The new Antitrust Litigation 2021 guide covers 18 jurisdictions. The guide provides the latest legal information on the basis for a claim, burden and standard of proof, class and collective actions, challenging a claim, disclosure and discovery, witness and expert evidence, damages, liability, remedies, funding and costs, and appeals.
Last Updated: September 21, 2021
Global Overview – Antitrust Litigation 2021
Antitrust litigation in the form of follow-on damages claims against cartels is now the norm in most European countries. The volume of claims has increased significantly in recent years since the implementation of the EU Damages Directive. France, Germany, the Netherlands and Spain in particular have seen a sharp increase in the volume (and value) of antitrust litigation, partly fuelled by a huge volume of individual claims against the trucks cartel. Litigation has been a standard part of the antitrust enforcement process for even longer in the USA, Australia, Canada and New Zealand. While antitrust litigation continues to grow and embrace new procedures and approaches in those jurisdictions (not least, class actions), the focus in terms of developing jurisdictions is now moving to Asia. As China, Japan and Korea are seeing a growth in cartel investigations, so antitrust damages claims in those jurisdictions will start to become more common.
To date, England and Wales has been the leading jurisdiction within Europe for EU-wide damages claims, in light of its highly respected commercial courts, specialist competition judges and a litigation procedure most like the USA's, including extensive disclosure requirements on both claimants and defendants. The first grant by the UK Competition Appeal Tribunal (CAT) of a collective proceedings order (CPO), in the Merricks v Mastercard collective action, will be a huge boost to the development of collective (or class) actions for competition claims in the UK.
The Brexit Effect
The UK has now left the European Union and completed its post-exit transition period. This means that statutory changes passed by the UK government have become effective, bringing an end to the direct jurisdiction of EU institutions and treaties in the UK. UK courts are now able to diverge from EU competition law, and European Commission decisions issued after the UK's Brexit transition period will no longer be binding on the UK courts. However, there are a number of grandfathering provisions which will preserve elements of the pre-Brexit framework, and UK courts will be free to have regard to EU jurisprudence in applying competition law in the UK. Importantly, decisions of the EC issued prior to the end of the Brexit transition will still be binding in the UK courts. In addition, if alleged breaches of EU competition law took place before the end of the transition period, the UK courts will be required to apply EU law as at the end of transition. The UK's exit from the European Union has also given the UK competition authorities freedom to conduct investigations and market studies in areas of interest to the EU autonomously from the European Commission. The Competition and Markets Authority (CMA) has taken a renewed interest in digital markets and online platforms (eg, its market study into Apple and Google's mobile ecosystems) and we can expect decisions in this area, with litigation to follow, in the coming years. Where the CMA is not investigating, the European Commission can no longer intervene to stay standalone claims brought in the UK courts, making the jurisdiction increasingly attractive as a forum for antitrust claims with a global reach.
Class actions are increasing in popularity in a variety of jurisdictions in Europe, particularly in England and Wales, and most recently, with the introduction of collective action legislation, in the Netherlands. The significance of antitrust litigation, both as a type of general commercial litigation and as one of the pillars of competition enforcement, is demonstrated by the fact that procedures are being introduced in some jurisdictions exclusively for antitrust litigation, whether it is the introduction of disclosure of documents across Europe for antitrust damages claims or the introduction of opt-out class actions for antitrust damages claims in England and Wales. There will be numerous examples of, as yet, unidentified procedural issues which will work their way through the courts for some years to come on issues relating to identifying the relevant class or disclosure of documents, particularly in those jurisdictions in which wide-ranging disclosure is an entirely new approach in any form of litigation.
The first grant by the CAT of a CPO in the Merricks v Mastercard collective action, in August 2021, will be a huge boost to the development of collective (or class) actions in the UK. After the CAT refused the application for a CPO on a variety of grounds, the Court of Appeal allowed the appeal by the proposed representative claimant and ordered that the CPO application be remitted to the Tribunal for re-hearing. In December 2020 the Supreme Court handed down its judgment dismissing Mastercard’s appeal against that judgment and the claim will now proceed in the CAT.
