Global Cartel Enforcement Report 2021

North America

Canada: Increased Budget: On October 20, Commissioner of Competition Boswell announced that the Competition Bureau would “receive an additional $96 million Canadian dollars ($78 million) over the next 5 years” to focus on three areas: (1) “new and more complex anticompetitive conduct, especially in digital markets”; (2) hiring for enforcement teams, including for litigation and external experts; and (3) “to advocate for pro-competitive regulatory and policy changes at all levels of government in Canada.”

Canada: Updated Competitor Collaboration Guidelines: On May 6, the Competition Bureau released its updated CCGs. Key changes include increased flexibility of the bureau to determine the appropriate section of the Competition Act for enforcement; clarification that “buy-side” agreements (such as no-poach and wage-fixing agreements) are subject only to section 90.1’s civil regime; reference to pricing algorithms as a potential means of price fixing; consideration of noncompete clauses in mergers and acquisitions; reviewability of consortium bids for competitive effects under section 90.1 of the act, even if the consortium’s members have informed the requesting party of the arrangement; and evaluation of research and development collaborations as between actual or potential competitors as potential “sham” agreements.     

United States: White House Executive Order: On July 9, President Biden signed the sweeping “Executive Order on Promoting Competition in the American Economy” designed to “promote competition in the American economy, which will lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.” According to the White House, the wide-ranging order includes 72 “initiatives” to be addressed by more than a dozen federal agencies to thwart anticompetitive conduct in several key segments of the economy, including healthcare (i.e., insurance, hospital, and prescription drug markets), telecommunications, agriculture, transportation, technology, and banking and consumer finance. The order mandates a “whole-of-government competition policy” and calls on multiple departments, including the FTC and DOJ, among others, to “fairly and vigorously” enforce the nation’s antitrust laws and to consider revising and strengthening existing agency policies. The order also “[e]ncourages the FTC and DOJ to strengthen antitrust guidance to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefit information with one another.”

United States: Whistleblower Protections: On February 19, the US Department of Labor (DOL) announced that the Occupational Safety and Health Administration (OSHA) had begun investigating whistleblower complaints of retaliation under the Criminal Antitrust Anti-Retaliation Act. The statute, enacted on December 23, 2020, provides new protections to an employee or another person who reports what he or she “reasonably believes to be a violation” of antitrust laws to the government, an internal supervisor, or company employee with authority to investigate the alleged allegations. Read Double-Check Whistleblower Programs to Prep for Antitrust Anti-Retaliation Act and New Federal Protections for Whistleblowers Who Report Criminal Antitrust Violations and Impact on Labor Mobility Issues.

United States: DOJ Procurement Collusion Strike Force Efforts: The DOJ Procurement Collusion Strike Force (PCSF), established in November 2019 to combat antitrust crimes and related fraudulent schemes involving procurement and grant and program funding, continued its proactive enforcement efforts. The PCSF has grown to include members in the DOJ’s Antitrust Division, 22 US Attorneys’ Offices, and seven national law enforcement agencies.

On October 13, the PCSF director delivered a speech highlighting enforcement priorities, which include “set-aside fraud” and infrastructure. Set-aside fraud involves targeting programs designed to facilitate the participation of disadvantaged communities in public procurement. This fraud “cheat[s] the government procurement process” and “rob[s] opportunities” from disadvantaged communities. The PCSF will also prioritize antitrust and other violations involving infrastructure funding.

United States: Continued Use of “Deferred Prosecution” Agreements: In 2021, the DOJ continued its recent trend of entering into deferred prosecution agreements. In 2021, case examples included resolution with a ready-mix concrete company for fixing prices and rigging bids under a deferred prosecution agreement resulting in a $20 million fine, and resolution with two providers of foreign-language services for conspiring to defraud the United States by impeding, impairing, obstructing, and defeating competitive bidding for a contract issued by the National Security Agency in 2017, resulting in criminal penalties of $147,000 and $140,000.

In prior years, the DOJ had resisted these agreements. In a speech on July 2021, the acting assistant attorney general defended the use of these agreements by the Antitrust Division, noting that “[a] deferred prosecution agreement is much closer to a guilty plea than leniency, which has unmatched benefits. Companies should understand that there’s no tactical advantage in deciding not to apply for leniency and instead holding out for a deferred prosecution agreement; a company that makes that choice will most certainly not be eligible for anything short of a criminal conviction.”

The acting assistant attorney general stressed the importance of robust antitrust compliance programs to detect and deter antitrust violations. And he indicated that the Antitrust Division would continue to credit compliance programs when making charging decisions in the same manner as the rest of DOJ does—a practice adopted by the Antitrust Division in 2019. For more information on antitrust compliance standards, read Landmark Antitrust Division Policy to Incentivize Corporate Compliance and Mitigate Antitrust Risk.

Finally, the acting assistant attorney general also emphasized that the Antitrust Division will continue to implement its “marquee enforcement tool, the leniency program.” According to the acting assistant attorney general, the leniency program—which has not changed since the early 1990s—remains to be a “model of … clear, transparent, [and] predictable enforcement.”

