Employee No-Poach Agreement Compliance Talk: Knock it Off! Now!!

April 18, 2018 by Robert Connolly

A hot topic at the ABA Antitrust Section Spring Meeting in DC that I recently attended, and in antitrust in general, is the treatment of employee “no-poach” agreements between companies. Naked no-poach agreements are illegal schemes wherein companies agree to not solicit or hire each other’s employees. These per se illegal agreements have, till now, been prosecuted as civil violations. In October 2016, however, the Antitrust Division and FTC issued joint Guidance to Human Resource Professionals warning that certain no poach agreements may be prosecuted criminally. Since that time the Antitrust Division has repeated the message that naked no-poach agreements that begin or continue after October 2016 will be treated as any other cartel behavior; meaning the investigation and prosecution will likely be as a criminal violation. Very recently, the Antitrust Division reached a civil settlement with rail equipment suppliers Knorr-Bremse and Wabtec over allegations of a long-standing agreement to not compete for each other’s employees. The DOJ press release (here) explained the case was brought civilly because the illegal agreements ended before October 2016. There is more background in prior Cartel Capers posts here and here.

I applaud the Division’s commitment to treat naked no-poach agreement as possible criminal violations. It has puzzled me why employee (input) allocation agreements were ever thought to warrant civil treatment. To be sure, there are times when an agreement not to hire away another company’s employees may be ancillary to some legitimate integration such as joint research. You don’t want the other guy to size up your good people and steal them. But, a naked agreement—I won’t hire away your employees if you won’t hire away mine—is a naked restraint of trade; to my mind just as bad as any customer or supplier allocation scheme.

A glimpse of how this collusion works is explained in an excerpt of a talk by then Assistant Attorney General Bill Baer discussing some of the details of a no-poach agreement between eBay and Intuit as alleged in a 2013 civil case (here):

“The behavior was blatant and egregious. And the agreements were fully documented in company electronic communications. In one email, eBay’s senior vice president of HR wrote Meg Whitman complaining that while eBay was adhering to its agreement not to hire Intuit employees, “it is hard to do this when Intuit recruits our folks.” Turns out that Intuit had sent a recruiting flyer to an eBay employee. Whitman forwarded that email to Scott Cook asking him to “remind your folks not to send this stuff to eBay people.” Cook quickly responded with “…Meg my apologies. I’ll find out how this slip up occurred again….”

Assistant Attorney General Bill Baer Speaks at the Conference Call Regarding the Justice Department’s Settlement with eBay Inc. to End Anticompetitive “No Poach” Hiring Agreements, Thursday, May 1, 2014.

Another graphic example of an employee collusion case is reported in the The Verge, Steve Jobs personally asked Eric Schmidt to stop poaching employees, January 27, 2012 (here)

Steve Jobs personally emailed Eric Schmidt to ask Google to stop poaching an Apple engineer, and Google responded by arranging to immediately and publicly fire the employee who initiated the call.
“Mr. Jobs wrote: “I would be very pleased if your recruiting department would stop doing this.”
Schmidt forwarded Mr. Jobs’s email to undisclosed recipients, writing: “I believe we have a policy of no recruiting from Apple and this is a direct inbound request. Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly so please let me know as soon as you can.”
Geshuri [a Google executive] told Mr. Schmidt that the employee “who contacted this Apple employee should not have and will be terminated within the hour.” Mr. Geshuri further wrote: “Please extend my apologies as appropriate to Steve Jobs. This was an isolated incident and we will be very careful to make sure this does not happen again.”
Three days later, Shona Brown, Google’s Senior Vice President for Business Operations, replied to Mr. Geshuri, writing: “Appropriate response, thank you. Please make a public example of this termination with the group.”

This behavior is a particularly damaging form of collusion. Imagine you are an employee at a high tech, or any firm. You really don’t like your job. Maybe it’s the boss you don’t get along with. Maybe you get lousy assignments; no opportunity for advancement; you think you’re under appreciated, overworked and underpaid (maybe you work at a law firm?). You’d like to get another job, but your application/resumes go unanswered. You can’t seem to get any interest from the other big firm in town. You not only are stuck at the same pay, same boss, same job, but your self-esteem takes a hit too. (When I was in law school applying for jobs, my roommates and I jokingly made a ‘wall of shame” of all the rejection letters. But, the disappointment was real). No-poach agreements are restraints of trade that are very focused on individuals and have a significant impact on their lives. The harm seems greater to me, and perhaps to a sentencing judge, than a price fixing scheme that inflates prices a small amount, though over perhaps thousands of customers.

