There is a tension at the heart of modern U.S. cartel enforcement. On one hand is the engine that has been driving most criminal and civil cartel enforcement since the mid-1990s — the Department of Justice’s corporate leniency or “amnesty” program. The modern leniency program offers a relatively simple bargain to the first intrepid cartelist who walks through DOJ’s door: complete criminal amnesty in exchange for complete cooperation. But, on the other hand, the simplicity of this bargain has historically been complicated by the significant countervailing likelihood of private “follow-on” lawsuits threatening some of the most severe penalties found anywhere in the U.S. legal system, including joint and several liability, treble damages, and the automatic recovery of attorneys’ fees and costs. By providing the government with the robust cooperation necessary to achieve criminal amnesty, a cartelist was also often ensuring private plaintiffs would have the evidence they needed to successfully obtain these civil penalties, which, at least for corporate defendants, can be more financially painful than anything the criminal process can provide. The result is that the cost-benefit analysis of invoking the DOJ’s amnesty program has not always been as straightforward as it appears or was likely intended.
Enter ACPERA. Sixteen years ago, the U.S. Congress expressed concern that the prospect of expansive unmitigated civil liability was deterring potential amnesty applicants from cooperating with the government, and thereby weakening the entire U.S. scheme of cartel enforcement. To address the issue, Congress passed the Antitrust Criminal Penalties Enhancement Reform Act of 2004 (“ACPERA”), which attempted to shift the cost-benefit analysis back in favor of criminal cooperation by potentially sparing successful amnesty applicants the joint and several liability and treble damages typically available in civil antitrust conspiracy cases, i.e., limiting the applicant’s civil liability to the actual damages attributable to its own sales. But the benefits of this enhanced bargain are not automatic and come with a big catch: in addition to satisfying all the ongoing requirements of the DOJ’s amnesty program, the applicant must also provide civil plaintiffs with “timely” and “satisfactory cooperation” — cooperation arguably meant to exceed what was provided to achieve criminal amnesty.
ACPERA has been controversial since its inception. Some have argued that the benefits of criminal amnesty are enough to motivate participation in the amnesty program, particularly when a potential applicant knows that if it does not act quickly, one of its co-conspirators may win the race to the DOJ’s door. Others have argued that while reduced civil liability under ACPERA is a meaningful additional incentive, the imposition of vague cooperation requirements nonetheless undermines it by making it unclear whether reduced liability actually will be achieved, including by incentivizing private plaintiffs to paint the applicant’s cooperation as “untimely” or “unsatisfactory” as leverage to extract monetary settlements nearly as punitive as in a world where ACPERA did not exist at all.
This debate is growing louder as Congress once again confronts ACPERA’s future. ACPERA was enacted in 2004 with a five-year “sunset provision,” and was then renewed in 2010 for another ten years. It is now up for renewal again, and there are serious questions about whether Congress will, or should, allow the statute to persist in its current form — or at all. This debate is happening against a complex backdrop, in which participation in DOJ’s amnesty program is at an all-time low, while the reach, power, and activity of many foreign antitrust leniency and enforcement programs continue to increase. The result of this debate will help determine the future of antitrust cartel enforcement in the United States, and it is not one that any company doing business in this country can safely ignore.
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* Reprinted with permission of Legal 500 Cartels Countrywide Comparative Guide, 2nd Edition, where it was originally published in April 2020.