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Public Comment and Judicial Review Regarding Government Antitrust Settlements

Under Section 5(a) of the Clayton Act, 15 U.S.C.S. § 16(a), a final judgment in a successful federal government antitrust enforcement action is prima facie evidence of the defendant’s antitrust violation in a subsequent private action for treble damages. However, a consent decree agreed to by a defendant in a federal government action before any testimony is taken is not considered prima facie evidence in a subsequent private action.

Procedures have been established to provide for public comment, third party intervention, and judicial approval concerning consent decrees or settlements entered in federal antitrust enforcement actions. These procedures to protect the public interest in the outcome of enforcement actions are stated in Sections 5(b) through 5(f) of the Clayton Act.

At least 60 days prior to the effective date of the consent decree, the Antitrust Division of the Department of Justice must publish the proposed decree, government comments on third party submissions and a competitive impact statement describing:

  • What effect the consent decree is expected to have;
  • What remedies remain available to parties damaged by the alleged antitrust violations covered by the decree; and
  • What alternatives to the decree were considered.

Within ten days after the government files the proposed decree, the defendant participating in the settlement must file a description of its communications (except for some communications by defendant’s counsel) with any government official regarding the decree.

The U.S. District Court in which the proposed decree is filed must determine whether entry of the decree would be in the public interest. The court is authorized to take testimony, appoint a special master and experts, allow appearances by any interested party, and review any written comments to the government and government responses.

In determining whether the decree is in the public interest, the court will consider the proposed decree’s competitive impact and provisions for modification and enforcement of the decree. The court also will consider the impact of the decree on particular parties subject to injury in addition to the impact of the decree on the public in general.

Copyright 2015 LexisNexis, a division of Reed Elsevier Inc.

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