Krauze, Raymond, Mulcahy, John, American Criminal Law Review
I. INTRODUCTION II. ELEMENTS OF THE OFFENSE A. Conspiracy B. Restraint of Trade C. Interstate Nexus D. Intent III. DEFENSES 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. Petitioning the Government I. Regulated Industry J. Foreign Commerce--Effects, Comity, and Foreign Sovereign Compulsion IV. ENFORCEMENT A. Federal Enforcement B. State Enforcement C. International Enforcement V. PENALTIES VI. RECENT DEVELOPMENTS: INTERNATIONAL COOPERATION
Section 1 of the Sherman Act ("Act") (1) aims to promote and protect free-market competition (2) by declaring "[e]very contract, combination ... or conspiracy" in restraint of interstate or foreign commerce to be illegal. (3) Despite the expansive language of the Act, courts have held consistently that Congress intended [section] 1 "to prohibit only unreasonable restraints of trade." (4) The Act, which is the primary federal antitrust provision, applies to both civil and criminal offenses without distinguishing between the two. (5) Congress intentionally left that task to the judiciary. (6) The broad and imprecise language of the Act has spawned the development of extensive federal common law in both the criminal and civil realms. (7) Indeed, the Supreme Court has characterized the Act as a "charter of freedom" with a "generality and adaptability comparable to that found desirable in constitutional provisions." (8)
This Article focuses on the criminal aspects of the Act. (9) Section II outlines the four elements of a criminal antitrust violation under section 1. Section III presents the defenses to an allegation of an antitrust violation. Section IV distinguishes between federal, state and international enforcement, and Section V explains the penalties for criminal violations. Finally, Section VI discusses recent developments in international enforcement.
II. ELEMENTS OF THE OFFENSE
A civil plaintiff must establish three elements to prove a violation of [section] 1: (i) an agreement to concerted action, such as a combination or conspiracy formed by two or more entities; (10) (ii) that the agreement unreasonably restrained trade or commerce; (11) and (iii) the restrained trade or commerce is interstate or international. (12) In a criminal antitrust prosecution, the government must also prove that the defendant intended to restrain commerce. (13) Parts A through D of this Section discuss each of these elements sequentially.
Under [section] 1 of the 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."  The illegal agreement itself constitutes the offense; thus, neither completion of the conspiracy nor any overt acts furthering the conspiracy need be pleaded or proven in a case brought under the Act. (15) The venture's contractual form and ultimate success are also immaterial as long as the parties form an illegal agreement. (16)
B. Restraint of Trade
The agreement or conspiracy must "unreasonably" restrain trade. (17) The Supreme Court has referred to the phrase "restraint of trade" as "a particular economic consequence, which may be produced by quite different sorts of agreements in varying times and circumstances." (18) Typically, a restraint of trade, or a decrease in competition, occurs as a result of the creation of a monopoly, artificial maintenance of prices, restriction of output, refusal to deal, or other interference with the free play of market forces. (19)
To determine whether a given activity constitutes an unreasonable restraint of trade, courts have employed three analytical approaches. …