USA Trends and Developments Contributed by: Djordje Petkoski, Matt Modell, Memmi Rasmussen and Tim Harris, A&O Shearman
programme in 2022, it then brought an antitrust lawsuit against Amazon alleging that the com - pany stifled competition and caused increased prices under California’s Unfair Competition Law and Cartwright Act. Another example of the uptick in state enforcement efforts occurred in early April when the Washington state Attor - ney General announced its own lawsuit against RealPage and nine local landlords, alleging that RealPage and landlords conspired to violate the state Consumer Protection Act. The lawsuit seeks restitution for a large number of Wash - ington renters, as 800,000 leases in Washington were allegedly priced using RealPage software from 2017 to 2024. Demonstrating how resource intensive antitrust cases can be for states to pur - sue, Washington has employed seven attorneys, seven paralegals, an investigator and an econo - mist to work on its civil case against RealPage. State level antitrust reform may also expand the scope of cartel enforcement in the United States. The California State Legislature is progress - ing with antitrust reforms that would reshape and expand antitrust enforcement under state law. Proposed reforms, if enacted, would make California’s laws broader than existing federal antitrust laws. The California Law Revision Com - mission (CLRC) has recommended that the Cart - wright Act be expanded to regulate single firm conduct. Recommendations from the CLRC have historically had over a 90% enactment rate when submitted to the legislature. Other pend - ing legislation in California seeks to raise crimi - nal penalties. Corporate criminal fines would increase from USD1 million to USD100 million per violation, individual fines would increase from USD250,000 to USD1 million, and prison sentences for felony antitrust violations under California state law would be extended to a max - imum of five years. Additional proposed legisla - tion seeks to ban the use of competitor data in
pricing algorithms and require that companies disclose to consumers when a pricing algorithm was used to set a product’s price. Companies should understand state level anti - trust reforms and increase in state enforce - ment activity could heighten scrutiny of busi - ness activity. Similar to follow-on civil litigation, increased state cartel enforcement activity cre - ates an additional burden and cost associated with misconduct. As regulators probe for cartel activity, effective corporate compliance pro - grammes are as important as ever. Corporate Compliance Guidance Updates and New Guidance on Monitors in Criminal Antitrust Matters An effective compliance programme can help a company avoid government investigations and detect potential antitrust pressure points before misconduct occurs. US corporate compliance guidance was clarified in the past year when the DOJ updated guidance used by its prosecutors to evaluate corporate compliance programmes when determining the appropriate charge or penalty to impose on violators. The DOJ emphasises that the guidance is not a checklist or rigid formula but an overview of factors for prosecutors to consider. Each company’s risk profile, and steps taken to reduce its risk, war - rant particularised evaluation. Prosecutors are encouraged to consider a multitude of factors that could impact compliance programmes at a company. Compliance updates from the DOJ’s Criminal Division in September 2024 and Anti - trust Division in November 2024, direct prosecu - tors to consider company efforts to account for AI in compliance programme design, emphasis - ing that a well-designed compliance programme accounts for risks from new emerging technol - ogy, particularly AI, and mitigates risk from AI through training and monitoring.
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