Antitrust Litigation 2024

Global Overview – Antitrust Litigation 2024

The year 2023 has produced a new record number of judgments on the level of damage in antitrust damage cases, particularly in Germany. The number of cartel damage claims has again increased as more member states of the EU have implemented the Damages Directive. While England and Wales remains a favourite jurisdiction within Europe for cartel damage claims, these have also become commonplace in France, Germany, The Netherlands and Spain. Portugal emerges as a new attractive venue for major antitrust litigation, after having established a class action regime and a specialist competition court. In 2023 in Spain, the Supreme Court issued a number of important rulings which established a low standard of proof for claimants to establish loss and causation and supported judicial estimation of damages.

While civil antitrust litigation, in particular damage claims against cartel members, are a standard pillar of antitrust enforcement in the Anglo-Saxon world and Europe, antitrust damage claims are still at an early stage in most of Africa, Asia and Latin America. Antitrust damage claims develop in those jurisdictions with active regulators (such as Argentina, Brazil and Mexico) or with collective redress regimes (such as Israel).

Class Actions and Collective Proceedings

Class actions are gaining in importance all over Europe, particularly as several EU member states are now introducing collective redress mechanisms for the first time as a consequence of the Representative Actions Directive. The Directive does not require member states to apply the representative actions regime to antitrust cases. However, certain jurisdictions have already done or are about to do so.

The UK already has a collective proceedings regime in place which was stimulated by the Mastercard v Merricks case in late 2020. In 2023 alone, eight collective proceedings were started totalling damage claims in excess of GBP14 billion. While the CAT and Court of Appeals decisions generally were favourable to permit certification, the Supreme Court declared unenforceable a litigation funding agreement in R (PACCAR) v CAT under which the funders’ return was calculated by reference to the amount of damages awarded. This has forced funders to replace funding agreements with legally viable alternatives.

In McLaren v MOL the CAT for the first time approved a settlement in collective proceedings. Under this settlement, McLaren, one of the claimants in the car shipping cartel case, agreed with a shipper (CSAV) that the latter was responsible for 1.7% of the value of commerce that was subject to anti-competitive behaviour. The settlement amount was GBP1.2 million in damages and GBP380,000 in costs. By approving the settlement, the CAT agreed that a high-level assessment of the proposed settlement is appropriate in order to avoid a detailed and precise review of the merits which might discourage parties from negotiating settlements.

Plaintiff-Friendly Court Decisions

Across Europe, courts have settled important issues in a rather plaintiff-friendly manner. As an example, the German Federal Court of Justice, in its “Schlecker” decision, has ruled that there is a high probability that the exchange of information on prices leads to higher prices. It has hence adopted a respective presumption. Furthermore, in the Schlecker case, the German Federal Supreme Court also held that one single participation in a meeting of a working group where competitively sensitive information is exchanged is sufficient to cause an anti-competitive outcome.

While plaintiffs still have to submit a substantiated case, defendants in Germany will have to prove that price information obtained in such an exchange did not have an impact on their own pricing decisions. The Schlecker case confirms a plaintiff-friendly stance of previous case law. For instance, in a truck cartel case, the German Federal Supreme Court decided that the publication of the Bundeskartellamt’s decision imposing a fine is the triggering point for the statute of limitations. The court also recognised liquidated damages and damages in the case of indirect purchases.

Another example of a plaintiff-friendly trend in European antitrust litigation is the fact that courts have a tendency to apply the “broad axe” approach when it comes to assessing damages in cartel cases. As an example, in the UK the CAT and Hight Court, respectively, found that in circumstances where the parties’ experts economic models failed to sufficiently measure the damages, the “broad axe” approach was suitable to arrive at the best estimate of the likely loss. For instance, in the Royal Mail v DAF case the CAT rejected the expert damage quantifications submitted by plaintiffs and defendants and determined that an overcharge of 5%, representing the middle ground between plaintiffs’ and defendants’ economic expert opinions, was appropriate. The UK Supreme Court ruled that the “broad axe” approach can also be applied to the calculation of passing on.

