There have been very few 'pure' competition damages cases before the Norwegian courts and no cartel damages claim has yet resulted in a judgment. There are some examples of out-of-court settlements in competition damages cases, in addition to contractual claims being defended on competition law grounds. Based on recent cartel and other competition-infringement decisions from the Norwegian Competition Authority (NCA) and the European Commission, we expect more cases over the next couple of years.
Directive 2014/104/EU (Damages Directive) has not yet been implemented into the European Economic Area (EEA) Agreement or transposed into Norwegian law.
The Norwegian Competition Complaints Board (Konkurranseklagenemnda) was established in April 2017 and handles complaints against the NCA's decisions, including complaints against decisions regarding violations of the prohibition against anti-competitive practices and abuse of dominance which were previously processed by the district courts. The Competition Complaints Board's decisions can be appealed to the Gulating Court of Appeals in Bergen.
With effect from July 2016, Section 34 of the Norwegian Competition Act on the limitation period for claims related to violations of the Norwegian Competition Act and violations of Sections 53 and 54 of the EEA Agreement was amended to clarify the limitation periods in relation to follow-on claims. See 4.3 Limitation Periods for further details about the limitation periods for competition damages claims.
There is no specific statue in Norwegian law mandating claims for damages for breach of competition law. These claims must be brought on the basis of the general rules and principles of the law on damages. Claims can be brought as follow-on or standalone claims. The plaintiff must be able to demonstrate a basis for liability, financial loss, and causation between the harmful event and that loss.¬
Claims for damages for breach of competition law must be brought before the ordinary Norwegian courts, which in the first instance are the district courts. Chapter 4(2) of the Norwegian Dispute Act (NDA) regulates which exact district court should be the legal venue for the claim, see also 4.2 Jurisdiction/Applicable Law below for further information on jurisdiction. Norwegian judges are generalists.
Norwegian courts handling competition damages claims assess the evidence brought before them independently and are not bound by decisions of other courts or government bodies. Accordingly, a final decision from the NCA (or a final judgment from a court confirming the decision) is treated as evidence and is not binding on a court that handles a subsequent claim for damages relating to the same subject-matter. Although the issue is not entirely clear under Norwegian law (and without a definitive precedent) it is nevertheless likely that a court handling a damages claim will, in its assessment of the evidence brought before it, give significant weight to a final NCA decision or a judgment relating to the infringement in question.
The decisions of foreign national competition authorities, or courts in other states, are similarly not binding on a Norwegian court when it decides on a claim for damages for breach of competition law. However, the Norwegian court will likely give weight in its assessment of evidence to such competition authority decisions or judgments.
Section 8 of the EEA Competition Act prevents Norwegian courts from making decisions pursuant to Articles 53 and 54 of the EEA Agreement (which mirror Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU)) when the alleged infringement is already the subject of a decision by the European Free Trade Association (EFTA) Surveillance Authority (ESA) contrary to ESA's decisions or decisions that ESA intends to make after it has initiated legal proceedings. Legal scholars argue that the same must apply to claims for damages based on a decision by ESA on breach of the EEA Agreement Articles 53 and 54, but at the time of writing there is no case law that confirms this view.
The NCA may, on its own initiative, provide written submissions to the courts on questions relating to the application of Articles 53 and 54 of the EEA Agreement. The NCA may also provide its submissions orally, if the relevant court so permits. As Section 7 of the EEA Competition Act requires the courts to also apply Articles 53 and 54 of the EEA Agreement in cases where the trade between EEA member states may be affected, the NCA will in practice often also have the right to intervene in cases involving Sections 10 and 11 of the Norwegian Competition Act (which mirrors Articles 53 and 54 of the EEA Agreement/TFEU Articles 101 and 102). ESA has a similar right to intervene in cases where uniform application of Articles 53 and 54 of the EEA Agreement so requires.
A claim for compensation for an alleged violation of the competition legislation will, in principle, succeed if the courts finds it more likely than not that there has been a competition infringement, a financial loss, and a causal link between the infringement and that financial loss. The standard required for the NCA to impose an administrative fine for an infringement of the Norwegian Competition Act is that the violation is substantiated by sufficiently clear and precise evidence, which is intended to constitute a stricter standard. The plaintiff generally bears the burden of proof.
Indirect purchasers may, in principle, bring claims under Norwegian law, but bear the burden of proof as to the amount of damage suffered and the causal link between this damage (the overcharge) and the infringement of antitrust law. Although these claims are recognised under the law there is nevertheless some uncertainty about the actual opportunities for obtaining coverage; taking into account the specific assessment that must be made (pursuant to case law) on whether the loss relates to a specific and immediate interest. This includes an assessment of who should bear the loss based on reasonableness.
At the time of writing there are no judgments clarifying the state of Norwegian law regarding passing on in antitrust litigation. For direct Norwegian purchasers passing on will likely be treated under the doctrine of benefit deduction, meaning that benefits gained from a violation shall be deducted from the compensation provided that the benefit is caused by the injurious act. The burden of proof will be reversed in these instances –ie, it will be up to the offender to demonstrate that the overcharge has actually been passed on.
