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GW Law and Constantine Cannon Collaborate on Proposed Antitrust Whistleblower Reward Program for COVID-19 Related Antitrust Violations

Posted  May 29, 2020
By Marlene Koury

George Washington University Law School Professor F. Scott Kieff, GW law student Michael DeJesus, and Constantine Cannon LLP partners Henry C. Su, Mary Inman, and Marlene Koury introduced the Antitrust Whistleblower Reward and Anti-Retaliatory Protection Act (WRAP Act) as part of the Financial Times Global Legal Hackathon. Our Hackathon Challenge was to find ways to harness the power of whistleblowers to stem the tide of COVID-19-related fraud. The GW Law and Constantine Cannon team proposed long overdue antitrust whistleblower reward legislation – the WRAP Act – as an answer to this challenge for anticompetitive activity related to COVID-19.

The current crisis presents opportunities for rapid change and innovation, but also creates the conditions for the business community to take advantage of the crisis to violate antitrust laws.  The Antitrust Division has cautioned the business community against engaging in anticompetitive activity related to COVID-19, including fixing prices or rigging bids for personal health protection equipment and components, allocating the market of consumers of public health products and services, and anticompetitive agreements to allocate essential workers. An antitrust whistleblower reward program is essential to support the Antitrust Division’s overarching goals of protecting against COVID-19-related anticompetitive activity.

As Professor Kieff noted, “in times of general stress and rapid change like these times of COVID-19, good-governance tools like whistleblower programs and compliance programs can be especially helpful for keeping organizations operating effectively and efficiently.”

Key features of the proposed WRAP Act are:

  • A whistleblower reward program limited to tips regarding COVID-19-related antitrust violations
  • Aimed at criminal enforcement regarding cartels and unlawful agreements under Sherman Act sections 1 and 3(a)
  • A bounty of between 10-30% of the associated monetary penalty
  • Includes strong anti-retaliation protections, regardless of whether the tip leads to a successful enforcement action
  • The Antitrust Division retains sole investigative and prosecutorial discretion with respect to enforcement actions, criminal or civil
  • No conflict with Division’s Leniency Program as the WRAP Act is aimed at whistleblowers who do not face criminal liability
  • The number of tips is controlled by requiring a violation of at least $10 million, discouraging tips about relatively small amounts of antitrust harm
  • The quality of tips is controlled by encouraging whistleblowers to retain counsel in order to make a submission and requiring counsel if their submissions are anonymous

The introduction of antitrust whistleblower bounty and anti-retaliation legislation is critical at this time given that anticompetitive schemes relating to COVID-19 are likely in their inception.  Our white paper expands on the myriad reasons why the WRAP Act should be immediately enacted. We drafted the WRAP Act to fit into the existing Antitrust Criminal Penalty Enhancement and Reform Act of 2004.

As Professor Kieff explained, “while our team is proud of our creative collaboration between academics and practitioners, the ideas of our proposal are hardly new.  When it comes to antitrust whistle-blowing, the main targets we aim to help everyone avoid and mitigate before they can do even more serious harm include the types of collusion on price, output, wage, and quality inflicted on the consumer and worker experiences that have long been recognized across countries and across the political spectrum of modern democracies to be seriously harmful.”

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Tagged in: Antitrust Legislation, CC Lawyers, COVID-19, Importance of Whistleblowers, Whistleblower Rewards,