Antitrust Litigation 2021

Last Updated September 16, 2021

Spain

Trends and Developments


Authors



GOLD Abogados has added leading competition law capability as part of the firm's continued drive to develop a top-tier legal boutique in Spain, through the addition of renowned competition expert Manuel Contreras as partner. The team has great strength in assisting clients on competition investigations and follow-on damage claims brought by companies for infringement of competition rules; in particular, after cartel investigations. Following an increase in Spain in private antitrust litigation, and follow-on claims, GOLD Abogados has worked on some of the most prominent cases in this evolving area.

Antitrust litigation has had quite the year in Spain. Cartel damages litigation has picked up considerably. Indeed, the EU truck cartel decision has sparked a wave of claims for damages before Spanish courts. This has, in turn, led to six separate sets of preliminary questions being referred to the EU court. Elsewhere, a co-operative of dairy producers has been awarded circa EUR2 million in the first ruling following the so-called milk cartel case in what may be the next wave of massive litigation, a trend that is both shaping and testing the limits of private competition law enforcement in Spain. Separately, a Madrid Commercial Court has referred a question for a preliminary ruling to the EU Court of Justice over possible antitrust abuses by European football’s governing body. At issue is the power of competition law to limit the organisation of sports leagues in Europe. Finally, a Commercial Court in Barcelona has allowed a claimant access to the case file of an investigation by the Spanish competition authority in a case in which that authority’s ruling had been set aside by the courts.

Truck Cartel Litigation

Harmonisation through the back door

In 2016, the European Commission fined Volvo, Daimler, Iveco and DAF and later fined Scania for participating in a cartel in the truck market – Man received no fine because it disclosed the conduct to the Commission. This set off a wave of litigation claims that has flooded courts all over Spain. According to public sources, the case has spawned more than 4,000 damage claims in connection with the purchase of 34,000 trucks for a total value of circa EUR700 million, although individually the claims do not tend to exceed EUR20,000.

Spain does not operate an "opt-out" class action system in which potential claimants are grouped in a single proceeding. As a result, each claim runs its own course through the Spanish judicial system. Furthermore, the competent Spanish court is the one geographically located in the place where harm was done to the aggrieved party. As such, a defendant liable for a particular anti-competitive conduct may be exposed to multiple competition claims in the different Spanish courts where claimants suffered the harm. This is particularly true for follow-on damage actions such as the EU truck cartel case, in which the cartelised products (trucks) were sold to a plurality of end users that, in turn, filed thousands of individual damage claims in multiple courts across the country (again, more than 4,000 claims may have been filed in Spain). This wave of litigation creates obvious difficulties for courts with limited resources and increases the risk of a disparity of opinions on procedural issues and on substance.

In these circumstances, it is only normal that Spanish courts handling multiple damage claims following the truck cartel case have filed six requests for preliminary rulings with the EU Court of Justice (CJEU) to clarify the interpretation of the Damages Directive. First, the Provincial Audience of Barcelona posed a number of questions on locus standi and the liability of affiliates of liable parties (Case C-882/19). Second, the CJEU also has to deal with questions on the transitory provisions of the Directive and the statute of limitations of damage claims (C-267/20). Third, the Commercial Court of Madrid had doubts on the territorial competence of Spanish courts dealing with damage claims (C-30/20). In addition, the Commercial Courts of Barcelona (C-163/21) and Valencia (C-312/21) referred a number of questions on the interpretation of the Directive, including access to sources of evidence. Finally, the Provincial Audience of Pontevedra referred a question on the scope and material content of the EU truck cartel decision and its binding nature (C-588/20).

The European Commission has seen the increase in preliminary rulings as a sign that the pace of private enforcement is picking up after the adoption of the Damages Directive (Commission Staff Working Document on the implementation of the Damages Directive). However, this can also suggest that the private enforcement system in certain EU member states is unprepared at the institutional level to deal with massive waves of litigation now and in the future. Indeed, having national court proceedings suspended to consult with the CJEU was probably not what the Commission was looking for when the Damages Directive was adopted in 2014, especially considering that the Directive was labelled at the time as a quasi-regulation with limited margin of interpretation for national courts. Indeed, while some pundits claimed the Directive provided extremely clear and detailed procedural rules, the facts prove that some Spanish courts require constant EU guidance to deal with claims in practice.

One may think that the next reform of the system of private competition law enforcement should consider if the institutional framework of each member state should be redesigned as well to deal with massive litigation; eg, opt-out systems, certification and specialised courts. On the other hand, Spain’s competition authority, the CNMC, has done its part and just published a draft report to help courts dealing with damages calculations in antitrust cases. The draft report was open to consultation until September 2021.