There seems to be a tendency in Germany for courts to also apply the “broad axe” approach. This is highlighted by a recent decision of the German Federal Supreme Court in a truck cartel case. In this decision it confirmed a lower court’s view that even though an economic regression analysis did not find a significant price effect of the cartel, this did not exclude the possibility that damages in any amount could still have occurred. The German Supreme Court went on to assume a general empirical rule that a cartel which has lasted over 14 years must have made commercial sense for its members. It confirmed the judges’ power to normatively estimate damages having priority over the calculated likelihood of damages based on economic models.

Forum Shopping and International Cross-Border Strategies

While the Private Damages Directive intends to discourage forum shopping, plaintiffs still can choose in which jurisdiction and court within the EU antitrust damage claims have the best chances of success. This choice is supported by the European Court of Justice’s practice. In Tibor-Trans for instance, the court has ruled that plaintiffs may sue in any new member state in which an infringement had effects. In Volvo, the European Court of Justice allowed for the bringing of a claim at the registered office of the plaintiff in respect of harm suffered in several EU member states. The court also allowed plaintiffs to sue at the seat of a local subsidiary even though the latter was not directly involved in the conduct for which the parent company was held liable (Sumal). Hence, under the European Court of Justice’s practice, plaintiffs have a wide array of possibilities to choose from when deciding where to bring cartel damage actions.

This possibility to choose from different venues is important because despite the Private Damages Directive’s aim to harmonise national rules on private enforcement, there are still important differences between national procedural rules and courts. These differences include among others the level of expertise of courts, procedural efficiency, the existence or lack of collective actions regimes and litigation costs. Based on these differences, certain EU member states such as Germany, The Netherlands and Spain have become more attractive venues for cartel damage claims than other member states lagging behind in the development in these areas.

Even jurisdictions outside the European Union have become more open to forum shopping. As a recent example, the Swiss Federal Supreme Court – deviating from its long-standing practice – has confirmed that a motion for negative declaratory relief by The Swatch Group, a Swiss domiciled watch manufacturer, in a refusal to deal case brought by an English wholesaler was admissible. When the English wholesaler challenged the Swiss Federal Supreme Court’s decision in the High Court, the latter rejected the claim based on a res iudicata argument.

Forum shopping is only one tool in the box of plaintiffs in antitrust cases. More and more often plaintiffs make use of the international arena of regulators and civil courts dealing with antitrust cases on the basis of cross-border strategies which leverage the differences between national regimes. The availability of an expanding number of jurisdictions friendly to complainants and plaintiffs have become the playground for specialised firms advising corporate plaintiffs in cartel and abuse of dominance cases. They make use of differing national procedural rules by, for instance, using wide disclosure regimes in one jurisdiction to identify information or documents for more targeted use in another jurisdiction with more restrictive discovery rules. It has also become commonplace for plaintiffs to systematically scrutinise defendants’ submissions in both regulatory and civil procedures across jurisdictions in order to identify inconsistencies or admissions which can be used in other jurisdictions. Defendants therefore will have to adapt to such plaintiff cross-border strategies and take into account at an early stage of a case the risk of parallel investigations or private enforcement in other jurisdictions.

Mass Lawsuits Against Big Tech

For many years, the focus of antitrust damage litigation has been cartel cases. However, recently a new focus on dominance cases, particularly in the area of big tech, has developed. Amazon recently has been taken to court over claims of abuse of dominance on its platform. Google has become the subject of a lawsuit totalling claims of GBP13.6 billion alleging anti-competitive conduct in its online advertising business. The case has been brought by Ad Tech Collective Action which represents website publishers. These cases have come in the wake of increased regulatory scrutiny of big tech companies. It remains to be seen how courts will deal with this novel area of private enforcement, both in terms of targeted defendants and theories of harm.