![](media/image1.wmf){width="1.0in"
height="0.9777777777777777in"}**DEPARTMENT OF JUSTICE**

**"Cartel Settlements in the U.S. and EU:**

**Similarities, Differences & Remaining Questions"**

**Ann O'Brien**

**Senior Counsel to the**

**Deputy Assistant Attorney General**

**For Criminal Enforcement**

### Antitrust Division

**U.S. Department of Justice**

**13^th^ Annual EU Competition**

**Law and Policy Workshop**

**Florence, Italy**

**June 6, 2008**

**Cartel Settlements in the U.S. and EU:**

**Similarities, Differences & Remaining Questions**

Cartel enforcement has reached unprecedented levels around the world.
Busy cartel enforcers with an abundance of cartels to investigate and
prosecute are looking for ways to enhance their efficiency and
effectiveness. At the same time, cooperating cartel participants are
often eager to quickly resolve their liability in multiple
jurisdictions. As a result, cartel settlements have become a hot topic
for discussion in international competition forums.[^1] The European
Commission (hereinafter "the Commission") should be commended for its
initiative in recently introducing a settlement procedure.

The Antitrust Division of the U.S. Department of Justice (hereinafter
"the Division") has a long history of settling cartel cases with plea
agreements. Over 90 percent of the hundreds of defendants charged with
criminal cartel offenses during the last 20 years have admitted to the
conduct and entered into plea agreements with the Division. Cartel
participants utilize the plea system that is available to all defendants
charged with federal crimes. However, some of the provisions used in
Division plea agreements are unique to cartel prosecutions. These
provisions and the policies behind them are discussed in a Division
paper titled, "The U.S. Model of Negotiated Plea Agreements: A Good Deal
With Benefits For All."[^2] Rather than retracing these issues, this
paper will instead explore the similarities and differences in the ways
that cooperation is currently rewarded, how cartel cases are settled in
the U.S., and how they are to be settled in the EU as explained in the
recent Commission Notice.[^3] As this paper identifies some similarities
and differences between the two systems, some myths will be dispelled
and some remaining questions discussed.

The Division's experience shows that the U.S. system of settling cartel
cases through negotiated plea agreements is a "win-win" situation for
both the Division and settling cartel members. A third "win" is for the
courts that are spared the time and resources of criminal cartel
litigation. For cooperating corporate defendants,[^4] there is the
obvious benefit of reduced fines, but the U.S. system of negotiated plea
agreements can also provide numerous non-monetary benefits to settling
corporations, such as transparency and certainty as to how a company
will be treated if it cooperates, and the opportunity for an expedited
disposition that brings finality and allows a company to put the matter
behind it. For the Division, settlement benefits include inducing
increased early cooperation, which leads to early insider evidence as
well as momentum in Division investigations after settlements become
public.[^5] This paper will address these benefits in relation to the
Commission's settlement procedure.

An effective cartel settlement system requires sufficient benefits and
incentives for both the government and the cartel participant, or else
neither will commit to settlement. However, the mere possibility of
reduced sanctions usually will not be enough to induce a company to
settle; the rewards must be transparent, predictable and certain. To
assess settlement gains, a cartel participant must be able to predict,
with a high degree of certainty, how it will be treated if it
cooperates, and what the consequences will be if it does not. To
maximize the goals of transparency, enforcers must not only provide
explicitly stated standards and policies, but also clear explanations of
prosecutorial discretion in applying those standards and policies.

Some current commentators say that a U.S.-style cartel settlement system
is unique to a jurisdiction with criminal enforcement and cannot work in
an administrative system. Similar comments were expressed years ago when
the revised U.S. leniency policy was first discussed abroad. At that
time, commentators around the world speculated that leniency programs
could not exist in their jurisdictions because of institutional, legal,
and cultural differences between the U.S. system and their own. Now, 15
years later, over 40 jurisdictions have leniency policies in place and
many of these jurisdictions with a wide variety of legal cultures have
drafted their leniency programs based on the U.S. model. Administrative
jurisdictions have surmounted some of the same challenges in the
leniency context that are now being raised in the settlement context and
made U.S.-style leniency programs work to produce astounding results.
The goal of this paper is to draw on our mutual experience with
leniency, look past criminal versus administrative distinctions, and
focus on what can be accomplished through effective cartel settlements.

