On July 12, 2022, the Brazilian Congress passed crucial modifications to the Brazilian Competition Act (Law No. 12.529/2011) fostering antitrust damages lawsuits. The bill will soon be sent to the President, and if signed into law, it will become effective upon publication on the Brazilian Federal Registry1.
The innovations increase the awards due by cartel members, now fixed as double the damages sustained by the injured parties. On the other hand, the bill also grants benefits to parties who cooperate with the Brazilian Antitrust Authority (CADE) during investigations (either through leniency or settlement agreements), shielding them from double damages awards and from joint and several liability in the payment of these claims.
The bill also includes provisions governing the calculation of the statute of limitations in damages lawsuits, as well as other procedural changes.
All modifications are summarized in the chart below:
|ISSUE||BEFORE||HOW IT WOULD BE PURSUANT TO THE APPROVED BILL|
|Compensation in cartel cases||
Award limited to the sustained damages
Double damages, except for cooperating parties (either through leniency or settlement with CADE)
|Joint and several liability in cartel cases||
Joint and several liability between cartel members
Joint and several liability between cartel members, except for cooperating parties (either through leniency or settlement with CADE)
|Limitation period (all violations)||
|Calculation of the statute of limitations (all violations)||
No specific provision; no settled case law in this regard
Statute of limitations counted as of the day of CADE's final decision; limitation period is tolled during CADE's investigation
|Defendant's burden of proof in cartel cases||No specific provision||Defendant bears the burden of pass-on defense|
|Mandatory arbitration clause in settlement agreements in cartel cases||No specific provision||Settling parties required to undertake arbitration in damages disputes (upon request or approval by the plaintiff)|
|Evidentiary weight of CADE's decisions||No specific provision||CADE's conviction suffices to ground interim injunctive relief in Court|
The innovations above raise the exposure associated with antitrust violations by encouraging injured parties to seek compensation in Brazilian courts. This bill was certainly designed to make antitrust damages claims more common, further increasing the stakes of non-compliance to the Brazilian competition law.
1. Available on https://www.camara.leg.br/proposicoesWeb/prop_mostrarintegra?codteor=1703442&filename=Tramitacao-PL+11275/2018 (in Portuguese).
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