[Congressional Record Volume 150, Number 45 (Friday, April 2, 2004)]
[Senate]
[Pages S3610-S3619]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       STANDARDS DEVELOPMENT ORGANIZATION ADVANCEMENT ACT OF 2003

  Mr. McCONNELL. I ask unanimous consent that the Senate now proceed to 
the immediate consideration of Calendar No. 376, H.R. 1086.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (H.R. 1086) to encourage the development and 
     promulgation of volunteer consensus standards by providing 
     relief under the antitrust laws to standards development 
     organizations with respect to conduct engaged in for the 
     purpose of developing voluntary consensus standards, and for 
     other purposes.

  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on the Judiciary, with an 
amendment to strike all after the enacting clause and insert in lieu 
thereof the following:
  [Strike the part shown in black brackets and insert the part shown in 
italic.]

                               H.R. 1086

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     [SECTION 1. SHORT TITLE.

       [This Act may be cited as the ``Standards Development 
     Organization Advancement Act of 2003''.

     [SEC. 2. FINDINGS.

       [The Congress finds the following:
       [(1) In 1993, the Congress amended and renamed the National 
     Cooperative Research Act of 1984 (now known as the National 
     Cooperative Research and Production Act of 1993 (15 U.S.C. 
     4301 et seq.)) by enacting the National Cooperative 
     Production Amendments of 1993 (Public Law 103-42) to 
     encourage the use of collaborative, procompetitive activity 
     in the form of research and production joint ventures that 
     provide adequate disclosure to the antitrust enforcement 
     agencies about the nature and scope of the activity involved.
       [(2) Subsequently, in 1995, the Congress in enacting the 
     National Technology Transfer and Advancement Act of 1995 (15 
     U.S.C. 272 note) recognized the importance of technical 
     standards developed by voluntary consensus standards bodies 
     to our national economy by requiring the use of such 
     standards to the extent practicable by Federal agencies and 
     by encouraging Federal agency representatives to participate 
     in ongoing standards development activities. The Office of 
     Management and Budget on February 18, 1998, revised Circular 
     A-119 to reflect these changes made in law.
       [(3) Following enactment of the National Technology 
     Transfer and Advancement Act of 1995, technical standards 
     developed or adopted by voluntary consensus standards bodies 
     have replaced thousands of unique Government standards and 
     specifications allowing the national economy to operate in a 
     more unified fashion.
       [(4) Having the same technical standards used by Federal 
     agencies and by the private sector permits the Government to 
     avoid the cost of developing duplicative Government standards 
     and to more readily use products and components designed for 
     the commercial marketplace, thereby enhancing quality and 
     safety and reducing costs.
       [(5) Technical standards are written by hundreds of 
     nonprofit voluntary consensus standards bodies in a 
     nonexclusionary fashion, using thousands of volunteers from 
     the private and public sectors, and are developed under the 
     standards development principles set out in Circular Number 
     A-119, as revised February 18, 1998, of the Office of 
     Management and Budget, including principles that require 
     openness, balance, transparency, consensus, and due process. 
     Such principles provide for--
       [(A) notice to all parties known to be affected by the 
     particular standards development activity,
       [(B) the opportunity to participate in standards 
     development or modification,
       [(C) balancing interests so that standards development 
     activities are not dominated by any single group of 
     interested persons,
       [(D) readily available access to essential information 
     regarding proposed and final standards,
       [(E) the requirement that substantial agreement be reached 
     on all material points after the consideration of all views 
     and objections, and
       [(F) the right to express a position, to have it 
     considered, and to appeal an adverse decision.
       [(6) There are tens of thousands of voluntary consensus 
     standards available for government use. Most of these 
     standards are kept current through interim amendments and 
     interpretations, issuance of addenda, and periodic 
     reaffirmation, revision, or reissuance every 3 to 5 years.
       [(7) Standards developed by government entities generally 
     are not subject to challenge under the antitrust laws.
       [(8) Private developers of the technical standards that are 
     used as Government standards are often not similarly 
     protected, leaving such developers vulnerable to being named 
     as codefendants in lawsuits even though the likelihood of 
     their being held liable is remote in most cases, and they 
     generally have limited resources to defend themselves in such 
     lawsuits.
       [(9) Standards development organizations do not stand to 
     benefit from any antitrust violations that might occur in the 
     voluntary consensus standards development process.
       [(10) As was the case with respect to research and 
     production joint ventures before the passage of the National 
     Cooperative Research and Production Act of 1993, if relief 
     from the threat of liability under the antitrust laws is not 
     granted to voluntary consensus standards bodies, both 
     regarding the development of new standards and efforts to 
     keep existing standards current, such bodies could be forced 
     to cut back on standards development activities at great 
     financial cost both to the Government and to the national 
     economy.

     [SEC. 3. DEFINITIONS.

       [Section 2 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4301) is amended--
       [(1) in subsection (a) by adding at the end the following:
       [``(7) The term `standards development activity' means any 
     action taken by a standards development organization for the 
     purpose of developing, promulgating, revising, amending, 
     reissuing, interpreting, or otherwise maintaining a voluntary 
     consensus standard, or using such standard in conformity 
     assessment activities, including actions relating to the 
     intellectual property policies of the standards development 
     organization.
       [``(8) The term `standards development organization' means 
     a domestic or international organization that plans, 
     develops, establishes, or coordinates voluntary consensus 
     standards using procedures that incorporate the attributes of 
     openness, balance of interests, due process, an appeals 
     process, and consensus in a manner consistent with the Office 
     of Management and Budget Circular Number A-119, as revised 
     February 10, 1998.
       [``(9) The term `technical standard' has the meaning given 
     such term in section 12(d)(4)

[[Page S3611]]

     of the National Technology Transfer and Advancement Act of 
     1995.
       [``(10) The term `voluntary consensus standard' has the 
     meaning given such term in Office of Management and Budget 
     Circular Number A-119, as revised February 10, 1998.''; and
       [(2) by adding at the end the following:
       [``(c) The term `standards development activity' excludes 
     the following activities:
       [``(1) Exchanging information among competitors relating to 
     cost, sales, profitability, prices, marketing, or 
     distribution of any product, process, or service that is not 
     reasonably required for the purpose of developing or 
     promulgating a voluntary consensus standard, or using such 
     standard in conformity assessment activities.
       [``(2) Entering into any agreement or engaging in any other 
     conduct that would allocate a market with a competitor.
       [``(3) Entering into any agreement or conspiracy that would 
     set or restrain prices of any good or service.''.

     [SEC. 4. RULE OF REASON STANDARD.

       [Section 3 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4302) is amended by 
     striking ``of any person in making or performing a contract 
     to carry out a joint venture shall'' and inserting the 
     following: ``of--
       [``(1) any person in making or performing a contract to 
     carry out a joint venture, or
       [``(2) a standards development organization while engaged 
     in a standards development activity,

     [shall''.

     [SEC. 5. LIMITATION ON RECOVERY.

       [Section 4 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4303) is amended--
       [(1) in subsections (a)(1), (b)(1), and (c)(1) by inserting 
     ``, or for a standards development activity engaged in by a 
     standards development organization against which such claim 
     is made'' after ``joint venture'', and
       [(2) in subsection (e)--
       [(A) by inserting ``, or of a standards development 
     activity engaged in by a standards development organization'' 
     before the period at the end, and
       [(B) by redesignating such subsection as subsection (f), 
     and
       [(3) by inserting after subsection (d) the following:
       [``(e) Subsections (a), (b), and (c) shall not be construed 
     to modify the liability under the antitrust laws of any 
     person (other than a standards development organization) 
     who--
       [``(1) directly (or through an employee or agent) 
     participates in a standards development activity with respect 
     to which a violation of any of the antitrust laws is found,
       [``(2) is not a fulltime employee of the standards 
     development organization that engaged in such activity, and
       [``(3) is, or is an employee or agent of a person who is, 
     engaged in a line of commerce that is likely to benefit 
     directly from the operation of the standards development 
     activity with respect to which such violation is found.''.

     [SEC. 6. ATTORNEY FEES.

       [Section 5 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4304) is amended--
       [(1) in subsection (a) by inserting ``, or of a standards 
     development activity engaged in by a standards development 
     organization'' after ``joint venture'', and
       [(2) by adding at the end the following:
       [``(c) Subsections (a) and (b) shall not apply with respect 
     to any person who--
       [``(1) directly participates in a standards development 
     activity with respect to which a violation of any of the 
     antitrust laws is found,
       [``(2) is not a fulltime employee of a standards 
     development organization that engaged in such activity, and
       [``(3) is, or is an employee or agent of a person who is, 
     engaged in a line of commerce that is likely to benefit 
     directly from the operation of the standards development 
     activity with respect to which such violation is found.''.

     [SEC. 7. DISCLOSURE OF STANDARDS DEVELOPMENT ACTIVITY.

       [Section 6 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4305) is amended--
       [(1) in subsection (a)--
       [(A) by redesignating paragraphs (1), (2), and (3) as 
     subparagraphs (A), (B), and (C), respectively,
       [(B) by inserting ``(1)'' after ``(a)'', and
       [(C) by adding at the end the following:
       [``(2) A standards development organization may, not later 
     than 90 days after commencing a standards development 
     activity engaged in for the purpose of developing or 
     promulgating a voluntary consensus standards or not later 
     than 90 days after the date of the enactment of the Standards 
     Development Organization Advancement Act of 2003, whichever 
     is later, file simultaneously with the Attorney General and 
     the Commission, a written notification disclosing--
       [``(A) the name and principal place of business of the 
     standards development organization, and
       [``(B) documents showing the nature and scope of such 
     activity.