# Similarity: Charges and Justice Are Not Bargained Away 

The term "plea bargaining" sometimes carries a negative connotation.
Concerns may be based on a commonly held myth that in the U.S.
prosecutors bargain away justice by securing agreements that allow
defendants to plead guilty to lesser offenses. This myth stems from a
misunderstanding of what is actually "bargained" during the U.S. plea
process.

The Commission Notice on Settlements is clear that the Commission "does
not negotiate the question of the existence of an infringement of
Community law and the appropriate sanction."[^6] Contrary to common
perceptions, the Division does not negotiate these bases either. In
fact, the U.S. Department of Justice has specific policies to ensure
that plea agreements entered into by federal prosecutors do not bargain
away justice and that they result in transparent, proportional and just
dispositions. Department of Justice policies require that when federal
prosecutors resolve cases through plea agreements, they should seek a
plea to the most serious, readily provable offense.[^7] Department
policies explicitly prohibit filing charges to exert leverage to induce
a plea or dismissing charges in exchange for a plea to lesser charges, a
practice commonly referred to as "charge bargaining."[^8] What that
means is that Division prosecutors will not drop readily provable
charges in exchange for a plea of guilty.

There is also a U.S. Department of Justice policy aimed at ensuring
"honesty in sentencing" when plea agreements are reached. This policy
requires that before accepting a plea agreement in lieu of taking a case
to trial, Department prosecutors must evaluate the probable sentence a
defendant would face if convicted of all counts for which the defendant
could be charged, versus the sentence to be imposed pursuant to a plea
agreement. [^9] Any sentence recommended by the government must honestly
reflect the totality and seriousness of the defendant's conduct and be
fully consistent with the U.S. Sentencing Guidelines and with the
readily provable facts about the defendant's history and conduct.[^10]
This policy also requires that a federal prosecutor must not stand
silent while a defendant argues for a sentencing reduction that is not
warranted or that the prosecutor does not believe is supported by law or
facts.[^11]

The Division will not forego prosecuting or imposing penalties against
cartel participants for conduct the Division could already prove. It is
important to note, however, that since a plea agreement can be reached
in the U.S. prior to the conclusion of an investigation, a settling
cartel participant may be in a position to inform the Division of
additional evidence of wrongdoing of which the Division was previously
unaware. In order to induce and ensure candid and complete cooperation,
if a company's cooperation pursuant to a plea agreement reveals that the
suspected conspiracy was broader than had been previously identified --
­either in terms of the length of the scheme or the products, contracts
or commerce affected -- then the Division's practice is not to use that
self-incriminating information in calculating the defendant's
sentence.[^12] It is not uncommon for a second-in corporate defendant to
face a significantly reduced fine due to this practice. The early
cooperation may help the Division to prosecute a cartel that is larger
in terms of participants, geographic scope, duration or products covered
than what would have been prosecuted without the insider evidence and,
in the case of an Amnesty-Plus situation, to prosecute additional
cartels disclosed by the pleading cartel participant. The Division is
essentially rewarding an early pleading cooperator more generously than
a later pleading cooperator in the same way that the Commission's
leniency program rewards earlier cooperation with a larger reduction in
fine.

**Similarity:** **Cooperators Rewarded with Reduced Penalties**

Before focusing specifically on the Commission's cartel settlement
procedure, it is important to note that currently in both the U.S. and
EU, cooperating cartel participants that have lost the race for full
immunity from prosecution may still receive a reduced penalty. That
means that in both the U.S. and EU, two equally culpable members of the
same cartel can receive vastly different penalties based on their early
acceptance of responsibility and the timeliness and value of their
cooperation.

