Get Out of Jail Free? The Hidden Cost of Deferred Prosecution

By Veda Katta '27

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Imagine a company gets caught rigging prices—a federal crime that harms consumers, crushes competition, and undermines market integrity. When competitors collude to fix prices, consumers pay more and have fewer choices, while the broader market loses the benefits of competition that drive innovation and keep dominant players accountable. Over time, unchecked collusion can erode the very foundations of a fair marketplace. Now imagine that instead of going to trial or pleading guilty, that company simply agrees to pay a fine, admit wrongdoing, clean up its internal processes, and then watch the charges disappear without any conviction or criminal record.

This negotiated exit from the shadow of the courtroom is called a Deferred Prosecution Agreement (DPA), and it’s become one of the DOJ’s favorite tools.

What Exactly Is a DPA?

A Deferred Prosecution Agreement (DPA) is a pretrial mechanism under which the government agrees to defer prosecution and move to dismiss the charges, provided the company satisfies a negotiated set of conditions. (1) Those conditions typically include a formal admission of wrongdoing, payment of fines or forfeitures, active cooperation with ongoing government investigations, and a commitment to implementing internal compliance reforms. (2) If the defendant meets all requirements over the agreement’s specified period, the charges are dismissed. (3)

The DOJ’s Antitrust Division has relied on this tool with increasing frequency. Since 2019, it has entered into eleven antitrust DPAs, with financial penalties ranging from $4 million to $225 million. (4) Especially in the early years of this shift, DPAs have actually rivaled or exceeded traditional plea agreements as the Antitrust Division’s primary method of antitrust resolution. (5) This transition marks a major turning point for a division tasked with policing the complex world of high-level corporate crime.

Why the DOJ Loves Them

The case for DPAs is compelling, considering that antitrust cases are notoriously resource-intensive. (6) Sprawling price-fixing conspiracies often span multiple industries, involve dozens of actors, and require years of investigative groundwork. In fact, only six percent of federal antitrust criminal cases ever reach trial. (7) DPAs allow the DOJ to resolve cases efficiently, conserve investigative resources, and redirect attention toward other enforcement priorities. (8)

The case for deterrence remains relatively strong, especially because the financial stakes of a DPA often mirror those of a standard plea deal. (9) Additionally, compliance mandates are far from symbolic. In the Teva and Glenmark cases, the government forced both companies to divest entire product lines and donate millions in pharmaceuticals to humanitarian causes, hitting their portfolios as hard as their bank accounts. (10)

DPAs also offer a level of flexibility that rigid criminal fines cannot always match. (11) While a conviction can lead to probation and ongoing judicial oversight, a DPA can mandate long-term, embedded supervision that is tailored specifically to the misconduct, ensuring the government actually reshapes the corporation's behavior from the inside out. For instance, a compliance monitor embedded in a pharmaceutical company for several years may do more to prevent future harm than a guilty plea that closes the file and moves on. (12)

The Conviction Problem

The defining feature of a DPA, or the one that makes it attractive to corporate defendants, is also its most troubling: the absence of conviction.

Criminal law has always served as more than a deterrent function, expressing something greater about the relationship between conviction and fundamental social norms.(13) Historically, antitrust authorities have framed price-fixing as a breach of the competitive ecosystem. Criminal charges can underscore this ethical distinction and highlight the harm done to consumers and small enterprises. (14)

The DPA process uncouples the admission of guilt from the finality of a judgment. Because the charges are ultimately wiped clean, the company’s confession is never codified into a criminal record, effectively laundering its reputation through the settlement process. (15) The public record reflects a company that paid a fine and reformed itself, not one that was found criminally liable. For antitrust violations, which are already invisible to most consumers and rarely feel morally intuitive, this expressive gap matters greatly. When enforcement stops short of a conviction, it reinforces the dangerous narrative that corporate misconduct is a regulatory hurdle to be managed rather than a moral line that was crossed. (16)

In other words, by avoiding a criminal record, companies bypass the secondary penalties that give the law its teeth. Without the sting of reputational damage or debarment from government contracts and healthcare programs, a serious legal sanction is reduced to a mere line item on a balance sheet. (17)

Who Benefits, And Who Doesn’t

DPAs are not available in equal measure to all defendants. To win a better agreement, a company needs more than just a good defense; it needs the massive resources and time to wear down the government’s opposition. (18) Large multinational corporations with elite outside counsel are well-positioned for that process, while smaller firms and individual defendants rarely are.

