The House of Representatives recently passed a bill, H.R. 1086, that would limit liability under the antitrust laws for qualifying Standards Development Organizations, increase the maximum individual and corporate criminal penalties for antitrust law violations, and amend the Tunney Act to give federal judges greater authority to review antitrust consent decrees. The Bill, which passed the House on June 2, 2004, had already passed the Senate, and now awaits presidential approval.
The Bill amends the National Cooperative Research and Production Act of 1993, 15 U.S.C. § 4301, et seq, to allow Standards Development Organizations to notify the Department of Justice and Federal Trade Commission of their standard-setting activities. If the government agencies do not object to the standard-setting activity, then the private Standards Development Organization ("SDO") will be exempted from liability for treble damages in the event a private plaintiff files suit against the SDO. Instead, the SDO’s liability will be limited to actual damages. The Bill was intended to address the "chilling effect" on standards organizations caused by antitrust lawsuits like that filed against the American Society for Testing and Materials ("ASTM"). That lawsuit alleged that ASTM and its members violated the antitrust laws when they developed standards for underground storage tanks.
The Bill also raises the criminal penalties for individuals and corporations convicted of antitrust violations. The maximum individual penalty is raised from three years to ten years and the maximum fine is increased from $350,000 to $1 million. For corporations, the maximum penalty is increased from $10 million to $100 million. The Bill also encourages antitrust defendants to enter into leniency agreements with the Government by limiting damages for those defendants. However, the corporate defendant would be obligated to pay restitution to the plaintiff.
The Bill also amends the Tunney Act, 15 U.S.C. § 16, to give district courts greater authority to review consent decrees entered in antitrust cases. The Bill directs a court to consider whether the consent decree would be in the public interest, prior to entering the decree. Among the facts a court is required to consider are the competitive impact of the settlement in the relevant markets and whether the public would benefit from the determination of the issues involved through trial. The Bill effectively overturns the D.C. Circuit’s decision in U.S. v. Microsoft Corp., 56 F.3d 1448 (D.C. Cir. 1995), which limited district court review of a consent decree to the purpose, meaning, and efficacy of the decree. See id. at 1462. The Bill can be found at http://frwebgate.access.gpo.gov/cgibin/ getdoc.cgi?dbname=108_cong_bills&docid=f:h1086enr.txt.pdf
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