USA – WASHINGTON Trends and Developments Contributed by: Jordanne M. Steiner and Kenneth R. O’Rourke, Wilson Sonsini Goodrich & Rosati
Though the DOJ previously filed a series of statements supporting cases against pricing recommendation tools allegedly fuelled with non-public information, this was the first move that appears to target mere analogue, aggre - gated information sharing without an allegation of a commonly determined price. This appears to confirm the DOJ’s shift in enforcement priori - ties to detect and prosecute conduct involving exchanges of competitive information. Wheth - er this shift in priorities will hold with the new administration, however, remains to be seen. We will see if 2025 will provide an answer. Per se standard gets dinged: per se standard not applied when companies had a hybrid relationship In 2024, the US Supreme Court in Washing - ton DC denied the DOJ’s petition for certiorari in United States v Brewbaker, letting stand a Fourth Circuit Court of Appeals decision hold - ing that the criminal per se standard does not apply where companies have both a vertical and horizontal relationship. The Fourth Circuit held in 2023 that the per se rule only applies when demonstrable economic evidence shows that the restraint on competition at hand “always or almost always” has “mani- festly anticompetitive effects” and “lack[s]... any redeeming virtue” (see United States v Brewbaker, 87 F.4th 563, 576 (4th Cir. 2023)). It went on to hold that there was insufficient eco - nomic evidence to warrant per se treatment of the agreement at issue in Brewbaker because, although the parties to the agreement competed for contracts, they had a hybrid relationship with both vertical and horizontal restraints that had “possible procompetitive effects” . As such, the indictment failed to allege a per se violation of the Sherman Act and the court reversed Brew - baker’s conviction.
As a result, given inter-company relationships that are vertical in nature even if there are also horizontal elements to the relationship, it will be more difficult for the DOJ to prosecute bid-rig - ging or price-fixing conduct as a per se violation of Section 1 of the Sherman Act. For additional background on the factual underpinnings of the Brewbaker case, see here . Artificial intelligence, algorithmic information sharing and price fixing In 2024, the DOJ informed the public that using pricing algorithms and other artificial intelligence tools will be considered criminal violations when they amount to price-fixing agreements, even if there are no direct communications between competitors. The DOJ’s position is that if a human engaging in conduct would have vio - lated the antitrust laws, then it remains unlawful when performed by artificial intelligence or an algorithm. Indeed, on 15 February 2024, the DOJ warned companies that the Department was closely investigating the use of artificial intelligence and algorithms and that companies could face criminal liability for improper sharing of confiden - tial information with competitors (see Informa - tion Exchanges: What is Safe?, American Bar Association; Antitrust Law Section, 14 February 2024). The DOJ has also noted that it expanded the scope of markets it is criminally investigating and emphasised that small companies and members of decentralised markets need to reassess their potential for criminal antitrust exposure. Consistent with the DOJ’s increased focus on artificial intelligence, in March 2024, then-Dep - uty Attorney General Lisa Monaco authorised all DOJ prosecutors to seek sentencing enhance -
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