Busting Modern-Day Trusts with the Help of Whistleblowers
Teddy Roosevelt is known as the youngest person to be sworn in as President of the United States when he assumed office after President McKinley was assassinated. But as the 26th President of the United States Teddy Roosevelt quickly became known for his willingness to use the Sherman Antitrust Act, signed into law in 1890, to take on corporations and titans of industry he believed were getting wealthy on the backs of average Americans. Roosevelt famously took on J.P. Morgan to break the trust controlling railroads and John D. Rockefeller, who controlled Standard Oil, among others. He earned the title Trust Buster, as depicted in this cartoon.
Today the Department of Justice’s (“DOJ”) Antitrust Division continues Roosevelt’s mission to take on titans of industry who engage in unlawful business practices to harm competition and American consumers. The DOJ’s 21st Century criminal antitrust enforcement efforts have led to massive takedowns involving things average Americans use every day. For example:
– In 2013, the DOJ announced criminal fines and guilty pleas against auto parts suppliers engaged in a price fixing conspiracy for things like seatbelts and airbags sold to U.S. manufacturers and installed in U.S. cars. All told, the DOJ charged 20 companies and 21 executives and collected more than $1.6 billion in criminal fines in its investigations against this cartel.
– In 2020, the DOJ filed its seventh case in an ongoing investigation into price fixing, bid rigging and other anti-competitive conduct in the generic pharmaceutical industry. Sandoz, Inc. agreed to pay a $195 million criminal penalty to resolve the case. In the press release announcing the Sandoz settlement, the DOJ highlighted that the Antitrust Division’s lawyers work in partnership with the Federal Bureau of Investigation and the U.S. Postal Service Office of the Inspector General to ensure a free and open marketplace and to quash any environment that allows bid rigging, market allocation or price fixing.
– In 2021, Pilgrim’s Pride pled guilty to charges that it engaged in a conspiracy to fix prices and rig bids for broiler chicken products that began as early as 2012 and continued to at least 2019. Pilgrim’s Pride also agreed to pay more than $110 M in fines to settle the ongoing investigation.
Unfortunately, the DOJ’s trendlines in bringing these important cases has been moving in the wrong direction for the last decade.
Recognizing the challenges they face in bringing these cases – and hoping to reverse this trend – the DOJ has joined together with its regular partners at the United States Postal Service in announcing a new whistleblower program. Assistant Attorney General Abigail Slater of the Antitrust Division said this of the program:
“Antitrust crimes and related offenses that harm free market competition often occur in secret, making detection a formidable challenge. The new Whistleblower Rewards Program will create a new pipeline of leads from individuals with firsthand knowledge of criminal antitrust and related offenses that will help us break down those walls of secrecy and hold violators accountable…This program raises the stakes: If you’re fixing prices or rigging bids, don’t assume your scheme is safe — we will find and prosecute you, and someone you know may get a reward for helping us do it.”
The DOJ’s acknowledgement of the critical role that whistleblowers can now play in antitrust enforcement introduces a new era of trust busting in the United States and an expectation that there will be a significant reversal in the DOJ’s enforcement trendline. For more information about this important emerging program, visit http://www.justice.gov/atr/whistleblower-rewards.
This piece was written by Kate Scanlan, with Keller Grover.