Direct Norwegian purchasers could also raise a claim as a restitutory claim based on the contract. The question of passing on might not be as evident here as under the law of damages. The Norwegian Supreme Court acknowledged the principle underlying the passing-on defence in the so-called KLM case (on flight seat fees, Rt-2008-738). In their decision, the Supreme Court acknowledged the government's argument that a charge that was passed on could not be refunded, much based on a condictio indebiti viewpoint. Although the KLM case was not related to competition law, there is reason to believe that the courts will choose a similar approach in cases related to competition law. This would mean that a passing-on defence against a claim would be assessed with regard to limitation of restitution for unjust enrichment –ie, as a questions of whether full compensation for the overcharge would result in an unjustified enrichment for the direct purchaser.
If a claimant alleges that the overcharge has been passed on to him or her, the claimant has the burden of proof regarding the passing on. Note that there is no presumption in Norwegian law for passing on, and it must accordingly be demonstrated by the relevant party.
Claims can in principle be brought by both direct and indirect purchasers, see 2.4. Burden and Standard of Proof above.
There is no standard duration for proceedings in Norway after the issue of a claim. This will depend on the circumstances of each case, including factors such as the complexity of the case, the workload of the courts, and whether the case is appealed. In general, the duration of civil cases in Norway varies from roughly one year for a simpler case with no appeal, to five years or more for a complex case that is appealed all the way to the Supreme Court. Due to their complexity cases regarding competition law are likely to require more trial time than many other civil cases, although the lack of precedent makes it difficult to predict this with certainty.
The court may, both on its own initiative or at the request of a party, stay the proceedings if the outcome of the case is wholly, or in part, dependent on a legal issue that will be bindingly settled in another case or if other weighty reasons exist pursuant to Section 16(18) of the (NDA). Even though the EU Commission's decisions and the judgments of EU courts are not directly binding upon Norwegian courts, there is at least one matter where a Norwegian district court found that a pending European Court of Justice (ECJ) judgment that would clarify the liability in a competition follow-on claims case brought before the Norwegian courts gave legal basis for a stay order. This is also in line with the homogeneity principle set out in Article 6 of the EEA Agreement.
Class actions are available in Norway pursuant to the provisions in Chapter 35 of the (NDA). The Act also allows, to quite a large extent, joinder of parties in ordinary proceedings, provided that certain conditions are met.
Under Norwegian law class actions are recognised on both an opt-in and opt-out basis. Opt-in includes anyone who falls within the scope of the class as defined by the court in its approval of the class action and is entitled to be registered as a member within the time limit set by the court. Opt-out includes anyone who falls within the scope of the class as defined by the court in its approval of the class action and is automatically a member of the group, they will be bound by the court's subsequent ruling unless they withdraw from the class.
As long as they meet the relevant criteria, class actions are available to both indirect purchasers and direct purchasers.
Section 35(2) of the (NDA) sets out certain prerequisites for a class action: that several legal persons have claims or obligations for which the factual or legal basis is identical or substantially similar, that the claims can be heard by a court with the same composition and principally in accordance with the same procedural rules, that class procedure is the most appropriate method for hearing the claims and that it is possible to nominate a class representative pursuant to Section 35(9) of the (NDA).
It is also necessary to obtain the court's approval for the class action pursuant to Section 35(4) of the (NDA).
Settlement of collective actions available on an opt-out basis requires the approval of the court –cf, Sections 35(11)(3) and 35(7) of the (NDA). The rule is based on the rationale that the claims are of little individual value, and the group members can therefore not be expected to take an active role in the proceedings or even be aware of the action. It is therefore important that the court ensures that the process leading up to the settlement, as well as the content of the settlement agreement itself, is satisfactory. It is not necessary to secure court approval for the settlement of collective actions available on an opt-in basis.
Strikeout/summary judgments, as known in the common law system, are not available in Norwegian district court. However, under Section 9(8) of the (NDA), the district court has the ability to rule on a claim using a simplified judicial procedure where it is evident that the claim in question cannot succeed either in whole or in part or, conversely, it is evident that the objections to the claim are unsustainable as a whole. Similarly, the Court of Appeal has the power to reject an appeal during the pre-hearing proceedings if the appeal is flawed by certain errors that must result in the appeal being rejected.
Jurisdiction and venue
In cases involving a Norwegian defendant it follows from Section 4(4) of the (NDA) that the ordinary venue in Norway is the home of the defendant –ie the defendant's habitual residence (for natural persons) and the head office according to the Register of Business Enterprises (for enterprises). It further follows from Section 4(5) of the (NDA) that actions for damages for economic and non-economic loss in tort may be brought in the place where the damage originated or where its effect occurred or may occur.
In international matters the competence of Norwegian courts is primarily governed by the 2007 Lugano Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and complemented by Norwegian procedural law to the extent a matter is not regulated by the Convention.
Pursuant to Article 2 of the Convention, Norwegian courts have jurisdiction in antitrust matters if the defendant is domiciled in Norway. Norwegian courts can also have jurisdiction in cartel damages actions where the harmful event has occurred or may have occurred in Norway –cf, Article 5(3) of the Convention. The latter is, however, pursuant to the case law of both EU courts and Norwegian courts (cf, the Norwegian Supreme Court's decision in Rt-2011-897 Marin Alpin, paragraph 47), to be interpreted as a narrow exception to Article 2(1) of the Convention, and is only applicable if there are "particularly close connecting factors" between the dispute and the legal venue.
