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On The Intersection Of Antitrust Enforcement And Corruption


Recently Roger Alford (Deputy Assistant Attorney General of the DOJ’s Antitrust Division – who until recently was a law professor at Notre Dame) delivered this speech regarding the intersection of antitrust enforcement and corruption.

Prior to highlighting the speech, this post further explores the intersection by: documenting how Congress – in enacting the FCPA – considered whether the antitrust laws adequately captured the so-called foreign corporate payments at issue; and highlighting FCPA enforcement actions which also included antitrust charges.

One of the first steps in Congress’s analysis of the foreign corporate payments problem in the mid-1970’s was to understand whether existing laws (such as the tax laws, securities laws, and antitrust laws) adequately captured the payments or whether a new legislative remedy was needed.

For instance, in 1975 the House held a series of hearings largely focused on whether the discovered payments were already a violation of U.S. law.  In opening the hearing, Representative Nix stated:

“Such payments to foreign officials are not a violation of American law at present, although they are very often a violation of foreign law. However, it is a requirement of the United States Code that American corporations make full disclosure of their assets and liabilities to the Securities and Exchange Commission, the Civil Aeronautics Board, and the Internal Revenue Service. It is also true that if the purpose of the payments was anticompetitive in intent, the Antitrust Division of the Department of Justice would have a basis to begin legal proceedings  . . . We may need improvements in our law. There is always room for improvement. . . .  Our hearing will continue until we can answer positively whether our present legal system can meet the challenge of foreign slush funds maintained by the foreign operations of American-based companies. Of course, that does not confine the operations of this subcommittee; it seeks to explore, to examine and to suggest legislation that will meet the needs of the problem that we face.”

As to whether existing antitrust laws adequately captured the discovered payments, during the House hearing a DOJ antitrust official set forth various different “hypothetical situations involving payments to foreign officials which might raise problems” under existing antitrust laws and stated:

“The kind of bribe, about which we have been reading a good deal recently, would most certainly not be, in itself, an antitrust violation. The reason is that such bribes are unlikely to have any direct and identifiable effect on U.S. foreign commerce. The bribe is not intended to harm a US. competitor’s export opportunities. In sum, neither payment nor the withholding of payment can be directly related to the flow of imports into or exports from U.S. markets.”

The DOJ official concluded his testimony as follows:

“I am not sure I feel fully qualified to comment on the whole question of whether we ought to have a specific foreign bribery law. . . .  If the Congress feels— and I hear you very clearly as saying that this is an important problem we have got to do something about, then I think you had better look to a criminal law dealing specifically with the international bribery situation or expanding the scope of it and not look to the antitrust laws as the way of dealing with it in a general way.”

Even though Congress did not believe that the antitrust laws adequately captured the so-called foreign corporate payments, time would demonstrate that certain FCPA enforcement actions also implicate the antitrust laws.

For instance, as highlighted in this prior post, the 2011 enforcement action against Bridgestone included FCPA violations as well as antitrust violations in which the company agreed to pay a $28 million criminal fine for “its role in conspiracies to rig bids and to make corrupt payments to foreign government officials in Latin America related to the sale of marine hose and other industrial products manufactured by the company.” Similarly, in the immediate aftermath of the 2010 FCPA enforcement action against Innospec, a competitor sued Innospec, based on the same core allegations in the FCPA enforcement action, claiming that Innospec violated the Robinson-Patman Act, the Virginia Antitrust Act as well as the Virginia Business Conspiracy Act. (See here).

Returning to Alford’s speech, he stated:

“[T]he most common intersection of corruption and anticompetitive conduct occurs in government procurement, when bid rigging can be combined with or facilitated by other illegal activity such as bribery of public officials, unlawful kickbacks, or fraud.


The abuse of public power for private gain distorts the essential functions of government. Where there is bribery and collusion of government services, the government is efficient for the corrupt few and inefficient for everyone else. Rampant corruption severs the bonds of community trust necessary for an effective partnership between private and public sectors so critical for a nation to thrive. Corruption begets distrust, which begets disorder, which begets a host of other evils. In contrast, good government promotes best principles of accountability, stability, fairness, even-handedness and independence. The corruption of the best ideals of government is one of the worst possible results.”

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