Federal Price Fixing Attorney Michael J. Petro

Federal price-fixing investigations can expose business owners, corporate executives, employees, and companies to serious criminal consequences. These cases often involve extensive business records, electronic communications, cooperating witnesses, grand jury subpoenas, and complex questions concerning whether competitors actually entered into an unlawful agreement.

Federal price-fixing attorney Michael J. Petro represents individuals and businesses facing federal criminal investigations and charges involving price-fixing, bid-rigging, market allocation, and other alleged antitrust violations.

With more than 35 years of federal criminal defense experience, Attorney Petro represents clients in federal investigations, grand jury proceedings, plea negotiations, trials, sentencing, and appeals.

A federal antitrust investigation should be taken seriously from its earliest stages. Conduct that appears suspicious to investigators does not necessarily establish a criminal agreement, and the government must prove the elements of a criminal antitrust offense beyond a reasonable doubt.

What Is Federal Price Fixing?

Price fixing generally involves an agreement among competitors concerning the prices they will charge for goods or services.

The United States Department of Justice Antitrust Division investigates and prosecutes criminal antitrust violations under the Sherman Antitrust Act.

Price fixing does not necessarily require competitors to agree upon one specific price.

An alleged agreement may involve competitors agreeing to:

• Charge the same price
• Raise prices together
• Establish minimum prices
• Eliminate or limit discounts
• Use an agreed pricing formula
• Coordinate fees or surcharges
• Maintain particular price levels
• Coordinate other terms affecting price

The critical issue in a criminal price-fixing prosecution is generally whether the government can prove the existence of an unlawful agreement and the defendant’s knowing participation in that agreement.

The Sherman Act and Criminal Price Fixing

Section 1 of the Sherman Act, 15 U.S.C. § 1, prohibits certain agreements that restrain interstate or foreign commerce.

The Department of Justice prosecutes certain agreements among competitors as criminal violations, including traditional forms of:

• Price fixing
• Bid rigging
• Customer allocation
• Territorial allocation
• Market allocation

A criminal Sherman Act prosecution can be brought against individuals as well as corporations.

The existence of competitors in the same market, similar prices, communication between businesses, or changes in pricing does not, by itself, answer whether a criminal agreement existed.

The evidence concerning the alleged agreement must be carefully examined.

What Must the Government Prove in a Criminal Price-Fixing Case?

A criminal antitrust case requires the government to prove the elements of the charged offense beyond a reasonable doubt.

In a Section 1 criminal prosecution, important issues include whether:

• A conspiracy or agreement was knowingly formed
• The defendant knowingly joined the alleged conspiracy
• The alleged agreement affected interstate or foreign commerce or occurred within the flow of that commerce

The existence of an agreement is therefore a central issue.

Federal prosecutors may attempt to establish an agreement through direct or circumstantial evidence.

The defense should examine what the evidence actually proves rather than accepting the government’s characterization of ordinary business conduct as criminal collusion.

Parallel Pricing Does Not Automatically Establish Price Fixing

Competitors sometimes charge similar prices for legitimate reasons.

Businesses operating in the same market may face the same costs, suppliers, economic conditions, customer expectations, and competitive pressures.

As a result, similar pricing behavior does not necessarily mean that competitors entered into a criminal price-fixing agreement.

The critical distinction is between independent business decisions and an agreement among competitors to restrain competition.

A federal price-fixing defense may therefore require careful examination of the economic circumstances, communications among competitors, internal business records, pricing history, and evidence concerning how pricing decisions were actually made.

Evidence in Federal Price Fixing Investigations

Federal antitrust investigations can involve enormous amounts of documentary and electronic evidence.

Investigators may examine:

• Emails
• Text messages
• Telephone records
• Messaging applications
• Pricing records
• Internal memoranda
• Meeting calendars
• Customer records
• Sales information
• Bid documents
• Contracts
• Financial records
• Travel records
• Trade association activities
• Communications among competitors
• Computer and mobile phone data

The government may attempt to use individual communications as evidence of a broader conspiracy.

Those communications should be evaluated in context.

Communication between competitors is not automatically evidence of price-fixing. The government must establish the connection between the evidence and the alleged criminal agreement.

Grand Jury Investigations

Federal antitrust investigations frequently involve the federal grand jury.

The Department of Justice may issue grand jury subpoenas seeking business records, electronic communications, financial information, or testimony.

A subpoena can request years of corporate records and communications.

Receiving a grand jury subpoena does not necessarily mean that the recipient will be criminally charged.

However, the recipient should determine whether the government considers the person or company a witness, subject, or target and carefully evaluate the legal obligations created by the subpoena.

Attorney Petro represents individuals and businesses during federal investigations and grand jury proceedings.

Individuals seeking additional information can review Attorney Petro’s Investigations and Grand Jury page.