Internal specialisation – “one court, one truck maker”

One of the key issues in dealing with damage claims is expert reports from the parties that are produced in court to prove the actual price impact of the truck cartel. Since claims are not aggregated under Spanish law, each claim must be assessed on its own merit. However, some Spanish courts have found a way to self-regulate and put in place internal rules to streamline repetitive procedural steps and be more efficient in handling the flood tide of claims after the truck cartel case.

Indeed, there have been cases in which the same law firm represented different clients in the same court and used the same method to discuss the cartel’s impact on prices in expert reports. In these cases, each claim would still be subject to the same judicial assessment over and over again. As such, four of the Commercial Courts dealing with damage claims in the truck cartel case in Barcelona have set up a protocol to fast-track the judicial process. Upon an agreement with both claimants and defendants, each of the four courts will take care of one of the four companies involved. As a result, each court has the same defendant-expert-report method and the same plaintiff-expert-report method for all cases subject to the protocol.

The protocol will save some procedural steps and avoid redundant questions in hearings for the benefit of both parties and the courts themselves under the “one court, one truck maker” rule. For instance, one of the four courts is dealing with circa 90 claims bought in Barcelona against Iveco. In line with the protocol, the parties will only have to participate in one hearing and one “macro-trial” instead of dealing with 90 hearings going through the same questions over and over again in front of the same court. This self-made solution to group litigation cases must be praised in the absence of procedural rules dealing with class actions under the private enforcement system of Spanish competition law. In addition, for the court, it will also be easier to examine the existence of damages if parties follow the same methods in the expert report to prove the existence or absence of overcharging.

However, the interests of the parties might not align in all cases. As a result, individual claimants or defendants (or both) may choose to go ahead with the process away from the group. It is therefore unclear at this stage if this solution will be replicated in other Spanish courts, in other damages cases, or if it is just a procedural tool to solve a specific issue in a complex case of mass litigation.

Competent court

As explained, the CJEU has clarified a number of questions raised by the Commercial Court of Madrid in relation to the territorial competence of Spanish courts in the truck litigation case. This will also have an impact on future follow-on actions in Spain. The CJEU explains that if the damaged party has purchased the cartelised product in an area where one single court is competent in Spain, then the damage claim should be filed with the court where the alleged cartelised truck was purchased. However, if the cartelised products were purchased in several areas, it would be impossible to identify one single area where the cartel caused harm to the purchaser; indeed, the same claimant may have purchased different trucks in several areas all over Spain. So, in those cases, the competent court will be the court where the claimant has its registered office, irrespective of the area where the trucks were purchased.

Standard of proof – “mass litigation does not imply mass judicial response”

A ruling of the Commercial Court of Oviedo in the context of the truck cartel litigation saga has been praised for its detailed review of the expert reports produced by the parties in court. In short, the damage claim was dismissed because there was no evidence of overcharging in the trucks purchased by the claimant, all in line with the expert report prepared by the defendant in this case.

The Court relies on a number of antitrust precedents from other jurisdictions – such as Germany, France, Belgium, Italy or Hungary – to define the precise standard of proof required to establish the existence of actual damages in cases such as this one, in which the Damages Directive did not apply. In a memorable paragraph, the Court explains that in the context of truck cartel litigation, the defendant should be able to prove that the anti-competitive conduct did not produce an overcharge to the claimant. Indeed, if the defendant cannot claim zero overcharge, private enforcement of competition law in Spain for the defendant would be “a walk to the gallows”, as the Court put it. Put differently, the cartelist cannot be forced to give up its innocence (the cartel produced no overcharge) and confess (an always inferior reasonable alternative) if it wants to have any chance of reducing the overcharge proposed by the claimant. Indeed, the actual existence of an overcharge must be subject to discussion and not only the amount of the overcharge.

The court concludes that “mass litigation does not imply mass judicial response”. In other words, courts must refrain from standard judicial responses. In follow-on actions, courts cannot simply limit their role to fixing the precise amount of the overcharge. Indeed, the actual existence of an overcharge and, hence, the actual harm must be examined thoroughly in court and every damage claim must be assessed on its own merits.

Low Prices, High Damages – First Damage Claim after the Milk Cartel

The Commercial Court of Granada awarded farmers circa EUR2 million in damages to be paid by major dairy companies that organised a “purchase cartel” in the milk sector in Spain. This claim for damages follows from the decision of the CNMC to have dairy companies and associations fined for exchanging information on purchase prices, purchase volumes and the level of surplus milk in Spain from 2000 to 2013. According to the CNMC, the collusion could help drive down the purchase price of milk paid by dairy companies to farmers in Spain to between 10 and 12% of the price total. As such, the cartel helped keep purchase prices of milk artificially low and farmers now expect to recover the (higher) price that should have been paid absent the cartel. More cases are expected to follow in relation to this case in Spain in a similar fashion to the EU truck cartel case.

