Changes to Ohio’s antitrust law, the Valentine Act, took effect on April 6, 2017. This edition of “Competition Matters” outlines the changes most likely to impact public purchasers.
- Public-record exemptions
Newly-added section 9.28 of the Ohio Revised Code applies to all public entities and exempts competitive bidding materials from the definition of a public record under Ohio’s public records law before a contract is awarded. This provision applies to re-bid projects as well, and therefore it protects against disclosure of competitively-sensitive information if a project is re-bid.
Because public entities are no longer obligated under the public records laws to disclose such materials until the contract is awarded, unscrupulous vendors will be deprived of what was formerly an easy method of learning whom to contact in order to solicit a potential conspiracy.
- Attorney General investigation disclosure exemptions
Another important change to the Valentine Act relates to the public disclosure of information that the Ohio Attorney General’s Office receives during an investigation. Previously, only information submitted in response to a subpoena by the Ohio Attorney General’s Office had statutory protection under the state’s antitrust law. Now, Ohio Revised Code (ORC) Section 1331.17 exempts from public disclosure any information received during an investigation by the Attorney General’s Antitrust Section. As such, it will encourage voluntary cooperation by third parties and protect investigative targets from premature public scrutiny while an investigation is in progress.
- Addressing conspiracies where vendors solicit public employees
Until recently, the Valentine Act did not directly speak to situations where a vendor solicits the assistance of a public employee to rig a public bid or to otherwise circumvent a competitive procurement process. The Ohio General Assembly’s revisions to ORC 1331.01 are designed to remedy this problem. The statute now declares such conspiracies to be violations of state antitrust law, and it provides the Ohio Attorney General with an important tool with which to upend these anticompetitive agreements involving taxpayer funds.
- Changes to criminal penalties
Other notable changes to the Valentine Act relate to criminal penalties. ORC 1331.99 enhances the penalties for violating the act from a first degree misdemeanor to a fifth degree felony. Moreover, if any of the following apply, the penalty is further enhanced to a fourth-degree felony: (1) the amount of the contract, or sale of goods or services, is $7,500 or more, (2) the conspiracy relates to the sale of goods or services to or from a local, state, or federal governmental entity, or (3) the contract or sale of goods or services involves funding to or from a local, state, or federal governmental entity. The purpose of these revisions is to deter anticompetitive behavior that harms Ohio’s consumers, especially when it impacts taxpayer-funded purchases.
The 2017 revisions to the Ohio Valentine Act launch a two-pronged attack on anticompetitive behavior in Ohio. They are designed to deter would-be wrongdoers from committing the violations in the first place and to better enable the Ohio Attorney General to bring actions when violations do occur.