New law facilitating competition damage claims takes effect in Brazil

On November 17, 2022, Brazil’s president sanctioned Law No. 14,470/2022, which adds provisions to Brazil’s Competition Defense Law (LDC).

These new provisions seek to improve the civil reparation system in regard to antitrust-related damage claims.

The main changes that the new law introduces are outlined below.

Statute of limitations

The statute of limitations for damage claims has been increased from three to five years. In regard to follow-on claims, Law No. 14,470/2022 establishes that this five-year period commences from the date the Brazilian Antitrust Authority’s (Cade) judgment is published in the Official Gazette.

Double damages

Claimants may now be awarded double compensation for damages caused by cartels, regardless of other sanctions stemming from administrative or criminal courts.

Increased incentives for leniency applications

In order to avoid disincentivizing companies from entering into leniency agreements, those that do so will be subject to double damages, nor will they be joint and severally liable.

Burden of proof for pass-on defenses

Courts must not presume claimants that have been harmed by a cartel have passed the price increases on to third parties (known as a pass-on defense). Therefore, whenever a defendant seeks to use the pass-on defense, it bears the burden of proving that the price increase was indeed passed on.

Burden of time shifted to defendants

Cade’s final decisions are considered prima facie evidence for granting injunctive relief, regardless of proof that the matter is urgent. This change intends to shift the burden of time to the defendant in the judicial proceedings.

For further information on this topic, please contact Mattos Filho’s Antitrust and Litigation & Arbitration practice areas.

*With the collaboration of João Lucas Ferreira Torres Vieira.