     [Any standards development organization may file additional 
     disclosure notifications pursuant to this section as are 
     appropriate to extend the protections of section 4 to 
     standards development activities that are not covered by the 
     initial filing or that have changed significantly since the 
     initial filing.'',
       [(2) in subsection (b)--
       [(A) in the 1st sentence by inserting ``, or a notice with 
     respect to such standards development activity that 
     identifies the standards development organization engaged in 
     such activity and that describes such activity in general 
     terms'' before the period at the end, and
       [(B) in the last sentence by inserting ``or available to 
     such organization, as the case may be'' before the period,
       [(3) in subsection (d)(2) by inserting ``, or the standards 
     development activity,'' after ``venture'',
       [(4) in subsection (e)--
       [(A) by striking ``person who'' and inserting ``person or 
     standards development organization that'', and
       [(B) by inserting ``or any standards development 
     organization'' after ``person'' the last place it appears, 
     and
       [(5) in subsection (g)(1) by inserting ``or standards 
     development organization'' after ``person''.

     [SEC. 8. RULE OF CONSTRUCTION.

       [Nothing in this Act shall be construed to alter or modify 
     the antitrust treatment under existing law of--
       [(1) parties participating in standards development 
     activity of standards development organizations within the 
     scope of this Act, or
       [(2) other organizations and parties engaged in standard-
     setting processes not within the scope of this amendment to 
     the Act.]

  TITLE I--STANDARDS DEVELOPMENT ORGANIZATION ADVANCEMENT ACT OF 2003

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Standards Development 
     Organization Advancement Act of 2003''.

     SEC. 102. FINDINGS.

       The Congress finds the following:
       (1) In 1993, the Congress amended and renamed the National 
     Cooperative Research Act of 1984 (now known as the National 
     Cooperative Research and Production Act of 1993 (15 U.S.C. 
     4301 et seq.)) by enacting the National Cooperative 
     Production Amendments of 1993 (Public Law 103-42) to 
     encourage the use of collaborative, procompetitive activity 
     in the form of research and production joint ventures that 
     provide adequate disclosure to the antitrust enforcement 
     agencies about the nature and scope of the activity involved.
       (2) Subsequently, in 1995, the Congress in enacting the 
     National Technology Transfer and Advancement Act of 1995 (15 
     U.S.C. 272 note) recognized the importance of technical 
     standards developed by voluntary consensus standards bodies 
     to our national economy by requiring the use of such 
     standards to the extent practicable by Federal agencies and 
     by encouraging Federal agency representatives to participate 
     in ongoing standards development activities. The Office of 
     Management and Budget on February 18, 1998, revised Circular 
     A-119 to reflect these changes made in law.
       (3) Following enactment of the National Technology Transfer 
     and Advancement Act of 1995, technical standards developed or 
     adopted by voluntary consensus standards bodies have replaced 
     thousands of unique Government standards and specifications 
     allowing the national economy to operate in a more unified 
     fashion.
       (4) Having the same technical standards used by Federal 
     agencies and by the private sector permits the Government to 
     avoid the cost of developing duplicative Government standards 
     and to more readily use products and components designed for 
     the commercial marketplace, thereby enhancing quality and 
     safety and reducing costs.
       (5) Technical standards are written by hundreds of 
     nonprofit voluntary consensus standards bodies in a 
     nonexclusionary fashion, using thousands of volunteers from 
     the private and public sectors, and are developed under the 
     standards development principles set out in Circular Number 
     A-119, as revised February 18, 1998, of the Office of 
     Management and Budget, including principles that require 
     openness, balance, transparency, consensus, and due process. 
     Such principles provide for--
       (A) notice to all parties known to be affected by the 
     particular standards development activity,
       (B) the opportunity to participate in standards development 
     or modification,
       (C) balancing interests so that standards development 
     activities are not dominated by any single group of 
     interested persons,
       (D) readily available access to essential information 
     regarding proposed and final standards,
       (E) the requirement that substantial agreement be reached 
     on all material points after the consideration of all views 
     and objections, and
       (F) the right to express a position, to have it considered, 
     and to appeal an adverse decision.
       (6) There are tens of thousands of voluntary consensus 
     standards available for government use. Most of these 
     standards are kept current through interim amendments and 
     interpretations, issuance of addenda, and periodic 
     reaffirmation, revision, or reissuance every 3 to 5 years.
       (7) Standards developed by government entities generally 
     are not subject to challenge under the antitrust laws.
       (8) Private developers of the technical standards that are 
     used as Government standards are often not similarly 
     protected, leaving such developers vulnerable to being named 
     as codefendants in lawsuits even though the likelihood of 
     their being held liable is remote in most cases, and they 
     generally have limited resources to defend themselves in such 
     lawsuits.
       (9) Standards development organizations do not stand to 
     benefit from any antitrust violations that might occur in the 
     voluntary consensus standards development process.

[[Page S3612]]

       (10) As was the case with respect to research and 
     production joint ventures before the passage of the National 
     Cooperative Research and Production Act of 1993, if relief 
     from the threat of liability under the antitrust laws is not 
     granted to voluntary consensus standards bodies, both 
     regarding the development of new standards and efforts to 
     keep existing standards current, such bodies could be forced 
     to cut back on standards development activities at great 
     financial cost both to the Government and to the national 
     economy.

     SEC. 103. DEFINITIONS.

       Section 2 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4301) is amended--
       (1) in subsection (a) by adding at the end the following:
       ``(7) The term `standards development activity' means any 
     action taken by a standards development organization for the 
     purpose of developing, promulgating, revising, amending, 
     reissuing, interpreting, or otherwise maintaining a voluntary 
     consensus standard, or using such standard in conformity 
     assessment activities, including actions relating to the 
     intellectual property policies of the standards development 
     organization.
       ``(8) The term `standards development organization' means a 
     domestic or international organization that plans, develops, 
     establishes, or coordinates voluntary consensus standards 
     using procedures that incorporate the attributes of openness, 
     balance of interests, due process, an appeals process, and 
     consensus in a manner consistent with the Office of 
     Management and Budget Circular Number A-119, as revised 
     February 10, 1998.
       ``(9) The term `technical standard' has the meaning given 
     such term in section 12(d)(4) of the National Technology 
     Transfer and Advancement Act of 1995.
       ``(10) The term `voluntary consensus standard' has the 
     meaning given such term in Office of Management and Budget 
     Circular Number A-119, as revised February 10, 1998.''; and
       (2) by adding at the end the following:
       ``(c) The term `standards development activity' excludes 
     the following activities:
       ``(1) Exchanging information among competitors relating to 
     cost, sales, profitability, prices, marketing, or 
     distribution of any product, process, or service that is not 
     reasonably required for the purpose of developing or 
     promulgating a voluntary consensus standard, or using such 
     standard in conformity assessment activities.
       ``(2) Entering into any agreement or engaging in any other 
     conduct that would allocate a market with a competitor.
       ``(3) Entering into any agreement or conspiracy that would 
     set or restrain prices of any good or service.''.

     SEC. 104. RULE OF REASON STANDARD.

       Section 3 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4302) is amended by 
     striking ``of any person in making or performing a contract 
     to carry out a joint venture shall'' and inserting the 
     following: ``of--
       ``(1) any person in making or performing a contract to 
     carry out a joint venture, or
       ``(2) a standards development organization while engaged in 
     a standards development activity,
     shall''.

     SEC. 105. LIMITATION ON RECOVERY.

       Section 4 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4303) is amended--
       (1) in subsections (a)(1), (b)(1), and (c)(1) by inserting 
     ``, or for a standards development activity engaged in by a 
     standards development organization against which such claim 
     is made'' after ``joint venture'', and
       (2) in subsection (e)--
       (A) by inserting ``, or of a standards development activity 
     engaged in by a standards development organization'' before 
     the period at the end, and
       (B) by redesignating such subsection as subsection (f), and
       (3) by inserting after subsection (d) the following:
       ``(e) Subsections (a), (b), and (c) shall not be construed 
     to modify the liability under the antitrust laws of any 
     person (other than a standards development organization) 
     who--
       ``(1) directly (or through an employee or agent) 
     participates in a standards development activity with respect 
     to which a violation of any of the antitrust laws is found,
       ``(2) is not a fulltime employee of the standards 
     development organization that engaged in such activity, and
       ``(3) is, or is an employee or agent of a person who is, 
     engaged in a line of commerce that is likely to benefit 
     directly from the operation of the standards development 
     activity with respect to which such violation is found.''.

     SEC. 106. ATTORNEY FEES.

       Section 5 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4304) is amended--
       (1) in subsection (a) by inserting ``, or of a standards 
     development activity engaged in by a standards development 
     organization'' after ``joint venture'', and
       (2) by adding at the end the following:
       ``(c) Subsections (a) and (b) shall not apply with respect 
     to any person who--
       ``(1) directly participates in a standards development 
     activity with respect to which a violation of any of the 
     antitrust laws is found,
       ``(2) is not a fulltime employee of a standards development 
     organization that engaged in such activity, and
       ``(3) is, or is an employee or agent of a person who is, 
     engaged in a line of commerce that is likely to benefit 
     directly from the operation of the standards development 
     activity with respect to which such violation is found.''.