Compliance guidance should not just explain the shift in DOJ policy towards naked no-poach agreements, but to explain how these agreements actually and very negatively can affect people’s lives and why they may be prosecuted criminally. I rarely here the human side of the story emphasized or even mentioned in discussion about 15 U.S..C Section 1 (The Sherman Act); the per se rule versus rule of reason, etc. Compliance guidance should also be clear about another potential human side to this story—some executive is going to be the first one facing a criminal charge with a possible sentence of up to 10 years in prison for an employee no-poach agreement.

PS. Since no-poach agreements may be treated criminally by the Antitrust Division, it is important to remember that Corporate Leniency (that also covers cooperating individuals) may be available to the first organization that self-reports.

Thanks for reading. Bob Connolly

Antitrust Division Issues 2018 Annual Newsletter

April 16, 2018 by Robert Connolly

JUSTICE NEWS

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Wednesday, April 11, 2018

Antitrust Division Issues 2018 Annual Newsletter

The Department of Justice’s Antitrust Division today issued the 2018 edition of its annual Spring Newsletter on its website. The Newsletter highlights the Antitrust Division’s recent activities and successes on civil and criminal enforcement, international cooperation, and competition advocacy. The Newsletter includes a message from Assistant Attorney General Makan Delrahim, articles recounting the Antitrust Division’s enforcement actions in the criminal, merger, and civil non-merger areas over the past year, as well as an update on the Division’s international and competition advocacy programs.

“This spring, I have had the opportunity to reflect on my six-month anniversary as Assistant Attorney General of the Antitrust Division, looking back on the important achievements of our career staff and the exciting new developments and announcements still on the horizon,” said Assistant Attorney General Delrahim in his ‘Message from Makan.’ “My goal as Assistant Attorney General is to ensure that the Antitrust Division exercises its power so that the American consumer can reap the rewards of free market competition and innovation.”

The Newsletter highlights these milestones and accomplishments, and features profiles of Division leadership and staff. It can be found at https://www.justice.gov/atr/division-operations/division-update-spring-2018.

It’s A Crime There Isn’t a Criminal Antitrust Whistleblower Statute

April 9, 2018 by Robert Connolly

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).

Antitrust Division Files Civil “No-Poach” Employee Agreement Case

April 5, 2018 by Robert Connolly

The Antitrust Division, US Department of Justice has put industry on notice since 2016 that naked “no poach” agreements–agreements not to compete for each other’s employees– could be treated as criminal antitrust violations. In other words “no-poach” employee agreements between competitors will be treated the same as “no-poach” customer agreements between competitors. The Antitrust Division’s press release stated: “Under the antitrust laws, no-poach agreements that are naked (i.e., not reasonably necessary for a separate, legitimate business transaction or collaboration) eliminate competition in the same irredeemable way as agreements to fix product prices or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct.”

In this particular case, the Division reached a civil settlement with rail equipment suppliers Knorr-Bremse and Wabtec over allegations of a long-standing agreement to not compete for each other’s employees. In October 2016 the Antitrust Division and Federal Trade Commission published Antitrust Guidance for Human Resource Professionals and announced that employee “no-poach” agreements that are not tied to some legitimate transaction or collaboration can be prosecuted criminally, like any other traditional naked agreement not to compete. But, in this case the government brought a civil action, stating, “In an exercise of prosecutorial discretion, the department will pursue as civil violations no-poach agreements that were formed and terminated before those announcements were made.” The Antitrust Division warned, however, that it still has open civil and criminal investigations into other no-poach agreements in the rail equipment industry as well as in other sectors. In early 2018 the Division warned that criminal “no-poach” cases were in the pipeline (here).

