Rethinking Antitrust Sanctions Douglas H Ginsburg The 8

Rethinking Antitrust Sanctions Douglas H. Ginsburg The 8 th Annual Baxt Lecture Melbourne Law School 21 June 2017

“Gentlemen, the fact that all my horses and all my men couldn’t put Humpty together again simply proves to me that I must have more horses and more men. ” 2

Antitrust Division Corporate Fines 892 1000 670 900 800 700 Average Total Cartel Fines 600 per Year ($ millions) 500 294 174 400 300 28 100 0 1990 -1994 1995 -1999 2000 -2004 2005 -2009 2010 -2015 Source: American Cartel Enforcement in Our Global Era, Antitrust. Institute. org (Preview of Am. Antitrust Inst. Cartel Chapter of Presidential Transition Rep. , posted February 24, 2017). 3

EU Corporate Fines 3000 2510 2213 2500 2000 Average Total Cartel Fines per Year ($ millions) 1500 577 1000 500 79 107 0 1990 -1994 1995 -1999 2000 -2004 2005 -2009 2010 -2015 Source: American Cartel Enforcement in Our Global Era, Antitrust. Institute. org (Preview of Am. 4 Antitrust Inst. Cartel Chapter of Presidential Transition Rep. , posted February 24, 2017).

Average Length of Jail Sentences 745 800 683 700 600 453 500 Average Prison Days 400 per Person 247 300 265 187 200 119 100 0 1980 -1984 1985 -1989 1990 -1994 1995 -1999 2000 -2004 2005 -2009 2010 -2015 Source: American Cartel Enforcement in Our Global Era, Antitrust. Institute. org (Preview of Am. Antitrust Inst. Cartel Chapter of Presidential Transition Rep. , posted February 24, 2017). 5

Highest EU Cartel Fines 2012 -16 7

Highest US Cartel Fines 2012 -16 8

Conventional Wisdom Corporation Monitor, investigate, report Employees 9

More Granular Depiction Shareholders Enforcers Monitor, investigate, enforce Directors Officers Employees Monitor, investigate, report 10

Proposed Sanctions Actor Sanction Non-negligent Directors & Officers Negligent Perpetrator Shareholders (“the corporation”) Rationale None Fine General deterrence Debarment from boards General deterrence + incapacitation Jail General deterrence (reputation) Fine General deterrence (subject to wealth constraint) Debarment from boards and management General deterrence + incapacitation Damages: Compensatory Compensation Fine 11

Debarment in Other Countries • Sweden: 2008 law provides for a “disqualification order” against a cartelist, which would prevent him from managing a business • UK: First criminal case (Marine Hose, 2008) where defendants got prison terms and are “disqualified” from acting as a director or participating in the management of any UK company for 5 -7 years 13

SEC Suspension Order As of 1984 defendants entered consent decrees barring them “from holding the positions, or performing the duties, of officer or director” for five years. SEC v. San Saba Nu Tech, Inc. , Litigation Release No. 10531 (D. D. C. ). Since 1990 the SEC has had statutory authority to seek a court order of debarment upon a finding of “substantial unfitness to serve. ” 15 U. S. C. §§ 77 t(e), 78 u(d)(2) 14