Cartel class actions and immunity programmes

The existence of class actions within a jurisdiction's competition law regime has significant implications for other legal and enforcement issues. This article focuses on the interaction between class actions for damages and immunity programmes pursuant to which cartel whistle-blowers may escape criminal punishment, but may remain vulnerable to class actions. The article challenges a simplistic conclusion that class actions undermine the incentives to report a cartel pursuant to an immunity programme. The threat of independent detection of the cartel, and a corresponding obligation to pay damages in any event, at least mitigates the potentially negative effect of class actions on immunity programmes. Moreover, other considerations, for example, the fact that class actions may increase the probability of the cartel's detection, suggest that class actions for damages may make immunity programmes more effective. If positive but lowered penalties are optimal for whistle-blowers, class actions also allow competition agencies to provide a bright-line, and thus more credible, commitment to zero public punishment for whistle-blowers, while maintaining a positive penalty overall because of private actions for damages. In light of this analysis, the article considers the question of standing of indirect purchasers to sue for damages from a cartel. There are competing considerations: indirect standing may mitigate concerns about reluctant direct purchaser plaintiffs, and about foreign cartels, but may increase concerns about attorney agency problems.