Thursday, April 9, 2009
Posted by D. Daniel Sokol
ABSTRACT: Enforcement against cartels has been been the great success story of recent antitrust history, both in the United States and around the world. Since the advent of international cartel enforcement in 1995, penalties for such misconduct have increased dramatically and individual accountability has become the centerpiece of U.S. cartel enforcement. Five years ago, the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (ACPERA) increased the maximum penalty for corporations ten-fold ($10 million to $100 million fines) and penalties for individuals more than threefold (from 3 years to 10 years imprisonment, and from $350,000 to $ 1 million in fines). However, because deterrence is a function of effective detection and prosecution, the harsh penalties represent a hollow threat unless there is also vigorous, timely, and successful enforcement.
In considering the future of antitrust sentencing of individuals under the higher penalties of ACPERA, it is essential to properly balance the impact of higher penalties against the importance of successful prosecution, which is primarily based on timely cooperation from the defendants themselves. These are the two elements of optimal deterrence.The proper balance lies not in the “lock them up and throw away the key” rhetoric of a few in Congress but in pragmatic negotiation by the parties, guided by the statutory mandate of 18 U.S.C. 3553(a), which provides for sentencing that is “sufficient but not greater than necessary,” given, inter alia, the nature and circumstances of the offense and the history and characteristics of the defendant. That pragmatism is responsible for the great success of U.S. cartel enforcement and should continue to guide the enforcers and the courts under ACPERA.