It is sufficient if one defendant in a group of joint and severally liable defendants can be sued in Norway for all of the defendants to be sued before the Norwegian courts, if there is a sufficiently close relationship between the claims against all of the defendants –cf, Article 6(1) of the Lugano Convention.
Choice of law
There is no specific provision in Norwegian law regulating the choice of law related to claims for damages arising from breaches of competition law. The general rules regarding the choice of law for claims for damages will therefore apply. A Norwegian court that handles a claim for damages caused by alleged violations of the Norwegian Competition Act is likely to apply Norwegian law.
For claims for damage arising from violations of the Norwegian Competition Act or Articles 53 and 54 of the EEA Agreement, the limitation rules set out in Section 9 and Section 11 of the Norwegian Limitation Act of 1979 applies.
Pursuant to Section 9, a claim for damages in tort will, as a general rule become, time-barred three years after "the day when the claimant acquired, or should have acquired, sufficient knowledge of the damage and the person responsible". The criterion of "sufficient knowledge" is normally interpreted to mean sufficient in order to present a claim against the person responsible. Both elements must be proven in order for the limitation period to start. There is an absolute limitation period of 20 years after the injurious act or other basis for liability, such as a cartel, ceased.
Should the claimant fail to present the claim within the ordinary limitation period due to lack of necessary knowledge of the damage or the person responsible, the limitation period, will at the earliest, occur one year after the date on which the claimant acquired, or should have acquired, such knowledge –cf, Section 10 of the Norwegian Limitation Act. The limitation period cannot be extended under the Section 10 rule by more than a total of 10 years.
For follow-on claims, the limitation period is prolonged by one year after a legally binding decision or final judgment has been issued in the case –cf, Section 34(2) of the Norwegian Competition Act which was added to the Act in 2013.
Pursuant to Section 11 of the Norwegian Limitation Act of 1979, claims for damage arising from a punishable offence may, even if the limitation period has expired, be asserted in the course of a penal case in which the debtor has been found guilty of the offence under which liability has been incurred. Such claims may also be brought by a separate legal action within one year of the judgment of conviction in the penal case becoming final. The rules on limitation periods set out in Section 11 are only applicable where the violation of the Norwegian Competition Act, from which the claim for damage arises, has been sanctioned by penalty (penal fine or imprisonment) pursuant to Section 32 of the Norwegian Competition Act –ie, not where the violation has been sanctioned with administrative fines pursuant to Section 29 of the Norwegian Competition Act.
With the enactment of Section 34(2) of the Norwegian Competition Act in 2013 the authorities' choice between administrative or penal sanctions in competition cases has become of less importance in relation to the limitation period for follow-on claims based on such cases.
Discovery as it is known in common law, does not exist in Norwegian law. It is, however, possible to petition the court to order the securing of evidence prior to commencing litigation (see Chapter 28 of the NDA). Evidence can be secured if it is of potential significance in a dispute to which the applicant may become a party or an intervener, and there is either a clear risk that the evidence will be lost or considerably weakened, or there are other reasons why it is particularly important to obtain access to the evidence before legal proceedings are initiated.
In Norwegian court proceedings there is a general obligation on parties to provide information that can be assumed to be of importance as evidence –cf, Sections 21(4) and 21(5) of the NDA. A court may issue an order to ensure that this obligation is met. A party seeking such an order from the court relating to a document should identify the document and explain what information the document is expected to contain. The disclosure obligation is limited by the principle of proportionality as set out in Section 21(8) of the NDA and by the criterion of relevance set out in Section 21(7) of the NDA.
Business secrets and other information that falls under the rules on professional secrecy are generally inadmissible –cf, Section 22(10) of the NDA. The court can, however, decide to treat information that falls under under the rules of professional secrecy as admissible if it finds that the benefits of presenting the evidence prevail over the need for secrecy.
Under Norwegian law documents can be withheld from disclosure if they are covered by legal privilege. In this context legal privilege extends to written correspondence to and from a practicing lawyer (including in-house lawyers) which is held by the lawyer or the client. The decisive criterion is whether the document in question was produced or received by the lawyer in connection with his or her provision of legal advice to the client and as such is covered by the lawyer's obligation of professional secrecy pursuant to applicable rules in Norway or another jurisdiction.
While there is no Norwegian case law on this at the time of writing, leniency and settlement agreements with competition authorities will most likely be protected from disclosure in subsequent damages claims. Information on admissions of guilt submitted to the NCA in the context of applications for leniency, or during settlement negotiations, is covered by the Authority's statutory duty of confidentiality pursuant to Section 27 of the Norwegian Competition Act and as such is inadmissible as evidence pursuant to Section 22(3) of the NDA. Furthermore, parties and party representatives that obtain knowledge of such information are under an obligation of confidentiality and restrictions on use pursuant to Section 27a of the Norwegian Competition Act.
For completeness it should be noted that should someone violate these confidentiality obligations this will not automatically entail that the court is prevented from using the evidence in question in its assessment.
In the Norwegian court system witnesses of fact are, in principle, relied on to the same degree as other evidence that is presented to the court. Witnesses are subject to cross-examination.
