GCR. The Handbook of Competition. A Global Competition Review special report published in association with:

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1 The Handbook of Competition Enforcement Agencies 2013 A Global Competition Review special report published in association with: Atsumi & Sakai Barrios & Fuentes, Abogados Bell Gully Berwin Leighton Paisner LLP D&B David si Baias SCA Dandria Studio Legale Dentons Elías, Napadensky & Cía Abogados ELIG, Attorneys-at-Law Gärde Wesslau Advokatbyrå Herbert Smith Freehills Heuking Kühn Lüer Wojtek J. Sagar Associates Lapidot, Melchior, Abramovich & Co Magalhães Nery e Dias Advocacia Prager Dreifuss Ltd Skrine GCR GLOBAL COMPETITION REVIEW

2 Overview United States Department of Justice The United States Department of Justice Antitrust Division (DoJ) enforces federal antitrust laws through both criminal and civil processes. The DoJ has exclusive authority for criminal enforcement at the federal level and shares civil enforcement authority with the Federal Trade Commission (FTC). Criminal enforcement The DoJ uses criminal enforcement processes only against hard-core cartel violations, which are agreements among competitors to fix prices, allocate markets or customers, restrict production or sales or rig bids. Penalties for these violations include fines for corporate defendants, in amounts up to twice the overcharge, and substantial fines and prison sentences for the individuals who have participated in the cartel. To investigate criminal antitrust violations, the DoJ uses a variety of tools, including wiretaps, search warrants and witness interviews. The primary body for criminal investigations is the grand jury, which at the DoJ s request can issue subpoenas compelling the production of documents and appearances to give testimony before the grand jury. Any witness who fears prosecution for cartel activity can refuse to testify by invoking the privilege, granted by the US Constitution, against self incrimination. To overcome the privilege, the DoJ relies primarily upon the leniency programme, in which the first cartel participant to report the violation will receive complete immunity in return for full cooperation with the investigation. The DoJ also relies on grants of immunity to cooperating witnesses, and on guilty pleas from cartel participants who agree to provide testimony in return for a reduced penalty. If the investigation turns up sufficient evidence for a prosecution, the DoJ will ask the grand jury to issue indictments charging the corporate target or the individual participants with criminal antitrust violations. The vast majority of indictments end with guilty pleas. If a defendant chooses not to plead guilty, the case will proceed, like any criminal prosecution, to a trial before a jury, where the DoJ is obligated to prove the defendant s guilt beyond a reasonable doubt. Civil enforcement The DoJ employs civil enforcement procedures for antitrust violations other than hard-core cartels, such as monopolisation, restraints imposed on distribution, price discrimination, and anti-competitive mergers, acquisitions and joint ventures. Remedies in civil enforcement actions typically include an injunction against the continuation or renewal of the challenged activity. Frequently, the DoJ seeks additional equitable relief, such as the unwinding of a merger or the dismemberment of a monopoly. In civil cases, the DoJ relies extensively on the voluntary submission of evidence and information from complainants, from customers, suppliers and competitors of the target, and from the target itself. The DoJ s primary tool for compelling the production of evidence in civil investigations is the civil investigation demand (CID), which can require the production of documents, including electronic documents, or tangible things, and also written answers to interrogatories and oral testimony under oath in a deposition. A CID functions in a manner similar to the comparable discovery devices in civil litigation. If the investigation turns up sufficient evidence for an enforcement action, the DoJ typically seeks to negotiate a consent decree, which is an agreed judgment, made without the admission of a violation, that the court can enforce in the same manner as an injunction. In the absence of a consent decree, the DoJ may seek injunctive or other equitable relief in a civil action tried before the court without a jury. The DoJ receives a copy of each pre-merger notification filed under the Hart-Scott-Rodino Act. Like the FTC, the DoJ can issue, prior to the expiration of the initial 30-day waiting period, a second request for additional information about the transaction, thereby extending the waiting period. If the DoJ determines that a transaction is anti-competitive, it can file a suit for injunctive relief in the United States District Court. The DoJ and the FTC have no formal division of responsibilities for civil enforcement of the antitrust laws. Each agency proceeds in accordance with its own enforcement priorities. They have established an 295

