Quarterly Cartel Catch-Up – New Year, New Administration

The new year marks the transition from the Biden administration and its whole-of-government approach to antitrust enforcement, to the return of President Trump. To spearhead his administration’s antitrust enforcement efforts, President Trump appointed Andrew Ferguson to lead the Federal Trade Commission (FTC) and Gail Slater to head the Department of Justice (DOJ)’s Antitrust Division (the Division). Both appointees appear eager to continue aggressive antitrust enforcement, especially against Big Tech. Omeed Assefi has been named acting assistant attorney general at the Division until Ms. Slater has been confirmed by the Senate to lead the agency. Among other things, the new administration will inherit the Division’s civil case against RealPage, Inc. related to its algorithmic pricing software. Although initially investigated as a criminal matter, the Division ultimately filed a civil antitrust lawsuit, despite allegations of direct communications among competitors. Other jurisdictions are following suit; Canadian and Brazilian enforcement agencies have launched similar investigations into the use of algorithmic pricing tools.

As usual, the Division’s Procurement Collusion Strike Force (PCSF) continued to secure indictments and obtain new guilty pleas, fines, and sentences. In a speech commemorating the PCSF’s fifth anniversary, now-former head of the Division Jonathan Kanter touted the PCSF’s impact on curtailing unnecessary government spending, crediting it with 145 criminal investigations and over 60 convictions for crimes involving over $575 million worth of government contracts. However, a counter-balance to this success was the Supreme Court’s decision not to hear arguments on the Division’s appeal of its Fourth Circuit loss in Brewbaker, which may hamstring the Division’s ability to bring criminal charges for antitrust violations in the future. Since this Strike Force was created during the first Trump administration, it seems likely that it will remain a priority area of enforcement in Trump Administration 2.0.

Around the world, international competition enforcers continue to ramp up their dawn raid efforts. In November 2024, the German Federal Cartel Office carried out dawn raids at the facilities of seven European tissue paper manufacturers in connection to price-fixing investigations. Additionally, competition authorities in Canada, Mexico, New Zealand, and the UK are cracking down on anticompetitive behavior, which signals a broader trend of enhanced enforcement efforts around the world in 2025.

These updates and more are in this latest edition of “Quarterly Cartel Catch-Up” (QCC).

President Donald Trump Taps New FTC and Division Heads; Division Combines Two Criminal Antitrust Sections

Key Point: President Donald Trump’s nominations of Andrew Ferguson to lead the FTC and Gail Slater, former counsel to Vice President Vance, to head the DOJ Antitrust Division signal a change in approach but continued aggression on antitrust enforcement.

President Donald Trump selected current FTC Commissioner Andrew Ferguson to chair the FTC and succeed Lina Kahn. Ferguson assumes leadership of an agency engaged in numerous lawsuits and investigations targeting Big Tech, among other sectors.

For the Division, Trump tapped Gail Slater, a former economic advisor to Vice President Vance, special assistant during the first Trump administration on telecommunications and cybersecurity issues, and general counsel of Roku. Like Ferguson, Slater is expected to continue the Division’s Big Tech and monopolization cases. And similar to the first Trump administration, Slater is expected to be aggressive on merger enforcement, even though she may be more selective in the cases she chooses to bring and grounded on more traditional antitrust considerations. 

In the criminal program, the Division announced the merger of the Washington Criminal I and Washington Criminal II Sections, now called the Washington Criminal Section. Ryan D. Tansey, former chief of the Criminal I section, is serving as chief of the combined section. These criminal offices have secured criminal convictions and fines in some of the largest international and domestic cartel prosecutions in the Division’s history. Now, as a consolidated section, the office will be positioned to focus time and resources on new and current investigations.

U.S. and EU Cartel Enforcement Officials Tout Rise in Leniency Applications

Key Point: Remarks by Manish Kumar, then-Deputy Assistant Attorney General (DAAG) for Criminal Enforcement, and Maria Jaspers, Senior EU Cartel Enforcer, indicate that leniency applications are taking center on the international stage.

On October 9, 2024, while speaking on an ABA panel, Kumar described the Division as thriving and highlighted an increase in leniency applications as corporate entities are “losing the race” to report anticompetitive conduct against fellow cartelists. Although the Division received criticism in the past for the low numbers of leniency applications, Kumar confirmed a recent uptick in leniency applications as it continues to market the benefits of leniency and the significant protections available to whistleblowers. Kumar suggested that these incentives are working because the Division has recently “received multiple calls related to the same conduct.”