The court can require persons who reside or are in Norway (and on certain conditions other Nordic countries) to present themselves before the court as a witness.
The court may appoint an expert witness at its own initiative or when this is required by a party. The expert will normally submit a written statement unless the court decides otherwise –cf, Section 25(5) of the NDA. Multiple experts may submit a joint statement unless the court decides otherwise. The court may summon the expert to provide his or her statement during the court hearing if it is deemed necessary or a party so requests. The expert may attend the hearing, consult with other experts and may ask questions to parties, witnesses and other experts if necessary to perform his or her assignment.
A party may call upon its own expert witness. Such an expert witness may attend the hearing and may be permitted to ask question to parties, witnesses and experts. The expert witness will provide an oral statement according to the rules for ordinary witnesses, and can therefore be subject to cross-examination. An expert witness appointed by a party may provide his or her statement as written evidence only to the extent the other party to the litigation agrees or is given the opportunity to examine the expert witness –cf, Section 21(12) of the NDA. In such cases the written statement will, as a rule, not be presented until it has been confirmed that the expert that prepared it will attend the court hearing.
Norwegian law only provides for compensatory damages, and accordingly not punitive or exemplary damages. A causal link between the liability (culpable behaviour or contract breach) and the damage incurred must be proven by the claimant. The claimant will only be compensated with his or her net financial loss.
As set out in 2.4 Burden and Standard of Proof above the pass-on defence is, in principle, available in Norwegian law, although the lack of precedent makes it uncertain how it would be applied in practice.
Pursuant to the Norwegian Act on Interest on overdue Payments, a claim for damages will attract interest from the time the claim becomes due. In relation to antitrust damages this will likely be from the time of the wrongful event that triggered the liability –eg, the time when the claimant paid the overcharge.
The statutory interest is calculated as a percentage of the outstanding amount. The interest rate is normally amended bi-annually (January 1st and July 1st). The interest rate is higher than the market rate, partly to add a punitive element that encourages swift payment and partly to avoid the issue of compound interest.
Parties that have colluded in violations of applicable competition law will, generally, be held jointly and severally liable for the losses caused by the infringement. Different levels of culpability do not affect each party's liability with regard to the aggrieved party. The varying degrees of culpability amongst the group members may, however, be taken into account in the distribution of liability as between the group members –cf Section 5(3)(2) of the Norwegian Torts Act.
Applicants for leniency or immunity are not protected against damages claims from their direct purchasers or others.
There is no special procedure for bringing contribution proceedings against a third party,a claim for contribution is however subject to limitation. It follows from Section 8 of the Norwegian Limitation Act that if several debtors are liable to the creditor and one of them discharges his debt before the limitation period has expired in respect of him, the period of limitation for his recourse claim against a co-debtor shall be one year after the discharge of the debt. However, the claim shall not become statute-barred before the expiry of the limitation period to which he would be entitled if the discharged claim had been transferred to him. If the creditor’s claim against the co-debtor had lapsed at the time of discharge of the debt, the recourse claim can only be asserted if the co-debtor has been notified within reasonable time of the discharge of the debt. If, prior to the discharge of the debt, the period of limitation has been interrupted or prolongation has been agreed, it shall be further required that the co-debtor be notified of this within a reasonable period of time.
Injunctive relief is available under Norwegian law. For pecuniary claims, such as claims for damages, injunctive relief may be available by way of arrest pursuant to Chapter 33 of the NDA. In order to be granted an arrest, the claimant must substantiate its primary claim (such as the claim for damages) and show why injunctive relief is required and justified. An arrest will only be required and justified if the debtor's conduct gives grounds for fearing that enforcement of the claim would otherwise be evaded or considerably impeded. During the court's assessment it will apply the facts it finds to be most probable under the circumstances (which may be affected by the summary nature of these proceedings).
As a condition for the execution of arrest, the court may decide that the claimant shall establish security as determined by the court in favour of the defendant. If delay involves a risk, the court may order an arrest even if the claimant has not substantiated its claim, provided that the claimant establishes the need for arrest. In such cases the court will always require the claimant to provide security in favour of the defendant.
Applications for arrest are submitted in the form of a pleading or orally. The application must set out the reasons for the claim for which arrest is sought and why arrest is required and justified. Documents invoked by the party submitting the application that are in his or her possession must be attached to the application.
The court will rule on the application for arrest by way of an interlocutory order after the parties have been summoned to an oral hearing. The court will reject the application if the claimant is absent from the court hearing (unless lawfully absent, in which case the hearing can be postponed). Similarly, the court can postpone the hearing if the defendant is lawfully absent. If a delay poses a risk, an interlocutory order for arrest can be made without an oral hearing. In such circumstances an arrest can also be obtained without notice being given to the other party.
There are no formal requirements as to how quickly the court must make a decision on whether to grant arrest without an oral hearing in cases where delay involves a risk. In practice, such decisions are rendered within approximately three to four working days from the submission of the application.
If it is subsequently established that the claimant did not have a valid claim when the arrest was ordered, the claimant will be liable to compensate the loss that the defendant has sustained as a result of the arrest, or as a result of measures that have been necessary to avoid the arrest or to have it set aside. The same applies if it is established that the application for arrest was unjustified due to incorrect or misleading information given with intent or through negligence.