In the U.S., the Division's Corporate Leniency Program[^13] offers the
promise of full immunity -- no criminal conviction, no criminal fine,
and no jail time for cooperating executives -- only to the first company
to report a criminal antitrust violation and to meet the other
conditions of the Program. A company and its culpable executives that
lose the race for full immunity under the Division's Leniency Program
may face substantial penalties, including corporations paying stiff
fines and culpable executives going to jail for up to ten years as well
as paying a fine. However, in the U.S., corporate and individual cartel
participants that lose the race for leniency can still obtain lesser
sentences in exchange for their cooperation by pleading guilty to
criminal charges and entering into plea agreements with the Division.
Pursuant to the Commission's Leniency Notice,[^14] the corporate cartel
participant that is the first to self-report and qualify can receive
full immunity from fines, and corporate cartel participants that lose
the race for full immunity may still qualify for a reduction in fine of
up to 50% in exchange for their cooperation.

So, even before the formal cartel settlement system currently in place
in the EU, early insider cooperation was received and rewarded in both
the U.S. and the EU through the use of different vehicles -- a plea
agreement in the U.S. and a reduction in fine pursuant to leniency in
the EU.

**Difference:** **Timing**

While cartel enforcers in both the U.S. and EU can obtain and reward
early and valuable cooperation, a cartel participant seeking to
cooperate and quickly resolve its liability will find itself on
dramatically different timelines in the U.S. and the EU.

A company that has lost the race for full immunity in the EU may still
be eligible for a reduced fine if it cooperates pursuant to the
Commission's Leniency Notice, but it must wait until the conclusion of
the Commission's investigation to learn if the Commission will engage in
settlement discussions. In the U.S., that same cartel participant that
has lost the race for full immunity may immediately initiate plea
negotiations with the Division to simultaneously resolve its culpability
and be rewarded for the cooperation it can provide. A cooperating cartel
participant can reach a settlement with the Division at any time -- from
very early in the Division's investigation until after formal charges
are brought.[^15] Seriatim plea agreements are the norm in Division
cartel investigations and the Division regularly negotiates, signs, and
publicly files plea agreements throughout the course of its
investigations. In addition, a plea agreement can be entered as soon as
an agreement is reached and sentencing can take place immediately.

In the EU, a cartel participant seeking to cooperate and quickly resolve
its liability may apply for a reduction in fine pursuant to the
Commission's Leniency Notice, but the applicant must wait until the end
of the administrative procedure to learn how its cooperation will be
rewarded and the actual fine imposed. There are numerous examples of
companies that have simultaneously offered to cooperate in both the U.S.
and the EU but had to wait years after settling in the U.S. to learn
what their fine would be in Europe. This problem is exacerbated by the
numerous lengthy appeals of Commission decisions where, at times, the
lag has been close to a decade.

The Commission's settlement procedure likely will not dramatically
change the timing of this process. Under the Commission's bifurcated
system, a cartel participant seeking a reduction in fine pursuant to the
Commission's Leniency Notice will have to provide substantive
cooperation and then wait until the end of the Commission's
investigation to see whether the Commission invites cartel participants
to engage in settlement discussions pursuant to its Notice on
Settlements. A cartel participant seeking to settle will then have to
wait until the end of the Commission's administrative procedure to know
its actual fine and if it received the settlement discount to be applied
cumulatively to any leniency reduction.

# Difference: Goals of Cartel Settlement

In the U.S., from the Division's perspective, the goals of cartel
settlements are to: 1) receive cooperation; 2) create and sustain
momentum in its investigations; and 3) resolve cartel cases quickly
without the need for litigation. Once a cartel participant and the
Division decide to enter into a plea agreement, both the government and
the defendant proceed along an entirely different path than they would
have if the case went to trial. Promises are made on each side. The
Division promises not to bring further charges against the defendant for
the reported conduct and to recommend a certain settlement discount at
sentencing. The defendant promises to waive its procedural rights --
such as the right to formal charge by indictment, the right to a trial,
and the right to appeal -- and to provide substantial and ongoing
cooperation. The type of cooperation the Division typically receives
from a pleading corporation is extensive and the U.S. Sentencing
Guidelines appropriately term such cooperation "substantial
assistance."[^16] The specific types of cooperation a pleading
corporation is required to provide to the Division are specified in the
plea agreement and usually include providing documents and witnesses
(including those located abroad) to assist the Division in its
investigation.[^17]