     SEC. 107. DISCLOSURE OF STANDARDS DEVELOPMENT ACTIVITY.

       Section 6 of the National Cooperative Research and 
     Production Act of 1993 (15 U.S.C. 4305) is amended--
       (1) in subsection (a)--
       (A) by redesignating paragraphs (1), (2), and (3) as 
     subparagraphs (A), (B), and (C), respectively,
       (B) by inserting ``(1)'' after ``(a)'', and
       (C) by adding at the end the following:
       ``(2) A standards development organization may, not later 
     than 90 days after commencing a standards development 
     activity engaged in for the purpose of developing or 
     promulgating a voluntary consensus standards or not later 
     than 90 days after the date of the enactment of the Standards 
     Development Organization Advancement Act of 2003, whichever 
     is later, file simultaneously with the Attorney General and 
     the Commission, a written notification disclosing--
       ``(A) the name and principal place of business of the 
     standards development organization, and
       ``(B) documents showing the nature and scope of such 
     activity.

     Any standards development organization may file additional 
     disclosure notifications pursuant to this section as are 
     appropriate to extend the protections of section 4 to 
     standards development activities that are not covered by the 
     initial filing or that have changed significantly since the 
     initial filing.'',
       (2) in subsection (b)--
       (A) in the 1st sentence by inserting ``, or a notice with 
     respect to such standards development activity that 
     identifies the standards development organization engaged in 
     such activity and that describes such activity in general 
     terms'' before the period at the end, and
       (B) in the last sentence by inserting ``or available to 
     such organization, as the case may be'' before the period,
       (3) in subsection (d)(2) by inserting ``, or the standards 
     development activity,'' after ``venture'',
       (4) in subsection (e)--
       (A) by striking ``person who'' and inserting ``person or 
     standards development organization that'', and
       (B) by inserting ``or any standards development 
     organization'' after ``person'' the last place it appears, 
     and
       (5) in subsection (g)(1) by inserting ``or standards 
     development organization'' after ``person''.

     SEC. 108. RULE OF CONSTRUCTION.

       Nothing in this title shall be construed to alter or modify 
     the antitrust treatment under existing law of--
       (1) parties participating in standards development activity 
     of standards development organizations within the scope of 
     this title, or
       (2) other organizations and parties engaged in standard-
     setting processes not within the scope of this amendment to 
     the title.

TITLE II--ANTITRUST CRIMINAL PENALTY ENHANCEMENT AND REFORM ACT OF 2003

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Antitrust Criminal Penalty 
     Enhancement and Reform Act of 2003''.

    Subtitle A--Antitrust Enforcement Enhancements and Cooperation 
                               Incentives

     SEC. 211. SUNSET.

       (a) In General.--Except as provided in subsection (b), the 
     provisions of sections 211 through 214 shall cease to have 
     effect 5 years after the date of enactment of this Act.
       (b) Exception.--With respect to an applicant who has 
     entered into an antitrust leniency agreement on or before the 
     date on which the provisions of sections 211 through 214 of 
     this subtitle shall cease to have effect, the provisions of 
     sections 211 through 214 of this subtitle shall continue in 
     effect.

     SEC. 212. DEFINITIONS.

       In this subtitle:
       (1) Antitrust division.--The term ``Antitrust Division'' 
     means the United States Department of Justice Antitrust 
     Division.
       (2) Antitrust leniency agreement.--The term ``antitrust 
     leniency agreement,'' or ``agreement,'' means a leniency 
     letter agreement, whether conditional or final, between a 
     person and the Antitrust Division pursuant to the Corporate 
     Leniency Policy of the Antitrust Division in effect on the 
     date of execution of the agreement.
       (3) Antitrust leniency applicant.--The term ``antitrust 
     leniency applicant,'' or ``applicant,'' means, with respect 
     to an antitrust leniency agreement, the person that has 
     entered into the agreement.
       (4) Claimant.--The term ``claimant'' means a person or 
     class, that has brought, or on whose behalf has been brought, 
     a civil action alleging a violation of section 1 or 3 of the 
     Sherman Act or any similar State law, except that the term 
     does not include a State or a subdivision of a State with 
     respect to a civil action brought to recover damages 
     sustained by the State or subdivision.
       (5) Cooperating individual.--The term ``cooperating 
     individual'' means, with respect to an antitrust leniency 
     agreement, a current or former director, officer, or employee 
     of the antitrust leniency applicant who is covered by the 
     agreement.
       (6) Person.--The term ``person'' has the meaning given it 
     in subsection (a) of the first section of the Clayton Act.

     SEC. 213. LIMITATION ON RECOVERY.

       (a) In General.--Subject to subsection (d), in any civil 
     action alleging a violation of section 1 or 3 of the Sherman 
     Act, or alleging a violation of any similar State law, based 
     on conduct covered by a currently effective antitrust 
     leniency agreement, the amount of damages recovered by or on 
     behalf of a claimant from an antitrust leniency applicant who 
     satisfies the requirements of subsection (b), together with 
     the amounts so recovered from cooperating individuals who 
     satisfy such requirements, shall not exceed that

[[Page S3613]]

     portion of the actual damages sustained by such claimant 
     which is attributable to the commerce done by the applicant 
     in the goods or services affected by the violation.
       (b) Requirements.--Subject to subsection (c), an antitrust 
     leniency applicant or cooperating individual satisfies the 
     requirements of this subsection with respect to a civil 
     action described in subsection (a) if the court in which the 
     civil action is brought determines, after considering any 
     appropriate pleadings from the claimant, that the applicant 
     or cooperating individual, as the case may be, has provided 
     satisfactory cooperation to the claimant with respect to the 
     civil action, which cooperation shall include--
       (1) providing a full account to the claimant of all facts 
     known to the applicant or cooperating individual, as the case 
     may be, that are potentially relevant to the civil action;
       (2) furnishing all documents or other items potentially 
     relevant to the civil action that are in the possession, 
     custody, or control of the applicant or cooperating 
     individual, as the case may be, wherever they are located; 
     and
       (3)(A) in the case of a cooperating individual--
       (i) making himself or herself available for such 
     interviews, depositions, or testimony in connection with the 
     civil action as the claimant may reasonably require; and
       (ii) responding completely and truthfully, without making 
     any attempt either falsely to protect or falsely to implicate 
     any person or entity, and without intentionally withholding 
     any potentially relevant information, to all questions asked 
     by the claimant in interviews, depositions, trials, or any 
     other court proceedings in connection with the civil action; 
     or
       (B) in the case of an antitrust leniency applicant, using 
     its best efforts to secure and facilitate from cooperating 
     individuals covered by the agreement the cooperation 
     described in clauses (i) and (ii) and subparagraph (A).
       (c) Timelines.--If the initial contact by the antitrust 
     leniency applicant with the Antitrust Division regarding 
     conduct covered by the antitrust leniency agreement occurs 
     after a civil action described in subsection (a) has been 
     filed, then the court shall consider, in making the 
     determination concerning satisfactory cooperation described 
     in subsection (b), the timeliness of the applicant's initial 
     cooperation with the claimant.
       (d) Continuation.--Nothing in this section shall be 
     construed to modify, impair, or supersede the provisions of 
     sections 4, 4A, and 4C of the Clayton Act relating to the 
     recovery of costs of suit, including a reasonable attorney's 
     fee, and interest on damages, to the extent that such 
     recovery is authorized by such sections.

     SEC. 214. RIGHTS AND AUTHORITY OF ANTITRUST DIVISION NOT 
                   AFFECTED.

       Nothing in this subtitle shall be construed to--
       (1) affect the rights of the Antitrust Division to seek a 
     stay or protective order in a civil action based on conduct 
     covered by an antitrust leniency agreement to prevent the 
     cooperation described in section 213(b) from impairing or 
     impeding the investigation or prosecution by the Antitrust 
     Division of conduct covered by the agreement; or
       (2) create any right to challenge any decision by the 
     Antitrust Division with respect to an antitrust leniency 
     agreement.

     SEC. 215. INCREASED PENALTIES FOR ANTITRUST VIOLATIONS.

       (a) Restraint of Trade Among the States.--Section 1 of the 
     Sherman Act (15 U.S.C. 1) is amended by--
       (1) striking ``$10,000,000'' and inserting 
     ``$100,000,000'';
       (2) striking ``$350,000'' and inserting ``$1,000,000''; and
       (3) striking ``three'' and inserting ``10''.
       (b) Monopolizing Trade.--Section 2 of the Sherman Act (15 
     U.S.C. 2) is amended by--
       (1) striking ``$10,000,000'' and inserting 
     ``$100,000,000'';
       (2) striking ``$350,000'' and inserting ``$1,000,000''; and
       (3) striking ``three'' and inserting ``10''.
       (c) Other Restraints of Trade.--Section 3 of the Sherman 
     Act (15 U.S.C. 3) is amended by--
       (1) striking ``$10,000,000'' and inserting 
     ``$100,000,000'';
       (2) striking ``$350,000'' and inserting ``$1,000,000''; and
       (3) striking ``three'' and inserting ``10''.

