The U.S. Department of Justice’s Antitrust Division reaffirmed its endorsement of leniency initiatives both on the domestic and international front by lauding congressional efforts to reauthorize the Antitrust Criminal Penalty Enhancement and Reform Act (ACPERA) and pushing forward international cooperation guidelines as part of a multinational working group. In doing so, the Division reiterated its commitment to prosecute anticompetitive criminal cartels through its own Leniency Program and through cross-border cooperation. The Division’s efforts offer a reminder that seeking leniency remains a powerful option that companies navigating a possible antitrust violation should continue to take seriously.
Reauthorization of ACPERA
On June 25, 2020, Congress repealed the sunset provision of ACPERA.1 ACPERA works to provide greater incentives for corporations to self-report and cooperate with the Division under its Corporate Leniency Policy.2 Enacted in 2004, and extended in 2010 for another ten years, ACPERA was set to expire absent congressional action. In commending Congress’ decision to reauthorize the Act, the Division acknowledged how ACPERA has “substantially strengthened” the Division’s detection and prosecutorial efforts against anticompetitive cartel activity under the Leniency Program.3 This reauthorization follows public statements by the Division to the same effect — which we previously wrote about — and the Division’s April 2019 public roundtable to discuss ACPERA and its ability to incentivize the self-reporting of criminal anticompetitive conduct.4 While participants at the roundtable had differing views on various details of the law, the general consensus was that ACPERA “provides important benefits to leniency applicants and civil plaintiffs.”5
We have previously discussed the specific ways in which ACPERA complements the Division’s criminal antitrust enforcement efforts. While the Division’s Leniency Program confers on the successful and appropriately cooperative applicant immunity from criminal prosecution, ACPERA offers the leniency applicant a complementary suite of civil litigation benefits. In particular, ACPERA eliminates in the civil litigation context the double threats of treble damages and joint and several liability, so long as the company in question cooperates with civil plaintiffs in a timely and satisfactory manner.6 These benefits are important because the specter of expensive civil and class action litigation that almost always follows a criminal antitrust investigation may serve as a powerful deterrent against self-reporting criminal antitrust conduct to the Division in the first place. Indeed, while treble damages and joint and several liability may serve as powerful deterrence against engaging in anti-competitive behavior, they also complicate the calculus about whether to self-report when a violation does happen.7 Only the first successful leniency applicant is eligible for ACPERA’s benefits, thus encouraging the race to self-report.
The Division considers its Leniency Program its “most important prosecutorial tool for the last 26 years, particularly when it comes to international cartels.”8 In fact, from 2010 to 2019 the Division collected $9 billion in criminal fines and penalties and attained jail terms for more than 250 individuals.9 It is therefore not surprising that the Division would champion reauthorization of ACPERA, which gives companies navigating a possible criminal antitrust infraction additional incentive to self-report.
New ICN International Leniency Guidelines
The Division also recently heralded the International Competition Network’s (ICN) release of Guidance on Enhancing Cross-Border Leniency Cooperation, spearheaded by the ICN’s Cartel Working Group.10 ICN, an informal network composed of 104 competition agencies established in 2001, works to improve competition policy and enforcement on an international scale by developing procedural and substantive benchmarks for governments.11 The Division helped lead a team of antitrust agencies and representatives from around the globe, including Australia, Canada, Chile, Brazil, the European Union, Hong Kong, New Zealand, Turkey, and Hungary, to release the Guidance, which is intended to encourage competition agencies to work with their international counterparts in cross-border investigations involving leniency applicants.12
The Guidance commends the increased adoption of leniency programs by antitrust agencies around the world, but notes the increasingly complex evaluation companies considering seeking leniency face.13 This squares with the fact that, generally, the number of new leniency applications is down in a number of jurisdictions, which some view as a natural consequence of the proliferation of leniency programs. Companies thinking about filing for leniency in the U.S., for example, must consider other countries where they do business and whether they should file for leniency in those locations as well. Doing so, however, may result in multiple simultaneous investigations in different places around the world — an expensive and time-consuming exercise.
One of the goals of the new ICN Guidance is to mitigate these disincentives for prospective leniency applicants.14 For instance, the Guidance attempts to streamline multijurisdictional investigations by coordinating interviews and other joint scheduling opportunities.15 Hoping to minimize the risks of “double counting,” the Guidance also encourages anticompetitive authorities investigating a cross-border cartel case to coordinate on fines and other sanctions by engaging in focused discussions regarding their respective approaches to calculating fines.16
Why This Matters for You
The Antitrust Division’s efforts to encourage leniency initiatives both in the U.S. and abroad signals continued support of self-reporting and cooperation as a critical means to forward its mission of prosecuting criminal antitrust behavior. Companies that discover a possible criminal antitrust violation should continue to take seriously the option of seeking leniency and consult with counsel to understand the risks and benefits of doing so.
1 H.R. Res. 7036, 116th Cong. (2020); S. Res. 3377, 116th Cong. (2020); see also U.S. Dep’t of Justice, Department of Justice Applauds Congressional Passage of Reauthorization of the Antitrust Criminal Penalty Enhancement and Reform Act (June 26, 2020), https://www.justice.gov/opa/pr/department-justice-applauds-congressional-passage-reauthorization-antitrust-criminal-penalty [hereinafter DOJ Press Release on ACPERA Reauthorization].
2 See ACPERA, Pub. L. No. 108-237, 118 Stat. 661 (2004); see also DOJ Press Release on ACPERA Reauthorization.
3 See DOJ Press Release on ACPERA Reauthorization.
4 See U.S. Dep’t of Justice, Public Roundtable on Antitrust Criminal Penalty Enhancement & Reform Act (ACPERA), https://www.justice.gov/atr/events/public-roundtable-antitrust-criminal-penalty-enhancement-reform-act-acpera#information.
5 See U.S. Dep’t of Justice, ACPERA Roundtable Executive Summary, 1 https://www.justice.gov/atr/page/file/1184396/download.
6 See DOJ Press Release on ACPERA Reauthorization.
7 See id.
8 See id.
9 See id.
10 See U.S. Dep’t of Justice, Antitrust Division Applauds New International Leniency Guidelines: New Guidelines Will Increase Effectiveness of International Cartel Enforcement Through Better Cooperation (July 10, 2020), https://www.justice.gov/opa/pr/antitrust-division-applauds-new-international-leniency-guidelines [hereinafter DOJ Press Release on New ICN Guidance].
11 See ICN Factsheet and Key Messages, Int’l Competition Network 2, 5 (Apr. 2009), https://www.internationalcompetitionnetwork.org/wp-content/uploads/2018/09/Factsheet2009.pdf.
12 See DOJ Press Release on New ICN Guidance.
13 See Cartel Working Group Subgroup 1, Guidance on Enhancing Cross-Border Leniency Cooperation, Int’l Competition Network 3 (June 2020), https://www.internationalcompetitionnetwork.org/wp-content/uploads/2020/07/CWG-Leniency-Coordination-Guidance.pdf?utm_medium=email&utm_source=govdelivery.
14 See id.
15 See id. at 18-19.
16 See id. at 19-21.
