Kimberly Justice and I are continuing to write about what we believe is a very important issue in cartel fighting–the passing of criminal antitrust whistleblower legislation. Below are the opening paragraphs of our latest article on the subject. The full article, kindly posted by Wolters Kluwer in their Antitrust Law Daily, can be found here.
“The SEC’s wildly successful whistleblower program has returned hundreds of millions of dollars to investors as a result of actionable whistleblower information over the past six years. The IRS paid one whistleblower more than $100 million for information that helped the government uncover a massive tax evasion scheme and led to a $780 million settlement. The CFTC predicts that the results of its whistleblower program this year will be “huge.” The Antitrust Division has paid $0 to whistleblowers and received $0 from cartels exposed by whistleblowers. Or, as Charlie Brown would say, the Antitrust Division “got a rock.”
There is no cartel whistleblower program and this should change now. Price-fixing and bid-rigging conspiracies are felonies costing American consumers millions of dollars in the form of artificially high prices. These fraudulent schemes are particularly suited to exposure by whistleblowers because senior corporate executives frequently use lower level employees (and potential whistleblowers) to carry out the illegal scheme. The time is right for serious antitrust whistleblower legislation.”
Full article here
Thanks for reading. If you have any reaction/comment you’d like to share please use the comment section or through LinkedIn (here).
We have been campaigning for this in Ireland for many years but as long as the body politic is hopelessly captured by the body corporate , it’s not going to happen.
Thanks Seamus. Likewise, there will be strong opposition here in the US to an antitrust whistleblower statute. Even the very mild Criminal Antitrust Anti-Retaliation employee projection bill (without any incentives to report) that regularly passes the US Senate cannot even be brought up for a vote in the House. But, antitrust whistleblower legislation may be an idea whose time has come.
I could not agree more about the need to develop a whistleblower program for antitrust, if only to adequately protect and compensate whistleblowers for the costs they have to bear, first and foremost the foregone earnings in the industry.
I have co-authored an academic publication, with Patrick Rey and William Kovacic, “The impact of leniency and whistle-blowing programs on cartels”, in the Industrial Journal of Industrial Organization in 2006 [https://www.sciencedirect.com/science/article/pii/S0167718706000427], that examines the impact of rewards on cartel deterrence and shows how a well-designed whistleblower program unambiguously improves upon current systems.
Theory is not enough and widespread support from practitioners is needed before we can hope for a change. Your article is a great step in the direction I would like to see followed…
Hello Cecile. Thanks for your comment. I am familiar with the the publication you cited. Ms. Justice and I are working on a longer article and will be citing it. I agree that the practical insight from former prosecutors, coupled with the theory and support of academic research, makes a compelling case. Ms. Justice and I are going to keep at it by trying to get the subject raised in ABA panel discussions and other platforms. If you have any suggestions, please let me know.