Sunday, February 19, 2012
Posted by D. Daniel Sokol
Stephen L. Braga, Christopher P. Conniff, & Mark S. Popofsky (Ropes and Gray) describe The Anticorruption and Antitrust Interface.
ABSTRACT: The Foreign Corrupt Practices Act ("FCPA") and the Sherman Act proscribe distinct forms of misconduct. The FCPA prohibits "the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to . . . any foreign official for purposes of," among other things, "securing any improper advantage." The Sherman Act, inter alia, prohibits price-fixing, bid-rigging, and similar "hard core" cartel offenses that harm U.S. consumers.
The two statutory schemes nevertheless share a number of common attributes. Both statutes proscribe overseas misconduct. Legal environments that spawn corruption also can nurture cartels. The incentives that lead employees to bribe foreign officials can also induce them to engage in price-fixing. Both are subject to significant criminal penalties. The U.S. Department of Justice ("DOJ") has made prosecution of both a priority. And DOJ and Securities Exchange Commission ("SEC") enforcement of both statutes increasingly benefit from international cooperation among enforcers and self-reporting by firms under investigation. These common attributes have given rise in recent years to notable examples of overlapping antitrust and anticorruption prosecutions by DOJ. Sometimes investigations initiated to pursue violations of one statute uncover related misconduct under the other. And in some notable instances, DOJ has charged violations of both the Sherman Act and the FCPA based on the same course of conduct. On the civil side, although the FCPA lacks a private right of action, competitors harmed by rivals who achieved their position through corrupt payments have sought to recover for conduct that violates the FCPA under the Sherman Act. This article surveys this intersection between anticorruption and antitrust. Part II describes common attributes of the statutory schemes. Part III describes notable instances where criminal antitrust investigations spawned FCPA investigations (and vice versa), as well as instances in which firms injured by rivals' FCPA violations seek to recover for the same conduct under the antitrust laws. Part IV explains how companies can craft effective antitrust and anticorruptioncompliance programs that reduce the risk that employees commit either type of offense.