Hair on Fire: Why Companies Are Less Likely To Feel the Burn Under the DOJ’s Newest Change to Antitrust Enforcement
In July 2019, the Department of Justice (DOJ) Antitrust Division announced that in an effort to help companies avoid “‘hair on fire’ experiences,” Division prosecutors are now, despite previous hesitancy, encouraged to offer prosecution alternatives in the form of deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) to corporate antitrust violators. Alternative prosecution agreements, such as DPAs and NPAs, are contracts between the government and corporate wrongdoers that allow companies to delay or entirely avoid prosecution, provided the company adheres to the contract terms. Additionally, as a part of the policy change, DOJ antitrust prosecutors must evaluate a corporation’s preexisting compliance program and determine whether the company should be offered a DPA or NPA. In the less than two years since the policy announcement, the use of DPAs to resolve antitrust cases rose dramatically compared to prior practice; while almost twenty years from the year 2000 through July 2019 saw only four DPAs come from the Antitrust Division, the last of which appeared only weeks before the announcement, the Division has subsequently entered eight to date. This Comment asserts that acceleration in DPA and NPA use within antitrust enforcement comes at the cost of dangerously neglecting the consumer welfare standard—the standard that dictates antitrust law serves to curb harm to consumers from anticompetitive activity. Alternative prosecution agreements protect large incumbent companies to the disadvantage of smaller players in the market by insulating them from the reputational damage that would normally follow an antitrust prosecution and by letting them get off easy through simply paying the contractually negotiated fine. Additionally, the policy change does not promote consumers and healthy competition because companies are incentivized to institute corporate compliance programs, which have not been demonstrated to provide adequate persuasions or standards to reduce corporate violations in this context. By reinstituting judicial review over alternative prosecution agreement terms and refocusing deterrent efforts towards culpable individuals, rather than towards the company, the government will be in a much better position to create meaningful change in antitrust enforcement during this pivotal time of Big Tech crackdowns.
Caroline M. Whitener
Hair on Fire: Why Companies Are Less Likely To Feel the Burn Under the DOJ’s Newest Change to Antitrust Enforcement,
49 Pepp. L. Rev.
Available at: https://digitalcommons.pepperdine.edu/plr/vol49/iss4/4