European Commission (EC) enforcers confirmed a similar trend in Europe. Despite an extended period of decline, Maria Jaspers highlighted that the EC has received more leniency applications for the fourth year in a row. According to Jaspers, because the EC sets a high bar for cartelists targeted by agency-initiated investigations to receive immunity, the incentives for companies to report anticompetitive behavior to authorities before an investigation has begun—and to be the first to do so—are only increasing.

The trends in the United States and the EU mark a gradual shift as antitrust agencies shift their focus on incentivizing accountability.

Competition Authorities Around the Globe Continue to Set New Precedents in Cartel Enforcement

Key Point: As international competition authorities continue to ramp up enforcement efforts, they are using new authorities, seeking more aggressive penalties, and dusting off old enforcement priorities.

This quarter saw the resolution of several cases across the world that set new precedents for cartel-related penalties. In Canada, a former engineering firm executive received an innovative 14-month conditional sentence—consisting of seven months of house arrest, a seven-month curfew, and 100 hours of community service—after he pleaded guilty to dividing the market for municipal infrastructure contracts among competitors.

In New Zealand, a company director who pleaded guilty to rigging bids for publicly funded construction projects received the nation’s first-ever criminal cartel penalty: six months of community detention, 200 hours of community service, and a fine of approximately $280,000. These charges were the first issued after New Zealand’s criminal cartel regime was enacted in April 2021.

Last quarter, Mexico’s COFECE signaled its intent to utilize new enforcement authorities, which we predicted would bolster COFECE’s scrutiny of the pharmaceutical and healthcare sectors. In October 2024, COFECE followed through on those signals and filed its first-ever class action, a precedent-setting case seeking approximately $100 million from three drug distributors and an industry association for their alleged involvement in a decade-long cartel to limit supplies and fix prices of medicines sold to pharmacies. This novel claim is likely part of a larger COFECE strategy to increase the agency’s public visibility in light of ongoing debates in the Mexican Congress regarding COFECE’s long-term future—including the proposed bill to dissolve the agency that recently passed in the Mexican Senate.

In the UK, the Competition and Markets Authority (CMA) recently announced an investigation into several construction companies that allegedly colluded to secure lucrative roofing contracts for UK schools. These contracts are government-funded, making the investigation the CMA’s first inquiry into public sector procurers after decades of focus on the private sector. In a speech on December 5, 2024, the CMA’s Executive Director highlighted that companies are set to face tougher sanctions under the UK’s new procurement regime, which enters into force in February 2025 and could ban bid-rigging companies from bidding on government tenders for up to five years.

However, the CMA suffered a recent setback in its investigation into the construction-chemicals industry. On October 17, 2023, CMA launched an investigative probe into chemicals used in the construction industry, but announced on January 23, 2025, that the regulatory agency no longer found the investigation to be an administrative priority. This decision comes on the tail end of CMA chair, Marcus Bokkerink, being forced out of the regulatory agency after political pressure for the agency to focus more on driving economic growth.

DOJ Releases New Guidelines for Assessing the Effectiveness of Corporate Compliance Programs

Key Point: The Division updated compliance guidelines for assessing the effectiveness of corporate compliance programs, which are designed to be consistent with the Division's September 2024 guidance on the evaluation of corporate compliance programs.

In November 2024, the Division revised its 2019 Evaluation of Corporate Compliance Program Guidelines. Placing a greater emphasis on artificial intelligence (AI) technology, information sharing, and document preservation, the updated guidelines reflect key themes that have come up in recent antitrust investigations and Biden administration enforcement actions.

Companies should consider the following key changes when reviewing their compliance programs:

1. Civil and Criminal Matters: The updated guidelines now explicitly apply to charging decisions in both civil and criminal enforcement matters, whereas they previously only applied to criminal matters.
2. Culture of Compliance: The updated guidelines place a larger emphasis on a culture of compliance at all levels of the company, including middle-level managers. Prosecutors are encouraged to examine the extent to which company leadership is committed to “good corporate citizenship.” Prosecutors may also consider whether senior leadership has “tolerated antitrust violations in pursuit of new business, greater revenues, hiring or retaining employees, maintaining or increasing market share, or maintaining customers, territories, or markets.”
3. AI & Algorithmic Pricing Technology: The updated guidelines focus on the role of AI and algorithmic revenue management software as a potential antitrust risk. Prosecutors are encouraged to look at what steps companies have taken to mitigate the use of AI and how quickly a company can “detect and correct decisions made by AI or other new technologies.” Enforcers will also examine whether a company’s compliance personnel are involved in the deployment of AI technology. Finally, the updated guidelines ask prosecutors to consider whether a company uses its compliance program to monitor the use of electronic communication and other sources of information to detect antitrust violations such as price fixing and bid rigging.
4. Document Preservation: The updated guidelines reflect a new understanding of the risk of ephemeral messaging. Prosecutors will evaluate a company’s guidelines regarding the preservation or deletion settings on electronic employee communication channels to ensure that appropriate document preservation is in place.
5. Information Sharing: The updated guidelines include new language on what constitutes effective compliance training for company personnel. Companies should seek to teach personnel that “competitor communications could signal an antitrust violation if they are not part of a legitimate joint venture or other procompetitive or competitively neutral collaboration.” In addition, employees should understand the difference between legitimate collaboration versus problematic communications involving “an exchange of competitively sensitive business information or future pricing information.”
6. Confidential Reporting Structures: The updated guidelines recommend more robust confidential reporting structures to ensure that whistleblowers are protected. Therefore, companies should consider whether any current non-disclosure agreements act as a potential deterrent to whistleblowers. In addition, companies are advised to implement an anti-retaliation policy and train their staff regarding the protections provided under the Criminal Antitrust Anti-Retaliation Act.
7. Remediation: The updated guidelines indicate that prosecutors should consider the thoroughness of a company’s remedial efforts upon discovering an antitrust violation. Specifically, prosecutors may ask whether a program effectively educates employees on the ramifications of document destruction and obstruction of justice.

DOJ and FTC Withdraw Antitrust Guidelines for Collaboration Among Competitors, Creating More Uncertainty

Key Point: After the withdrawal of the Collaboration Guidelines, businesses considering collaborations with competitors no longer have a north star guiding them to safer waters.

On December 11, 2024, the FTC and the Division jointly announced the withdrawal of the Antitrust Guidelines for Collaboration Among Competitors (the Collaboration Guidelines) because they “no longer provide reliable guidance about how enforcers assess the legality of collaborations involving competitors.”

Issued in April 2000, the Collaboration Guidelines detailed the agencies’ perspectives for evaluating competitor collaborations under the antitrust laws and identified “safety zones” for competitor collaborations that the agencies would not challenge. The agencies reasoned that some parts of the Collaboration Guidelines rely “on outdated and withdrawn policy statements” and therefore “risk creating safe harbors that have no basis in federal antitrust statutes.”

The FTC approved the withdrawal of these guidelines by a 3-2 vote, with Commissioners Andrew Ferguson and Melissa Holyoak dissenting. Commissioner Alvaro M. Bedoya issued a statement in support of the decision, and Commissioners Ferguson and Holyoak each issued separate dissenting statements. Among other things, Commissioner Ferguson—now President Trump’s chair of the FTC—criticized “the Commission’s withdrawal of these antitrust guidelines a mere 40 days before the country inaugurates a new President.” Commissioner Holyoak added that “[t]he Majority’s decision to withdraw the 2000 Antitrust Guidelines for Collaborations Among Competitors . . . without providing any replacement guidance, or even intimating plans for future replacement, leaves businesses grasping in the dark.”

But, according to the FTC majority, businesses considering collaborations with competitors should review relevant statutes and caselaw to assess whether their collaboration would violate the law.

Algorithmic Collusion Investigation Updates – As U.S. Criminal Case Closes, Civil Enforcement in the United States and Around the Globe Pick Up Steam

Key Point: Although DOJ declined to bring a criminal case against RealPage, public and private enforcers worldwide continue to investigate software tools that may facilitate coordination between competitors through civil cases.

In December 2024, RealPage, a provider of rent recommendation software for residential landlords, announced that the Division closed its criminal investigation of pricing practices in the multifamily rental housing industry. However, civil lawsuits targeting algorithmic pricing software providers—including a civil suit against RealPage brought by the Division and several state attorneys general, as covered in prior editions of the QCC—and their customers continue to move forward and grow in the United States and abroad. 

In January 2025, the Division amended its civil complaint (initially filed in August 2024) to add horizontal price-fixing allegations against six major property management companies. Among other things, the amended complaint claims that landlords expressly agreed to share rents, pricing strategies, occupancy rates, and other competitively sensitive information. That same day, the Division also announced that it had entered a civil consent decree with one of the named defendant property managers, Cortland. The consent decree requires Cortland to cooperate with the Division’s investigation and stop using third-party pricing algorithms or otherwise sharing or soliciting competitive pricing information with other landlords.