                     Subtitle B--Tunney Act Reform

     SEC. 221. PUBLIC INTEREST DETERMINATION.

       Section 5 of the Clayton Act (15 U.S.C. 16) is amended--
       (1) in subsection (d), by inserting at the end the 
     following: ``Upon application by the United States, the 
     district court may, for good cause (based on a finding that 
     the expense of publication in the Federal Register exceeds 
     the public interest benefits to be gained from such 
     publication), authorize an alternative method of public 
     dissemination of the public comments received and the 
     response to those comments.''; and
       (2) in subsection (e)--
       (A) in the matter before paragraph (1), by--
       (i) inserting ``independently'' after ``shall'';
       (ii) striking ``court may'' and inserting ``court shall''; 
     and
       (iii) inserting ``(1)'' before ``Before''; and
       (B) striking paragraphs (1) and (2) and inserting the 
     following:
       ``(A) the competitive impact of such judgment, including 
     termination of alleged violations, provisions for enforcement 
     and modification, duration of relief sought, anticipated 
     effects of alternative remedies actually considered, whether 
     its terms are ambiguous and any other competitive 
     considerations bearing upon the adequacy of such judgment 
     necessary to a determination of whether the consent judgment 
     is in the public interest; and
       ``(B) the impact of entry of such judgment upon competition 
     in the relevant market or markets, upon the public generally 
     and individuals alleging specific injury from the violations 
     set forth in the complaint including consideration of the 
     public benefit, if any, to be derived from a determination of 
     the issues at trial.
       ``(2) The Court shall not enter any consent judgment 
     proposed by the United States under this section unless it 
     finds that there is reasonable belief, based on substantial 
     evidence and reasoned analysis, to support the United States' 
     conclusion that the consent judgment is in the public 
     interest. In making its determination as to whether entry of 
     the consent judgment is in the public interest, the Court 
     shall not be limited to examining only the factors set forth 
     in this subsection, but may consider any other factor 
     relevant to the competitive impact of the judgment.''.

  Mr. HATCH. Mr. President, I rise today to support passage of H.R. 
1086, the Standards Development Organization Advancement Act of 2003. 
This legislation, along with provisions added to it during the 
Judiciary Committee markup and by the substitute amendment that I have 
offered along with Senators Leahy, DeWine, and Kohl, provides several 
important and significant improvements to our antitrust laws.
  This legislation incorporates the limited antitrust protection for 
Standards Development Organizations that Senator Leahy and I introduced 
as S. 1799, and that Chairman Sensenbrenner introduced in the House as 
H.R. 1086. Under this provision, the civil liability for Standards 
Development Organizations or ``SDOs'' will be limited to single, rather 
than treble, damages for standards-setting activities about which they 
have informed the Department of Justice and Federal Trade Commission 
using a newly-created notification procedure.
  The bill also increases the maximum criminal penalties for antitrust 
violations so that they are more in line with other comparable white 
collar crimes. I will note that this provision of the legislation is 
substantially the same as the one included in S. 1080, a Leahy-Hatch 
bill.
  This legislation also provides increased incentives for participants 
in illegal cartels to blow the whistle on their co-conspirators and 
cooperate with the Justice Department's Antitrust Division in 
prosecuting the other members of these criminal antitrust conspiracies. 
This is accomplished by allowing the Justice Department, in appropriate 
circumstances, to limit a cooperating company's civil liability to 
actual, rather than treble, damages in return for the company's 
cooperation in both the resulting criminal case as well as any 
subsequent civil suit based on the same conduct.
  Finally, this substitute would amend the Tunney Act to end the 
problem of courts simply ``rubber-stamping'' antitrust settlements 
reached with the Justice Department. In my view, this amendment 
essentially codifies existing case law, while reemphasizing the 
original congressional intent that lead to passage of the Tunney Act. 
When this provision was added to H.R. 1086 in the Senate Judiciary 
Committee, I noted that, although I supported it in principal, I 
thought that continued modifications of the actual language might be 
necessary to respond to concerns that had been raised. I am pleased to 
be able to state that, largely through the efforts of Senator Kohl and 
his staff, a compromise on this language was reached that is 
supported--or at least not strongly objected to--by the parties 
involved.
  With that introduction, I will briefly discuss the four principal 
sections of the legislation.
  The section Protection of Standards Development Organizations, which 
comes from S. 1799, a bill that Senator Leahy and I introduced as a 
Senate companion to H.R. 1086, is designed to extend limited antitrust 
protection to Standards Development Organizations, or ``SDOs''.
  In the United States, most technical standards are developed and 
promulgated by private, not-for-profit organizations called SDOs. 
Numerous concerns have been raised that the threat of treble damages 
deters SDOs from their pro-competitive standard-setting activities. 
This legislation addresses those concerns by providing a notification 
process whereby SDOs may inform DOJ and the FTC regarding their 
intended standards-development activities. If the authorities do not 
object to the proposed activities but the SDO is subsequently sued by a 
private plaintiff, the SDO's civil liability is limited

[[Page S3614]]

to single rather than treble damages. Importantly, this legislation 
does not in any way immunize industry participants who cooperate in the 
development of standards from antitrust liability for using the 
standards-setting process for anti-competitive purposes.
  I thank Senator Leahy and Chairman Sensenbrenner and their staffs for 
their vigilant efforts toward passage of the Standards Development 
Organization Advancement Act of 2003.
  The legislation also amends the antitrust laws to provide 
corporations and their executives with increased incentives to come 
forward and cooperate with the Department of Justice in prosecuting 
criminal antitrust cartels. It does so by enhancing the effectiveness 
of the already-successful Corporate Leniency Policy issued by the 
Justice Department's Antitrust Division.
  In general, the leniency policy provides that a corporation and its 
executives will not be criminally charged if the company is not the 
ringleader of the conspiracy and it is the first of the conspirators to 
approach the division and fully cooperate with the division's criminal 
investigation. The program serves to destabilize cartels, and it causes 
the members of the cartel to turn against one another in a race to the 
Government. Cooperation obtained through the leniency program has led 
to the detection and prosecution of massive international cartels that 
cost businesses and consumers billions of dollars and has led to the 
largest fines in the Antitrust Division's history.
  Though this important program has been successful, a major 
disincentive to self reporting still exists, the threat of exposure to 
a possible treble damage lawsuit by the victims of the conspiracy. 
Under current law, the successful leniency applicant is not criminally 
charged, but it still faces treble damage actions with joint and 
several liability. In other words, before voluntarily disclosing its 
criminal conduct, a potential amnesty applicant must weigh the 
potential ruinous consequences of subjecting itself to liability for 
three times the damages that the entire conspiracy caused.
  This provision addresses this disincentive to self-reporting. 
Specifically, it amends the antitrust laws to modify the damage 
recovery from a corporation and its executives to actual damages. In 
other words, the total liability of a successful leniency applicant 
would be limited to single damages without joint and several liability. 
Thus, the applicant would only be liable for the actual damages 
attributable to its own conduct, rather than being liable for three 
times the damages caused by the entire unlawful conspiracy.
  Importantly, this limitation on damages is only available to 
corporations and their executives if they provide adequate and timely 
cooperation to both the Government investigators as well as any 
subsequent private plaintiffs bringing a civil suit based on the 
covered criminal conduct. I should also note that, because all other 
conspirator firms would remain jointly and severably liable for three 
times the total damages caused by the conspiracy, the victims' 
potential total recovery would not be reduced by the amendments 
Congress is considering. And again, the legislation requires the 
amnesty applicant to provide full cooperation to the victims as they 
prepare and pursue their civil lawsuit.
  With this change, more companies will disclose antitrust crimes, 
which will have several benefits. First, I expect that the total 
compensation to victims of antitrust conspiracies will be increased 
because of the requirement that amnesty applicants cooperate. Second, 
the increased self-reporting incentive will serve to further de-
stabilize and deter the formation of criminal antitrust conspiracies. 
In turn, these changes will lead to more open and competitive markets.
  The enhanced criminal penalties provision, which was originally part 
of S. 1080, which I introduced with Senator Leahy, improves current law 
by increasing the maximum prison sentences and fines for criminal 
violations of antitrust law. This change puts the maximum prison 
sentences for antitrust violations more in line with other white collar 
crimes. By increasing these criminal penalties, we are recognizing the 
profoundly harmful impact that antitrust violations have on consumers 
and the economy.
  This legislation also amends the Tunney Act to end what some have 
seen as courts simply ``rubber-stamping'' antitrust settlements reached 
with the Justice Department without providing meaningful review. As I 
have stated, while I agree with the principle behind this proposal, I 
had significant concerns with the specific language that was reported 
out of the Judiciary Committee. After several months of discussions, I 
am happy to say that the current language appears to have answered 
most, if not all, of the principal concerns that were raised regarding 
the amendments to the Tunney Act.
  In conclusion, I would like to thank Senators Leahy, Kohl, and DeWine 
and their staffs for their efforts on this bill. In particular, I would 
like to thank Susan Davies of Senator Leahy's staff, Jeff Miller and 
Seth Bloom of Senator Kohl's staff, and Pete Levitas and Bill Jones of 
Senator DeWine's staff. I also appreciate the expert and energetic 
efforts of my own antitrust counsel, Dave Jones. And finally, I thank 
Makan Delrahim, my former chief counsel, for all of his ``technical 
assistance.''
  I urge my colleagues to support this bill.
  Mr. LEAHY. Mr. President, I am delighted that Senator Hatch, Senator 
Kohl, Senator DeWine, and I have been able to work together to develop 
a version of this bill that can pass today as the Standards Development 
Organization Advancement Act. Technical standards help to promote 
safety, increase efficiency, and allow for interoperability in a 
variety of products Americans use every day. Despite the fact that they 
go largely unnoticed, we would be markedly less safe without airbags 
that deploy properly in serious automobile collisions, more vulnerable 
were there not technical standards for fire retardant materials in 
homes. And consumers would be less likely to make the purchases that 
drive our economy without the technical standards that ensure a light 
bulb will fit in its socket or allow DVDs to function properly 
regardless of the manufacturer.
  In the United States, most technical standards are developed by 
private, not-for-profit Standards Development Organizations, which 
often possess superior knowledge and adaptability in highly technical 
matters. Rather than Government overregulation of technical standards, 
SDOs promulgate guidelines that frequently are then adopted by State 
and Federal governments. Like many conveniences we take for granted, 
technical standards are so deeply infused in our lives that they may 
attract little or no individual attention.
  While standards serve this vital societal role, there exists a 
natural tension between the antitrust laws that prohibit businesses 
from colluding and the development of technical standards, which 
require competitors to reach agreement on basic design elements. The 
Standards Development Organization Advancement Act reduces this 
tension, providing relief for SDOs under current law while preserving 
the trademark features of antitrust enforcement that benefit consumers.
  Without creating an antitrust exemption, the Standards Development 
Organization Act allows SDOs to seek review of their standards by the 
Department of Justice or Federal Trade Commission prior to 
implementation. If these agencies do not object to the standard during 
this ``screening'' phase, but the organization is later sued by a 
private plaintiff, the SDO would be limited to single damages, rather 
than the treble damages levied under existing law.
  Additionally, this bill amends the National Cooperative Research and 
Production Act of 1993, by directing courts to apply a ``rule of 
reason'' standard to SDOs and the guidelines they produce. Under 
existing law, standards may be deemed anticompetitive by a court even 
if they have the effect of better serving consumers. Courts should be 
able to balance the competing interests of safety and efficiency 
against any anticompetitive effect, making certain that the law is 
doing everything possible to meet the needs of the one constituent we 
all share--the American consumer. The Standards Development 
Organization Advancement Act gives our courts the authority to do so.
  We may fail to notice the technical standards that provide 
dependability,

