The Antitrust Division of the Department of Justice has a “leniency program” that serves as an incentive for antitrust violators to self-report their violations. The program permits the first member of an antitrust conspiracy that admits its conduct to obtain full amnesty from all criminal enforcement for itself and, if the reporting entity is a corporation, its employees as well.
To provide even greater incentives for antitrust violators to self-report violations, in 2004 Congress passed the “Antitrust Criminal Penalties Enforcement and Reform Act of 2004.” In addition to increasing the criminal penalties for antitrust violations (to $100 million or twice the harm caused for corporations; to $10 million and 10 years in prison for individuals), the legislation also reduced the self-reporting antitrust violator’s damages in follow-on civil actions. While antitrust violators typically face treble damages in such actions, the law limited the penalty to single damages. This provision, however, was implemented for only a five year period.
With the damages cap set to sunset in June of 2009, last year a bill was hastily introduced, and subsequently passed, that extended the damages cap provision for an additional year. Now, with the cap again set to expire, on April 26 Senator Kohl introduced the “Antitrust Criminal Penalty Enforcement and Reform Act of 2004 Extension Act of 2010” (S.3259). The bill would strike the sunset provision regarding the damages cap, making it permanent. In support of the legislation, Senator Kohl noted that since the original passage of the legislation in 2004, requests for leniency have increased by 25 percent.
Congress is expected to pass the legislation prior to June 22, when the damages cap would otherwise sunset.