Antitrust Litigation 2024 Comparisons

The Peruvian Competition Act (Legislative Decree 1034) empowers any person (natural or legal) to seek compensation for losses incurred due to breaches of competition law through the judicial system.

This redress for damages resulting from anticompetitive behaviour exemplifies private enforcement of competition law, complementing public enforcement by the National Competition Authority (NCA).

Claimants can initiate damages actions when the decision declaring the existence of the anticompetitive conduct that caused such damages becomes final.

An administrative decision becomes final when it is not possible to file for appeals, because the offenders did not appeal or because the Court of Appeals confirmed the decision. In other words, a sanctioning proceeding for the breach of competition law and a judicial procedure for damages cannot be carried out simultaneously.

Damages actions are possible since 1991. In 2015, the Competition Act was amended to allow the NCA to sue for damages on behalf of consumers, when appropriate.

It should be noted that the NCA is also the consumer protection authority. Before the 2015 amendment, the authority already had the ability to sue for damages on behalf of consumers for infringements to consumer law, so the reform expanded this power to encompass competition-related matters.

Those affected by anti-competitive offences may also sue for damages directly. When the affected parties are final consumers, consumer associations and the NCA may sue on their behalf.

In recent years, private antitrust litigation has emerged as a tool to enforce competition law:

• The first claim for the compensation of antitrust damages was started by a mobile phone operator against a competitor previously found to have violated competition law. The damages claimed amount to USD83 million, and a decision is pending.
• The second claim was started by the NCA in November 2018 against pharmacies that participated in a price-fixing agreement that involved 36 medicines. A consumer association has requested to join the NCA as a co-plaintiff in this litigation, and a decision is pending.
• The third and last claim was started by a consumer association in April of 2022 against two companies that agreed to fix the prices of toilet paper. The damages claimed amount to USD1.612 billion, and a decision is pending.

In April 2021, the NCA issued guidelines on actions for damages on behalf of consumers as a consequence of anticompetitive conducts (the “Guidelines”).

In the absence of legislation and further judicial criteria, these guidelines fill a gap in Peruvian law and are a reference on the private application of competition law.

The Guidelines are mandatory for the NCA but non-binding on the judiciary. However, judges might consider the Guidelines to assess this type of claim.

The Guidelines prioritise damages resulting from cartel infringements due to their inherently illegal nature and the similarity of harm suffered by affected parties who paid inflated prices, facilitating collective compensation estimation.

Furthermore, the document limits the NCA’s ability to pursue cases where the anti-competitive offence affects natural persons who directly purchased the product or service. The NCA reasons that these individuals have less incentive to sue independently, as the benefits are often outweighed by the costs of litigation.

Consequently, the NCA will not initiate actions on behalf of companies, regardless of size, nor on behalf of indirect purchasers affected by anti-competitive conduct. These parties retain the right to pursue damages directly through the courts.

Additional aspects of the Guidelines are explored in the following sections.

The legal framework for the antitrust damages claims process is as follows:

• Legislative Decree Approving the Repression of Anticompetitive Conducts Law (the “Competition Act”): Section 49 provides that anyone who has suffered damages as a consequence of anticompetitive conduct is able to claim compensation if they can show a causal link between the damages and the anticompetitive offence. This provision also enables the NCA to claim compensation on behalf of consumers.
• Code of Civil Procedure: Section 82 defines “diffuse interest” as that which pertains to an undefined group, encompassing assets of inestimable patrimonial value, including consumer rights. It further enables non-profit associations to litigate on behalf of such interests.
• Civil Rights Code: Section 1983 sets forth the rule of joint and several liability when several parties are liable for the damage. Article 2001 establishes the statute of limitations for tort liability actions.
• The Guidelines (see 1.2 Recent Developments): A soft law document that regulates the terms, rules, conditions and restrictions of the NCA to sue on behalf of consumers. The Guidelines contain non-binding recommendations for judges when evaluating this type of claim.

The lawsuits are processed before the civil courts of the superior courts. There are no predetermined or specialised civil courts for these lawsuits, so potentially any of the courts could hear this type of case, as determined by the Judicial Branch’s case allocation system, which aims to distribute the procedural workload.