[[Page S3615]]

security, and convenience in our lives, but they serve an increasingly 
vital role in a country driven by technological change but devoted to 
safety and reliability.
  Title II of the Standards Development Organization Advancement Act 
also addresses several areas of our antitrust laws that merit updating, 
as our experience with the actual practice in the world has shown. 
First, the act strives to eliminate the disparity between the treatment 
of criminal white collar offenses and antitrust criminal violations. 
Without this legislation, offenders who violated the criminal 
provisions of the antitrust laws would face much less significant 
penalties than would their wire fraud or mail fraud counterparts. The 
act increases the maximum penalty for a criminal antitrust violation 
from 3 years to 10 years and raises the maximum fines to corporations 
from $10 million to $100 million per violation. Senator Hatch and I had 
introduced this provision in S. 1080, the Antitrust Improvements Act of 
2003, and I am pleased that this useful update to the penalties for 
criminal violations of the antitrust laws can be made as part of this 
bill.
  Title II will also update the Justice Department's amnesty program in 
the criminal antitrust context. We have worked with the antitrust 
division of the Department of Justice and our States' attorneys general 
to give prosecutors the maximum leverage against participants in 
criminal antitrust activity. The Department has long had an ``amnesty'' 
or ``leniency'' policy that is generally available to the first 
conspirator involved in a criminal cartel that offers to cooperate with 
the authorities. But under the current policy, the Department may only 
agree to not bring criminal charges against a corporation, and its 
officers and directors, in exchange for cooperation in providing 
evidence and testimony against other members in the cartel. Under this 
bill, to qualify for amnesty, a party must provide substantial 
cooperation not only in any criminal case brought against the other 
cartel members, but also in any civil case brought by private parties 
that is based on the same unlawful conduct.
  This bill would then give our prosecutors the authority to 
effectively limit a cooperating party's potential civil liability as 
well, and to limit that liability to single damages in any subsequent 
civil lawsuit brought by a private plaintiff. And while a party that 
receives leniency would only be liable for the portion of the damages 
actually caused by its own actions, the rest of its non-cooperating co-
conspirators would remain jointly and severally liable for the entire 
amount of damages, which would then be trebled, to ensure that no 
injured party will fail to enjoy financial redress.
  Finally, the Standards Development Organization Advancement Act makes 
some useful adjustments to the Tunney Act. That law provides that 
consent decrees in civil antitrust cases brought by the United States 
must be reviewed and approved by the District Court in which the case 
was brought. Under the Tunney Act, before entering a consent decree, 
the court must determine that ``the entry of such judgment is in the 
public interest.'' In making this determination, the court may, but is 
not required to, consider a variety of enumerated factors. As currently 
drafted, the court has discretion in making this public interest 
determination, and some have expressed concerns that this lack of 
guidance results in courts that are overly deferential to prosecutors' 
judgments. Thus, this bill intends to explicitly restate the original 
and intended role of District courts in this process by mandating that 
the court make an independent judgment based on a series of enumerated 
factors. In addition, the legislation makes clear that this amendment 
to the Tunney Act will not change the law regarding whether a court may 
be required, in a particular instance, to permit intervention or to 
hold a hearing in a Tunney Act proceeding.
  A final and important technical change would allow a judge to order 
publication of the comments received in a Tunney Act proceeding by 
electronic or other means. Currently, the Tunney Act requires the 
Antitrust Division to publish in the Federal Register the public 
comments received on its proposed consent judgments, along with the 
Division's response to those comments. This can be very expensive--it 
cost almost $3 million in the Microsoft case--with little benefit, 
because those materials are, if anything, more accessible on the Web 
than in a library. Of course, interested people who lack Internet 
access will need to go to a library, but they would have had to do that 
for a paper copy as well.
  This is an important bill that makes necessary, well-conceived, and 
bipartisan reforms.
  Mr. KOHL. Mr. President, I rise today in strong support of the 
Antitrust Criminal Penalty Enhancement and Reform Act of 2003. It 
passed the Judiciary Committee unanimously in November 2003. Today, 
along with Senators Hatch, Leahy, and DeWine, we offer a substitute 
amendment to H.R. 1086. This legislation will enhance and improve the 
enforcement of our nation's antitrust laws in several important 
respects.
  In light of the importance of this legislation to the administration 
of our antitrust laws, as well as the infrequency with which we amend 
major provisions of the antitrust laws, it is essential to describe in 
detail the reasons we our advancing this bill. Our proposal will 
accomplish four important goals. First, our legislation will restore 
the ability of Federal courts to review the Justice Department's civil 
antitrust settlements to be sure that these settlements are good for 
competition and consumers. We will amend the Tunney Act, the law passed 
in 1974 in response to concerns that some of these settlements were 
motivated by inappropriate political pressure and failed to restore 
competition or protect consumers. Congress concluded then, and it is 
still true now, that judicial review will ensure that cases are settled 
in the public interest. Unfortunately, in recent years, many courts 
seem to have ignored this statute and do little more than ``rubber 
stamp'' antitrust settlements. This practice is contrary to the intent 
of the Tunney Act and effectively strips the courts of the ability to 
engage in meaningful review of antitrust settlements. Our bill will 
overturn this precedent and make clear that the courts have the 
authority to do this vital job.
  Second, our legislation enhances criminal penalties for those who 
violate our antitrust laws. It will increase the maximum corporate 
penalty from $10 million to $100 million; it will increase the maximum 
individual fine from $350,000 to $1 million; and it will increase the 
maximum jail term for individuals who are convicted of criminal 
antitrust violations from 3 to 10 years. These changes will send the 
proper message that criminal antitrust violations, crimes such as price 
fixing and bid rigging, committed by business executives in a boardroom 
are serious offenses that steal from American consumers just as surely 
as does a street criminal with a gun.
  Our legislation will give the Justice Department significant new 
tools under its antitrust leniency program. The leniency program helps 
the Government break up criminal cartels by encouraging wrongdoers to 
cooperate with the authorities. Our bill will give the Justice 
Department the ability to offer those applying for leniency the 
additional reward of only facing actual damages in antitrust civil 
suits, rather than treble damage liability. This will result in more 
antitrust wrongdoers coming forward to reveal antitrust conspiracies, 
and thus the detection and ending of more illegal cartels.
  Finally, our bill incorporates a provision in the original House 
passed version of H.R. 1086. This provision limits the liability that 
standards setting organizations face under the antitrust laws to single 
damages in most circumstances. It will protect these important 
organizations from the threat of liability. However, it will not in any 
way limit the damages available to any company that is a member of such 
an organization for antitrust violations, nor limit damages should a 
standard setting organization engage in conduct that is a per se 
violation of antitrust law.
  It is important to explain clearly and specifically why it is 
necessary to amend the Tunney Act and what we intend to accomplish with 
these changes. In recent years, courts have been reluctant to give 
meaningful review to antitrust consent decrees, and have been only 
willing to take action with respect to most egregious decrees that