The Commission's settlement system, in contrast, maintains virtually the
identical investigative structure as its ordinary procedure but provides
for the possibility of an additional monetary reduction in fine for
"settlement" in exchange for "cooperation" after the conclusion of the
Commission's investigation. The Commission makes clear that the
cooperation sought under its settlement procedure is different from the
voluntary production of evidence to trigger or advance an investigation
covered under the Commission's Leniency Notice.[^18] Under the
Commission's settlement procedure, the required "cooperation" is
essentially a waiver of certain procedural rights and not the type of
substantial assistance that is provided to the Division by settling
cartel participants in the U.S.

**Difference: Finality and Expeditiousness**

Since the Commission's settlement system does not provide for early
settlements, and because a cartel participant that wishes to settle must
still wait until the end of the administrative process to know the
amount of its fine, a corporate cartel participant cannot achieve the
early finality in the EU that it can in the U.S. when it enters into a
plea agreement with the Division and is able to put the matter behind it
immediately.

The time and resource savings the Commission expects to receive from
settlements appear to be limited to the time saved by not having to
provide access to the file, oral hearings or translations, and any time
saved by writing a more streamlined statement of objections. But even
these procedural efficiencies may not be obtained under the Commission's
settlement procedure unless all cartel participants seek to settle,
since the Commission would otherwise have to continue with the
full-blown, ordinary procedure for the non-settling cartel members.

**Difference: Momentum**

In the U.S., early cooperators not only provide valuable evidence that
the Division can use against other co-conspirators, but also once their
plea agreements are filed on the public record they often provide strong
momentum that expedites the Division's investigation and prosecution of
other conspirators and even, in an Amnesty-Plus situation, other
cartels. Plea negotiations are confidential, but once agreements are
reached, the plea agreement is filed with the court and made
public.[^19] Other cartel participants can then see that co-conspirators
have accepted responsibility and promised to cooperate, and they often
quickly line up to plead guilty. The momentum created by seriatim
settlements before the conclusion of an investigation is a powerful
benefit to the Division that has no counterpart under the Commission's
settlement procedure.

# Remaining Question: Transparency, Predictability and Certainty as to Fine?

Commentators and members of the antitrust bar have said that the 10%
settlement reduction offered by the Commission is not sufficient to
induce companies to settle.[^20] The success of the Commission's
settlement procedure, however, will not hinge solely on the amount of
the settlement discount offered, but on the transparency, predictability
and certainty of the fine a cooperator can expect to pay. In the
Division's experience, prospective cooperating parties come forward in
direct proportion to the predictability and certainty of their treatment
following cooperation. A party is more likely to settle if it is able to
predict, with a high degree of certainty, how it will be treated if it
cooperates, and what the consequences will be if it does not.

A critical issue to the success of the Commission's settlement procedure
will be the Commission's transparency in discussing the fine that a
cartel participant can expect to pay. A percentage discount means little
to a cartel participant that cannot predict the starting point for its
fine reduction. While the Commission has Fining Guidelines in place,
they are relatively new and they have not yet been applied in many
matters. Therefore, the more transparency that the Commission can
provide as to how it will apply its Fining Guidelines, the more likely
parties are to settle. If cartel participants cannot assess their
possible fines with reasonable certainty, they may choose to seek
leniency but not settle, resulting in a scenario where a cartel
participant provides cooperation to receive leniency but then litigates
its fine.

# Similarity: Rights are Respected

Another reason sometimes offered for the proposition that U.S.-style
plea bargaining cannot work in administrative systems is that rights of
defense must be respected. Again, implicit in this response is a
misimpression that the rights of settling defendants are not respected
in the U.S. plea process.

The Commission's settlement procedure makes it clear that a settling
party's rights of defense will be respected and provides for a Hearing
Officer to arbitrate due process issues during the settlement process.

