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24 November 2022
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New Statute Fostering Antitrust Damages Claims Enters Into Force In Brazil

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On November 17, 2022, a new statute was enacted introducing crucial modifications to the Brazilian Competition Act, changes that foster antitrust damages lawsuits (Law No. 14.470/2022).
Brazil Antitrust/Competition Law

On November 17, 2022, a new statute was enacted introducing crucial modifications to the Brazilian Competition Act, changes that foster antitrust damages lawsuits (Law No. 14.470/2022).

The innovations introduce the concept of double damages  as the standard compensation for victims of cartel activity. The statute also provides an exception for defendants that cooperate with the Brazilian Antitrust Authority (CADE)—whether they ask for immunity at the onset of the case or settle with the government in the course of the case—shielding them from double damages awards and from joint and several liability in the payment of these claims.

The new statute also changes the rule on statute of limitations in damages lawsuits, as well as making other procedural changes. It also gives greater weight in court to the CADE decision that cartel conduct exists.

All changes are summarized in the chart below:

ISSUE

BEFORE

HOW IT IS NOW

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)

Length of the statute of limitations (all violations)

3 years

5 years

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

Evidentiary weight of CADE's decisions

No specific provision

CADE's conviction suffices to ground interim injunctive relief in court

 

The innovations above increase exposure to antitrust violations by encouraging allegedly injured parties to seek compensation in Brazilian courts. This bill was certainly designed to make antitrust damages claims more common, further raising the stakes of non-compliance with the Brazilian Competition Law.

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This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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