Some highlights from the Antitrust Division’s press release:

The department’s complaint alleges that:

Beginning no later than 2009, Knorr and Wabtec reached agreements not to solicit, recruit, hire without prior approval, or otherwise compete with one another for employees. For example, in a letter dated January 28, 2009, a director of Knorr Brake Company wrote to a senior executive at Wabtec’s headquarters, “[Y]ou and I both agreed that our practice of not targeting each other’s personnel is a prudent cause for both companies. As you so accurately put it, ‘we compete in the market.’”
Beginning no later than 2011, Knorr Brake Company (a wholly-owned subsidiary of Knorr) and Faiveley Transport North America (the U.S. subsidiary of Faiveley before Faiveley was acquired by Wabtec) agreed to get the other’s permission before pursuing each other’s employees. For example, in October 2011, a senior executive at Knorr Brake Company explained that he had a discussion with an executive at Faiveley’s U.S. subsidiary that “resulted in an agreement between us that we do not poach each other’s employees. We agreed to talk if there was one trying to get a job[.]”
Beginning no later than 2014, Wabtec Passenger Transit, a U.S. business unit of Wabtec, and Faiveley Transport North America similarly agreed not to hire each other’s employees without prior approval. For example, in an e-mail to his colleagues, a Wabtec Passenger Transit executive explained that a candidate for employment “is a good guy, but I don’t want to violate my own agreement with [Faiveley Transport North America].”

Reuters reported that Wabtec said in a statement that it had settled even though it committed no wrongdoing.

“We firmly believe that our recruiting policies have been consistent with the antitrust laws and have in no way diminished competition for talent in the marketplace,” the company said. “We have elected to settle this matter to avoid the cost and distraction of litigation.”

Thanks for reading.

FYI: Upcoming 2018 Antitrust in Asia Conference

April 5, 2018 by Robert Connolly

Concurrences Review, with the support of the Chinese University of Hong Kong and the Hong Kong Competition Association will hold the 2018 Antitrust in Asia Conference on Friday, May 18, 2018.

There will be four panels:

Extraterritoriality Enforcement: A Rising Concern?
Due Process: Could There Be a Global Standard?
Foreign Direct Investment & Mergers: Towards Broader Provisions?
A Brand New Digital World: Price Parity, Big Data, Vertical Search… What Is the Asian Perspective?

Speakers include, among others, Toh Han Li (Singapore Competition Commission), Frédéric Jenny (OECD Competition Committee), Justice Godfrey Lam Wan-Ho (Hong Kong Competition Tribunal) and Brent Snyder (Hong Kong Competition Commission).

You can see the full agenda online here:

Antitrust Division to Hold Roundtable on Criminal Antitrust Compliance

March 12, 2018 by Robert Connolly

From the Press Release (here):

On April 9, the Department of Justice’s Antitrust Division will hold a public roundtable discussion to explore the issue of corporate antitrust compliance and its implications for criminal antitrust enforcement policy.

The roundtable will provide a forum for the Antitrust Division to engage with inside and outside corporate counsel, foreign antitrust enforcers, international organization representatives, and other interested parties on the topic of antitrust compliance. Participants will discuss the role that antitrust compliance programs play in preventing and detecting antitrust violations, and ways to further promote corporate antitrust compliance. The format of the program will be a series of panel discussions with featured speakers. Audience participation in the discussions will be encouraged.

The Roundtable will take place in the Great Hall of the Robert F. Kennedy Department of Justice Building, 950 Pennsylvania Avenue, NW, Washington, DC, from 1:00 p.m. to 5:00 p.m. EDT. The agenda can be found here.

This should be an interesting and spirited program. There is some disagreement between enforcers and the defense bar/compliance community about what credit a company should receive for a compliance program if, despite the program, company officials engage in cartel behavior.

For previous posts on antitrust compliance programs see:

https://cartelcapers.com/blog/brent-snyder-explains-antitrust-division-approach-to-credit-for-compliance-programs/

https://cartelcapers.com/blog/senior-antitrust-division-official-comments-on-credit-for-compliance-programs/

https://cartelcapers.com/blog/hitachi-chemical-plea-agreement-part-1-enhancement-compliance-program-condition-probation/

Was Heir Locators Indictment a Hair Too Late?

February 21, 2018 by Robert Connolly

Below is a post that I wrote with a friend and former Antitrust Division colleague, Karen Sharp. The post originally appeared in Law 360 Competition (here). I am reposting for those that don’t have access to the article.

