Academic journal article American Criminal Law Review


Academic journal article American Criminal Law Review


Article excerpt


A. Conspiracy

B. Restraint of Trade

C. Interstate Nexus


A. Withdrawal from Conspiracy

B. Statute of Limitations

C. Double Jeopardy.

D. Single Entity

E. Respondent Superior

F. Meeting Competition

G. State Action Immunity

H. Regulated Industry

1. Foreign Commerce-Effects, Comity, and Foreign Sovereign Compulsion IV. ENFORCEMENT

A. Federal Enforcement


A. The Explosives Industry

B. The General Electric-DeBeers Acquittal


Section I of the Sherman Act(1) ("Act") provides for criminal sanctions against any person "who shall make any contract or engage in any combination or conspiracy" in restraint of interstate commerce.2 Despite the Scope of its literal meaning, courts have consistently held that [sections]1 was "intended to prohibit only unreasonable restraints of trade."(3) The Act, which is the primary federal antitrust provision, applies to both criminal and civil offences but does not distinguish between them.(4) This article, however, will concentrate on the criminal aspects of the Act. Although Congress intentionally left the task of distinguishing between civil and criminal offences to the judiciary,(5) the Act includes a number of common law terms to assist the courts in their task.(6) The lack of a clear legislative pronouncement of their meaning, however, has resulted in the development of a federal common law.(7) As such, the Supreme Court has characterized the Sherman Act as a "charter of freedom [with a] generality and adaptability comparable to that found to be desirable in constitutional provisions."(8)


To prove a criminal violation of [sections] 1, the government must establish four elements: (1) two or more entities formed a combination or conspiracy; (2) the combination or conspiracy produces, or potentially produces,(9) an unreasonable restraint of trade or commerce; (3) the restrained trade or commerce is interstate in nature;(10) and (4) general intent.(11)

A. Conspiracy

Under [sections] 1 of the Sherman Act, a conspiracy "must comprise an agreement, understanding or meeting of the minds between at least two competitors, for the purpose of, or with the effect of, unreasonably restraining trade."(12) The illegal agreement itself constitutes the offense, and overt acts furthering the conspiracy do not have to be pleaded or proven in a Sherman Act case.(13) The contractual form and the ultimate success of the venture are immaterial as long as the illegal agreement is formed.(14)

B. Restraint of Trade

The Supreme Court has noted that the term "restraint of trade . . . refers not to a particular list of agreements, but to a particular economic consequence, which may be produced by quite different sorts of agreements in varying times and circumstances."(15) Such consequences include elimination of competition, creation of a monopoly, artificial maintenance of prices, or interference with the free play of market forces.(16)

In determining whether a given activity constitutes an unreasonable restraint of trade, courts have employed two distinct analytical approaches. The "per se" rule, announced by the Supreme Court in United States v. Socony-Vacuum Oil Co.,(17) is limited to activities which have no legitimate justification and lack any redeeming competitive purpose.(18) Examples of such agreements include price-fixing arrangements,(19) allocation of markets,(20) and group boycotts.(21) The policy underlying the per se unreasonableness test is to avoid the complicated and lengthy investigation into the economics of the industry which is required under the rule of reason test, as explained below.(22) The government, therefore, need only prove the existence of an unlawful agreement. …

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