Binding Nature of Agency Decisions Before the Courts

While the NCA’s determination regarding the existence of an infringement is considered binding, the courts retain the authority to assess and quantify any harm suffered by the claimant as a result of the infringement.

The Role of the Competition Agency Before the Civil Courts

The NCA may sue on behalf of the affected consumers, as explained in 1.2 Recent Developments.

Impact of Decisions of Foreign Competition Agencies On Civil Courts

There are no precedents regarding the influence of foreign competition agency decisions on civil courts, and little to no impact is anticipated unless the anticompetitive conduct occurs at an international level, including Peru.

The burden of proof lies with the claimant, who must demonstrate both that the anticompetitive conduct sanctioned by the NCA caused them harm and the extent of that harm. Claimants may rely on NCA decisions as evidence for quantifying damages, as the authority often estimates the overcharges imposed on direct purchasers or the state as a result of anticompetitive behaviour. However, judges are not bound by these estimates and may conduct their own assessment.

It is important to note that cartels typically result in two types of economic damage: one affecting prices and another impacting quantities demanded. The NCA generally does not estimate the effects on quantities demanded. When the NCA brings a lawsuit on behalf of consumers, it quantifies the damage caused. According to the Guidelines, an exact quantification is not required; a reasonable estimate, based on the facts and available information, is deemed sufficient.

A “pass-on” defence is possible. Due to the challenges in proving damages for indirect purchasers, the Guidelines specify that the NCA will only seek damages on behalf of consumers who directly purchased the product affected by the offence. The burden of proof rests with the claimant (indirect purchaser), who must demonstrate that the direct purchaser passed on the overcharge caused by the anticompetitive conduct.

The limitation period for bringing actions for damages, pursuant to Section 52 of the Competition Act, is two years, starting from when the decision declaring the existence of the anticompetitive conduct becomes final. It should be noted that if the decision is contested in court, this judicial process does not count towards the statute of limitations. This has been confirmed by the Supreme Court (Sentence 3279-2013, December 2014).

As the first three claims are still ongoing, it is currently not possible to predict the duration of the proceedings.

The legal framework for class or collective actions initiated by the NCA or a consumer association includes the Competition Law, the Code of Civil Procedure, the Civil Code, the Consumer Protection Code, and the Guidelines. There is no legal provision allowing an individual consumer to sue on behalf of a class or group of consumers.

In cases where the NCA brings claims on behalf of consumers, the Guidelines provide that consumers may request to be excluded from the lawsuit. The opt-out process operates as follows: after the lawsuit is accepted, the NCA issues a public notice informing consumers of their right to opt out and preserve their ability to file an individual claim. Consumers wishing to opt out must submit a written statement to the NCA within 30 working days of the notice. The NCA is required to inform the judge of any exclusions, so this can be taken into account when calculating damages.

Both direct and indirect purchasers are entitled to bring claims for damages before the courts. However, the NCA will only pursue claims on behalf of direct purchasers who are natural persons.

The NCA has discretionary power to decide whether to request consumers belonging to the protected class to provide evidence of their membership (see 4.2 Opting In or Out). Consumers have 30 working days from the publication of the notice to submit this evidence, in order to receive any compensation granted as a result of the NCA’s claim.

Jurisdiction is determined by the Civil Procedure Code. Civil courts of the superior courts in the defendant’s domicile have jurisdiction.

Judicial proceedings are confidential, with only general information such as the names of the parties, the start date, and the amount of compensation being made public. Evidence used by the NCA to establish the existence of an anticompetitive offence can be submitted in the damages lawsuit. Once the NCA’s procedure is concluded, any non-confidential information in the case file becomes public.

All communications between a professional legal adviser and their client are protected under legal professional privilege. According to the Peruvian Constitution and the case law of the Constitutional Court, these communications cannot be used as evidence.

Leniency

Leniency agreements are confidential under Section 26 of the Competition Act and the Leniency Program Guidelines issued by the NCA in 2017. Therefore, these agreements cannot be included in the civil procedure as evidence.

However, the information provided by the leniency applicant and used by the NCA to sanction the anticompetitive offence, which is contained in the public case file, can be used as evidence in the damages claim procedure.

On the other hand, the Guidelines prevent the NCA from claiming damages from leniency applicants that applied before the NCA initiated its investigation (Type A Leniency).This provision aims to maintain incentives for leniency applications. Nonetheless, affected parties retain the right to pursue damages through the court.