Alternative dispute resolution methods are available in relation to antitrust damages claims to the same extent as in other areas of litigation. The rules governing arbitration in Norway are set out in the Norwegian Arbitration Act of 2004.
Litigation in Norway may be funded by third parties. Although not yet very common it has been seen in certain areas of civil litigation.
The general rule in civil litigation in Norway is that the losing party must compensate the other party for costs that are both necessary and associated with the case. The parties are normally required to present their cost claims at the end of the oral hearing. In the judgment the court decides whether the winning party will be awarded costs, and in what amount (often lower than claimed). There are exceptions to this rule, for example if the winning party is to blame for the initiation of the case or if the court finds it reasonable to not require the losing party to pay the winning party's cost.
Pursuant to Section 20(11) of the NDA a defendant may ask the court to issue an order requiring a claimant who does not reside in Norway to establish security for its potential liability for costs, although the circumstances in which this can happen are limited. Security cannot be required if the claimant is a resident of an EEA state, if it would violate an obligation of international law for equal treatment of parties residing abroad and parties residing in Norway or if it would appear disproportionate based on the nature of the case, the party relationship or other circumstances.
When a district court has awarded a party costs that party can request an execution lien once the claim for costs is due, even though the court decision granting the costs is not yet final –cf, Section 4(12) of the Norwegian Enforcement Act of 1992. However, if the defendant provides security for the claim for costs, an execution lien cannot be requested until the court decision is final (legally binding). Chapter 7 of the Norwegian Enforcement Act sets out the procedure for requesting an execution lien in these circumstances.
Appeals are available under Norwegian law and are addressed to the relevant court of appeal, which is determined by the location of the district court that rendered the judgment that is being appealed. An appeal may be brought against a judgment or an interlocutory order on the grounds of:
The appeal is lodged with the district court in question which transmits the case file to the relevant court of appeal after the other party has submitted its comments to the appeal.
The judgment of the court of appeal can be further appealed to Norway's Supreme Court, subject to authorisation from the Supreme Court in each case. Such authorisation is only granted where the appeal concerns issues that have importance beyond the case in question or where, for other reasons, it is particularly important to have the case decided by the Supreme Court.
Antitrust litigation in Norway has until recently mainly concerned challenges to decisions adopted by the Norwegian Competition Authority (NCA) and the appellate body (previously the Ministry of Trade, now the Norwegian Competition Tribunal). A very limited number of ‘pure’ competition damages cases have been tried by Norwegian courts and no cartel damages claim has resulted in judgment yet. There are, however, examples of out-of-court settlements.
We expect an increase in private actions (injunctive relief or damages) over the next couple of years. There are several reasons for this. Firstly, private actions are in principle available in any type of antitrust matter. Claims can be made against members of cartels and against companies that abuse a dominant position, as well as against any party to a potentially anticompetitive agreement. Norwegian and EEA competition laws prohibiting agreements and concerted practices restrictive of competition (Competition Act, Section 10 and EEA Article 53) and abuse of dominance (Competition Act, Section 11 and EEA Article 54) generally mirror the EU competition rules, TFEU Article 101 and 102, respectively. Secondly, in the autumn of 2019, the Norwegian Supreme Court shall decide whether Article 6 (1) of the Lugano Convention is applicable to actions for infringement of competition law rules against a company that is not an addressee of the European Commission decision, and further, whether foreign plaintiffs can apply this provision against a company that is not an addressee of the European Commission decision. The Lugano Convention is modelled on the Brussels Convention of 1968 and Council Regulation (EC) 44/2001 respectively. If the Supreme Court rules that Norwegian courts have jurisdiction, this is likely to lead to several damages cases pertaining to the truck cartel case and other cartel damages actions. Thirdly, the introduction and maturity of class action rules and the expected adoption of Directive 2014/104/EU (Damages Directive) will likely increase enforcement.
At the same time, we expect an increase in legal actions challenging NCA decisions, given the intensified enforcement and increase in the level of fines evidenced over the last couple of years.
This trends and developments section shall therefore focus on the drivers of the expected increase in antitrust litigation. We comment on public antitrust litigation and its intensified enforcement, and we also comment on strategic assessment, from a 'defender' perspective, as to whether to settle with the NCA or challenge the decision. We further comment on private antitrust litigation and the jurisdictional issues to be decided shortly by the Norwegian Supreme Court, as well as Norwegian class action rules. Lastly, we look at the strategic question, from a plaintiff's perspective, as to when would be the right time to bring a damages action.
Public Antitrust Litigation
Intensified enforcement of competition rules
It might be argued that the seemingly increased enforcement of competition rules by the NCA is attributable to the particularities of the cases brought before, or initiated by, the NCA. In the authors' view, however, the activities of the NCA in recent years indicate that it is taking a more offensive approach to its role as competition watchdog in Norway. It is telling that we have recently seen an increase in the level of fines – both as concerns procedural infringements (a leading Norwegian grocery chain recently received a statement of objection indicating a fine of EUR2.5 million for breach of a notification obligation concerning acquisition of store sites) and as concerns substantive infringements.