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Was Heir Locators Indictment a Hair Too Late?

by Robert Connolly and Karen Sharp[1]

On August 17, 2016, a Utah grand jury returned a one count Sherman Act indictment against Kemp & Associates, Inc. and Daniel J. Mannix,[2] a Kemp corporate officer. According to the indictment, the conspiracy was an agreement to “allocate customers of Heir Location Services sold in the United States” that began as early as September 1999 and continued as late as January 29, 2014.

Heir location service companies identify heirs to estates of intestate decedents and, in exchange for a contingency fee, develop evidence and prove heirs’ claims to an inheritance in probate court. The indictment charged that there was an allocation scheme whereby the defendants agreed with a competing heir location service company that the first company to contact an heir would be allocated certain remaining heirs to the estate and, in return, would pay the other company a portion of the collusive contingency fees collected from the heirs.

In pretrial orders issued last August, U.S. District Court Judge David Sam, 1) dismissed the indictment as time barred by the five-year statute of limitations; and 2) held that if there were a trial, the agreement would not be considered per se, but instead judged by the jury under the Rule of Reason. The Antitrust Division is challenging both rulings on appeal in the Tenth Circuit. In this article we discuss the court’s ruling that the indictment was time barred by the statute of limitations.

A full exposition of the facts can be found in the indictment,[3] Judge Sam’s Memorandum Decision and Order[4], the government’s opening brief in the Tenth Circuit,[5] and the defendants’ response.[6] But in short, the relevant facts are these:

There was a written allocation agreement between competing heir location service companies to divide certain customers.
On July 30, 2008, defendant Mannix wrote to Kemp & Associates colleagues in an email: “The ‘formal’ agreement that we have had with [Blake & Blake] for the last decade is over.”
There were in fact no other heirs allocated after July 30, 2008.
Payments made by previously allocated customers, however, occurred within the Sherman Act five-year statute of limitations period preceding the indictment.

The government argues on appeal that the conspiracy did not end on July 30, 2008 when the agreement was abandoned but continued based on the “payments theory.” The payments theory is straightforward: conspirators rig bids, fix prices and/or allocate customers to reap the higher prices that come from eliminating/restraining competition. As long as a conspirator is being paid as a result of the illegal agreement, the conspiracy continues.

The government has the weight of authority and specifically, Tenth Circuit precedent, on its side. The government argues on appeal that Judge Sam “mistakenly concluded that the alleged conspiracy ended after the last customers were allocated, rather than continuing as long as the conspirators collected and distributed payments from the contracts with the allocated customers.” The indictment specifically alleged that as part of the customer allocation conspiracy, the defendants “accepted payment for Heir Location Services sold to heirs in the United States at collusive and noncompetitive contingency fee rates.” The indictment alleges that the conspiracy continued at least as late as January 29, 2014, which is the date when, according to the defendants’ motion to dismiss the indictment, “a large team of law enforcement agents and prosecutors served subpoenas on, and sought to interview, many of the Company’s employees.”

The payments theory is well accepted, including in the Tenth Circuit. United States v. Evans & Associates Construction Co.[7] was a bid-rigging case where the contract was rigged outside the statute of limitations, but the defendant received payments for the work done on the contract within the statute period. The Tenth Circuit in Evans concluded that “the statute did not begin to run until after the successful contractor accepted the last payment on the contract.”[8] According to the court, “the Sherman Act violation was ‘accomplished both by the submission of noncompetitive bids and by the request for and receipt of payments at anti-competitive levels.’”[9] Similarly, in the more recent case of United States v. Morgan, the Tenth Circuit held that “the distribution of the proceeds of a conspiracy is an act occurring during the pendency of the conspiracy.”[10]

Judge Sam did not agree that the indictment before him alleged a conspiracy that would properly invoke the payments theory. He concluded that the primary purpose of the anticompetitive agreement was the allocation of customers. According to Judge Sam, “[i]t then follows that any conspiratorial agreement ceased to exist once the allocation of customers through the [agreed-upon] Guidelines ceased.” Judge Sam distinguished the heir locators’ agreement from the bid-rigging agreement in Evans, stating, “[T]he evidence in Evans and Morgan shows that the central purpose of the conspiracy was to obtain wrongful proceeds or money. While the Indictment here mentions the payment of proceeds, Ind. ¶¶ 11 (h), (i), the central purpose of the conspiracy charged was not ‘economic enrichment.’” Judge Sam found, without even a hearing or trial, that the “central purpose” of the heir locators’ allocation agreement was not “economic enrichment.” The statute of limitations, therefore, expired on July 30, 2013, five years after defendant Mannix sent an internal Kemp & Associates email abandoning the allocation agreement.

