Double damages in cartel cases

On November 17, 2022, Law No. 14,470/2022, which implemented changes to certain provisions of Law No. 12,529/2011 (the Brazilian Competition Act), was published.

The main change refers to the possibility of individuals and legal entities recover double damages in cartel and uniform commercial conduct cases – indirectly, art. 1, paragraph 1, of Law No. 14,470/2022, makes clear that double damages will not be applicable to abuse of dominance and vertical restraint cases.

In a scenario where cartel members have signed leniency agreements and/or cease-and-desist agreements and the Brazilian Antitrust Authority (CADE) has declared that those agreements have been fully fulfilled, cartel members will only be liable for actual damages they caused to the plaintiff – double damages will not apply to those cases. Also, those who signed leniency agreements and/or cease-and-desist agreements shall not be held jointly and severally liable with (co)conspirators.

Law No. 14,470/2022 also sets forth that, if cartel members argue there was pass on costs, those cartel members shall submit supporting evidence in that sense (i.e., there is no presumption of pass-on defenses).

Law No. 14,470/2022 also establishes that while an antitrust investigation is ongoing, statutes of limitations will not apply; the statutes of limitations in those cases will be 5 years, which will trigger after the publication of a decision by CADE’s Tribunal finding the defendants guilty. CADE’s Tribunal decisions will also be given full faith and credit to speed up judicial litigation derived from anticompetitive practices.

Notwithstanding the new rules brought by Law No. 14,470/2022, such a law does not deal with calculation of damages, one of the most complex matters in cartel damages cases, which usually involves the hiring of expert witnesses who adopt a variety of different methodologies.

Our Antitrust/Competition and Litigation Practices Areas are available to assist clients in connection with the matters above.