In the U.S., defendants also have constitutional and due process rights,
including the right: Number range CHAPTER1) to be formally charged by
indictment; 2) to plead not guilty; 3) to a trial by jury (where the
defendant can cross-examine witnesses and present evidence); 4) against
self-incrimination; and 5) to appeal a conviction and sentence. In order
to convict a defendant of a criminal offense, the Division must prove
its case beyond a reasonable doubt, a standard that is higher than the
standard of proof required in administrative or civil jurisdictions. A
defendant who chooses to plead guilty and enter into a plea agreement
with the Division will waive the rights enumerated above. This waiver
must take place before a court, prior to acceptance of a plea. The court
must find that the waivers were executed knowingly and voluntarily, that
the defendant received competent legal representation, and that the
defendant fully understood the nature of the offense and applicable
maximum penalties. The Commission's settlement procedure is different
because it does not require a waiver of some of these rights, such as a
waiver of appeal, but it is similar in that it provides for a waiver of
certain procedural rights such as access to the file, a formal hearing
and translation.

In the U.S., these rights are held by the defendant who can choose to
waive any right if done knowingly and voluntarily. Such waivers provide
valuable benefits for enforcers and defendants by saving time, money,
and resources. By ending all further litigation, these waivers provide
ultimate finality and certainty for all parties. Without such waivers,
resources are not saved, true finality and certainty are not achieved,
and the full benefits of settlement are not realized. The best testament
to the Division's success in respecting the rights of settling cartel
participants is the dozens of companies and individuals that have ample
financial resources and are represented by skilled counsel who decide to
plead guilty and enter into plea agreements with the Division each year.

**Similarity: Neither DG Competition nor the Division Impose Cartel
Sanctions**

Another often repeated myth is that U.S.-style plea agreements will not
work in the EU because it is the College of Commissioners that imposes
fines, and not DG Competition. However, the U.S. and the EU are much
closer in that regard than many people appreciate. In the U.S., even
when a sentencing agreement is reached with the Division, it is the
court that must accept the plea and impose the cartel participant's
actual sentence. Similarly, in the EU, the College of Commissioners must
adopt the final decision containing the fine amount.

What this means is that in both jurisdictions cartel participants are
asked to engage in settlement discussions and arrive at an agreed
sanction with a government entity that does not actually impose the
sanction. Cartel participants must rely on the good-faith commitments of
the competition authority that it will stand behind a fine
recommendation that is the result of a settlement.

Typically, Division plea agreements contain a joint sentencing
recommendation Number range CHAPTERspecifying that a specific sentence
or sentencing range is appropriate.[^21] After accepting the plea
agreement, the court will impose the defendant's sentence. U.S. courts
accept the joint sentencing recommendations contained in Division plea
agreements with high frequency.

The Division has built a strong track record of persuading courts to
accept plea agreements in its cartel cases and impose sentences
consistent with those agreements. Courts are willing to accept these
plea agreements and impose the recommended sentences contained in them
because the Division brings to the court only sentences that it believes
are just and proportional. Courts can also be confident that both
parties are well represented by counsel. Cartel participants engaging in
settlement negotiations are aware of the Division's track record with
courts and are confident that the Division will stand behind its
sentencing recommendation should the courts question it at sentencing.

**Difference: Differentiated Settlement Discounts**

Another difference between the U.S. plea system and the Commission's
settlement system is that the settlement discount in the U.S. can be,
and usually is, different for various cartel participants, whereas in
the EU the settlement discount is a fixed figure for all settling
parties.

In the U.S., the settlement discount cartel participants can receive is
dependent upon the timeliness of their acceptance of responsibility and
the quality of their cooperation, with earlier settling defendants
receiving larger settlement discounts than those received by later
pleading defendants. This is consistent with the
race-to-the-prosecutor's-door mentality that has successfully fueled
leniency programs around the world. A cartel participant that is the
"second-in" to self-report and loses the race for leniency in the U.S.
can still win a substantial settlement discount by pleading guilty. This
system induces quicker, higher quality cooperation.

