Criminal Enforcement of Section 2 of the Sherman Act: An Empirical Assessment

In early 2022, the new leadership of the Justice Department’s Antitrust Division made waves by announcing that the DOJ would consider bringing criminal cases for monopolization under Section 2 of the Sherman Act. This dramatic change in policy—Section 2 has not been criminally enforced in decades—was first announced in a speech in March by Deputy Assistant Attorney General Richard Powers, asserted again a month later in another speech by Assistant Attorney General Jonathan Kanter, and then confirmed in an updated Antitrust Division Manual released in April.

If the point was to get the attention of the defense bar and the companies they represent, these bombshell announcements succeeded. Defense-oriented law firms rushed to release a slew of client alerts, warning of a “significant departure from modern DOJ criminal antitrust enforcement policy,” and a “surprising” and “significant policy shift” with “far-reaching” implications. And, although the Justice Department has not yet identified possible targets, it is no secret that the Biden administration has ongoing monopolization cases against Google and Facebook, has investigations open as to other Big Tech companies as well, and generally takes the position that Section 2 has been dramatically underenforced and that a reckoning is due.

Whatever the administration’s plans, and whatever the policy considerations of bringing criminal monopolization cases, it is clear that historical precedent will play a considerable role in arguments for and against a renewed regime of criminal enforcement. In response to assertions that criminal Section 2 enforcement would constitute a dramatic break with precedent, the administration answers that criminal monopolization enforcement was once standard practice and that the last several decades of non-enforcement are the aberration. In a June 7, 2022 speech, Deputy AAG Powers defended the possibility of bringing criminal monopolization cases as “‘not a novel idea or theory’” but one that represents a revival of previous agency practice. He added: “Historically, the antitrust division did not shy away from bringing criminal monopolization charges when companies and executives committed flagrant offenses intended to monopolize markets . . . and by my count, the Justice Department has brought over 100 criminal monopolization cases.”

So, what exactly is the historical record on criminal Section 2 enforcement? Surprisingly, there is no source authoritatively compiling the record. In contrast to Mr. Powers’ assertion of over 100 cases, a study in 2002 reported 87 criminal monopolization cases, without providing any significant detail about them. Estimates of when the last criminal monopolization case was brought have varied, with one scholar asserting that “[t]he last major criminal monopolization case the federal government brought was against American Tobacco in 1940,” and other scholars estimating that the last criminal monopolization case (major or not) was brought in 1967, 1969, or 1972. In fact, the Justice Department brought a criminal monopolization case as recently as 1977. According to a study by Richard Posner, the only criminal monopolization jail sentences were between 1925 and 1929. As will be shown, that also is not quite accurate or complete.

This article aims to provide a comprehensive account of the Justice Department’s historical record on criminal Section 2 enforcement. Based on a review of every Justice Department enforcement action reported in CCH’s Trade Regulation Reporter, I have assembled a table of 168 criminal monopolization cases, with the first (against Federal Salt) brought in 1903 and the last (against Braniff Airlines) brought in 1977. That table is included as an online-only appendix.

The raw numbers are not the most important headline. A far more significant question is what sort of criminal monopolization cases the Justice Department historically brought. In particular, were these criminal conspiracy cases of the type that today would still be charged criminally, but only under Section 1 of the Sherman Act, or were these cases involving unilateral exclusionary conduct—cases of the type that the Justice Department has rarely brought even civilly in recent decades (but of which there are hundreds of private cases)? The answer to this question is significant because the Justice Department’s announcement of criminal monopolization charges seems to be aimed at unilateral monopolization offenses rather than as a mere supplement to its anti-cartel Section 1 criminal enforcement. Claims that criminal monopolization enforcement is historically grounded in agency practice thus turn primarily on the Department’s historical practice with respect to unilateral conduct offenses—a topic on which there is scant academic work.

My findings can be summarized briefly as follows: Out of 168 cases in which the Justice Department brought a criminal charge under Section 2, only 20 involved unilateral conduct. In 8 of these cases, the criminal charges were dismissed as to all defendants, or all of the defendants were found not guilty. In the remaining 12 cases, the defendants were found guilty, usually via a nolo contendere plea, and a fine was imposed. The largest fine—$187,000—was imposed on Safeway Stores in 1955 and would be equivalent to about $3 million today. In three cases, a prison sentence was imposed. Two of those cases—United Pacific (1933) and Barrett (1939)—involved crimes of violence. In one curious outlier case in 1973, an individual apparently served one month of prison time for unilateral monopolization not involving violence.

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