Other collective actions in the UK, including the trucks litigation, have been stayed pending the outcome of the appeal and will now proceed to be heard by the CAT.
Claims Based on an Abuse of a Dominant Position
In Europe and more widely, as competition regulators switch their focus to the big technology companies and increase the number of investigations based on an abuse of a dominant position, so the number of antitrust litigation claims based on such allegations has increased. Such claims are not limited to follow-on damages claims, but encompass standalone damages claims and/or injunction applications to prevent an alleged abuse of a dominant position, often as a matter of urgency. Such injunction applications are often settled privately, without a court hearing, and never see the light of day. However, most of these claims are unsuccessful and the cost consequences in those jurisdictions which order costs to be paid by the losing party (including in the UK) can be significant, so such claims – particularly on a standalone basis – should be considered very carefully.
Trends in Antitrust Investigations
In recent years, authorities around the globe have been focused on investigating a number of prominent technology companies including the European Commission's investigations into Apple's App Store Rules and Apple Pay, the US DOJ and 11 state Attorneys General filing a civil antitrust lawsuit relating to alleged exclusionary practices in the search and search advertising markets, and the UK's CMA has opened an investigation into Apple over suspected anti-competitive behaviour. There has also been a particular focus in Europe and the UK in recent years on investigations into pharmaceutical companies which have principally focused on allegations of excessive pricing and/or anti-competitive agreements. These investigations may lead to follow-on damages claims.
The majority of cartel damages claims are settled prior to the trial hearing. In the more significant claims in terms of value of sales and quantum claimed, it may take many years to arrive at the point where a principled settlement can be achieved, which is a genuine estimate of the claimant's loss, including an assessment of the extent to which such loss has been passed on to third parties. Such a principled assessment will require the parties to go through the steps of disclosure of documents, factual witness statements and expert economic reports to quantify the loss suffered (potentially, in addition to interlocutory applications on issues such as jurisdiction and/or limitation). In lower-value claims, parties may consider it worth trying to achieve a settlement in advance of doing the bulk of such work, particularly where the legal costs of years of trial preparation might exceed the value of the claim itself.
The presence of specialist (often US) claimant firms in an increasing number of European jurisdictions and the growth in litigation funding generally, but specifically in the context of antitrust damages claims, are having a significant impact on the strategy for managing such claims. US claimant firms have pursued the introduction of class actions with evangelical zeal, positioning themselves as being on the side of the angels standing alongside the competition authorities and against the combined forces of the cartelists.
Antitrust Litigation in Other Jurisdictions
Other jurisdictions which are seeing an increasing volume of antitrust litigation include Israel and some jurisdictions in Latin America which have active national competition authorities, including Argentina, Brazil and Mexico. Israel also has a class action regime and the claimant lawyers are beginning to focus on antitrust claims.
COVID-19 has not yet had a visible impact on antitrust litigation in most jurisdictions. Many of the legal issues arising from the pandemic to date concern consumer law issues (rather than competition law issues), such as price gouging. Many businesses have considered co-ordinating their activities with others in response to the pandemic. This may have entailed the development of common standards, exchanging sensitive information, and co-ordination to address supply chain issues. However, where businesses are rivals, or co-operation could otherwise result in the disclosure or receipt of competitors’ competitively sensitive information, such collaboration could amount to competition law infringements. For this reason, the UK Government disapplied certain Chapter I (of the CA 1998) prohibitions under a series of statutory instruments relating to discrete areas such as grocery delivery, healthcare provision and dairy production. This allowed information sharing and resource co-ordination in these areas during the pandemic. However, the CMA has stated that it will consider any evidence companies have broken competition law, for example by charging excessive prices, and take appropriate action. Follow-on damages claims may follow from any such enforcement action.
The last financial crisis resulted in the then-biggest global cartels in terms of volume and value to date: the Libor cartel and the foreign exchange cartel. We are yet to see whether the next financial crisis results in an increase in cartels and cartel damages litigation. However, the usual motivation for cartels in a financial crisis of falling profit margins combined with working from home and the risk of lighter-touch compliance in these unique circumstances is a potentially toxic combination which may well lead to an increase in cartel damages claims in years to come.