[[Page S3616]]

make a ``mockery'' of the judicial function. Our bill will effectuate 
the legislative intent of the Tunney Act and restore the ability of 
courts to give real scrutiny to antitrust consent decree.
  The Tunney Act was enacted in 1974 and provides that consent decrees 
in civil antitrust cases brought by the United States must be reviewed 
and approved by the district court in which the case was brought to 
determine if they are in the public interest. However, the text of the 
statute contains no standards governing how a court is to conduct this 
review. While the legislative history of the law is clear that it was 
meant to prevent ``judicial rubber stamping'' of consent decrees, the 
leading precedent of the D.C. Circuit Court of Appeals currently 
interprets the law in a manner which makes meaningful review of these 
consent decrees virtually impossible. Leading cases stand for the 
proposition that only consent decrees that ``make a mockery of the 
judicial function'' can be rejected by the district court. The changes 
in the Tunney Act incorporated in this legislation, as well as the 
statement of Congressional findings, will make clear that such an 
interpretation misconstrues the legislative intent of the statute.
  The amendments to the Tunney Act found in our bill will restore the 
original intent of the Tunney Act, and make clear that courts should 
carefully review antitrust consent decrees to ensure that they are in 
the public interest. It will accomplish this by, No. 1, a clear 
statement of congressional findings and purposes expressly overruling 
the improper judicial standard of recent D.C. Circuit decisions; No. 2, 
by requiring, rather than permitting, judicial review of a list of 
enumerated factors to determine whether a consent decree is in the 
public interest; and No. 3, by enhancing the list of factors which the 
court now must review.
  The Tunney Act was enacted in 1974 to end the practice of courts 
``rubber stamping'' antitrust consent decrees, and to remove political 
influence from the Justice Department's decision as to whether to 
settle antitrust cases. There were several prominent decisions in the 
preceding years in which antitrust settlements by the Justice 
Department came under strong criticism as inadequate or motivated by 
illegitimate purposes, and which were not scrutinized by the courts. 
One of the leading early cases applying the Tunney Act noted that

     the legislators found that consent decrees often failed to 
     provide appropriate relief, either because of miscalculations 
     by the Justice Department [citation omitted] or because of 
     the ``great influence and economic power'' wielded by 
     antitrust violators [citing S. Rep. No. 93-298, 93d Cong., 
     1st Sess. 5 (1973)]. The [legislative] history, indeed, 
     contains references to a number of antitrust settlements 
     deemed ``blatantly inequitable and improper'' on these bases 
     [citing 119 Cong. Rec. 24598 (1973) (Remarks of Sen. 
     Tunney)].

U.S. v. American Telephone and Telegraph, 552 F.Supp. 131, 148 (D.D.C. 
1982), aff'd sub nom., Maryland v. U.S., 460 U.S. 1001 (1983).
  While there were several notable cases which gave rise to the concern 
that the government was settling for inadequate remedies for antitrust 
violations, see U.S. v. AT&T, 552 F.Supp. at 148 n. 72; 119 Cong. Rec. 
24598, Remarks of Sen. Tunney, the most prominent case was the 
Government's settlement in 1971 of an antitrust suit brought against 
ITT. Critics alleged that the Nixon administration had been influenced 
by campaign contributions to the Nixon reelection effort in 1972. The 
reasons for the settlement were not publicly disclosed, and the 
settlement was strongly criticized by consumer advocates. The 
settlement's critics attempted to have the settlement overturned by the 
district court, but the court rejected these efforts. ``[T]here was no 
meaningful judicial scrutiny of the terms of the consent decree and no 
consideration of whether it was in the public interest.'' Anderson, 
supra, 65 Antitrust Law Journal at 8.
  The legislative history of the original Tunney Act is clear that the 
purpose of the statute was to give courts the opportunity to engage in 
meaningful scrutiny of antitrust settlements, so as to deter and 
prevent settlements motivated either by corruption, undue corporate 
influence, or which were plainly inadequate. In introducing the bill, 
Senator Tunney highlighted his concern that antitrust settlements could 
result from the economic power of the companies under scrutiny. He 
noted that ``[i]ncreasing concentration of economic power, such as 
occurred in the flood of conglomerate mergers, carries with it a very 
tangible threat of concentration of political power. Put simply, the 
bigger the company, the greater the leverage it has in Washington.'' 
119 Cong. Rec. 3451, Feb. 6, 1973.

  Senator Tunney also pointed with concern at the lack of scrutiny the 
courts were applying to antitrust settlements. He argued that ``too 
often in the past district courts have viewed their rules [sic] as 
simply ministerial in nature--leaving to the Justice Department the 
role of determining the adequacy of the judgment from the public's 
view.'' Id. at 3542. Thus, his legislation was intended to 
substantially expand the role of the court in considering an antitrust 
consent decree. Senator Tunney described the criteria in the bill under 
which the courts to review the settlements, and stated that

       The thrust of those criteria is to demand that the court 
     consider both the narrow and the broad impacts of the decree. 
     Thus, in addition to weighing the merits of the decree from 
     the viewpoint of the relief obtained thereby and its 
     adequacy, the court is directed to give consideration to the 
     relative merits of other alternatives and specifically to the 
     effect of the entry of the decree upon private parties 
     aggrieved by the alleged violations and upon the enforcement 
     of antitrust laws generally.

  In a later floor debate on the legislation, Senator Tunney cited the 
testimony of Judge J. Skelley Wright of the U.S. Court of Appeals for 
the D.C. Circuit, who had testified at an earlier hearing of the Senate 
Antitrust and Monopoly Subcommittee expressing concern as to whether 
antitrust settlements ``might shortchange the public interest.'' 119 
Cong. Rec. 24597, July 18, 1973. Commenting on this testimony, Senator 
Tunney stated that ``I think Judge Wright gets to the heart of the 
problem--it is the excessive secrecy with which many consent decrees 
have been fashioned, and the almost mechanistic manner in which some 
courts have been, in effect, willing to rubber stamp consent 
judgments.'' Id. at 24598 (emphasis added). The bill passed the Senate 
that day on a 92 to 8 vote.
  The later House debate in which the bill was passed echoed Senator 
Tunney's concern. Congressman Seiberling of Ohio commented that, in 
considering antitrust consent decrees, ``too often the courts have, in 
fact, simply rubber-stamped such agreements, and the public or 
competitors that might be affected have had an effective way to get 
their views before the court . . .'' 120 Cong. Rec. 36341, Nov. 19, 
1974. Similar sentiments were expressed by Congressman McClory, id., 
Congressman Jordan, id. at 36343, and Congressman Heinz, id. at 36341. 
Congressman Holtzman of New York commented that these procedures would 
``insure that our antitrust laws are not for sale.'' Id. at 36342.
  The House and Senate Committee Reports on the legislation also echo 
the floor debate. The Report of the House Judiciary Committee states 
that

     [o]ne of the abuses sought to be remedied by the bill has 
     been called ``judicial rubber stamping'' by district courts 
     of proposals submitted by the Justice Department. The bill 
     resolves this area of dispute by requiring district court 
     judges to determine that each proposed consent judgment is in 
     the public interest.

House Rep. No. 93-1463, 93rd Cong., 1st Sess. (1974), reprinted in 1974 
U.S. Code Cong. & Admin. News 6535, 6538.
  In one of the first cases to construe the statute, the Government's 
case to break up the AT&T phone monopoly, Judge Greene of the U.S. 
District Court for the District of Columbia reviewed, and then 
summarized, the legislative history of the Tunney Act. He concluded 
that:

       To remedy these problems [that led to the passage of the 
     Tunney Act], Congress imposed two major changes in the 
     consent decree process. First, it reduced secrecy by ordering 
     disclosure by the Justice Department of the rationale and the 
     terms of proposed consent decrees and by mandating an 
     opportunity for public comment. Second, it sought to 
     eliminate ```judicial rubber stamping' of proposals submitted 
     to the courts by the Department,'' by requiring an explicit 
     judicial determination in every case that the proposed decree 
     was in the public interest. It is clear that Congress wanted 
     the courts to act as an independent check upon the terms of 
     decrees negotiated by the Department of Justice. . . .

U.S. v. AT&T, 552 F. Supp. at 148-149 (emphasis added) (citations 
omitted).
  This conclusion is supported by a recent law journal article co-
authored by

[[Page S3617]]

John J. Flynn, who was special counsel to the Senate Antitrust 
Subcommittee during the period when the Tunney Act was drafted and 
adopted. Professor Flynn writes that, in enacting the Tunney Act, 
Congress rejected the ``notion that courts must give deference to the 
DOJ when determining if a consent decree is in the public interest. 
Instead, Congress wanted the courts to make an independent, objective, 
and active determination without deference to the DOJ.'' Flynn and 
Bush, The Misuse and Abuse of the Tunney Act: The Adverse Consequences 
of the ``Microsoft Fallacies'', 34 Loyola U. Chicago L. J. 749, 758 
(2003).
  The early case law that followed the adoption of the Tunney Act in 
1974 imposed fairly stringent requirements on courts reviewing 
antitrust settlements reached by the Justice Department.
  The leading early case is the district court's review of the 
Government's proposed settlement with AT&T in the massive antitrust 
case that broke up the telephone monopoly, U.S. v. AT&T, supra (D.D.C. 
1983). Judge Greene of the U.S. District Court for the District of 
Columbia rejected an argument for a highly deferential review of the 
proposed consent decree. The court stated that

       uIt does not follow . . . that courts must unquestionably 
     accept a proffered decree as long as it somehow, and however 
     inadequately, deals with the antitrust and other public 
     policy problems implicated in the lawsuit. To do so would be 
     to revert to the ``rubber stamp'' role which was at the crux 
     of the congressional concerns when the Tunney Act became law.

