Limits on Antitrust Damage Exposure for Cooperating Cartelists Extended

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Provisions in the Antitrust Criminal Penalties Enforcement and Reform Act (ACPERA) of 2004 that limit the civil liability in private antitrust actions of cartel participants who are accepted into the Department of Justice Antitrust Division's leniency program have been extended for ten years.

Legislation extending the provisions through June 22, 2020, was signed into law on June 9. The text of ACPERA, as amended by Public Law 111-190, begins at CCH Trade Regulation Reporter ¶27,750.

Under the Antitrust Division’s corporate leniency program, a company is protected from criminal prosecution for antitrust violations if it is first to come forward to advise the Antitrust Division of an antitrust offense and cooperates with the government’s investigation.

The ACPERA provides the added incentive of reducing liability in private damages suits to actual damages rather than treble damages. Under the law, the cooperating company must also cooperate in the private litigation in order for the de-trebling provision to apply.

For futher details about the legislation, see Trade Regulation Talk, May 28, 2010 posting.

Congress Passes Extension of Limits on Antitrust Damages for Leniency Program Participants

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Legislation to extend for ten years the Antitrust Criminal Penalties Enforcement and Reform Act (ACPERA) of 2004 was approved by Congress yesterday. ACPERA limits the civil liability of cartel participants who are accepted into the Department of Justice Antitrust Division's leniency program.

Under ACPERA, leniency program participants are liable in private antitrust lawsuits for the actual damages caused by the company, rather than the treble damages usually available.

As a result, a significant disincentive to participating in the leniency program—the prospect of treble damages in a civil suit despite immunity from criminal prosecution--is removed. The law was amended in 2009 to extend the detrebling provision for one year, until June 22, 2010.

The current legislation (H.R. 5330), if signed by the president, will extend the de-trebling provision until 2020. A Senate version of the bill (S. 3259) would have provided for a permanent extension of ACPERA.

Senator Kohl’s Views

"This 10-year extension will offer the Department of Justice Antitrust Division the resources and authority necessary to protect consumers from price-fixing cartels," said Senator Herb Kohl (Wisconsin) in a May 28 statement.

"The program has proven successful in uncovering and punishing price-fixing crimes, and it is my hope that this extension will usher in another decade of detection and prosecution."

Comptroller General Study

The legislation also calls on the Comptroller General to submit a report to Congress on the effectiveness of the ACPERA, both in criminal investigation and enforcement and in private civil actions. The report is to consider the addition of qui tam proceedings to the antitrust leniency program and the creation of anti-retaliatory protection for employees who report illegal anticompetitive conduct.

Limits on Treble Damages for Antitrust Amnesty Applicants Extended for One Year

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (ACPERA) has been amended to extend for one year provisions that protect successful amnesty applicants under the Department of Justice Antitrust Division corporate leniency program from treble damages in private suits.

The “Antitrust Criminal Penalty Enhancement and Reform Act of 2004 Extension Act” (Public Law 111-30) was signed into law on June 19, 2009. Enactment came just two days after the measure received Senate approval and ten days after it passed the House of Representatives. The legislation was introduced on June 3.

Portions of ACPERA had been scheduled to sunset on June 22, 2009. According to the original law, limitations on recovery against an amnesty applicant cease to have effect five years after the law's June 22, 2004, date of enactment. The extension ensures that antitrust amnesty agreements entered into until June 22, 2010, will shield successful applicants from treble damages.
Senator Herb Kohl (D-Wis.), chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, called the limitations on civil liability “an important part of the Division’s Leniency Policy.”

The limitations “removed a significant disincentive to participation in the leniency program--the concern that, despite immunity from criminal charges, a participating corporation might still be on the hook for treble damages in any future antitrust lawsuits.”

Remarking that “the incentives in this program are critical to the success of the Antitrust Division's criminal antitrust enforcement,” Sen. Patrick Leahy (D-Vt.) said that “the one-year extension will allow the Department of Justice to continue this successful program while Congress assesses the long-term direction of the Department of Justice's leniency program.” Sen. Leahy chairs the Senate Judiciary Committee.

Further information about the legislation appears here at the Library of Congress Thomas website.