In our opinion the judge was grasping at straws to distinguish (and extinguish) this case from Evans to avoid application of the payments theory. Payments by allocated heir locator customers seem like payments made on rigged contracts. Since the judge also found this to be a Rule of Reason case, he apparently felt that the agreement on balance was procompetitive–and not designed to generate supra competitive profits. The court’s logic seems to be a real-life application of the “bad facts make bad law” principle. But, there was simply no record on which to base a finding that the payments made and accepted by defendants and their co-conspirators within the statute were merely administrative tasks that “bore no relation to customer allocation.”

A Better Way to Judge The Validity of Using a Payments Theory To Extend the Statute

The Judicial Concern with Prosecutorial Delay

Judge Sam was clearly troubled by the fact that the defendants were indicted in August 2016, several years after the five-year statute of limitations would have appeared to have run on an agreement that was abandoned in July 2008. Moreover, since there was no fixed time when an estate distribution would be finalized, there was no telling when the statute of limitations would begin to run in this type of case. The court noted:

“Additionally, the government has identified 269 allegedly affected estates, the administration of which consisted of a series of ordinary, non-criminal events that could last many years. In contrast, Evans involved the bid for one contract which was bid, granted, completed and fully paid within the two years. [citation omitted] . . .. This arbitrariness is not consistent with the very reasons limitations periods exist in criminal cases.”

In bid-rigging cases, the outer limits of the statute of limitations is at least defined by the length of the contract. But here, as the court noted, the payments theory could extend the statute of limitations for an unknown, and possibly very long time.

2. The “Payments Theory” as a Due Process Violation

A more direct and fair method to address the concern that Judge Sam and other courts may have with an indefinite extension of a statute of limitations is to consider the application of the payments theory as a possible violation of due process. Does extending the statute of limitations for an indefinite and arbitrary period deprive the defendants of due process?

The Supreme Court has recognized that prosecutorial delay may constitute a due process violation but has set an extremely high bar for a would-be successful defendant. In United States v. Marion,[11] the Court held that in order for the Due Process Clause of the Fifth Amendment to require dismissal of an indictment the defendant must show that the pre-indictment delay:

1) caused substantial prejudice to the defendant’s rights to a fair trial; and

2) that the delay was an intentional device to gain tactical advantage over the accused.[12]

There is a critical difference, however, between the facts in Marion and the heir location services case. In Marion there was a three-year delay between the commission of the crime and the charged case. The defendants alleged this delay was a prejudicial due process violation. But, the case was still brought within the statute of limitations. However, where, as here, the application of a payments theory leads to an arbitrary and indefinite extension of the statutorily set limitations period, Marion can be distinguished. We suggest it would be appropriate to apply a different/lesser test in this case. The near-impossible-to-meet prong of showing that the prosecution intentionally engaged in delay tactics to gain an advantage should be dropped. Instead, the defendants should be required to make the Marion showing of substantial prejudice suffered by the application of the payments theory. A showing of substantial prejudice would require for example a witness’ death or illness, loss of physical evidence, or a witness who was once available is now not available; i.e., something more than a general allegation that memories fade with time.

Another aspect of due process that can arise in payments theory cases, and may be what really troubles courts, is that an individual who is the subject or target of a criminal antitrust investigation is often without a job and can find it difficult to get one while possible legal charges hang over his or her head. A company may also suffer negative financial consequences while a “cloud of suspicion” from a grand jury investigation lingers. Being a subject/target of an antitrust criminal investigation is an incredibly stressful and expensive ordeal. If this status is going to continue, perhaps indefinitely, past the traditional statute of limitations, there should be a very good reason. Depending on the circumstance, a judge, like Judge Sam, may find that the delay in bringing a case was a due process violation of the defendants’ property rights—the right to earn a living.

