U.S.S.G. §2R1.1

(a) Base Offense Level: 12

(b) Specific Offense Characteristics

(1) If the conduct involved participation in an agreement to submit non-competitive bids, increase by 1 level.

(2) If the volume of commerce attributable to the defendant was more

than $1,000,000, adjust the offense level as follows:

VOLUME OF COMMERCE ADJUSTMENT TO

(APPLY THE GREATEST) OFFENSE LEVEL

(A) More than $1,000,000 add 2

(B) More than $10,000,000 add 4

(C) More than $50,000,000 add 6

(D) More than $100,000,000 add 8

(E) More than $300,000,000 add 10

(F) More than $600,000,000 add 12

(G) More than $1,200,000,000 add 14

(H) More than $1,850,000,000 add 16.

For purposes of this guideline, the volume of commerce attributable

to an individual participant in a conspiracy is the volume of commerce

done by him or his principal in goods or services that were affected by

the violation. When multiple counts or conspiracies are involved, the

volume of commerce should be treated cumulatively to determine a

single, combined offense level.

(c) Special Instruction for Fines

(1) For an individual, the guideline fine range shall be from one to five

percent of the volume of commerce, but not less than $20,000.

(d) Special Instructions for Fines ― Organizations

(1) In lieu of the pecuniary loss under subsection (a)(3) of §8C2.4 (Base

Fine), use 20 percent of the volume of affected commerce.

(2) When applying §8C2.6 (Minimum and Maximum Multipliers), neither

the minimum nor maximum multiplier shall be less than 0.75.

(3) In a bid-rigging case in which the organization submitted one or more

complementary bids, use as the organization’s volume of commerce

the greater of (A) the volume of commerce done by the organization in

the goods or services that were affected by the violation, or (B) the

largest contract on which the organization submitted a complementary bid in connection with the bid-rigging conspiracy.

Commentary

Statutory Provisions: 15 U.S.C. §§ 1, 3(a). For additional statutory provision(s), see Appendix A

(Statutory Index).

Application Notes:

1. Application of Chapter Three (Adjustments).—Sections 3B1.1 (Aggravating Role), 3B1.2

(Mitigating Role), 3B1.3 (Abuse of Position of Trust or Use of Special Skill), and 3C1.1 (Obstructing or Impeding the Administration of Justice) may be relevant in determining the seriousness

of the defendant’s offense. For example, if a sales manager organizes or leads the price-fixing

activity of five or more participants, the 4-level increase at §3B1.1(a) should be applied to reflect

the defendant’s aggravated role in the offense. For purposes of applying §3B1.2, an individual

defendant should be considered for a mitigating role adjustment only if he were responsible in

some minor way for his firm’s participation in the conspiracy.

2. Considerations in Setting Fine for Individuals.—In setting the fine for individuals, the

court should consider the extent of the defendant’s participation in the offense, the defendant’s

role, and the degree to which the defendant personally profited from the offense (including salary,

bonuses, and career enhancement). If the court concludes that the defendant lacks the ability to

pay the guideline fine, it should impose community service in lieu of a portion of the fine. The

community service should be equally as burdensome as a fine.

3. Fines for Organizations.—The fine for an organization is determined by applying Chapter

Eight (Sentencing of Organizations). In selecting a fine for an organization within the guideline

fine range, the court should consider both the gain to the organization from the offense and the

loss caused by the organization. It is estimated that the average gain from price-fixing is 10 percent of the selling price. The loss from price-fixing exceeds the gain because, among other things,

injury is inflicted upon consumers who are unable or for other reasons do not buy the product at

the higher prices. Because the loss from price-fixing exceeds the gain, subsection (d)(1) provides

that 20 percent of the volume of affected commerce is to be used in lieu of the pecuniary loss

under §8C2.4(a)(3). The purpose for specifying a percent of the volume of commerce is to avoid

the time and expense that would be required for the court to determine the actual gain or loss.

