The Antitrust Division of the Department of Justice recently announced on July 8 that for the first time, it is launching a program to offer payouts for tips related to violations of federal antitrust law. The DOJ is partnering with the US Postal Service, US Postal Inspection Service, and the USPS Office of the Inspector General to coordinate the investigation of alleged antitrust violations and the payout of these rewards. Whistleblowers may be eligible for payouts of between 15 and 30% of the total criminal fine assessed, as long as the fine is at least $1 million.
Historically, whistleblowers generate a large number of DOJ cases. However, this is the first time the DOJ has offered rewards for tips relating to violations of antitrust law. To offer such rewards, the DOJ is relying on statutory authority given to the US Postal Service under 39 USC. § 404, which provides the USPS with authority to offer rewards for information about violations of the postal laws. Accordingly, tipsters will only be eligible for a reward where the allegations relate to “violations of law affecting the Postal Service, its revenues, or property.” Funds for rewards are allocated by the Antitrust Division, but are authorized and distributed by USPIS and USPS OIG.
Steep Fines and Strong Incentives
The DOJ publishes its highest fines issued for Sherman Act violations, with the costliest criminal fines tallying in the hundreds of millions of dollars. The highest such fine assessed by the DOJ to date cost $925 million. Since 2013, the DOJ has issued 159 fines and penalties of at least $10 million each. With the costliest violations on the DOJ's website resulting in such exorbitant fines, a 30% incentive to a whistleblower could be a strong one. Individuals, not just corporations, can run afoul of the Sherman Act, and can be slapped with fines of up to $ 1 million and punished with up to 10 years’ imprisonment. For a whistleblower to recover a reward, the criminal fines assessed must reach at least $ 1 million. The Justice Department's Memorandum of Understanding outlines such an example, describing a scenario where if the criminal fine was $2 million, the whistleblower, if determined eligible for a 20% reward, would receive $400,000. The DOJ releases antitrust guides to whistleblowers on its website, describing common schemes that give rise to per se liability, including price fixing, bid-rigging, and market allocation schemes.
The DOJ has increased its focus on whistleblowers in recent months. In January, the Department issued a press release warning employers that certain nondisclosure agreements could “undermine the goals of” the Criminal Antitrust Anti-Retaliation Act of 2019 (CAARA) by dissuading tipsters from making reports of antitrust violations against their employers. This recent announcement is the newest in a string of decisions and announcements by the Department aimed at whistleblower protection and incentives.
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