We also suggest, however, that if the defendant can make a showing of substantial prejudice, the government should have the opportunity to explain why there was a need to resort to a payments theory. Was the crime or industry investigated very complex? Did the subjects themselves stonewall the investigation and cause delays? Did the defendants successfully conceal the conspiracy until very near the typical running of the statute? If the government has a satisfactory explanation of why it has resorted to the payments theory, and especially if the defendant’s conduct during the investigation contributed to the delay, then the court should find no due process violation.

The due process analysis we are suggesting is, of course, a deviation from the two-step test the Supreme Court established in Marion, but it is based on a valid distinction from Marion—but for the payments theory, the heir locators’ indictment is barred. A balancing of the prejudice to the defendant versus the government’s need to use the payments theory, is a more appropriate way for a court to decide whether a case is time-barred than by finding that the ultimate goal of a customer allocation scheme was not economic enrichment.

Some Thoughts on the Case as Former Prosecutors

Another benefit of a due process analysis is that it would help explain why the government brought a case that is facially so far out of the statute of limitations. One might conclude, and perhaps Judge Sam did, that the government was simply negligent, and the defendants should not bear the cost of that negligence. After all, the allocation agreement itself was in the form of written “Guidelines,” and the directive ending the “formal” agreement was in a July 2008 email. The defendants further allege that two disgruntled former Kemp & Associates employees (and potential witnesses) first approached the Antitrust Division in 2008 or 2009. By all appearances, this seems like a relatively easy conspiracy to “uncover” and prove, so why did the Antitrust Division wait until it had to rely on a payments theory to bring an indictment?

As former prosecutors we can speculate—and it is just speculation– as to why the case was brought using a payments theory to extend the statute. One possibility that comes to mind is that the government believes that the conspiracy was not abandoned in July 2008. Perhaps the government has evidence that additional customers were allocated after July 2008 and that the conspiracy in fact continued until the date the defendants received the subpoenas. Was the Mannix email withdrawing from the conspiracy just a cover and the allocation actually continued “underground?” The government may simply have found it expedient to go with the payments theory rather than disprove the withdrawal email beyond a reasonable doubt. This, of course, is just speculation–there may be other valid reasons why a payments theory was necessary. But, often the public facts do not tell the entire story. The Antitrust Division brought a case that appeared to be a straightforward per se customer allocation agreement and used the well accepted payments theory to bring the case within the statute of limitations. Without a trial or a record of any sort, there is no way to tell whether this was a sound exercise of prosecutorial discretion or not.[13]

The Tenth Circuit may reverse Judge Sam on the statute of limitations issue, in which case the rule of reason versus per se issue will take center stage. Or the appeals court may agree with Judge Sam and limit the payments theory to situations, like Evans, where there is a fixed contract performance time that limits the payments theory extension of the statute of limitations. But, even in this situation, contracts typically have delays, so the idea of a “fixed contract time” may be somewhat illusory. While it is not the law currently, our suggestion is that rather than have courts chip away at the legally sound payments theory based on dubious distinctions, defendants should challenge, and courts should assess the fairness of, the government’s use of the payments theory on the basis of due process; i.e., balancing the harm to the defendants against the justification offered by the government for relying on this theory to extend the statute.

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[1] Bob Connolly is a partner with GeyerGorey LLP. He is the former chief of the Antitrust Division’s Philadelphia Field Office and served for 34 years in the Antitrust Division. He publishes a blog, Cartel Capers.

Karen Sharp is a former trial attorney with the DOJ Antitrust Division, where she investigated and prosecuted national and international antitrust matters for 25 years. She also served as a special assistant United States attorney in the Eastern District of California. Most recently she was counsel for Wilson Sonsini Goodrich & Rosati in San Francisco. Ms. Sharp can be reached at Sharpkj100@gmail.com.

[2] United States v. Kemp & Associates, Inc., et al., No. 2:16-cr-00403 (D. Utah Aug. 17, 2016) (David Sam J.)16-

[3] The indictment can be found on the Antitrust Division’s website at https://www.justice.gov/atr/file/887761/download.

