Legislation to help detect and prosecute price-fixing cartels (Sen. Herb Kohl)

Yesterday, I introduced the Antitrust Criminal Penalties Enforcement and Reform Act of 2004 Extension Act. This legislation extends a critical component of the Antitrust Criminal Penalty Enforcement and Reform Act of 2004, set to expire on June 22, which encourages participation in the Antitrust Division’s leniency program. My bill would enable the Justice Department to continue to detect, investigate and aggressively prosecute price-fixing and other cartels which harm consumers.

The Antitrust Division of the Department of Justice has long considered criminal cartel enforcement a top priority, and its Corporate Leniency Policy is an important tool in that enforcement. Criminal antitrust offenses are generally conspiracies among competitors to fix prices, rig bids, or allocate markets of customers. The Leniency Policy creates incentives for corporations to report their unlawful cartel conduct to the Division, by offering the possibility of immunity from criminal charges to the first-reporting corporation, as long as there is full cooperation. For more than fifteen years, this policy has allowed the Division to uncover cartels affecting billions of dollars worth of commerce here in the United States, which has led to prosecutions resulting in record fines and jail sentences.

An important part of the Division’s Leniency Policy, added by the Antitrust Criminal Penalties Enforcement and Reform Act of 2004, limits the civil liability of leniency participants to the actual damages caused by that company – rather than triple the damages caused by the entire conspiracy, which is typical in civil antitrust lawsuits. This 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.

ACPERA’s damages limitation is set to expire later this month, so we must act quickly to extend it. Otherwise, the Justice Department will lose an important tool that it uses to investigate and prosecute criminal cartel activity. This bill extends that provision for one year. Over the next year, we will fully review ACPERA, and consider potential changes to make it more effective.

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