Comments to the U.S. Sentencing Commission Concerning Antitrust Fines

Abstract

This Comment was submitted to the US Sentencing Commission on behalf of the American Antitrust Institute. It makes three important points, all of which concern the US Sentencing Commission's Antitrust Guidelines' cartel overcharge presumption. First, the evidence demonstrates there currently is significant underdeterrence of price fixing and other anticompetitive forms of collusion. Second, the general approach to calculating cartel fines embodied in the US Sentencing Commission Guidelines, under which the enforcers and ultimately the courts calculate antitrust fines based upon a very specific presumed overcharge, is sound and in the public interest. Third, the 10% cartel overcharge presumption in the Guidelines is much too low. The best evidence demonstrates that the Commission should double it, to 20%. This would conform it more closely to the median or average overcharge likely to result from collusion, yet still be a conservative resolution of the issues. Raising the 10% presumption should increase the overall level of cartel deterrence which will benefit consumers greatly.