Search Warrants in Antitrust Investigations

Some federal antitrust investigations involve search warrants.

Federal agents may seek authorization to search:

• Corporate offices
• Residences
• Computers
• Mobile phones
• Email accounts
• Electronic storage
• Business records
• Other locations containing potential evidence

Search warrants must comply with the Fourth Amendment.

Defense counsel should examine whether the warrant was supported by probable cause, whether it adequately described the places and items to be searched, and whether agents remained within the lawful scope of the warrant.

Evidence obtained through an unconstitutional search may be subject to a motion to suppress when permitted by law.

Bid Rigging

Bid rigging is another type of criminal antitrust conduct prosecuted by the Department of Justice.

Bid rigging generally involves an agreement among competitors concerning the submission of bids.

Allegations may involve competitors agreeing:

• Which company will submit the winning bid
• That other companies will submit intentionally higher bids
• That certain competitors will not bid
• To rotate winning bids
• To divide contracts or customers
• To coordinate bidding terms

Government contracting and public procurement can receive particular scrutiny because collusion can affect taxpayer-funded purchases and projects.

A bid-rigging investigation may involve procurement records, bidding histories, communications among competitors, cooperating witnesses, and economic evidence.

Market and Customer Allocation

Federal antitrust prosecutions may also involve allegations that competitors agreed not to compete for particular customers, territories, contracts, or markets.

For example, prosecutors may allege that competitors agreed to divide:

• Geographic territories
• Particular customers
• Types of customers
• Contracts
• Products
• Services
• Business opportunities

As with price fixing, the existence of a criminal agreement is critical.

Businesses may independently decide where to operate and which customers to pursue. The government must prove that the challenged conduct resulted from an unlawful agreement rather than independent business decisions.

DOJ Antitrust Division Investigations

The United States Department of Justice Antitrust Division is responsible for federal criminal enforcement of the antitrust laws.

The Division investigates and prosecutes individuals and corporations suspected of criminal antitrust conduct.

An investigation may begin through:

• A cooperating individual
• A cooperating company
• A leniency application
• Customer complaints
• Competitor complaints
• Procurement data
• Another federal investigation
• Whistleblowers
• Electronic evidence
• Information obtained through subpoenas
• Other law enforcement agencies

Because investigations may develop before the target knows they exist, obtaining counsel early can be particularly important.

The DOJ Antitrust Leniency Program

The Antitrust Division maintains a leniency program that can provide significant benefits to qualifying corporations or individuals who voluntarily disclose participation in criminal cartel activity and satisfy the program’s requirements.

Timing can be extremely important.

A person or company considering voluntary disclosure should obtain legal advice before communicating with the government.

Whether leniency is available and whether seeking it is advisable depends upon the particular circumstances.

The decision can affect not only the company but also executives and employees.

Individual Criminal Liability

Corporate executives and employees can face individual criminal liability for participating in price fixing or other criminal antitrust agreements.

A corporation and its employees do not necessarily have identical interests.

During an investigation, important questions can include:

• Who participated in relevant meetings
• Who communicated with competitors
• Who made pricing decisions
• Who approved particular transactions
• What each individual knew
• Whether an individual actually joined the alleged agreement
• Whether employees were acting independently
• Whether witnesses are cooperating with prosecutors
• Whether corporate and individual interests have diverged

An executive or employee contacted during a federal antitrust investigation should consider seeking independent legal representation.

Cooperating Witnesses

Federal antitrust prosecutions can rely heavily on cooperating witnesses.

A cooperating witness may be an executive, employee, competitor, or other participant who has agreed to provide information to the government.

The witness may have significant incentives to cooperate.

Those incentives can include avoiding prosecution, obtaining leniency, receiving consideration at sentencing, or reducing potential corporate penalties.

The defense should evaluate the witness’s motives, prior statements, communications, role in the alleged conduct, and whether independent evidence supports the witness’s account.

Statements to Federal Investigators

Federal agents may request interviews during an antitrust investigation.

A person should not assume that voluntarily answering questions will prevent criminal charges.

Investigators may already possess emails, text messages, business records, cooperating witness statements, and other evidence before requesting an interview.

Statements made during an interview can later be used as evidence.

Additionally, knowingly making a materially false statement to federal investigators can potentially create separate criminal exposure.

Individuals contacted by federal investigators should consider obtaining legal advice before participating in a substantive interview.

Price Fixing in Online Markets

Price-fixing investigations are not limited to traditional businesses.

Modern federal investigations can involve online sellers, digital marketplaces, algorithms, electronic communications, and pricing software.

The government may investigate whether sellers allegedly coordinated prices through:

• Email
• Text messages
• Messaging applications
• Online seller communications
• Shared pricing information
• Pricing algorithms
• Automated pricing software
• Other electronic methods

The use of technology does not eliminate the government’s burden to prove the elements of a criminal antitrust offense.