[4] Judge Sam’s memorandum opinion is linked at Law 360, Aug. 29, 2017, Antitrust Charges Against Heir-Tracker Co. Dismissed, available at https://www.law360.com/articles/958574/doj-antitrust-charges-against-heir-tracker-co-dismissed. It can also be found here JudgeSamSOLOrderandMemorandum.

[5] Opening Brief for the United States, (corrected) (filed January 3, 2018), available at https://www.justice.gov/atr/case-document/file/1020466/download.

[6] The defendants’ brief is linked at Law 360, February 5, 2018, Heir-Tracking Firm Urges 10^th Circ. to Refuse Antitrust Case, available at https://www.law360.com/competition/articles/1009042/heir-tracking-co-urges-10th-circ-to-refuse-antitrust-case. It can also be found here defendants’ kemp-brief.

[7] United States v. Evans & Associates Construction Co., 839 F.2d 656 (10th Cir. 1988).

[8] Id. at 661.

[9] Id. (quoting United States v. Northern Improvement Co., 814 F.2d 540 (8th Cir. 1987)).

[10] United States v. Morgan, 748 F.3d 1024, 1036-37 (10th Cir. 2014).

[11] United States v. Marion, 404 U.S. 307 (1971).

[12] Id. at 324.

[13] The Antitrust Division already had a significant setback on the “payments theory” in United States v. Grimm, 738 F.3d 498 (2d Cir. 2013), a case where the jury returned guilty verdicts for fixing of municipal bonds. The last bond fixed was outside the five-year statute of limitations, but payments on the fixed bonds could extend over the life of the bonds—up to thirty years. The Second Circuit could not accept this extreme extension of the statute of limitations and reversed the convictions ruling that a “[criminal] conspiracy ends notwithstanding the [later] receipt of anticipated profits where the payoff merely consists of a lengthy, indefinite series of ordinary, typically noncriminal, unilateral actions.” Id. at 502 (quotation marks, ellipses, and brackets omitted).

Concurrences 2018 Antitrust Writing Awards Voting

February 7, 2018 by Robert Connolly

Concurrences is conducting voting for its 2018 Antitrust Writing Awards. There were nominations for more than 600 papers. The Awards Editorial Committee selected for voting:

92 academic articles
134 business articles
24 soft laws

You can vote here. The deadline for voting has been extended to Friday, February 16. Check out the Awards website. There are many great articles on a wide variety of subjects and all of the shortlisted articles are temporarily available for free.

Results will be announced at the Gala Dinner on Tuesday, April 10, in Washington, DC, the night before the ABA Spring Meeting. Bill Kovacic and Andrew Finch, among others, will give remarks and present the awards.

Registration is available here on the dedicated Eventbrite page.

Thanks for reading.

An Antitrust Lawyer’s Guide to Machine Learning (Guest Post by Ai Deng PhD.)

December 6, 2017 by Robert Connolly

Below is a post by valued guest contributor, Ai Deng, PhD. of Bates White Economic Consulting.

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There has been growing interest in the legal community in artificial intelligence (AI), and more specifically in machine learning (ML). This recent interest in AI is at least in part driven by concerns about algorithmic collusion, i.e., the possibility that computer algorithms could ultimately collude on their own, without human facilitation.

There is no question that the antitrust community is largely playing catch-up when it comes to the technical subject matters of AI and ML. As the Acting Chair of the Federal Trade Commission Maureen K. Ohlhausen noted, “The inner workings of these tools are poorly understood by virtually everyone outside the narrow circle of technical experts that directly work in the field.”

While there is no point to antitrust attorneys understanding the nuts and bolts of AI and ML technology, a basic understanding is necessary to better understand and assess the implications of the AI/ML research on antitrust and related legal and economic issues. That is the motivation behind my latest article. Through a series of simple examples, I introduce some fundamental concepts in ML. Along the way, I also discuss a wide variety of ML applications in the law and economics field. I conclude with a brief discussion of the hot topic of algorithmic collusion.

You can download the paper here https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3082514

As always, I appreciate your thoughts and comments. You can reach me at ai.deng@bateswhite.com or connect with me on LinkedIn [here].

Ai Deng, PhD

Principal

direct: 2022161802 | fax: 2024087838

1300 Eye Street NW, Suite 600, Washington, DC 20005

ai.deng@bateswhite.com

BATESWHITE.COM