In December 2024, a federal judge in Seattle rejected a motion to dismiss per se price-fixing allegations against software provider Yardi Systems and its clients. Distinguishing the 2023 ruling in the RealPage civil MDL lawsuit, Judge Lasnik is allowing the per se claims in the Yardi case to proceed because, where there is a horizontal agreement, “the fact that the lessor defendants did not meet as a group but rather used an intermediary, Yardi, to compile their commercially sensitive data and calculate the supracompetitive rental rate each participant would utilize does not preclude the existence of an agreement or change its unlawful nature.”

Meanwhile, the Canadian Competition Bureau confirmed in December 2024 that it has started a preliminary investigation into “algorithmic pricing in the Canadian real estate rental market.” This follows widespread press coverage of a proposed civil class action against RealPage and landlords filed in Ontario Superior Court, as well as pressure from industry minister François-Philippe Champagne and certain MPs to address revelations from the Division’s case and investigate potential price fixing by landlords in Canada using technologies like RealPage’s YieldStar.

In November 2024, Brazil’s competition authority (CADE) began investigating whether an algorithmic pricing tool used by fuel stations is promoting collusion in the Brazilian fuel market. CADE’s press release claims that the developers bragged that their software can “prevent[] individual decision-making by petrol station owners” helping to avoid sharp drops in fuel prices. CADE is also investigating the role of a fuel retailer trade union that may have encouraged its members to adopt the tool. Similar to the position taken by enforcers in the United States and elsewhere, CADE points out that the use of pricing algorithms standing alone is not illegal, but the concern is whether the use of such technology may enable concerted practices that lead to antitrust violations.  

Supreme Court Declines to Review Fourth Circuit’s Brewbaker Decision, Leaving in Place a Troubling Precedent for Bid-Rigging Enforcement

Key Point: The Supreme Court’s refusal to review the Brewbaker decision means that the Division is likely to steer clear of bringing bid-rigging cases in the Fourth Circuit for the foreseeable future, which may hamstring enforcement efforts.

On November 12, 2024, the Supreme Court denied the DOJ’s and Brent Brewbaker’s certiorari petitions in United States v. Brewbaker, leaving intact the Fourth Circuit’s decision overturning the bid-rigging conviction of a former engineering executive. By letting the decision stand, the Division’s ability to bring bid-rigging charges in the Fourth Circuit may be severely limited.

The Division indicted Contech sales manager Brent Brewbaker for rigging bids on numerous contracts with North Carolina’s Department of Transportation (NCDOT) to construct and install aluminum headwalls near roads, bridges, and overpasses. Two of the firms that routinely bid for these contracts—Pomona Pipe Products and Contech Engineered Solutions—also had a supply relationship. Prosecutors alleged that, over a nine-year period, Brewbaker coordinated bids with Pomona so that Pomona would submit a lower bid than Contech, but after winning the contract would then purchase the products from Contech. Between 2009 and 2018, Pomona won almost 400 of these contracts, totaling more than $23.9 million dollars. Brewbaker was convicted on multiple counts of fraud and bid rigging, and sentenced to 18 months in prison. On appeal, the Fourth Circuit upheld his conviction on several fraud counts, but unanimously overturned his bid-rigging conviction.

However, the Fourth Circuit overturned the bid-rigging conviction when it held that companies with a hybrid relationship (both a horizontal/competitor and a vertical/dealer-distributor) could not be the subject of a per se antitrust offense, which is the basis for the Division’s criminal antitrust program. According to the appellate court, this relationship allowed for “possible procompetitive effects” and thus failed to warrant per se treatment. After much consideration, the Division sought review of this decision in the Supreme Court because it claimed that the decision marked a sharp departure from the well-established understanding that any form of bid rigging between competitors is per se illegal. Brewbaker petitioned for the Supreme Court to review as well and questioned the basic premise of criminal antitrust enforcement.

The Supreme Court’s denial of these petitions now hinders the Division’s ability to charge bid rigging in the Fourth Circuit where competitors have a hybrid relationship. By limiting the scope of per se violations in this way, cartelists appear to have, at least at the moment, a “get-out-of-jail-free card” so long as they can point to a vertical relationship, such as distributing each other’s products. To mitigate this risk, the Division is likely to look for alternative venues to charge bid-rigging conduct emanating in this part of the country.

German Cartel Office Raids European Tissue Paper Firms

Key Point: The German antitrust agency’s November 2024 dawn raids of seven European manufacturers of hygienic paper hints at a major enforcement initiative in the coming year.

