Ultimate November, at the tenth anniversary of the Brazilian Festival Act (Regulation No. 12,529/2012, or BCA), a long-expected legislation aiming at incentivizing movements for antitrust damages was once enacted in Brazil (the so-called “Brazilian Personal Enforcement Package deal” – BPEP, or Regulation No. 14,470/2022).
Previously proposed prior to the Brazilian Senate in 2016 (Senate Invoice 283/2016) and impressed by way of america treble damages in addition to the EU Damages Directive (Directive 2014/104/EU), this new regulation strengthens the equipment for the implementation of the home festival coverage. Festival coverage has been traditionally anchored, in Brazil, in actions carried out within the public enforcement  realm – i.e., the administrative prosecution by way of the Brazilian antitrust company (CADE) and the prison prosecution by way of investigators, public prosecutors and Courts in opposition to the ones anticompetitive acts that still represent prison violations (Regulation No. 8,137/90). At the backseat has sat, thus far, the non-public enforcement regime.
This ancillary position of personal enforcement isn’t a results of a loss of prison regulations. Certainly, the Brazilian Civil Code (BCC) has, for a very long time, entrusted folks injured by way of an illegal observe the appropriate to sue for damages (BCC, Artwork. 927 and BCA, Artwork. 47, which covers precise loss, lack of benefit, and ache and struggling).
On the other hand, as in lots of spaces of the regulation, a prison provision by myself is inadequate to successfully workout a proper. That is specifically necessary in relation to festival regulation non-public enforcement, in opposition to which sensible hindrances play a central position in combating non-public events from suing for damages. Those hurdles, normally, come with uncertainties regarding the limitation length; advanced and costly litigation, frequently taking a number of years, and loss of financial incentives when the anticipated indemnification is faced with the possibilities of luck and the litigation prices (together with, if the case, the prices incumbent at the shedding birthday party). The BPEP was once handed to modify this panorama in Brazil.
On the other hand, discussions regarding the necessity of boosting home non-public enforcement didn’t happen out of context.
From the Nineteen Eighties and Nineties, research started to show the significance of movements for damages as a deterrence mechanism in opposition to anticompetitive practices in america.  Within the 2000s, a landmark judgment by way of the Eu Court docket of Justice (ECJ) (Braveness v Crehan) showed the then-disputed risk that folks may carry damages movements according to violations of the provisions of Eu Union regulations at the coverage of festival.  This precedent raised the Eu debate, culminating, in 2014, within the version of the Eu Damages Directive No. 2014/104/EU, comprising provisions geared toward making certain the appropriate to general repayment for damages coming up from anticompetitive acts and clarifying/harmonizing procedural regulations for this goal. In 2019 the OECD introduced its peer overview on Festival Regulation and Coverage in Brazil and said that “so far, the level of a hit non-public enforcement job in Brazil has been restricted“. In line with the entity, a invoice to spice up non-public movements whilst protective the effectiveness of public enforcement, significantly CADE’s leniency program, will have to, thus, be handed – a requirement that has now been attended.
3 legislative targets and 8 provisions: an summary of Regulation 14,470/2022
A commonplace flooring for contentious debates on projects in quest of the promotion of personal enforcement is discovering the appropriate stability between, at the one hand, incentivizing events to sue those that devote antitrust infringements and alluring courts to have a extra energetic position within the interpretation and alertness of festival regulation; and, alternatively, maintaining a robust, empowered, and constant public enforcement coordinated by way of an antitrust company. The theory of harmonization, thus, is important.
In Brazil, the vector for such compatibility assumed the will for shoring up CADE’s job and warding off collateral results within the public enforcement subsystem. Therefore, a long way from changing the “CADE-centrism“, the brand new regulation targets to extend CADE’s common degree of enforcement while assuring concrete advantages to the injured events thru a couple of normative “fine-tunings“.
Those changes come with, as an example, additional expanding the beauty of conventional tools of collaboration (e.g., Leniency and Stop and Desist Agreements – TCC) to CADE’s investigations, connecting their advantages now not handiest to the normal administrative and prison immunity but in addition to decrease degree of repayment to be paid by way of a such birthday party if sued for damages. Every other fine-tuning is the try to cut back litigation transaction prices by way of (supposedly) dissipating necessary procedural quandaries and uncertainties.
