US: Antitrust heavyweights make the case for higher fines

Top antitrust officials have submitted public comment to the United States Sentencing Commission suggesting that higher antitrust fines are necessary to deter anticompetitive behavior, but the submissions disagreed as to why.

The American Antitrust Institute submitted its comment to the USSC arguing that current guidelines that fine price-fixing entities based on the negative effects of that collusion should be changed. In its submission, the AAI argues that previous studies show that price-fixing usually raises prices for consumers by more than 10 percent, but that the figure was found based on evidence in 1987.

Newer studies, the AAI suggests, show that price-fixing more often hikes prices by 20 percent; the antitrust group is now calling for the doubling of the 10 percent threshold to determine fines to corporate entities.

In their own submission, Federal Trade Commissioner Josh Wright and US District Judge Douglas H. Ginsburg similarly argue that antitrust fines should increase. The antitrust experts, however, argue that hiking fines for corporations is ineffective in deterring anticompetitive behavior, and instead greater sanctions should be imposed on individuals of those corporations found to have violated antitrust law.

In their statement, Wright and Ginsburg argue to that “maintaining fines to organizations at something near current levels while, even more important, increasing individual penalties in order to deter those actors actually responsible for causing their organizations to violate the antitrust laws” is more effective than current methods for sanctioning antitrust violators at deterring anticompetitive practices.

Wright and Judge Ginsburg included in their submission an article the experts wrote for Competition Policy International’s Autumn 2010 Antitrust Journal entitled Antitrust Sanctions, which outlines the authors’ case for focusing antitrust fines on individuals.

Both submissions were made as part of the USSC’s call for public comment on several matters, including on current guidelines for sanctioning violators of antitrust law.

Full content: United States Sentencing Commission

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.