Congress Misses Opportunity to Bolster Flagging Cartel Enforcement through Whistleblowers

By: Michael W. Scarborough and Kevin Costello (Sheppard Mullin)

Congress recently took two steps towards incentivizing private participation in federal cartel enforcement:  the permanent adoption of ACPERA, and enactment of the Criminal Antitrust Anti-Retaliation Act.  While now companies may have permanent incentives to self-report cartel activity, and whistleblowing employees may be better protected from employer retaliation, no surge in individual cartel reporting should be expected absent direct whistleblower financial incentives, such as found in other federal enforcement regimes.

ACPERA Is Now Permanent

Signed into law in October 2020, the Antitrust Criminal Penalty Enhancement and Reform Permanent Extension Act made permanent the provisions in ACPERA originally enacted in 2004 providing greater incentives for corporations to self-report and cooperate pursuant to the Department of Justice Antitrust Division’s Corporate Leniency Policy.  ACPERA buttresses the Division’s policy of giving amnesty from criminal prosecution to the first firm or individual to confess participation in a criminal antitrust conspiracy by limiting subsequent civil liability for the same conduct.  The rationale is that even if a co-conspirator qualifies for amnesty from criminal prosecution, the specter of broad civil liability might dissuade an otherwise cooperative cartel member from confessing, thereby blunting the amnesty program’s incentives.

Under ACPERA, a defendant that fulfills the reporting and cooperation requirements under the DOJ’s amnesty program can also limit its liability in subsequent civil lawsuits to the “actual damages” caused by the defendant’s illegal conduct.  However, defendants are only entitled to ACPERA protection if they provide “timely” and “satisfactory cooperation” to civil plaintiffs.  As this blog previously observed, these terms are ambiguous, and only at the end of litigation will the judge determine whether a civil defendant has satisfactorily performed its role and earned the sought protection under ACPERA.  This lack of clarity calls into question just how effective ACPERA’s protections are in getting co-conspirators to come forward…