Tuesday, May 17, 2022

How To Hide A Price-Fixing Conspiracy: Denial, Deception, and Destruction of Evidence

How To Hide A Price-Fixing Conspiracy: Denial, Deception, and Destruction of Evidence



Christopher R. Leslie

University of California, Irvine School of Law


Price-fixing conspiracies overcharge consumers by billions of dollars every year. Although such collusion violates antitrust law, hundreds of price-fixing cartels continue to operate unimpeded because they successfully conceal their illegal collusion. Using examples from over 50 price-fixing conspiracies, this is the first scholarship to identify and catalog the various concealment measures that actual price fixers employ to hide their collusion.

When engaging in price fixing, respectable business executives use code names and encrypted messages; they register in hotels using aliases; they rendezvous secretly in seedy locations; they create fake trade associations; they hide or destroy incriminating documents; and they falsify their travel documents and expense reports. And if they are ever accused of collusion, they deny the charges and profess that they are reputable businesspeople who would never countenance illegal conduct. Then they tell false cover stories that they have coordinated in advance.

This Article explains how federal courts have unwittingly rewarded the various concealment methods commonly employed by price-fixing conspirators. For example, judges treat defendants’ documents as inherently accurate, even though price-fixing conspirators routinely fabricate exculpatory documents. Because they do not understand cartel concealment methods, many federal judges are too quick to dismiss price-fixing claims or grant summary judgment to price-fixing defendants. This Article analyzes dozens of cases, across most federal circuits, in which judges have been fooled by – or have failed to appreciate the significance of – cartel concealment methods.

The Article concludes by proposing changes to antitrust doctrine and antitrust enforcement that would better serve the twin goals of holding price-fixing conspirators accountable while protecting innocent firms against improper findings of antitrust liability. Such changes are warranted because the current judicial deference to price-fixing defendants undermines deterrence and thwarts the goal of compensating victims of illegal price fixing.


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