South America

Brazil: Leniency Program Milestone: In April, CADE noted 21 years had passed since Brazil’s Leniency Program was introduced in 2000 by Law 10149 and amended over the years, and that “101 agreements have already been signed, contributing to the investigations held by the agency.”

Brazil: Leniency Guide: In September 2021, CADE published a guide on evidence examination in leniency cases. 

Europe

United Kingdom: CMA Annual Report: On March 23, the CMA published its annual plan for 2021/2022 and it was presented to Parliament. The report followed the end of the transition period on December 31, 2020 (during which the United Kingdom was no longer a member of the European Union but remained a member of the EU single-market and customs union). The report highlighted that the CMA is “ready to launch complex cartel and antitrust cases and merger investigations with a global dimension that would have previously been reserved to the European Commission.” The CMA remains “committed” to using its powers “to investigate and prosecute individuals under the criminal cartel offence … wherever appropriate.” The CMA plans to “clamp down on cartels and collusive behaviour which seek to keep prices up.”

United Kingdom: Testing the Boundaries of International Enforcement: On November 5, the High Court of England and Wales concluded that it lacks jurisdiction over cartel-damages claims brought against a Brazilian orange juice producer by more than 1,500 Brazil’s farmers and 50 local fruit farms, although the court confirmed that it can hear the claims against two of the company’s executives. The case is another example of the limits of enforcement authority for extraterritorial conduct that raise fact-specific issues.

United Kingdom: Temporary Suspension of Antitrust Enforcement for Fuel Industry: On September 26, the UK government decided to “temporarily exempt [the fuel] industry from the Competition Act 1998 for the purpose of sharing information and optimising supply.” The objective was to “ease temporary supply chain pressures brought on by the pandemic and the global economy rebounding around the world.”

Asia

China: New Enforcement Agency: On November 18, China’s National Anti-Monopoly Bureau (NAMB) was inaugurated in Beijing. The new bureau will be responsible for drafting measures and guidelines, organizing enforcement work, guiding fair-competition review work, and promoting enforcement, international cooperation, and exchange. Gan Lin was appointed Head of the NAMB. She has served as vice minister of the State Administration for Market Regulation (SAMR). The move comes after China prioritized antitrust work as a key task for the year.

China: Pending Amendments: A series of significant changes to antitrust law are under consideration in China.

On November 15, SAMR issued the Guidelines for Overseas Anti-Monopoly Compliance of Enterprises, which signal China’s preparation for integrating China's antitrust practice with international standards. The guidelines caution Chinese companies of major antitrust rules and compliance requirements in foreign jurisdictions. They also recommend for Chinese companies engaging in business outside of China or engaging in domestic business but having an impact on overseas markets to establish teams responsible for overseas antitrust compliance to ensure overseas compliance as well as to mitigate noncompliance risks in foreign jurisdictions.

On October 19, draft amendments to the Anti-Monopoly Law were submitted to the Standing Committee of the National People’s Congress for first review.

• “Hub-and-spoke” cartels: Among several changes, the draft amendments would extend the cartel prohibition to any undertaking organizing other undertakings to reach agreements or provide substantive assistance for other undertaking to reach agreements. “Hub-and-spoke” cartels may be sanctioned under this provision.
• Increased Penalties and Individual Liability: The draft amendments propose to increase legal penalties and add individual liability for cartel violations. They would increase the fine up to 3 million renminbi ($470,000) upon the undertakings if the undertakings are found to have reached but have not yet implemented the monopoly agreements. A fine of up to 1 million renminbi ($160,000) would be imposed on individuals responsible for the undertaking’s cartel violations; this is the first time that individual liability was proposed for cartel violations. Safe Harbor: The draft amendments propose a safe harbor for small-sized market players. Undertakings whose market shares in the relevant market are lower than a specific threshold to be set by the People’s Republic of China antitrust agency are generally not subject to the prohibitive provisions unless there is evidence proving that the agreements entered into by these undertakings have anticompetitive effects.

On February 7, the Anti-Monopoly Commission of State Council issued the Anti-Monopoly Guidelines on the Field of Platform Economies, which represent a significant milestone in China’s antitrust legislation. The guidelines clarify many long-debated antitrust issues in the cutting-edge platform economy and provide helpful guidance for market players and legal practitioners in the platform economy area, including guidance concerning collusion among competitors and information exchanges.

South Korea: New Amendments: Amendments to the Korean Monopoly Regulation and Fair Trade Act take effect on December 29, including new enforcement measures and enhanced penalties. For example, under the amendments an information exchange may establish a cartel and the maximum penalty rates and the maximum fixed amount fines are doubled for cartels. 

Taiwan:  Enhanced Whistleblower Payments:  On November 17, Taiwan’s government doubled the maximum reward an individual can receive for notifying authorities of cartel conduct. The law, the Measures for the Payment of Bonuses for Reporting Illegal Joint Acts, raises the maximum award from $50 million Taiwan dollars ($1.8 million) to $100 million Taiwan dollars ($3.6 million). The Taiwanese Fair Trade Commission will allocate 30% of all cartel fines recovered to an “antitrust fund” to pay whistleblowers.