U.S. v. AT&T, 552 F. Supp. at 151.
  Instead the standard the court applied to determine if the public 
interest was served by the consent decree was rather exacting. The 
court stated it would only enter the proposed consent decree ``if the 
decree meets the requirements for an antitrust remedy that is, if it 
effectively opens the relevant markets to competition and prevents the 
recurrence of anticompetitive activity, all without imposing undue and 
unnecessary burdens upon other aspects of the public interest.'' Id. at 
153.
  The more recent precedent under the Tunney Act have sharply retreated 
from Judge Green's opinion in AT&T to a much more deferential standard 
of review. It is this misinterpretation of the Tunney Act that our bill 
corrects. In describing the recent Tunney Act precedent, one 
commentator has called it a ``retreat toward rubber stamping.'' 
Anderson, supra, 65 Antitrust Law Journal at 19. We agree. It is this 
overly deferential standard review which makes reform of the Tunney Act 
necessary so that the legislative intent can be effectuated and courts 
can provide an independent safeguard to prevent against improper or 
inadequate settlements. The changes we make to the Tunney Act today 
address these problems and correct the mistaken precedents.
  The precedent continues to recognize that the Tunney Act is intended 
``to prevent ``judicial rubber stamping' of the Justice Department's 
proposed consent decree,'' and for the court to `` `make an independent 
determination as to whether or not entry of a proposed consent decree 
[was] in the public interest.' '' U.S. v. Microsoft, 56 F.3d 1448, 1458 
(D.C. Cir. 1995), quoting S. Rep. No. 298 at 5. Further, in reviewing 
the proposed consent decree, the court should inquire into ``the 
purpose, meaning, and efficacy of the decree.'' Microsoft, 56 F.3d at 
1463.
  However, these same decisions improperly and strictly circumscribe 
the role of the trial court and give it little leeway to fail to 
approve an antitrust consent decree. The D.C. Circuit has stated that:

       [T]he district judge is not obligated to accept [an 
     antitrust consent decree] that, on its face and even after 
     government explanation, appears to make a mockery of judicial 
     power. Short of that eventuality, the Tunney Act cannot be 
     interpreted as an authorization for a district judge to 
     assume the role of Attorney General.

Id., 56 F.3d at 1462 (emphasis added). In other words, under this 
precedent, unless the proposed decree would ``make a mockery of 
judicial power,'' the consent decree must be entered by the Court. In 
another portion of this opinion, in language much cited by lower 
courts, the D.C. Circuit held that the court should not insist that the 
consent decree is the one that will ``best serve society,'' but only 
confirm that the resulting settlement is ``within the reaches of the 
public interest.'' Id. at 1460, citations omitted; emphasis in 
original.
  In a subsequent decision, the D.C. Circuit summarized a district 
court's review under the Tunney Act, as follows:

       The district court must examine the decree in light of the 
     violations charged in the complaint and should withhold 
     approval only if any of the terms appear ambiguous, if the 
     enforcement mechanism is inadequate, if third parties will be 
     positively injured, or if the decree otherwise makes ``a 
     mockery of judicial power.''

Massachusetts School of Law v. U.S., 118 F.3d 776, 783 (D.C. Cir. 1997) 
(emphasis added) (quoting Microsoft, 56 F.3d at 1462). This is plainly 
quite a limited standard of review, which contains no admonition to 
review the likely effects of the consent decree on competition, and 
makes it very unlikely that a court would fail to enter almost any 
consent decree.
  In the opinion of a leading academic commentator on the Tunney Act,

     the court of appeals in Microsoft made a potentially serious 
     mistake by formulating a rule that, so long as procedural 
     niceties are followed, all antitrust consent decrees must be 
     approved unless they are a ``mockery.'' Once the real threat 
     of meaningful scrutiny is eliminated, the benefits of 
     deterrence and mediation would be destroyed and the Tunney 
     Act would be nullified.

Anderson, supra, 65 Antitrust Law Journal at 38. Professor Flynn, who 
was involved in drafting the Tunney Act, agrees with this criticism of 
the D.C. Circuit's approach. Professor Flynn states that ``from the 
language of the Tunney Act and its legislative history, this is 
precisely the sort of deferential standard the drafters of the Tunney 
Act did not want. . . . [T]he D.C. Circuit chose to ignore the 
legislative intent and cast judicial review of consent decrees back to 
the days when rubber-stamping was prevalent.'' Flynn and Bush, supra, 
34 Loyola U. Chi. L. J. at 780-781.
  As originally written, the Tunney Act serves two goals deterrence and 
mediation. The prospect of judicial scrutiny deters the Justice 
Department from heeding political pressure to enter into a 
``sweetheart'' settlement. And real Tunney Act review also provides an 
opportunity for a judge to act as a mediator, obtaining modifications 
to deficient settlements. As Professor Anderson points out, ``[i]f the 
government and antitrust defendants come to perceive that meaningful 
[judicial] scrutiny is not a real threat, the door will be wide open 
for attempts to swing sweetheart deals and for the public to lose 
confidence in antitrust enforcement by the government.'' 65 Antitrust 
Law Journal at 38.
  In sum, as the Tunney Act is currently interpreted, it is difficult 
if not impossible for courts to exercise meaningful scrutiny of 
antitrust consent decrees. The ``mockery'' standard is contrary to the 
intent of the Tunney Act as found in the legislative history. Our 
legislation will correct this misinterpretation of the statute. Our 
legislation will insure that the courts can undertake meaningful and 
measured scrutiny of antitrust settlements to insure that they are 
truly in the public interest, and to remind the courts of Congress' 
intention in passing the Tunney Act.

  In an effort to explain how the revisions to the Tunney Act in H.R. 
1086 correct the mistaken standard used by certain courts in applying 
the law, it is important to describe each of the specific provisions of 
section 221 of H.R. 1086. Today we have introduced, with Senators 
Hatch, Leahy, and DeWine, a Managers' Amendment to H.R. 1086. These 
comments address H.R. 1086 as amended.
  First, section 221(a) of our bill contains Congressional Findings and 
Declarations of Purposes. These provisions clarify that we are 
determined to effectuate the original Congressional intent of the 
Tunney Act. In other words, after the enactment of this legislation, 
courts will once again independently review antitrust consent decrees 
to ensure that they are in the public interest. The Congressional 
Findings expressly state that for a court to limit its review of 
antitrust consent decrees to the lesser standard of determining whether 
entry of the consent judgments would make a ``mockery of the judicial 
function'' misconstrues the meaning and intent in enacting the Tunney 
Act. The language quoted paraphrases the D.C. Circuit decisions in

[[Page S3618]]