In cases in which the actual monopoly overcharge appears to be either substantially more or

substantially less than 10 percent, this factor should be considered in setting the fine within the

guideline fine range.

4. Another Consideration in Setting Fine.—Another consideration in setting the fine is that

the average level of mark-up due to price-fixing may tend to decline with the volume of commerce

involved.

5. Use of Alternatives Other Than Imprisonment.—It is the intent of the Commission that

alternatives such as community confinement not be used to avoid imprisonment of antitrust offenders.

6. Understatement of Seriousness.—Understatement of seriousness is especially likely in cases

involving complementary bids. If, for example, the defendant participated in an agreement not

to submit a bid, or to submit an unreasonably high bid, on one occasion, in exchange for his being

allowed to win a subsequent bid that he did not in fact win, his volume of commerce would be

zero, although he would have contributed to harm that possibly was quite substantial. The court

should consider sentences near the top of the guideline range in such cases.

7. Defendant with Previous Antitrust Convictions.—In the case of a defendant with previous

antitrust convictions, a sentence at the maximum of the applicable guideline range may be warranted.

Background: This guideline applies to violations of the antitrust laws. Although they are not unlawful in all countries, there is near universal agreement that restrictive agreements among competitors,

such as horizontal price-fixing (including bid-rigging) and horizontal market-allocation, can cause serious economic harm. There is no consensus, however, about the harmfulness of other types of antitrust offenses, which furthermore are rarely prosecuted and may involve unsettled issues of law. Consequently, only one guideline, which deals with horizontal agreements in restraint of trade, has been

promulgated.

The agreements among competitors covered by this section are almost invariably covert conspiracies that are intended to, and serve no purpose other than to, restrict output and raise prices, and

that are so plainly anticompetitive that they have been recognized as illegal per se, i.e., without any

inquiry in individual cases as to their actual competitive effect.

Under the guidelines, prison terms for these offenders should be much more common, and usually

somewhat longer, than typical under pre-guidelines practice. Absent adjustments, the guidelines require some period of confinement in the great majority of cases that are prosecuted, including all bid-rigging cases. The court will have the discretion to impose considerably longer sentences within the

guideline ranges. Adjustments from Chapter Three, Part E (Acceptance of Responsibility) and, in rare

instances, Chapter Three, Part B (Role in the Offense), may decrease these minimum sentences; nonetheless, in very few cases will the guidelines not require that some confinement be imposed. Adjustments will not affect the level of fines.

Tying the offense level to the scale or scope of the offense is important in order to ensure that the

sanction is in fact punitive and that there is an incentive to desist from a violation once it has begun.

The offense levels are not based directly on the damage caused or profit made by the defendant because

damages are difficult and time consuming to establish. The volume of commerce is an acceptable and

more readily measurable substitute. The limited empirical data available as to pre-guidelines practice

showed that fines increased with the volume of commerce and the term of imprisonment probably did

as well.

The Commission believes that the volume of commerce is liable to be an understated measure of

seriousness in some bid-rigging cases. For this reason, and consistent with pre-guidelines practice, the

Commission has specified a 1-level increase for bid-rigging.

Substantial fines are an essential part of the sentence. For an individual, the guideline fine range

is from one to five percent of the volume of commerce, but not less than $20,000. For an organization,

the guideline fine range is determined under Chapter Eight (Sentencing of Organizations), but pursuant to subsection (d)(2), the minimum multiplier is at least 0.75. This multiplier, which requires a

minimum fine of 15 percent of the volume of commerce for the least serious case, was selected to provide an effective deterrent to antitrust offenses. At the same time, this minimum multiplier maintains

incentives for desired organizational behavior. Because the Department of Justice has a well-established amnesty program for organizations that self-report antitrust offenses, no lower minimum multiplier is needed as an incentive for self-reporting. A minimum multiplier of at least 0.75 ensures that

fines imposed in antitrust cases will exceed the average monopoly overcharge.

The Commission believes that most antitrust defendants have the resources and earning capacity to pay the fines called for by this guideline, at least over time on an installment basis.