Firstly, in a judgment of 22 June 2017, the Norwegian Supreme Court dismissed an appeal from Ski and Follo taxi companies relating to an NCA decision concerning joint bidding in a tender procedure for patient transport services. In its decision, the Supreme Court concluded that the two taxi competitors were competitors, since they had, in principle, a realistic possibility to bid in the tender and had therefore restricted competition by object. The case is part of a trend of increased enforcement against joint bidding – and a strict approach to joint bidding as 'by object' restriction of competition.
Secondly, the Norwegian Competition Tribunal (NCT) recently upheld a fine of NOK788 million (approximately EUR79 million) by the NCA against Telenor Norge. The basis for the fine was an alleged abuse of Telenor's dominant position in the Norwegian wholesale market for mobile communication services in the period 2010 to 2014 in violation of Section 11 of the Norwegian Competition Act. In essence, the NCA (and the NCT) held that the price structure in the wholesale roaming agreement between Telenor and Network Norway in the relevant period reduced Network Norway's incentive to roll out a third network by making it more profitable for it to roam in Telenor's network. This was, according to the NCA, part of Telenor's strategy to delay the roll-out of the third mobile network. The fine against Telenor is the highest fine ever imposed under the Norwegian Competition Act. Telenor has until September 2019 to decide whether to appeal the case to the Gulating Appellate Court (located in Bergen, Norway). An appeal appears likely.
Thirdly, on 17 June 2019 the NCA issued a statement of objections to Verisure and Sector Alarm, notifying the parties of its preliminary intention to impose fines of NOK784 million (approximately EUR78.5 million) on Verisure and NOK424.8 million (approximately EUR43 million) on Sector Alarm for collusion in the Norwegian market for residential alarm services (that is, alarm services to private homes). The infringement concerns collusion in that the two competitors allegedly agreed not to sell residential alarm services to each other’s customers via door-to-door sales, and to share customers in the market for residential alarm services. Sector Alarm has accepted the fine. Verisure had until 2 September 2019 to respond to the statement of objections.
Fourthly, in June 2018 the Oslo District Court upheld the NCA’s decision that the publishing companies Gyldendal, Cappelen Damm and Aschehoug infringed the Competition Act when they exchanged information and boycotted the distributor Interpress, thereby restricting competition in the mass market for books, consisting of retail outlets for books that are not traditional book stores, such as kiosks, grocery stores and petrol stations. The NCA initially issued fines totalling NOK32 million – ranging from NOK4.56 million (Vigmostad & Bjørke) to NOK9.66 million (Aschehoug). In the appeal case brought by three of the four publishing houses (except Vigmostad & Bjørke), the court reduced the fines of Gyldendal and Cappelen Damm to NOK5 million each (approximately EUR500,000), down from NOK9.1 million and NOK7.88 million respectively, and the fine of Aschehoug to NOK3 million (approximately EUR300,000), down from NOK9.7 million. The NCA conducted a new dawn raid on the said publishers in January 2018 in a case concerning a possible illegal exchange of sensitive information related to the joint venture Bokbasen AS. The joint venture is a platform for e-books in Norway. The case is likely to lead to litigation.
From a defendant’s perspective: Settle or challenge? Strategic implications
When assessing whether to settle or challenge a decision by the NCA or any other competition authority in competition cases, the defendant must take several key strategic considerations into account. In this section, we highlight the pros and cons of engaging in settlement discussions as opposed to challenging the decision by the NCA or any other competition authority.
Important considerations in assessing whether or not to accept a settlement are the allegations and charges put forward and the strength of the infringement case (ie, risk of a fine and possible level of fine), parallel investigations in other jurisdictions, damages exposure, reputational damage and legal defence costs, timing and cash flow effects. If the presented evidence is probably insufficient to convince a court of a competition infringement, the defendant should not accept a settlement. If an invitation to explore settlement could give the defendant insight into key evidence, this could help the defendant assess whether settlement is likely to be the preferable solution.
Pros of a settlement
Fine containment is the key advantage of settlements. Settlement discussions allow negotiation regarding fine calculation and the scope of the infringement, which could possibly lead to a substantial discount. A settlement agreement would effectively limit the boundaries for damages claimants.
Another essential advantage of a settlement decision is that it is less compromising. Settlement decisions are shorter and contain significantly fewer revealing details than a regular infringement decision would. This allows some degree of containment of facts in the public domain concerning the alleged infringement, which in turn can be a significant factor for shareholders.
Closely correlated with the above strategy to prevent disclosure of compromising details to the public, is the consideration of reputational damage. Admission of wrongdoing may be better tolerated by the public than persistently claiming innocence while being fined.
A settlement procedure is often considerably shorter and thus cheaper. This can lead to a speedy end-result.
Cons of a settlement
The main disadvantage with settlements is that there will be a monetary fine. The defendant must admit guilt, agree to a fine, and waive most of its procedural rights, whereas the chances of a successful appeal are in practice non-existent.
Another strategic implication that the defendant must take into account is if the admitted infringement and settlement decision includes trade to and from all jurisdictions. Authorities conducting parallel investigations can use the admission of guilt to leverage the defendant into submission in their jurisdiction. The presumption of harm in follow-on damages claims from any cartel decision will kick in faster and is unlikely to be subject to appeal. Damages claimants will refer to the admission of guilt in the settlement decision.