On November 26, 2024, the German Federal Cartel Office (Bundeskartellamt) carried out dawn raids at the facilities of seven European tissue paper manufacturers in connection with the agency’s investigation into anticompetitive price fixing and volume agreements in the consumer tissue and hygienic paper markets. The agency also searched four private apartments. Finnish manufacturer Metsä Tissue, German manufacturer Sofidel Group, and Swedish manufacturer Essity all confirmed that they were targets of the dawn raids and stated that they are cooperating with German authorities.  

Notably, the German Federal Cartel Office deployed 50 employees to conduct the searches—a significant number considering that only a few hundred staff members total are qualified to be involved in dawn raids—which suggests that the investigation is a major initiative. As competition authorities start to sort through the materials seized during the raids, the investigation of the European tissue paper manufacturers may soon expand and prove to be a major area of scrutiny in 2025. 

Division’s First Criminal Monopolization Trial in Half a Century Postponed

Key Point: Originally scheduled for February 2025, the Division’s first modern criminal monopolization trial has been delayed after several counsel for one defendant withdrew from the case.

The Division will have to wait several months before opening its criminal monopolization trial in the transmigrante services case. After a 2022 announcement that—for the first time in 50 years—it would pursue criminal charges for violations of Section 2 of the Sherman Act, the Division has pursued only a handful of cases.

On October 10, 2024, the Division filed a superseding five-count indictment in one such criminal monopolization case, alleging that defendants in United States v. Martinez conspired to monopolize the transmigrante forwarding industry along the U.S.-Mexico border in Texas through threats of violence against competitors. The indictment also charged a violation of Section 1 for fixing prices and allocating the transmigrante agency services market, as well as charges for extortion and money laundering.

The case was scheduled to go to trial in February 2025 and would have been the first modern criminal monopolization case of its kind to be litigated to a verdict. However, in late December 2024, the court held a hearing about a possible conflict of interest between several of the attorneys representing Carlos Martinez, the alleged ringleader of the conspiracy charged. Shortly after the hearing, several counsel for Martinez withdrew from the matter, which prompted a motion to continue the trial that the judge appeared inclined to grant. Regardless of the length of the delay, it may prompt the parties to consider whether a negotiated resolution short of trial is warranted.

Procurement Collusion Strike Force Stays Busy Heading into Its Sixth Year

Key Point: The PCSF exemplifies the Division’s increasingly aggressive enforcement in the government procurement space.

Last month, the Division celebrated the five-year anniversary of the PCSF. The Division launched the PCSF in November 2019 to pursue anti-competitive conduct impacting government purchasers. In a speech commemorating the anniversary, now-former head of the Division Jonathan Kanter touted the PCSF’s impact on government spending, crediting the PCSF with 145 criminal investigations and over 60 convictions for crimes involving over $575 million worth of government contracts. Kanter also noted that bid rigging in government contracts increases procurement prices by 20% or more and warned that procurement collusion has only grown more sophisticated. 

Kanter’s speech came on the heels of a busy October for the PCSF. On October 2, a ninth defendant—and one of six individual defendants—pled guilty to conspiring to rig bids for asphalt paving contracts in Michigan. On October 17, a concrete company and four of its executives were sentenced for participating in a long-running conspiracy to fix prices, rig bids, and allocate jobs for ready-mix concrete in the Savannah, Georgia area. Argos USA LLC had separately admitted to its role in the conspiracy and entered into a deferred prosecution agreement with the Division back in 2021. Finally, on October 29, the Division secured indictments against six defendants for a scheme to defraud the U.S. government and its intelligence agencies over IT contracts. These were the Division’s first charges in its ongoing investigation into IT manufacturers, distributors, and resellers who sell products and services to government purchasers.

Corporation and Executives Plead Guilty to Stealing Competitor Information as Division Cracks Down on Competitive Process Offenses

Key Point: Division reinforces commitment to non-Sherman Act cases with Siemens Energy pleading guilty and agreeing to pay $104 million penalty and three years of probation for undermining the competitive process.

On September 30, 2024, Siemens Energy, Inc. and four former executives pled guilty to criminal violations related to the misappropriation of confidential competitor information. According to court documents, Dominion Energy, Inc. sought to construct a power plant in Virginia and hosted a closed-bid process soliciting requests for proposals. After the closed bids were submitted, a Siemens account manager coordinated with a Dominion executive to obtain confidential competitor bidding information. The Siemens employee then funneled the information to two Siemens executives, who instructed the Siemens team to resubmit a lower bid—ultimately undercutting the would-have-been winner in the competitive bidding process.

The four former executives pleading guilty received sentences ranging from 21 to 43 months of imprisonment. The length of these sentences is notable, especially compared to recent sentences for Sherman Act violations, and reflect the Division’s heightened interest in protecting the competitive process.