Corporate Compliance and the Antitrust Agencies' Bi-Modal Penalties

Abstract

Mine is a singularly daunting assignment: to discuss individual compared with entity penalties as tools for encouraging corporate law compliance, to comment on the relationship between monetary payments as compensation and deterrence, and to reflect on the role of the private attorney general in the year 2000. In Part II, I briefly discuss some of the principal issues debated by corporate compliance authorities, including some of the issues relevant to the Federal Trade Commission (FTC) and the Justice Department's Antitrust Division. In Parts III and IV, respectively, I reflect on the deterrence provided by those agencies, and on their approach to corporate compliance issues. In Part V, I consider the role of private litigation as a supplement or complement to federal enforcement of competition and consumer-protection laws. Finally, in Part VI, and again focusing on competition and consumer protection, I discuss some modest ways in which our system for deterring corporate wrongdoing could be improved. The antitrust agencies employ penalties that are at once of increasing severity and strikingly bi-modal. Defendants in some actions by either agency may face extremely unpleasant consequences for their wrongdoing, while defendants in other actions may pay little, if any, price. One of the special roles of private litigation is to supplement agency enforcement, especially where otherwise there would be no significantly adverse consequences. Other roles are to identify cases of wrongdoing, to compensate victims, to help legal doctrine evolve, to provide an institutional safety-valve, and to preserve the integrity of an increasingly regulatory system of enforcement. That system could be improved, I suggest in Part VI, were the agencies to recognize the externality benefits of litigation, to develop middle ground civil deterrence, to continue