There is also an inherent risk that in 'hybrid'cases, ie, cases where some but not all companies involved settle with the competition authority, damages claims are more likely to be directed towards the settling companies. This has been the situation in the ongoing truck cartel litigation in Norway. In these cases, all parties risk being held jointly and severally liable.
A settlement can lead to disadvantages regarding cash flow with regards to the timing of the decision and speeding up of other processes.
In summary, for a settlement solution to be attractive, the settlement on offer should imply a monetary fine substantially lower than the possible worst-case scenario following a standard procedure. The competition authorities, at least the European Commission, are known to be more flexible in settlement discussion on other aspects relevant to the fine calculation, such as value of sales and the duration of the infringement, but it ultimately depends on whether the presented evidence is unconvincing or has some merit.
Private Antitrust Litigation
In July 2017, several Norwegian and foreign companies in the Norwegian Royal Mail (Posten) group brought a follow-on claim based on the European Commission decision in AT 39824 (Trucks) against several foreign defendants (truck manufacturers) as well as Volvo Norge AS (Volvo Norge), subsidiary of one of the other defendants, Volvo Lastvagnar AB. All of the defendants, except for Volvo Norge, are addressees of the Trucks decision. The defendants challenged the jurisdiction of the Norwegian courts, but the Oslo City Court decided on 1 July 2018 to advance the proceedings. On appeal, Borgarting Appellate Court decided on 4 December 2018 that only the case brought by the Norwegian plaintiffs was to be heard by the Norwegian courts. Both the decision to admit the case concerning the Norwegian plaintiffs, and the decision to reject the case concerning the foreign plaintiffs, have been appealed to the Norwegian Supreme Court. The oral hearing is scheduled for September 2019.
The core of the case is whether a claim for damages for violating the competition law rules against the foreign defendants, included in an infringement decision by the European Commission, can be cumulated pursuant to Article 6 (1) with an alleged claim for damages for the same infringement of the competition law rules against an 'anchor defendant' based in Norway (subsidiary of one of the foreign plaintiffs) that is not included in the infringement decision. This question has no precedents in Norway or in the CJEU.
Pursuant to Article 6 (1) of the Lugano Convention, a plaintiff may, under certain circumstances, combine actions against several defendants with jurisdiction in different countries before the courts of the country of origin of one of the defendants (henceforth referred to as the 'anchor defendant'). The provision states that:
“A person domiciled in a state bound by this Convention may also be sued where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.”
The appellants basically argue that jurisdiction in Norway cannot be based on Article 6 (1) of the Lugano Convention since the claim against Volvo Norge is not based on the same factual and legal situation as the claim against the other defendants. The appellants contend that there are significant factual and legal differences between the claims against Volvo Norge and the other defendants respectively. In effect, there is no risk of 'irreconcilable judgments' if the claims are heard separately. The fact that Volvo Norge is not an addressee of the European Commission infringement decision, nor mentioned in the decision, unlike all the other defendants, is especially important. In order to consider the claim for damages against Volvo Norge, extensive evidence and arguments are needed to decide whether there has been a violation of competition law rules and whether Volvo can be held liable. The case against Volvo Norge is, therefore, arguably, legally and factually a different case.
The respondent, Posten, argues that Volvo Norge is jointly liable with the foreign companies for the loss Posten has suffered. In particular, they hold that Volvo Norge could not have been ignorant of the long-lasting and extensive collaboration the Volvo group has had with other truck producers, and must be considered as having contributed to this, and having contributed to carrying out unlawful agreed-upon price increases. Reference is made to board representation and intra-group links. Further, and with reference to CJEU case law, Posten holds that differences in the evidence for the claims against Volvo Norge and the foreign defendants, and different legal bases, do not prevent cumulation.
The Appellate Court ruled that the claims for damages each of the Norwegian plaintiffs allege to have against Volvo Norge for violating the competition law rules were so closely connected with each of the Norwegian plaintiffs’ claims against the other defendants that it would be expedient to hear them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. The requirements for cumulation pursuant to Article 6 (1) were therefore in principle fulfilled.
The Appellate Court held that the fact that there was no European Commission infringement decision establishing liability for Volvo Norge did not in itself imply that the condition of the same legal and factual situation had not been fulfilled. In the authors' view, this is a crucial point of law where the Supreme Court may not agree. It might be argued that a follow-on claim (foreign defendants) is different to that of a standalone claim (Norwegian defendant).
The Appellate Court agreed with the City Court in that the difference between the evidence is not significant enough for the claims not to be connected, meaning that there is no risk of irreconcilable judgments. However, it would not be possible to cumulate cases where one defendant acknowledges liability, while another defendant disputes liability.
The Appellate Court noted that Lugano Article 6 (1) only regulates cumulation on the defendants' side, not the plaintiffs'. As long as each plaintiff has the same legal basis for its claims against the different defendants, the condition for cumulation will in any case be fulfilled for each of the plaintiffs. The claims for damages of each of the plaintiffs against Volvo Norge and the other defendants are based on joint liability for the infringement of the competition law rules. Any differences between the different plaintiffs in the legal basis for the claims were therefore of no significance under Article 6 (1).