While, as previously discussed, second and subsequent cooperators can
receive substantial rewards under the Commission's leniency program, the
fixed settlement discount for all settling parties provides little
additional incentive for cartel participants to line up to be the first
to settle, since the last-in receives the same discount.

# Remaining Question: Are All Cartel Participants Required to Settle?

Questions remain as to whether the Commission will accept settlements in
a "hybrid" situation where some cartel participants are prepared to
settle, but others are not. Since the Commission's settlement procedure
is set up with the goal of obtaining procedural efficiencies, rather
than inducing cooperation or creating momentum in its investigations, an
"everyone or no one" approach is appealing from the Commission's
viewpoint because a hybrid settlement will not achieve the procedural
efficiencies the Commission hopes to gain through settlement. From the
perspective of cartel participants contemplating settlement, and the
counsel who advise them, this may be unsettling. If a company expends
the time and resources to seek settlement, only to be told at the end
that its settlement offer will not be accepted because a co-conspirator
does not wish to settle, it will not be pleased and its counsel may
advise against engaging in the settlement process when representing
future clients.

In addition, the "everyone or no one" approach is inconsistent with the
race mentality that has been so successful in the leniency context.
Instead of destabilizing the cartel as co-conspirators rush to cooperate
with the government, in an ironic twist, an "everyone or no one"
settlement system might actually promote further coordination as those
inclined to settle or not to settle attempt to influence the entire
group.

# Difference or Similarity: Negotiation or Discussion of the Merits?

As previously mentioned, the Commission Notice on Settlements makes
clear that the Commission will not negotiate the existence of a cartel
infringement or the appropriate fine.[^22] The concept that the
settlement system must be "non-negotiated" is likely driven by a desire
to distinguish the system from a U.S.-style plea system because of the
negative connotations associated with plea bargaining discussed above.
Hopefully this paper has dispelled some of the myths that lie beneath
those negative connotations, including dispelling the notion that U.S.
prosecutors negotiate charges or bargain away justice.

A question that remains, one that will be critical to the success of the
Commission's settlement procedure, is: what does the Commission mean
when it says it will not negotiate? The Commission Notice on Settlements
says that the discussions "will allow the parties to be informed of the
essential elements taken into consideration so far, such as the facts
alleged, the classification of those facts, the gravity and duration of
the alleged cartel, the attribution of liability, an estimation of the
range of likely fines, as well as the evidence used to establish the
potential objections."[^23] When and how this information is discussed
with parties contemplating settlement will be critically important to
the willingness of cartel participants to engage in settlement
discussions with the Commission.

In the U.S., once plea negotiations commence, a candid two-way dialogue
takes place between the Division and the cartel participant's counsel
regarding certain key terms of a possible plea agreement, including: the
entity to be charged; the scope of the alleged conspiratorial conduct to
be charged; the products or services covered by the conspiratorial
agreement; the duration and geographic scope of the conspiracy; the
scope of the nonprosecution protections and cooperation requirements;
the sentencing recommendation; and the cooperation that the defendant is
prepared to offer. In the experience of the Division, this dialogue is
necessary to reaching a settlement. If the Division and the defendant
were to just put their final offers on the table without this dialogue,
they likely would be like ships passing in the night with their offers
relying on vastly different assumptions and fine figures that could be
orders of magnitude apart.

While, as previously discussed, the Division will not negotiate charges
it can readily prove, the Division will listen to arguments from cartel
participants negotiating settlements as to why the evidence does not
support the charges and sentence calculations proposed by the Division
and, therefore, the scope of the charge should be limited and the
sentence reduced. Understanding the scope of a multinational cartel or
calculating the volume of commerce affected by the defendant's
participation in a cartel are not easy tasks, and the Division is
willing to listen to cartel participants on these issues. Of course the
Division looks to other sources to verify the information provided by
those seeking settlement, but it is not uncommon that cartel
participants are able to persuade the Division to alter its original
charge or sentencing recommendation due to facts, evidence, and industry
nuances of which the Division was not previously aware.