Interim Measures – the First Game of the Super League Will Be Played in Luxembourg

The European Super League is an organisation trying to run an annual club football competition that would be contested only by so-called elite European football clubs. In this context, the Super League has asked a Commercial Court in Madrid to adopt interim measures to forestall UEFA and FIFA, the governing bodies of European and world football respectively, from taking any action that could hamper this competition. However, both UEFA and FIFA had publicly stated their intention to punish clubs and players involved in the Super League, including the exclusion of clubs and players involved from all competitions organised by FIFA or UEFA. Some of the football clubs have already abandoned the initiative.

The Madrid Court has requested the CJEU to explain if such actions and, more generally, the rules from FIFA and UEFA governing football competitions are compatible with the Treaty on the Functioning of the European Union (TFEU) (C-333/21). In particular, the Madrid Court asks whether the requirement that the Super League seek prior authorisation from FIFA and UEFA to establish an independent football competition could constitute an abuse of dominant position or an agreement restricting competition under Articles 101 and 102 of the TFEU. In addition, the CJEU must explain if FIFA and UEFA can threaten to punish clubs and football players participating in the Super League. It will also deal, among other issues, with the question of whether all rights derived from football competitions (including lucrative TV rights) belong to football clubs or the national leagues. The Spanish League has decided to appear in court in Madrid, likely in support of UEFA and FIFA, and will now be heard before the CJEU in the context of the preliminary ruling. It is unclear if the European Commission will also be appearing in court in Luxembourg in one of the cases that may set a precedent on the interplay of EU competition law and sports law.

Disclosure of Documents – the Case File of the CNMC Will Not Be Sealed Forever

In 2015, the CNMC fined a number of entities for participating in a cartel in the paperboard and cardboard sectors from 2002 to 2013 (S/0469/13). In 2018, the National Court annulled the CNMC decision and all fines on procedural grounds (Appeal No 598/2015) and the Court decision is now final. However, in 2019, Danone filed a competition damage claim in Barcelona against some of the companies fined by the CNMC in 2015 and that were successful on appeal in 2018.

The claim can no longer rely on the binding effect of the CNMC ruling from both a factual and legal perspective because the CNMC decision has been annulled in court. However, the claimant asked the Commercial Court of Barcelona to grant access to the case file of the CNMC to gather potential evidence, prove a competition law infringement and recover damages. The Court accepted the request for access and ordered the CNMC to disclose certain documents included in the case file despite the decision having been annulled in court:

  • the statement of objections and the draft decision of the CNMC;
  • emails between competitors exchanging information on prices for certain categories of paper; and
  • emails and records of internal meetings between competitors in the cardboard sector (Appeal No 2182/2019).

This means that companies that have successfully appealed a decision of the CNMC in court are not completely safe from claims for damages in Spain. Indeed, they will be exposed to such claims relying on the evidence contained in the case file of the CNMC even if the eventual decision in that case has been declared null and void in court. In other words, the case file of the CNMC will always remain as a potential source of evidence for claimants even if the decision of the CNMC has been annulled in court.

Conclusion

Overall, it has been an intense year for antitrust litigation in Spain. Important issues for the future of European competition law in the sports sector will also be decided in the future with the support of EU courts. Similarly, significant issues will still need to be clarified as the massive litigation following from the truck cartel case and other cases moves forward in Spain. However, Spanish courts have shown an ability to adapt and maximise the available tools to deal with massive claims. The CNMC has also taken notice of this increasing trend and published a draft report to help courts deal with damage calculations in antitrust cases.

GOLD Abogados

Fernando el Santo 17
28010 Madrid
Spain

+34 91 391 10 72

+34 91 391 53 21

mcontreras@goldabogados.com www.goldabogados.com
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Trends and Development

Authors



GOLD Abogados has added leading competition law capability as part of the firm's continued drive to develop a top-tier legal boutique in Spain, through the addition of renowned competition expert Manuel Contreras as partner. The team has great strength in assisting clients on competition investigations and follow-on damage claims brought by companies for infringement of competition rules; in particular, after cartel investigations. Following an increase in Spain in private antitrust litigation, and follow-on claims, GOLD Abogados has worked on some of the most prominent cases in this evolving area.

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