In additional didactic phrases, Regulation No. 14,470/2022 comprises 8 provisions which regulate the unique textual content from the BCA to fulfil 3 regulatory targets: (i) incentivize plaintiffs to sue for damages; (ii) stability the incentives for private and non-private enforcement; and (iii) supply prison walk in the park on particular procedural regulations. Those are mentioned intimately beneath.
Within the first crew of measures, geared toward growing (monetary) incentives for submitting court cases, there may be the availability for the appropriate to repayment in an quantity similar to two times the damages suffered (double damages) because of a collusive anticompetitive act (e.g., a cartel or affect on collusive behaviour) (BCA, Artwork. 47, §1). While it’s true that, very similar to the principles within the EU, the primary of complete repayment applies in Brazil, the concept that wrongdoing will have to be punished in “double” has been extra just lately provide within the Brazilian prison machine in numerous prison fields, equivalent to, as an example, (i) Shopper Regulation (see Shopper’s Protection Code Article 42, sole paragraph, surroundings forth the appropriate to double refund for undue fee by way of a client); or (ii) Civil and Regulatory Regulation, given the availability from Regulation No. 10,209/2001, dominated constitutional by way of the Brazilian Ultimate Court docket, which grants the appropriate to double fee to shipment provider who has now not won upfront a toll voucher to be equipped by way of the shipment shipper.  Thus, Brazilian non-public enforcement regulation follows america fashion fairly than the EU fashion in relation to punitive damages.
The 2nd crew outlines provisions to stability CADE’s investigative efforts (public enforcement) and the promotion of personal prosecution. Certainly, given (i) the significance of leniency agreements and TCC to CADE (important supply for purchasing proof to prosecute firms, in addition to a destabilizing issue to illegal cooperation amongst companies); and (ii) the truth that such agreements don’t insulate its applicant from the obligation of repayment equipped for in Artwork. 47 of the BCA, it was once vital to reset the dimensions and supply additional immunities to leniency and agreement candidates. Those new immunities confer with the exclusion of the double damages rule and from the strange utility of the joint and several other legal responsibility institutes.
As to the 3rd crew, the regulation seeks to explain procedural regulations acceptable in motion for damages. For such, it establishes (i) the iuris tantum presumption that overcharges by way of an entity harmed by way of the anticompetitive behavior have now not been handed on, which in flip must be proved by way of the defendant (reversed burden of evidence); (ii) that statute of barriers for harm claims is of 5 years and handiest begins after the e-newsletter of CADE’s ultimate choice; and (iii) that CADE’s choices will have to suffice as proof for the granting of provisional measures by way of Courts in the advantage of the claimant.
Just one provision of the undertaking transformed into Regulation No. 14,470/2022 was once vetoed by way of the Brazilian Presidency: the one who made up our minds that the events to leniency and TCC agreements with CADE will have to input arbitral commitments with the events desirous about submitting their calls for by means of such discussion board.
Nonetheless, a bumpy street forward
With that stated, the longer term traits from the non-public movements for damages prior to the Brazilian Courts will unquestionably inform whether or not the legislator contributed decisively or to not fortify the effectiveness of such an tool from the contest coverage toolkit. Any further, in spite of the above legislative inventions, it’s price keeping track of some sensible problems that may surely populate the Brazilian festival enviornment within the coming years. A few of them are in brief expected beneath.
First, the brand new regulation handiest awards monetary incentives (double damages) to the dissuasion of collusive anticompetitive acts. It seems that the universe of festival infringements is way broader, together with a number of vertical/unilateral practices. Thus, despite the fact that the invoice is aligned with the present “dogma” that the cartel will have to be historically understood as probably the most destructive infringement to the marketplace functioning, it will now not be misplaced to speak about the significance of grating the similar form of incentives for plaintiffs who suffered damages as a consequence of unilateral abuse by way of agent(s) with really extensive marketplace energy, mainly within the age of virtual markets and in a rustic characterised by way of a predominantly oligopolistic marketplace construction in vital financial sectors. Contemporary research at the profile of personal antitrust enforcement in Brazil additionally corroborate this significance. 
2nd, the BPEP can provide upward push to undesirable results relating to fits filed independently and prior to a call issued by way of CADE. In such circumstances, regulations when it comes to the statute of barriers would possibly, in observe, develop into obscure or misplaced: does it appear affordable to unconditionally keep the working of the statute of barriers for in quest of antitrust damages for infringements that CADE is not going to scrutinize, or whose prosecution happens a number of years after the termination of the alleged illegal behavior? 