As previously discussed, transparency as to the potential fine range the
Commission is contemplating will be very important. In addition,
engaging in discussions during the settlement process regarding the
scope and duration of the cartel violation contemplated -- optimally
before a cartel participant must submit a settlement submission -- will
also be critical to reaching a settlement that will be acceptable to
both the Commission and the settling cartel participant. The
Commission's settlement procedure does allow for discussions and seems
to envision that at least some of these items will be discussed. The
semantics of whether a dialogue between the Commission and cartel
participants seeking settlement is called "negotiation" or "discussions"
is less important than whether and to what extent it actually takes
place. The more cartel participants are able to engage in a dialogue
with the Commission in the context of settlement discussion, the more
likely it is that a mutually-agreeable resolution will be reached.

**Conclusion**

The leniency programs that have proliferated and flourished around the
world during the last decade have resulted in cracking a previously
unimaginable number of cartels. As a result, cartel enforcers in a
growing number of jurisdictions are trying to find ways to more quickly
resolve cartel cases. As a result, cartel settlements are at the
forefront of discussions in competition forums.

The Commission should be commended for adopting a settlement procedure
to complement its highly successful leniency program. The Commission has
built a leniency track record, and it will now begin to build a
settlement track record. The bar and the business community, who are
stakeholders in the process, still have some remaining questions about
how the Commission will implement the settlement procedure, and they
will be watching closely. The good news is that the Commission,
cooperating cartel participants, and their counsel all have a vested
interest in making cartel settlements work because they hold potential
benefits for them all.

This paper has attempted to dispel some myths about the U.S. plea system
and point out some similarities between the U.S. and EU systems that
might not be readily apparent. Some substantial differences do remain
between the U.S. system and the Commission's settlement procedure, as
they once did in the leniency context. Our collective experience in the
leniency context teaches us that what might not seem possible often is
possible. That lesson can be applied in the settlement context as we
focus not on distinguishing criminal from administrative systems but
look instead at how cartel settlements can have benefits for all parties
involved and ultimately benefit consumers through increased cartel
enforcement.

[^1]: *See* International Competition Network Cartel Working Group,
    Cartel Settlements, Report to the ICN Annual Conference Kyoto, Japan
    (April 2008) (hereinafter "ICN Cartel Settlements Paper"),
    *available at*
    [http://www.icn-kyoto.org/documents/materials/Cartel_WG_1.pdf](../%20http://www.icn-kyoto.org/documents/materials/Cartel_WG_1.pdf);
    *see also* OECD Policy Roundtable on Plea Bargaining (2006),
    materials *available at*
    <http://www.oecd.org/dataoecd/12/36/40080239.pdf>.

[^2]: *See* Scott D. Hammond, The U.S. Model of Negotiated Plea
    Agreements: A Good Deal With Benefits For All, address before the
    OECD Competition Committee, Working Party No. 3 (October 17, 2006)
    (hereinafter "The U.S. Model of Negotiated Plea Agreements"),
    *available at*
    <http://www.usdoj.gov/atr/public/speeches/219332.pdf>.

[^3]: Commission Notice on the conduct of settlement procedures in view
    of the adoption of Decisions pursuant to Article 7 and Article 23 of
    Council Regulation (EC) No 1/2003 in cartel cases (hereinafter
    "Commission Notice on Settlements"), Official Journal of the
    European Union, OJ C 167, 2.3.2008, p. 1, *available at*
    <http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:167:0001:0006:EN:PDF>;
    *see also* Commission settlement documents, *available at*
    <http://ec.europa.eu/comm/competition/cartels/legislation/settlements.html>.

[^4]: Individuals may also plead guilty in the U.S. and receive
    substantial benefits for doing so, but this paper will focus solely
    on the benefits to corporations since the Commission does not
    prosecute individuals.

[^5]: For a full discussion of the benefits of U.S. plea agreements,
    *see* The U.S. Model of Negotiated Plea Agreements, *supra* note 2,
    at § VI; for a discussion of the benefits generally of cartel
    settlements, *see* ICN Cartel Settlements paper, *supra* note 1.

