[Congressional Record (Bound Edition), Volume 156 (2010), Part 8]
[Extensions of Remarks]
[Pages 10532-10533]
[From the U.S. Government Publishing Office, www.gpo.gov]




  BALANCING PUBLIC AND PRIVATE REMEDIES IN ENHANCED CARTEL PROSECUTION

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                        Thursday, June 10, 2010

  Mr. CONYERS. Madam Speaker, just before Congress left for the 
Memorial Day recess, we passed and sent to the President H.R. 5330, the 
Antitrust Criminal Penalty Enhancement and Reform Act of 2004 Extension 
Act, and the President has just signed it into law. As Chairman of the 
House Judiciary Committee, and sponsor of this legislation, I would 
like to emphasize a few points about its importance.
  The antitrust laws have been described as the Magna Carta of free 
enterprise. They are a safeguard that protects the vitality of the free 
market by preventing its becoming concentrated in too few hands. Just 
as importantly, they protect consumers from unscrupulous businesses 
that would conspire among themselves or illegally leverage market power 
to charge artificially high prices and deny meaningful choice.
  The worst kinds of antitrust offenses, conspiracies by competitors to 
organize into cartels to cheat the marketplace of fair competition, are 
rightly condemned and subject to high criminal fines and prison 
sentences.
  Treble damages in private rights of action are also an essential 
element of vigorous antitrust enforcement. They not only compensate 
consumers for harm they suffer from illegal anticompetitive activity, 
they also create a powerful incentive for other market participants to 
refrain from engaging in anticompetitive activity in the future.
  The Department of Justice Antitrust Division's corporate leniency 
program has worked well in exposing illegal price-fixing cartels and 
bringing them to justice. Starting in 1993, the corporate leniency 
program created incentives for participants in illegal price-fixing 
cartels--provided that they weren't the ringleader--to come forward and 
expose the cartel, in exchange for amnesty from criminal prosecution. 
Although the program was achieving success, the Antitrust Division 
recognized that the treble damages, as well as the joint and several 
liability overall, to which amnesty applicants would be exposed in 
related private actions was limiting the effectiveness of the program. 
The party that was coming forward to expose the cartel could 
potentially even be left paying damages for the entire cartel.
  The Antitrust Criminal Penalty Enhancement and Reform Act was passed 
in 2004 to address these concerns, by limiting the civil liability of 
amnesty applicants to their share of the legal responsibility, while 
leaving the other cartel participants subject to joint and several 
liability. In this way, Congress sought to balance the need for strong 
incentives to uncover harmful, sometimes multi-billion-dollar price-
fixing cartels, without lessening the total amount of damages that 
would be available to the victims in private civil actions.
  By some measures, the 2004 changes have been effective. Since those 
changes were made, the Antitrust Division has prosecuted some of the 
biggest cartels ever detected, collecting more than $5 billion in 
criminal fines.
  However, concerns have arisen that some cartel members who have taken 
advantage of the leniency program may be abusing the civil liability 
relief by failing to cooperate fully and in a timely manner with the 
cartel's victims in their civil actions. In reauthorizing the Act for 
another 10 years, we are making some clarifying amendments to ensure 
that the benefits to the Department of Justice's criminal cartel 
enforcement program do not come at the expense of the victims.
  One of the amendments revises the timely cooperation requirement. In 
the original Act, Section 213(c) signaled the importance of timely 
cooperation with civil claimants, but specifically required it only in 
a very narrow set of prosecutions. This legislation revises section 
213(c) to make it clear that this timely cooperation requirement 
applies in all cases where amnesty is being sought under the leniency 
program.
  The legislation also creates a new Section 213(d) that clarifies the 
necessary balance between public and private pursuit of price-fixing 
cartels. The Department of Justice will frequently ask the court to 
stay related civil claims in order to build its criminal case against 
the rest of the cartel. These stays can sometimes last a year, or even 
longer. As the Act makes clear, the judicious granting of these stays 
is, and remains, fully in keeping with the purposes of the Act. We have 
added a new section 213(d) to clarify that the obligation for timely 
cooperation with civil claimants does not take effect until after the 
stay is lifted, but that, once it is lifted, then the amnesty applicant 
must cooperate in a prompt and timely fashion.
  Section 213(d) does not include a reference to the 213(b)(3) 
requirement to make available witnesses for deposition or testimony, in 
recognition of the fact that, even after the stay is lifted generally, 
there may be remaining sensitivities that, for a time, may make it 
problematic for certain witnesses to provide interviews, depositions, 
or trial testimony in connection with the private litigation without 
disrupting or harming the ongoing criminal investigation. The omission 
of this reference from section 213(d) is not intended to discount the 
importance of cooperation with civil claimants in this regard; rather, 
it reflects that these aspects of cooperation with civil claimants may 
be more disruptive to the ongoing criminal investigation. Subject to 
the additional temporary delays that the Antitrust Division may request 
on a case-by-case basis, the timely cooperation requirement also 
applies to witness availability. We expect that the Antitrust Division 
and the courts will be appropriately sensitive to the needs and rights 
of private claimants in this regard as well.
  We are also commissioning a study by the Government Accountability 
Office to consider other possible ways to improve the efficacy of the 
Act, including, but not limited to, adding qui tam and whistleblower 
protection provisions.
  We believe these improvements further promote vigorous antitrust 
enforcement for the protection of American consumers and free-market 
competition.

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