Abstract
Our study analyzes data from the Corporate Prosecution Registry of the University of Virginia School of Law and Duke University School of Law (Garrett and Ashley, 2023). We examine a subset of corporate violators, namely prosecutions brought under the Sherman Antitrust Act’s criminal provisions. The Sherman Antitrust Act of 1890 is a federal statute that prohibits activities that restrict interstate commerce and competition in the marketplace. We utilize the framework of bounded rationality of decision making to hypothesize that prosecutors are influenced by internal and external factors that affect the total monetary penalties ultimately levied on corporate violators of the Sherman Anti-Trust Law’s criminal provisions. Specifically, our results indicate that corporate monetary penalties for antitrust corporate offenders are significantly more likely to be lower when the corporate defendant entered into disposition agreements (such as non-prosecution agreements, deferred prosecution agreements, and plea agreements) with the prosecutor and is a company incorporated and registered under U.S. laws. On the other hand, the total monetary penalties imposed on corporate defendants are more likely to be higher when the defendant is a financial institution, a public company, or a Fortune 500 company.
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Data availability
The data and materials supporting the findings of this research study are available from the corresponding author upon reasonable request. The data will be made available in accordance with Texas A&M San Antonio’s policy on data sharing and open access. The authors have provided all necessary information and details regarding the methods, protocols, and tools used in this research study to enable other researchers to replicate the findings presented in this paper.
Notes
The DOJ Antitrust Division Manual explicitly states that a substantial amount of its investigations are civil investigations (e.g., merger investigations). In general, current Division policy is to proceed by criminal investigation and prosecution in cases involving horizontal, per se unlawful agreements such as price fixing, bid rigging, and customer and territorial allocations. Civil prosecution is used with respect to other suspected antitrust violations, including those that require analysis under the rule of reason and some offenses that historically have been labeled “per se” by the courts (U.S. DOJ Antitrust Division, 2015, p. III-12). The manual appears to give wide discretion to the DOJ Antitrust Division in deciding whether to criminally prosecute. For example, although some situations may involve conduct that appears to be a per se violation of law, the manual explains that criminal investigation or prosecution may not be appropriate. These situations may include cases in which (1) “the case law is unsettled or uncertain”; (2) there are “truly novel issues of law or fact presented”; (3) “confusion reasonably may have been caused by past prosecutorial decisions”; or (4) there is “clear evidence that the subjects of the investigation were not aware of, or did not appreciate, the consequences of their action” (U.S. DOJ Antitrust Division, 2015, p. III-12).
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Laws Cited
CFR 1010.100(t)
U.S.C. §§ 6201–12
U.S.C. §3571(d)
U.S.A.M. § 9–47.120
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All authors have contributed to this research study. Claire Nolasco Braaten conceived and designed the study and coded the variables for the data, while Lily Chi-Fang Tsai analyzed the data. Claire Nolasco Braaten drafted, revised, and improved the manuscript based on suggestions of the peer reviewers. All authors have read and approved the final version of the manuscript.
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The authors declare that they have no competing interests in relation to this research study. Claire Nolasco Braaten has received research grants from Texas A&M San Antonio for unrelated projects. Claire Nolasco Braaten is an employee of Texas A&M San Antonio while Lily Chi-Fang Tsai is an employee of University of Maryland Eastern Shore which are not related to the topic of this study. The authors confirm that these relationships did not influence the design, conduct, or reporting of this research study.
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Braaten, C.N., Tsai, L.CF. Corporate antitrust prosecutions: Prosecutorial decision making in the assessment of total monetary penalties. Crime Law Soc Change (2023). https://doi.org/10.1007/s10611-023-10136-4
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DOI: https://doi.org/10.1007/s10611-023-10136-4