This creates a double standard, as a wealthy company knows it can simply negotiate away a criminal record in exchange for a fine and a few new rules. The problem isn't that the fines are small; it has become that the most serious punishments are only 'optional' for those who can afford the lawyers to talk their way out of them. The rational corporate calculus can begin to resemble not “don’t break the law,” but rather “assess the risk and price in the DPA.” In other words, while a small business might be crushed by the weight of a single indictment, a multinational corporation can treat the legal process as a multi-year negotiation.

The Heritage Pharmaceuticals case illustrates this concern directly. In 2019, Heritage admitted to participating in a generic drug price-fixing conspiracy that carried serious consequences for patients. (19) The company entered a DPA, paid its penalties, and avoided exclusion entirely from federal healthcare programs, despite the criminal nature of its conduct. (20) It is difficult to read that outcome and conclude that the legal system treated it with the gravity it deserved.

DPAs have created a 'wait-and-see' culture in corporate boardrooms. Rather than self-reporting misconduct immediately, firms calculate the risk of discovery against the manageable cost of a settlement. By making the fallout of a crime so predictable, we have accidentally rewarded companies for staying silent until they are caught, which is the exact opposite of what a compliance program is meant to do. (21)

Efficiency vs. Justice: An Unresolved Tension

None of this means DPAs are indefensible. A system that resolves complex antitrust cases efficiently, extracts meaningful remedies, and avoids the uncertainty of trial has real value, and the DOJ is not wrong to use it. (22)

But there is a difference between a useful tool and an uncritical default. As DPAs become more common, they increasingly define what “criminal” antitrust enforcement means in practice. That definition is drifting further from conviction, from judicial scrutiny, and from the expressive moral force that criminal law has traditionally carried. (23) The agreements are negotiated privately, reviewed by judges only to satisfy procedural requirements, and resolved without the public adjudication that gives the system its legitimacy. (24) For everyday Americans, this matters because the same price-fixing conspiracies that quietly inflate the cost of medications, food, or financial products may never result in the public reckoning that holds powerful corporations responsible and deters the next violation.

The deeper question is one that policymakers have been content to leave unanswered: if antitrust enforcement no longer reliably produces conditions, public adjudication, or meaningful reputational consequence, then in what sense is it still criminal enforcement, and not simply a licensing regime for well-resourced wrongdoers? (25) Right now, it is trying to be both, and in doing so, it may be doing justice to neither.

Endnotes

1. Claire Black, “Deferred Prosecution Agreements in Antitrust Enforcement: An Efficient Alternative to Pleas,” University of Chicago Business Law Review Online (2023).

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

7. Ibid.

8. Ibid.

9. Ibid.

10. U.S. Department of Justice, “Major Generic Drug Companies to Pay Over Quarter of a Billion Dollars to Resolve Price-Fixing Charges,” Press Release, August 21, 2023.

11. Black, “Deferred Prosecution Agreements.”

12. Ibid.

13. David M. Uhlmann, "The Pendulum Swings: Reconsidering Corporate Criminal Prosecution," 1760 University of Michigan Law School Faculty Publications (2016).

14. Ibid.

15. John C. Coffee Jr., Corporate Crime and Punishment: The Crisis of Underenforcement (2020).

16. Black, “Deferred Prosecution Agreements.”

17. Levine, Eyre, and Zhou, "The Impact of Criminal Conviction on Public Sector Contractors and Grantees," Crowell & Moring LLP (2016).

18. Black, “Deferred Prosecution Agreements.”

19. U.S. Department of Justice, “Pharmaceutical Company Admits Price Fixing Violation of Antitrust Law,” Press Release, May 30, 2019.

20. Ibid.

21. Black, “Deferred Prosecution Agreements.”

22. Coffee, Corporate Crime and Punishment.

23. Black, “Deferred Prosecution Agreements.”

24. Ibid.

25. Ibid.