in 2021.

And the DOJ’s theory in those cases is that certain no-poach agreements amount to market allocation, which courts have long held criminally violates the antitrust laws. A court recently agreed with that theory. Here, though, O’Brien pointed out, there isn’t a similar foundation for criminal Section 2 cases.

Dave Gelfand, former deputy assistant attorney general for litigation in the antitrust division, told MLex it would be difficult to imagine a case of this kind that could result in a criminal conviction proving a violation of the antitrust laws beyond reasonable doubt.

“Monopolization is a rule-of-reason kind of analysis,”Gelfand said. “Courts have said that it is not in itself unlawful if it achieves better services or products.” A hypothetical case brought by the DOJ would be complex because it would involve economists balancing procompetitive effects and anticompetitive effects, he explained, making successful prosecution a challenge.

It’s unclear at this stage whether the DOJ has any active criminal probes under Section 2 of the Sherman Act. A DOJ spokesperson declined to comment.


Instances of individual criminal prosecutions in Section 2 cases are unheard of in recent decades, but the subject was addressed in an April 2007 report by the Antitrust Modernization Commission.

The report said although the DOJ has statutory authority to prosecute all violations of Section 1 and 2 of the Sherman Act criminally, over time, the DOJ has narrowed the scope of its criminal enforcement of the Sherman Act to “hard-core” offenses such as price-fixing.

It said the DOJ has forgone criminal prosecutions of unilateral conduct under Section 2 and joint conduct where the competitive effects are often ambiguous. The agency has at various points over the last 50 years also made policy statements narrowing the types of antitrust violations it will prosecute as criminal, according to the AMC report.

“The last criminal prosecutions by the DOJ against conduct that did not involve price-fixing, bid-rigging, or market allocation were over twenty-five years ago,” the report said.

The same report recommended that “no change” is needed to the sentencing guidelines to distinguish between different types of antitrust crimes because the guidelines already apply only to “bid-rigging, price-fixing, or market allocation agreements among competitors.” It said the antitrust division “limits criminal enforcement to such hard-core cartel activity as a matter of both historic and current enforcement policy.”

Griffin Bell, former US attorney general under President Jimmy Carter and a former circuit judge, touched on the penalties available for all types of antitrust law infractions in a March 1977 public address.

“Felony charges are becoming more common. They should be a deterrent,” he said, referring to the agency’s work targeting price-fixing.

“The stigma of becoming a convicted felon is difficult to reconcile with a business leadership status in the community,” Bell said in a speech at the Harvard Law Review in Boston.

“Even more significant is the fact that prison sentences for those convicted which have been extremely rare for antitrust violators may become more commonplace under the new felony authority,” he said.

In 1974, the Antitrust Procedures and Penalties Act made a criminal violation of the Sherman Act a felony, rather than a misdemeanor. The DOJ, however, didn’t bring cases involving Section 2 criminal charges against individuals.

The last time the DOJ brought criminal charges in a Section 2 case was in the United States v. Cuisinarts, Inc., lawsuit in the District of Connecticut in 1981. But no individual executives were prosecuted in the resale price maintenance case.

Another case was United States v. Empire Gas Co., which was an unsuccessful prosecution under Section 2 for attempted monopolization through destruction of a competitor’s assets. The government alleged that Empire — a retailer, and to a lesser extent a wholesaler — violated Section 2 of the Sherman Act by attempting to monopolize the retail sale of liquefied petroleum in parts of Missouri.

Perhaps the last criminal monopolization indictment discovered is United States v. Dunham Concrete Products, in which three corporate entities as well their owner were tried criminally for antitrust law violations. Charges were first brought in the late 1960s.

Whether the DOJ will indeed bring criminal cases under Section 2 remains to be seen.

“This automobile has not been driven for a while. It’s an actual car and it’s not been used,” former Federal Trade Commissioner Bill Kovacic told MLex.

The above article appeared on MLex on March 3, 2022. For more details about MLex, including getting access to its exclusive content, please contact