3 inter-agency clearance procedure to ensure that they do not pursue duplicative investigations. Recent developments The DoJ has been engaged in vigorous criminal enforcement in recent years. During 2012, more than $1 billion in fines were collected from guilty verdicts and guilty pleas for cartel offences. One of the major ongoing investigations concerns the possibility of price-fixing in the sale of auto parts, primarily by Japanese and other foreign manufacturers and their US distribution subsidiaries. The investigation first became public in early 2010 and has grown into the largest criminal antitrust investigation in history, with fines collected to date totalling $809 million. Ten executives, all from Japan, have pleaded guilty and been sentenced to prison sentences of one to two years. Recent statements from the DoJ indicate that the investigation is likely to expand in the scope of products and companies targeted. The DoJ has also been investigating possible cartel violations involving the Libor benchmark interest rates. During 2012, the DoJ obtained guilty pleas from affiliates of some leading global financial institutions. In February 2013, the DoJ entered a deferred prosecution agreement with Royal Bank of Scotland (RBS), under which the DoJ filed charges of antitrust violations against RBS but agreed not to prosecute RBS on those charges for a period of two years, and to drop the charges at the end of the two-year period, in return for RBS s fulfilment of certain commitments, including payment of a $150 million fine, full cooperation with the DoJ s investigation and implementation of a more effective compliance programme. The DoJ had previously refrained from entering deferred prosecution agreements in antitrust cases out of a concern that they would undermine the effectiveness of the leniency programme, which grants full amnesty to the first cartel participant to report the cartel and nothing to the other participants. The agreement with RBS suggests that the DoJ is taking a more flexible approach and that amnesty for cartel violations might still be available to participants that fail to report first. The Libor investigation was conducted by the Financial Fraud Enforcement Task Force (FFETF), which was established in 2009 and coordinates the activities of more than 20 different federal agencies, including the DoJ, in the investigation and prosecution of financial crimes. In the past year, the FFETF has also coordinated investigations into possible antitrust 225 West Wacker Drive Suite 3000 Chicago, IL United States Tel: Fax: tbush@edwardswildman.com is an international law firm with 15 offices and over 600 attorneys in major business locations in Europe, USA and Asia. The firm is a 125-yearold full-service, business-minded, Am Law 100 firm. Its attorneys work with Fortune 500 and FTSE 250 clients and start-up companies alike, throughout a range of industries across three continents. The firm s attorneys are known internationally for their work in antitrust/competition, complex litigation, private equity, venture capital, corporate and finance transactions, insurance and reinsurance, and intellectual property. Whether the issue involves corporate finance, mergers and acquisitions, private equity, venture capital, fund formation, licensing or assignment of intellectual property, high stakes litigation, insolvency and restructuring, complex securities, insurance and reinsurance, tax or other legal services, our knowledge helps make us a value-added member of our clients team. Edwards Wildman fields a team of experienced antitrust practitioners who deliver premier legal services on a rapid response basis. We advise on the full range of US antitrust law and European Union and United Kingdom competition law, including antitrust/competition litigation, merger control, criminal and civil investigations, licensing and distribution issues, monopolisation/abuse of dominance, joint ventures and strategic alliances, market and sector investigations, compliance and state aid. Our antitrust lawyers have particular experience of issues arising in the pharmaceutical, biotech, life sciences, healthcare, financial services, gaming, insurance, retail, communications, media, technology, transport, sports and petrochemical industries. 296 The Handbook of Competition Enforcement Agencies 2013

4 violations involving real estate foreclosure auctions in various parts of the country and contracts for the investment of proceeds from municipal bonds. In the civil enforcement area, the DoJ brought an action in 2012 against Apple and five book publishers, charging them with collusive practices that raised the price of electronic books. The DoJ has agreed to consent decrees with each of the publishers. The claims against Apple continue. In the merger area, the DoJ filed a suit to block Anheuser-Busch InBev s acquisition of Mexican brewer, Grupo Modelo, a transaction that would combine the holders of the largest and third-largest shares of the US beer market. The DoJ pursued two actions to impose penalties for violations of the requirements of the merger clearance process. Biglari Holdings agreed to pay a civil penalty of $850,000 for its failure to make filings under the Hart-Scott-Rodino Act of certain acquisitions of voting securities. An executive of Hyosung Corporation of South Korea pleaded guilty and will serve a prison sentence for obstruction of justice by submitting fabricated documents to the DoJ in the course of a merger investigation

5 ABOUT THE AUTHORS is a partner in the Chicago office and co-chair of the antitrust/competition practice group of. He has more than 30 years of experience in a wide range of antitrust matters, including price-fixing litigation, criminal investigations, merger control, and consulting and litigation relating to vertical restraints and patent issues. Tom also has extensive experience with antitrust issues relating to the insurance industry and with counselling and representing Asian clients on antitrust matters