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DOJ Obtains First Monopolization Conviction in Decades

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On October 31, 2022, the U.S. Department of Justice Antitrust Division (“DOJ”) announced that the president of a Montana paving and asphalt contractor, Nathan Nephi Zito, had pleaded guilty to one count of attempting to monopolize the highway crack-sealing services markets in Montana and Wyoming.1 The guilty plea marks the DOJ’s first criminal prosecution under Section 2 of the Sherman Act since the late 1970s, when the DOJ brought a monopolization charge over an alleged conspiracy between Braniff Airlines and Texas International Airlines.2 While this development warrants monitoring, both the Zito case and the Braniff case had unique facts that may make this prosecution the exception, not the rule.

Traditionally fodder for civil lawsuits, Section 2 of the Sherman Act has often overlooked language that make it a felony for a person or business to monopolize, attempt to monopolize, or conspire to monopolize a market. For the last four decades, DOJ’s criminal antitrust prosecutions have been limited to violations of Section 1 of the Sherman Act, such as bid rigging, price fixing, allocating markets, and (more recently) no-poach agreements.

In this case, Zita’s major competitor turned down Zita’s offer to allocate markets between them. Thus, the proposed agreement never came to fruition. Because Section 1 of the Sherman Act does not cover attempted market allocation (or any other inchoate crime), DOJ could not seek an indictment under Section 1 of the Sherman Act. However, the DOJ still brought charges and secured a guilty plea for an attempted unilateral monopolization claim.3 By doing so, the DOJ relied on the “attempt” provision of Section 2.

The charging document (the “Information”) alleges that Zito attempted to monopolize the markets for highway crack-sealing services in Montana and Wyoming by unsuccessfully soliciting a geographic “market-allocation” partnership with the company’s major competitor, “Company B,” which is based in another state.4 According to the Information, Zito’s company and its main competitor are often “the only two companies that submit bids for crack sealing projects” in the relevant states.5 However, in facts paralleling the Braniff case in almost every detail, instead of agreeing to the plan, the competitor cooperated with DOJ and recorded phone calls with Zito, in which Zito encouraged his competitor to allocate regional markets for highway crack-sealing projects.6 Zito faces a maximum of 10 years in prison and a $1 million fine for attempted monopolization. He is set to be sentenced on February 23, 2022.

Key Takeaways

Zito reinforces that companies must continue to focus on identifying contact with direct competitors and minimize the risk of employees potentially offering competitors to fix prices or divide markets — even if such offers never get accepted. It also represents a rare case in which the factual circumstances of a case force DOJ to bring a criminal action under Section 2 of the Sherman Act rather than Section 1. While DOJ has indicated that it will bring cases for criminal violations of Section 2 of the Sherman Act,7 the unique facts of the Zito case mean that it remains to be seen whether this case is an aberration or the beginning of a trend.

*Nataly Farag is a law clerk in our Washington office.

1 Press Release, Dep’t of Just., Executive Pleads Guilty to Criminal Attempted Monopolization (Oct 31, 2022),

2 See United States v. Braniff Airways, Inc., 453 F. Supp. 724 (W.D. Tex. 1978).

3 Information, United States v. Zito, Crim. No. 1:22-cr-00113, at 4 (D. Mont. Sept. 19, 2022), ECF. No. 1  (“Information”).

4 Information, at 4−5.

5 Id.

6 Id.

7 Jonathan Kanter, Assistant Att’y Gen., Dep’t of Just., Opening Remarks at 2022 Spring Enforcers Summit (Apr. 4, 2022),

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.