Settlement Agreements

Settlement agreements are public, but there may be future debate about whether companies that reach a settlement can still face damages claims. Under the Competition Act, damages claims are only possible against companies that have been officially declared offenders, which is not the case for those involved in settlement agreements.

Under the Civil Procedure Code, parties are permitted to offer witness testimony as evidence. Witnesses can be challenged, questioning their credibility or suitability to testify. Witness statements are given during the evidentiary hearing, and the judge may order a confrontation of the testimony with other witnesses, experts, or the parties.

Parties can also offer as evidence expert witnesses or reports. Expert statements are also made during the evidentiary hearing, and the judge may order their confrontation with other experts, witnesses, or the parties.

Damages Assessment

Judges recognise two main categories of damages: actual loss and loss of profits. Actual loss refers to the harm directly or indirectly caused by the anticompetitive conduct, while loss of profits represents the financial gains lost due to the offence. Claims must specify the types of damages sought, and punitive damages are not allowed in Peru.

Passing-On Defence

While there is no definitive judicial ruling on this matter yet, defendants in antitrust cases may potentially raise the passing-on defence. As explained in 2.5 Pass-On Defence, the NCA acknowledges the challenges in proving how the effects of anticompetitive conduct can be passed on to purchasers further down the chain.

Interest

Section 1985 of the Civil Code states that compensation accrues legal interest from the date on which the damage occurred. The legal interest rate is set by the Peruvian Central Bank (BCRP).

Although the courts have not yet ruled on this issue, if several persons are held liable for an anticompetitive offence, there is joint liability.

The Civil Code provides the right of the company that paid the entire compensation to recover it from joint liable parties. For this purpose, the judge must determine the amount to pay considering the seriousness of the offence. If proportional distribution is not feasible, the compensation is divided equally among the liable parties.

Injunctive relief is available if the following conditions are met:

• There is a likelihood that the claimed right exists.
• The injunction is necessary to prevent irreparable harm caused by the duration of the litigation or other valid reasons.
• The measure is reasonable to ensure the effectiveness of the claim.

The injunction is granted or denied based on the evidence and grounds of the request, without the involvement of the defendant. An appeal may be filed against the decision denying the injunction.

The decision granting the injunction must specify the form, nature and scope of the counter-guarantee. The purpose of the counter-guarantee is to compensate the possible damages that could be caused by the injunctionif it is later shown to be unnecessary or unjustified. To date, no injunctions have been granted in private antitrust litigation cases.

Before initiating a claim in court, Peruvian law mandates an unsuccessful conciliation attempt with the defendant. However, when the plaintiff is not the direct right holder, such as in the case of consumer associations, the feasibility of settling on behalf of affected consumers needs to be assessed. In lawsuits initiated by the NCA, the Guidelines allow for settlements, provided the compensatory payment is exclusively directed to the consumers, not the NCA.

While direct litigation funding is not readily available, NCA-initiated lawsuits are financed through the authority’s budget. Additionally, consumer associations receive a portion of fines imposed for consumer rights violations, potentially enabling them to allocate funds for private antitrust litigation on behalf of consumers.

The prevailing party in a judicial proceeding can request reimbursement of attorney fees, court fees, and other expenses from the opposing party, as per the Code of Civil Procedure. This reimbursement does not require a specific request, and the judge can order it ex officio. Payment is due within three days of the final resolution approving the amount, with delays incurring legal interest.

Civil court decisions may be appealed to the civil chamber of the superior courts. Appeals can be based on error of law or facts. The former relates to procedural irregularities or an incorrect interpretation of law, while the latter relates to an incorrect perception of the facts.

In recent years, the NCA has actively pursued and sanctioned cartels. Numerous cases are currently under review in the Court of Appeals of the NCA or the courts, with conclusions expected in the coming years. If anti-competitive offences are confirmed, affected parties will have the opportunity to claim damages.

While affected parties have the right to sue directly, it is anticipated that the NCA will increasingly initiate lawsuits on behalf of directly impacted consumers, particularly when the Guidelines have created a legitimate expectation among them.

To further incentive the Leniency Program, the NCA is not expected to sue companies granted Type A Leniency (see 6.3 Leniency and Settlement Agreements).