Massachusetts School of Law v. U.S., 118 F.3d 776, 783 (D.C. Cir. 1997) 
and U.S. v. Microsoft, 56 F.3d 1448, 1462 (D.C. Cir. 1995). To the 
extent that these precedents are contrary to section 221(a) of our bill 
regarding the standard of review a court should apply in reviewing 
consent decrees under the Tunney Act, these decisions are overruled by 
this legislation. While this legislation is not intended to require a 
trial de novo of the advisability of antitrust consent decrees or a 
lengthy and protracted review procedure, it is intended to assure that 
courts undertake meaningful review of antitrust consent decrees to 
assure that they are in the public interest and analytically sound.
  Section 221(b)(2)(A) of our bill amends the existing subsection of 
Section 5 of the Clayton Act (codified at 15 U.S.C. Sec.  16(e)) 
containing the requirement that courts review antitrust consent decrees 
to determine that these consent decrees are in the public interest. Our 
bill modifies the law by stating that, in making this determination, 
the court ``shall'' look at a number of enumerated factors bearing on 
the competitive impact of the settlement. The current statute merely 
states that the court ``may'' review these factors in making its 
determination. Requiring, rather than permitting, the court to examine 
these factors will strengthen the review that courts must undertake of 
consent decrees and will ensure that the court examines each of the 
factors listed therein. Requiring an examination of these factors is 
intended to preclude a court from engaging in ``rubber stamping'' of 
antitrust consent decrees, but instead to seriously and deliberately 
consider these factors in the course of determining whether the 
proposed decree is in the public interest.
  Our bill, in section 221(b)(2)(B), also revises and enhances the 
factors which the court is now required to review in making its public 
interest determination. In addition to the factors enumerated under 
current law, the court must examine whether the terms of the proposed 
decree are ambiguous. While complete precision when dealing with future 
conduct may be impossible to achieve, an overly ambiguous decree is 
incapable of being enforced and is therefore ineffective. A mandate to 
review the impact of entry of the consent judgment upon ``competition 
in the relevant market or markets'' is also added by our bill. This 
will ensure that the Tunney Act review is properly focused on the 
likely competitive impact of the judgment, rather than extraneous 
factors irrelevant to the purposes of antitrust enforcement. Finally, 
this list is not intended to be exclusive, as the court is directed to 
review any other competitive consideration ``that the court deems 
necessary to a determination of whether the consent judgment is in the 
public interest.''
  Under the existing statute, the trial court is granted broad 
discretion as to how to conduct Tunney Act proceedings. Our amendments 
make no changes to these procedures. In deciding whether to approve the 
consent decree, the court may, but is not required to, hold a hearing 
on the proposed decree. Id. Sec.  16(f). In such a hearing, the court 
may take the testimony of Government officials or expert witnesses. The 
court may also take testimony from witnesses or other ``interested 
persons or agencies'' and examine documents relevant to the case. The 
court may also review the public comments filed during the sixty-day 
period pursuant to the Tunney Act. In addition, the court may appoint a 
special master or outside consultants as it deems appropriate. Finally, 
the court is granted the discretion to ``take such other action in the 
public interest as the court may deem appropriate.'' Id. While the 
court may do any of the preceding, it is not required to follow any of 
these procedures.
  Our amendments to section five of the Clayton Act add language 
stating that nothing in that section will be ``construed to require the 
court to conduct an evidentiary hearing or to require the court to 
permit anyone to intervene.'' This language is not intended to make any 
changes to existing law, but merely to restate the current 
interpretation of the law. Under the statute, the court is not required 
to conduct an evidentiary hearing, but is permitted to do so or to take 
testimony if it wishes to do so. See 15 U.S.C. Sec. 16(f). This will 
remain the procedure, a court will be permitted, but not required, to 
conduct evidentiary hearings in making its Tunney Act determination. 
Additionally, the statute currently permits in 15 U.S.C. Sec. 16(f)(3) 
intervention by interested parties in the Tunney Act review proceeding. 
This will remain the procedure a court will be permitted, but not 
required, to allow parties to intervene.
  Our amendments also make two other minor and technical changes to 
Tunney Act procedures. First, section 221(b)(1) of the bill permits the 
district court to authorize an alternative means of publication, rather 
than publication in the Federal Register, of the public comments 
received in response to the announcement of the proposed consent 
decree. A court may only authorize such alternative means of 
publication if it finds the expense of Federal Register publication 
exceeds the public interest benefits to be gained from such 
publication. This provision is intended to avoid unnecessary expense in 
publishing proposed consent decrees if alternate means are available, 
such as, for example, posting the proposed decrees electronically, 
which are sufficient to inform interested persons of the proposed 
consent decree.
  The second technical amendment, found in section 221(b)(3) of our 
bill, amends the provision of the Tunney Act codified in 15 U.S.C. 
Sec.  16(g) which requires that defendants notify the court of all 
communications with the Government relevant to the consent decree, 
except for communications between the defendant's counsel of record and 
the Justice Department. Our bill adds language which clarifies the 
statute's language to make clear that only communications with the 
defendant, or any officer, director, employee, or agent of such 
defendant, or other person representing the defendant must be 
disclosed. The defendant is not required to disclose contacts with the 
Government concerning the settlement by persons not affiliated with, 
representing, or acting on behalf of the defendant, for example, 
competitors of the defendant. The defendant's obligation to disclose 
contacts by agents or persons representing the defendant, including 
outside lobbyists, is unaffected by this technical change.
  In sum, our bill will mandate that courts engage in meaningful review 
of the Justice Department's antitrust consent decrees and not merely 
``rubber stamp'' the decrees. It will make clear that it is a 
misinterpretation of the Tunney Act to limit a court's review to limit 
judicial review of these consent decrees to whether they make a mockery 
of judicial function, and therefore overrule recent D.C. Circuit 
decisions holding to the contrary. The bill is expressly intended to 
effectuate the legislative intent of the Tunney Act and ensure the 
ability of courts to effectively review consent decrees to ensure that 
they are in the public interest. It will require, rather than permit, a 
court to review a list of enumerated factors to determine whether a 
consent decree is in the public interest. By restoring a robust and 
meaningful standard of judicial review, our bill will ensure that the 
Justice Department's antitrust consent decrees are in the best 
interests of consumers and competition.
  Mr. DeWine. Mr. President, I rise today, along with Senator Hatch, 
Senator Leahy and Senator Kohl, as a sponsor of H.R. 1086, the 
Standards Development Organization Advancement Act of 2003. H.R. 1086 
was passed unanimously by the Judiciary Committee in November 2003, and 
I am proud to say that H.R. 1086 encompasses many of the provisions of 
S. 1797, the Antitrust Criminal Penalty Enhancement and Reform Act of 
2003, which Senator Kohl and I introduced in October 2003. H.R. 1086 is 
a comprehensive bill that will enhance and improve the enforcement of 
U.S. antitrust law in four key areas.
  First, and perhaps most important, this bill will raise the penalties 
for criminal violations of antitrust law and bring those penalties more 
into line with penalties for other, comparable white collar offenses. 
Antitrust crimes such as bid rigging or cartel activity cheat consumers 
and distort the free market just as surely as any other type of 
commercial fraud, and should be strongly punished. Under current 
antitrust laws, the maximum criminal penalties for individuals guilty 
of

[[Page S3619]]

price-fixing are three years incarceration and $350,000 in fines. For 
corporations, the maximum fine is $10 million. This bill will, No. 1, 
raise the maximum prison term to 10 years; No. 2, raise the maximum 
fine for individuals to $1,000,000; and No. 3, raise the maximum 
corporate fine to $100 million. By increasing the prison terms for 
individuals, this bill brings criminal antitrust penalties closer in 
line with the maximum penalties assessed for mail fraud and wire fraud, 
which are both 20 years. Executives and other antitrust offenders need 
to know that they face serious consequences when they collude with 
their competitors, and this bill will send that message to the 
marketplace.
  Second, this bill improves on an investigative and prosecutorial tool 
already being employed effectively by the Justice Department. Since 
1993 the Antitrust Division has successfully used a revised corporate 
amnesty program to help infiltrate and break-up criminal antitrust 
conspiracies. In short, if a corporate conspirator self-reports its 
illegal activity to the Antitrust Division and meets certain 
conditions--it must be the first conspirator to confess, it cannot be 
the ringleader of the conspiracy, and it must agree to cooperate fully 
with the investigation, among other things--it will receive a ``free 
pass'' from prosecution. This program has been extremely successful in 
cracking conspiracies, because it creates a strong uncertainty dynamic 
among co-conspirators; members of the cartel can never be sure that one 
of the other conspirators will not confess its illegal activity to the 
Antitrust Division in order to avoid criminal liability. This 
uncertainty decreases the likelihood of cartels forming to begin with, 
and makes cartels less stable when they do form.
  H.R. 1086 helps to enhance the Division's corporate amnesty program 
by expanding its reach. The current amnesty program does not affect the 
civil liability of the conspirators; that is, a corporation cooperating 
with the Division through the amnesty program receives protection from 
government prosecution, but may still be sued in court by private 
parties for treble damages. This bill decreases that liability by 
limiting the damages a private plaintiff may recover from a corporation 
that has cooperated with the Antitrust Division. Specifically, the 
conspirator is not liable for the usual treble-damages; instead, it is 
only liable for actual damages. This modification recognizes that a 
corporation that has fully cooperated with the Antitrust Division is 
less culpable than other conspirators, and provides a far greater 
incentive for corporations to cooperate with the Antitrust Division.
  Third, H.R. 1086 addresses a concern raised recently by a string of 
court opinions that appear to limit the depth of review required by the 
Tunney Act. In brief, the Tunney Act requires that prior to 
implementing an antitrust consent decree a court must review that 
decree to assure that it is in the public interest; historically, that 
requirement has been understood to require that the courts engage in 
more than merely ``rubber-stamping'' those decrees. A number of recent 
opinions have led some to question the depth of review required by the 
Tunney Act. This bill makes clear that the Tunney Act requires what it 
has always required, and that mere rubber-stamping is not acceptable. 
In addition, H.R. 1086 makes a small number of minor modifications and 
revisions to ensure both that the Tunney Act accurately reflects its 
original intent and that it effectively functions in the modern legal 
and economic environment.
  Finally, this bill will treat Standard Development Organizations 
(SDOs) more favorably under the antitrust laws. SDOs are private, 
voluntary non-profit organizations that set standards for industry 
products--e.g., one SDO sets the standard for the required depth of a 
swimming pool before a diving board may be installed. Under the bill, 
qualifying SDOs which pre-notify the Antitrust Division of their 
standard-setting activities will not be subject to treble damages in 
private suits brought against them. Moreover, SDO activities will be 
scrutinized for antitrust violations under the less strict ``rule of 
reason'' legal standard, and SDOs may be awarded certain costs and 
attorney fees if they substantially prevail in litigation which is 
later held to be frivolous.
  In all of these ways, H.R. 1086 modernizes and enhances the 
enforcement of U.S. antitrust laws, and I am proud to sponsor it.
  Mr. McCONNELL. I ask unanimous consent that the Hatch-Leahy amendment 
at the desk be agreed to, the committee-reported substitute, as 
amended, be agreed to, the bill, as amended, be read a third time and 
passed, the motions to reconsider be laid upon the table en bloc, and 
any statements relating to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3010) was agreed to.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  The committee amendment, in the nature of a substitute, as amended, 
was agreed to.
  The bill (H.R. 1086), as amended, was read the third time and passed.

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