[^6]: Commission Notice on Settlements, *supra* note 3, at 1.2.

[^7]: *See* Principles of Federal Prosecution, U.S. Attorney's Manual §§
    9-27.400 and 9-27.430(A)(1), *available at*
    [[http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/27mcrm.htm]{.underline}](http://www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/27mcrm.htm).

[^8]: *See* Memo from Attorney General John Ashcroft to All Federal
    Prosecutors, Memo Regarding Policy On Charging Of Criminal
    Defendants (September 22, 2003) (hereinafter "September 22, 2003
    Ashcroft Memo"), at § I(A) and § II(C), *available at*

    <http://www.usdoj.gov/opa/pr/2003/September/03_ag_516.htm>.

[^9]: *See* Memo from Attorney General John Ashcroft to All Federal
    Prosecutors, Department Policies and Procedures Concerning
    Sentencing Recommendations and Sentencing Appeals (July 28, 2003)
    (hereinafter "July 28, 2003 Ashcroft Memo"), at § II(B), *available
    at*
    [[http://www.nacdl.org/public.nsf/legislation/ci_03_32/\$FILE/AG_Guidance_Stcg_Recs.pdf]{.underline}](http://www.nacdl.org/public.nsf/legislation/ci_03_32/$FILE/AG_Guidance_Stcg_Recs.pdf);
    *see also* September 22, 2003 Ashcroft Memo, *supra* note 8.

[^10]: July 28, 2003 Ashcroft Memo, *supra* note 9, at § II(B).

[^11]: July 28, 2003 Ashcroft Memo, *supra* note 9, at § II(A)(2).

[^12]: For a detailed discussion of the benefits available to early
    cooperators, *see* Scott D. Hammond, Measuring the Value of
    Second-In Cooperation in Corporate Plea Negotiations, address Before
    the 54th Annual Spring Meeting of the ABA Section of Antitrust Law
    (March 29, 2006), *available at*
    <http://www.usdoj.gov/atr/public/speeches/215514.pdf>.

[^13]: Corporate Leniency Policy (1993), *available at*
    <http://www.usdoj.gov/atr/public/guidelines/0091.htm>; *see also*
    Leniency Policy Speeches, *available at*
    <http://www.usdoj.gov/atr/public/criminal.htm>.

[^14]: Commission Notice on Immunity from fines and reduction of fines
    in cartel cases (hereinafter "Commission Leniency Notice"), Official
    Journal of the European Union, OJ C 298, 8.12.2006, p. 17,
    *available at*
    <http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52006XC1208(04):EN:NOT>.

[^15]: While the Division will entertain plea proposals both before and
    after indictment, most are entered pre-indictment where early
    cooperation holds an array of benefits for defendants.

[^16]: *See* United States Sentencing Commission Guidelines Manual §
    8C4.1 (November 1, 2007), *available at*
    <http://www.ussc.gov/2007guid/GL2007.pdf>.

[^17]: *See* ¶ 14 of the Division's Model Annotated Corporate Plea
    Agreement (Last Updated December 19, 2006), *available at*
    <http://www.usdoj.gov/atr/public/guidelines/220671.htm>.

[^18]: Commission Notice on Settlements, *supra* note 3, at 1.1.

[^19]: *See* Federal Rule of Criminal Procedure 11.

[^20]: *EU Settlements Procedure Met with Skepticism*, Global
    Competition Review (June 30, 2008), *available at*
    <http://www.globalcompetitionreview.com/news/news_item.cfm?item_id=6935>

[^21]: The Division and the defendant may enter into a type of plea
    agreement that requires the court to either accept the recommended
    sentence in the plea agreement or to reject the entire plea
    agreement. For a comprehensive discussion of sentencing
    recommendations contained in U.S. plea agreements, *see* The U.S.
    Model of Negotiated Plea Agreements, *supra* note 2, at § IV(F).

[^22]: Commission Notice on Settlements, *supra* note 3, at 1.2.

[^23]: Commission Notice on Settlements, *supra* note 3, at 2.2.16.