DOJ Secures Guilty Plea in First Section 2 Prosecution in Decades

November 2, 2022

On Oct. 31, 2022, the U.S. Department of Justice Antitrust Division (DOJ) announced that it brought criminal attempted monopolization charges under Section 2 of the Sherman Act, resulting in a guilty plea. Section 2, which prohibits monopolization and conspiracy to monopolize in addition to attempted monopolization, has from its inception provided for both civil enforcement and criminal enforcement.

As McGuireWoods previously highlighted, DOJ leadership signaled in November 2021 and March 2022 that, after decades of pursuing Section 2 violations as civil matters, it was prepared to use Section 2 criminal enforcement as a tool to combat monopolization. This week’s announcement makes it clear that DOJ will bring criminal Section 2 actions, including prosecuting attempts that do not result in an unlawful agreement, a predicate for more common Sherman Act Section 1 criminal offenses.

Companies and individuals should take steps now to mitigate exposure by assessing business strategies that may implicate Section 2 and supplementing antitrust compliance programs and education materials to reflect this change.


According to a one-count information filed in the U.S. District Court for the District of Montana in September, the individual defendant, Nathan Zito, owned a Montana company that competes for opportunities to provide highway or road crack-sealing services to the Wyoming and Montana Departments of Transportation. As set forth in the information, the U.S. Department of Transportation (USDOT) often funds crack-sealing projects in part or in full. In January 2020, Zito called a competitor company (which was often Zito’s only competitor for crack-sealing business) to propose a “strategic partnership.” The individual receiving the call promptly reported the invitation to USDOT and participated in an investigation run by the Office of the Inspector General of USDOT.

During recorded telephone calls over approximately nine months, Zito proposed that Zito’s company would pursue crack-sealing opportunities only in Montana and Wyoming if the competitor would pursue crack sealing opportunities only in South Dakota and Nebraska. Zito also offered to pay the competitor for lost business and proposed that the arrangement be memorialized in a “sham” option-to-purchase contract, composed to obscure the terms of the market allocation agreement. The competitor ultimately refused to enter into the arrangement.

Based on this conduct, DOJ charged Zito with attempted monopolization, an offense with three elements: “(1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power.” Zito pleaded guilty to having “knowingly engaged in anticompetitive conduct with the intent of gaining monopoly power in the market for highway crack sealing services in Wyoming and Montana” through an agreement that, had it been “effectuated,” would have posed a “dangerous probability” of conferring monopoly power on Zito’s company. Zito will be sentenced in February, facing up to 10 years in prison and a $1 million fine.


  • With this shift in enforcement practices, companies should redouble efforts to educate teams regarding Section 2 risk and revise corporate compliance programs to include adequate information about monopolization offenses, tools for identifying and avoiding them, and a description of the potential criminal penalties.
  • The facts here also reinforce that competitor communications pose particular antitrust risk where one party is aware of the antitrust laws and chooses to report potentially unlawful conduct in order to protect its own interests. Although this matter does not appear to involve participation in the DOJ’s leniency program, as a tool for deterring unlawful conduct, companies’ antitrust training should highlight the leniency program and the incentive for competitors to report potential violations to the DOJ and other regulators.
  • Companies that participate in government bidding processes should reinforce in training that anticompetitive conduct involving public procurement continues to be an enforcement focus. Although the DOJ’s Public Procurement Strikeforce was not mentioned in the DOJ announcement, DOJ described the conduct as an attempt to “cheat American taxpayers by subverting the government contracting process.”
  • Companies should remain vigilant and continue to assess and invest in antitrust compliance as current DOJ leadership continues to demonstrate its commitment to use all available antitrust enforcement tools.