Turning to the second limb of the test, whether Posten had, in fact, reasonably substantiated that Volvo Norge could be jointly liable, the court concluded in the affirmative. In support of this conclusion, the court referred to a number of factual findings. Firstly, Volvo Norge is in the same group as several of the addressees. Secondly, the addressees of the European Commission infringement decision could have had board positions or other leading positions in Volvo Norge. Thirdly, and worth noting, the omission to respond to the plaintiff's request for access to the statement of objections and an overview of Volvo's board representation meant that too-strict requirements for the factual basis of the review could not be set.
The Appellate Court rejected jurisdiction for the foreign plaintiffs. The Appellate Court in particular held that the foreign plaintiffs have not alleged suffering any loss in Norway (directly or indirectly), unlike the Norwegian plaintiffs. The place where the (alleged) loss occurred is different for the Norwegian and the foreign plaintiffs, which means that different submission of evidence is required, at least as regards the size of the loss. The claims from the Norwegian and the foreign plaintiffs may also be based on different rules of law.
The Norwegian system of civil justice was overhauled at the beginning of this century, and a new Civil Procedure Act came into force on 1 January 2008.
As part of the reform, the concept of class action was introduced in the Civil Procedure Act. The purpose was in particular to promote access to justice in cases involving multiple plaintiffs with small claims, and to obtain more efficient and effective justice in such cases. The American and, in particular, the Swedish rules served as inspiration for the specific chapter in the Civil Procedure Act devoted to class actions.
The enactment of the class action rules was subject to considerable debate in Norway. Advocates for consumer interest argued that class action would be an important instrument to ensure justice, while advocates for business interest warned against 'ill-founded blackmailing' lawsuits. However, the rules were adopted unanimously by the Norwegian parliament.
The Civil Procedure Act includes the possibility for both opt-in and opt-out class actions. Opt-in actions are actions where anyone who falls within the scope of the class, as defined by the court in its approval of the class action, is entitled to register as a member within the time limit set by the court. Opt-out actions are actions where anyone who falls within the scope of the class, as defined by the court in its approval of the class action, is automatically a member of the group (and will be bound by a subsequent ruling) unless they withdraw from the class.
According to preparatory work, the main rule for class action shall be opt-in. Which of the two procedures is most suitable for a specific class action is ultimately left to the court to decide. In order for a class action to be approved under the opt-out alternative, the claims or obligations must be of such a minor value individually that they would not justify a separate legal action and it must be assumed that the claims or obligations will not raise issues that need to be heard individually.
Class actions are heard before the ordinary courts (ie, there are no specialised courts for class actions).
Class actions may be brought either by a claimant meeting the conditions for becoming a group member, provided that the action is approved or representative, or by public bodies, provided that the action falls within their purpose and natural sphere of activity (eg, the Consumer Council).
In the early years following the introduction of the class action rules, there was some uncertainty as to whether class action would play any significant role in Norway. The development during the past years seems, however, to imply that the legal environment has matured and a number of class actions have been brought, or discussed, in cases where there may be a real benefit from applying the class action rules. Class actions have been brought in different sectors involving different areas of law (pension law, tax law, consumer law, etc). However, class actions typically involve some kind of monetary claim (ie, the class is seeking to obtain damages, repayment or similar from the defendant). To date, there are no competition class action cases in Norway, but recent NCA decisions, eg, the alarm case, may change this.
From a plaintiff's perspective:
When is the right time to sue? Standalone v follow-on actions
The objective of this section is to identify the main obstacles in the system of antitrust damages claims, as well as the strategic differences in damages recovery through follow-on actions and standalone actions from a plaintiff’s perspective.
While, in principle, private enforcement remains independent of public enforcement, the existence of a public decision eases the burden imposed on the plaintiff to prove the infringement. The infringement decision by the NCA or NCT is regarded as a key piece of evidence and important in establishing the evidentiary basis for the case, although it is not legally binding upon the courts in their appraisal of the merit of the claim.
An infringement ruling by a competition authority is therefore certainly helpful, but not a prerequisite for a private antitrust action in Norway.
The burden of proof rests on the claimant to substantiate a basis for liability, economic loss and causation between the harmful event and the loss. Violation of the cartel prohibition is generally regarded as sufficient basis for liability, which in turn makes it easier to establish the necessary legal basis for a claim in follow-on actions.
From a plaintiff’s perspective, it is therefore advisable to wait for the finding of the authority or the outcome of criminal or public competition cases. From a strategic standpoint, follow-on cases often deal with more serious infringements, lead to greater sums of recovery, and settlement rates are higher for cases that succeed a government decision.
Although the decisions of the European Commission and the judgments of EU courts are not binding upon Norwegian courts, the court has previously found that a pending ECJ judgment that will clarify liability in a competition follow-on claim case, gives legal basis for a stay order.
The plaintiff should also consider whether the main objective for suing the defendant is damage recovery or to end an abusive anticompetitive refusal to supply goods or services. Norwegian damages law does not provide for punitive damages. Damages are calculated on the basis of the difference between the financial position of the claimant after the infringement occurred and the hypothetical financial position the claimant would have been in if the competition law infringement had not occurred. However, the principle of natural restitution may lead to the defendant being ordered by the court to contract with the claimant and supply goods or services.