3rd, making an allowance for that (i) CADE famously applies harsh fines in cartel circumstances; and that (ii) the an increasing number of commonplace judicialization of the authority’s choice would possibly lead, in an extra spherical, to an an increasing number of encouraging agreement of the dispute with the defendant, one may simply ask: how would the incentives for the movements for harm be shifted if (i) the Judiciary overturns CADE’s choice; or, within the imminence of such (ii) CADE concurs to settle upon the specific or tacit popularity that no illegal behavior was once carried out, or, a minimum of, no harm to the marketplace existed?
Fourth, regarding the iuris tantum presumption of non-pass-on of the overcharges, the defendant carries the load of evidence to turn that the plaintiff misplaced, in complete or partly, his/her proper to repayment for passing on his damages. Such evidence, alternatively, is very advanced and can surely call for the invention of the plaintiff’s paperwork. If this kind of burden is deemed insufferable by way of the Court docket, a Pass judgement on would possibly opposite it (Civil Process Code, Artwork. 373, §1) and even resolve get admission to to express paperwork from the accuser. From every other perspective, such presumption would possibly lead to difficulties for the appropriate to complete repayment for the ones in quest of repayment for oblique damages coming up exactly from the passing-on of the overcharge (e.g., customers who acquire a product produced from inputs bought at an overpriced value because of a cartel).
In the end, in regards to the better ease in granting provisional reduction to the plaintiff according to CADE’s choice, handiest observe will inform the effectiveness and appropriateness of this rule. It’ll, if truth be told, be the appropriate medication for the fallacious affected person. In relation to provisional measures after CADE’s choice, the cessation of the anticompetitive offence may have already been accomplished. As such, the principle reduction to be asked will probably be the anticipation of the damages. Its quantification, alternatively, isn’t trivial however is regarded as some of the advanced demanding situations of personal enforcement, frequently requiring the use of other econometric strategies and elaborating other counterfactual situations.
In conclusion, if the great goal of the Regulation No. 14,470/2022 is indeniable and merits a priori applause, it’s nonetheless unsure its precise incremental impact at the strengthening of Brazilian antitrust enforcement. This level evokes consideration. If effectiveness isn’t a criterion of normative validity as claimed by way of Kelsen, social legitimacy is a conditio sine qua non for such.  As the well known pronouncing tells: „Das magazine in der Theorie richtig sein, taugt aber nicht für die Praxis”.  Sensible problems will, due to this fact, have crucial position right here, as expected. Consideration will have to even be performed to (i) the velocity and technical accuracy of the events and judges within the utility of this kind of new regulation to the Brazilian judicial tradition; and (ii) the environment friendly “are compatible” between the time and high quality of the executive prosecution performed by way of CADE; and the seek for repayment prior to Courts.
Greater than embedding within the Brazilian prison machine regulations that building up the potential of punishing folks and undertakings, it kind of feels very important for the great construction of the home antitrust coverage that ongoing evaluative projects are installed position to know the concrete results of the regulation vis-à-vis its authentic targets. Surveillance and punishment, merely, aren’t sufficient. Actual beneficial properties for society call for time and institutional perseverance, with efforts that transcend mere legislative job. On this box, both by way of the State or by way of civil society, excellent examples abound. 
 Public enforcement, for the context of this newsletter, issues the implementation of festival regulation by way of administrative or prison establishments. However, non-public enforcement corresponds to the implementation of such regulation by the use of court cases filed by way of or within the identify of a person or a gaggle of people.
 See, as an example, Personal antitrust litigation: New proof, new finding out.
 See Direct Motion for the Declaration of Unconstitutionality No. 6031, Rapporteur Min. Carmén Lucia Antunes Rocha.
 In cartel circumstances, CADE understands that it has as much as twelve years to start out the prosecution of the infringement as of its termination with out the investigation being declared time bared.
 “It can be legitimate in idea, however now not acceptable to the praxis“. (Über den Gemeinspruch: Das magazine in der Theorie richtig sein, taugt aber nicht für die Praxis).
 V.g. A contemporary overview at the utility of Directive 2014/104 performed by way of the EC in 2020 in https://ec.europa.european/festival/antitrust/actionsdamages/report_on_damages_directive_implementation.pdf. There also are a large number of instructional projects in the similar path, amongst which Cartel damages movements in Europe: How courts have assessed cartel overcharges.