The defense should distinguish between independently using similar technology or responding to the same market conditions and actually entering into an unlawful agreement with competitors.

Price Fixing and Amazon Sellers

Online marketplaces such as Amazon can generate antitrust issues when independent sellers compete to sell identical or similar products.

Federal investigators may examine communications between sellers, pricing histories, seller accounts, and electronic records when investigating possible collusion.

An allegation of price fixing can also create significant business consequences separate from the criminal investigation.

However, the existence of similar prices among Amazon sellers does not, by itself, establish a criminal agreement.

The evidence must establish the defendant’s knowing participation in the alleged conspiracy.

Federal Antitrust Plea Negotiations

A person charged with a federal antitrust offense may eventually need to evaluate a proposed plea agreement.

Important considerations may include:

• The offense charged
• The government’s evidence
• Individual versus corporate exposure
• Cooperation requirements
• Sentencing consequences
• Financial penalties
• Restitution
• Factual stipulations
• Appeal waivers
• Related investigations
• Potential collateral consequences

The decision whether to plead guilty belongs to the defendant after consultation with counsel.

Individuals considering a federal plea agreement should review Attorney Petro’s Federal Plea Negotiations page.

Trial Defense in a Price Fixing Case

A federal price-fixing trial may center on whether the government can prove an actual criminal agreement.

Potential trial issues can include:

• Whether an agreement existed
• Whether the defendant knowingly joined the agreement
• Whether communications have an innocent explanation
• Whether pricing decisions were independently made
• Whether cooperating witnesses are credible
• Whether economic evidence supports the government’s theory
• Whether alleged conspirators actually competed with each other
• Whether the government has taken documents or communications out of context
• Whether the alleged agreement affected interstate or foreign commerce

Attorney Petro represents defendants at federal criminal trials and has experience challenging the government’s evidence before a jury.

Federal Sentencing in Price Fixing Cases

A federal antitrust conviction can result in substantial sentencing consequences.

Criminal violations of the Sherman Act can expose individuals to imprisonment and significant financial penalties.

Federal sentencing may involve consideration of the United States Sentencing Guidelines, the volume of commerce affected by the alleged conduct, the defendant’s role, cooperation, acceptance of responsibility, criminal history, and other factors.

The sentencing court must also consider the statutory sentencing factors under 18 U.S.C. § 3553(a).

Individuals facing federal sentencing should review Attorney Petro’s Federal Sentencing Guidelines page.

Federal Antitrust Appeals

A federal antitrust conviction or sentence may present appellate issues depending upon what occurred in the district court.

Potential issues may involve:

• Jury instructions
• Sufficiency of the evidence
• Evidentiary rulings
• Admission of co-conspirator statements
• Search and seizure issues
• Statutory interpretation
• Sentencing Guideline calculations
• Procedural sentencing errors
• Other preserved legal issues

Individuals considering a federal appeal should review Attorney Petro’s Federal Criminal Appeals Attorney page.

How a Federal Price Fixing Attorney Can Help

Federal antitrust investigations can involve complicated legal, factual, economic, and evidentiary issues.

Attorney Petro’s representation may include:

• Representing individuals and businesses during DOJ investigations
• Responding to federal grand jury subpoenas
• Communicating with the Antitrust Division
• Reviewing search warrants
• Evaluating electronic evidence
• Reviewing competitor communications
• Analyzing pricing and bidding records
• Evaluating cooperating witness testimony
• Determining whether evidence establishes an agreement
• Evaluating individual and corporate exposure
• Advising concerning government interviews
• Evaluating potential leniency issues
• Negotiating with federal prosecutors
• Preparing for a federal criminal trial
• Challenging Sentencing Guideline calculations
• Developing sentencing mitigation
• Representing clients at sentencing
• Evaluating potential appellate issues

Every federal antitrust investigation requires an individualized defense based upon the evidence, the alleged agreement, the participants, and the applicable federal law.

Experienced Federal Price Fixing Attorney

Michael J. Petro has more than 35 years of criminal defense experience representing individuals facing serious federal investigations and criminal charges.

Federal price fixing cases can involve complicated business relationships and extensive documentary evidence. The fact that competitors communicated or charged similar prices does not eliminate the government’s obligation to prove, beyond a reasonable doubt, a criminal agreement and the defendant’s knowing participation.

If you or your business has received a federal grand jury subpoena, been contacted by the Department of Justice Antitrust Division, or become the subject of a federal price-fixing investigation, an experienced federal price-fixing attorney can evaluate the allegations, evidence, potential exposure, and available defenses.

Contact Michael J. Petro to discuss your federal antitrust case.