Contributed By Skadden, Arps, Slate, Meagher & Flom LLP
It has been just over a year since Directive 2014/104/EU on antitrust damages actions ('Antitrust Damages Actions Directive' or 'Directive') was transposed into national law by all EU Member States. Overall, the Directive has had a positive impact on private enforcement of the EU competition rules in terms of general awareness of how action may be pursued and the prospects for success of future claims across the EU. The impact, however, is perceived to be limited for Member States that already had a comprehensive toolkit for the compensation of victims of antitrust violations. An excessive focus on ensuring that victims of violations of the EU competition rules obtain compensation is viewed as risking undermining public enforcement if the measures designed to facilitate private damages claims in fact reduce the incentives for undertakings to apply for leniency under competition authorities' leniency programmes.
In matters on which the Directive is silent, including remedies and procedures, national rules continue to apply, subject to the principles of effectiveness and equivalence (Recital 11). Questions of interpretation of the Directive have already been referred to the Court of Justice of the European Union ('Court of Justice') which recently handed down its first two (claimant friendly) preliminary rulings. In Skanska Industrial Solutions and Others (Case C-724/17, judgment of 14 March 2019), the Court of Justice clarified that the Directive is not applicable retrospectively to pre-existing cartels and, clarified that the principle of economic continuity applies in actions for damages resulting from a violation of Article 101 of the Treaty on the Functioning of the European Union ('TFEU'). The legal entities involved in the cartel no longer existed and/or had been restructured through asset transfers or liquidation proceedings; the court confirmed the liability of its economic successor for damages. In Cogeco Communications (Case C-637/17, judgment of 28 March 2019), the Court of Justice clarified that the EU competition rules and the general principles of effectiveness and equivalence precludes national legislation that provides limitation periods for the bringing of an action for damages that are less favourable than those set out in the Directive.
With regard to class actions, a report of the European Commission ('Commission'), published on 25 January 2018, describes the slow start to class actions across the EU Member States and inconsistencies between collective redress mechanisms. Currently, collective redress mechanisms are available in only 19 Member States; four Member States (Belgium, Bulgaria. Denmark and the United Kingdom) apply borth the 'opt-in' and 'opt-out' mechanisms depending on the type of action or specifics of the case; while two Member States (the Netherlands and Portugal) apply only the 'opt-out' mechanisms. In the United Kingdom, since the opt-out class action reform in 2015, one class has action failed (Dorothy Gibson v Pride Mobility), one is subject to appeal (Merricks v MasterCard) and one is under consideration (Trucks and Boundary Fares claims). That may change if the Commission's "New Deal for Consumers" is adopted; published in April 2018, it proposes an EU-wide compensatory redress mechanism to protect the collective interest of consumers. See 3 Class/Collective Actions for more detail on the proposal.
The Antitrust Damages Actions Directive clarifies that national courts must strike the right balance between claimants' rights to access information and the protection of confidential information. To support national courts in these efforts, on 29 July 2019, the Commission issued a draft non-binding Communication aimed at providing practical guidance to national courts in dealing with requests to disclose confidential information in damages proceedings.
The draft Communication presents a number of methods available to obtain relevant information while protecting confidentiality and highlights the elements that courts should consider in choosing the most effective approach, within the boundaries of their national procedural rules. The Commission does not aim to change the procedural rules applicable to civil proceedings in the different Member States and, when finalised, the Communication will not be binding on national courts. See 5 Disclosure/Discovery for more detail on the disclosure of documents.
For the purpose of this European Union Chapter, we refer to claims that can be brought either before the General Court and the Court of Justice (together 'European Courts') or the national courts of the EU Member States for breach of EU competition law.
The legal basis for an action for breach of EU competition law lies in Articles 101 and 102 of the TFEU and Regulation 1/2003 on the implementation of Articles 101 and 102 TFEU ('Regulation 1/2003'), as interpreted by the European Courts. Articles 101 and 102 TFEU have 'direct effect' in relations between individuals and undertakings and create, for the individuals and undertakings concerned, rights and obligations that national courts of the EU Member States must enforce. This also means that Articles 101 and 102 TFEU are part of the national legal order of each EU Member State and national courts are required to set aside any national rules or contractual arrangement that contravene them.
Whilst compensation for harm caused by a breach of the EU competition rules is an EU right, its exercise is governed by national rules. In Courage v Crehan (Case C-453/99) and Manfredi (Joined Cases C-295/04 to C-298/04), the Court of Justice confirmed that any individual who has suffered harm caused by a violation of the EU competition rules must be allowed to claim damages before the national courts. In Europese Gemeenschap v Otis NV and Others (Case C-199/11), the Court of Justice confirmed that the Commission itself is entitled to bring a damages claim before the national courts, on behalf of the EU, in respect of loss incurred by the EU as a result of a conduct that has been found, by a Commission decision, to violate Article 101 TFEU.
The Antitrust Damages Actions Directive, which entered into force on 26 December 2014, makes it easier for claimants to bring antitrust damages actions, regardless of whether or not there has been a prior finding of infringement by a competition authority, while protecting the efficacy of the Commission’s leniency programme by protecting leniency statements. While all Member States have transposed the measures into their national system, national rules governing aspects not addressed in the Directive, such as remedies and procedures, must observe the principles of effectiveness and equivalence (Recital 11).
The basis for bringing a claim before the European Courts lays in Article 263 TFEU which gives the European Courts jurisdiction to annul a Commission decision on the grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaty, or misuses of powers; Article 265 TFEU enables action to be taken against the Commission’s failure to act; and Article 278 TFEU provides for interim relief. Article 267 TFEU gives the Court of Justice jurisdiction to deliver a preliminary ruling, at the request of a national court of a Member State, on the validity or interpretation of EU law in a case pending before the national court.
There are no specialist competition law courts at the EU level. There may be specialist courts at the national level to which competition law cases may be assigned depending on the national legal system in question, eg, the United Kingdom Competition Appeal Tribunal. This is discussed in other chapters of this publication. However, as explained in 2.1 Legal Basis for a Claim, Articles 101 and 102 TFEU are part of the national legal order of each EU Member State, and national courts and authorities are required to ensure full effectiveness of the EU competition rules.
A finding by the Commission, or a national competition authority of an EU Member State ('NCA'), that a violation of Article 101 or 102 TFEU has occurred has probative value as to the existence of an infringement and can form the basis for a follow-on damages action before a national court.
The Antitrust Damages Actions Directive provides that infringement decisions of an NCA will be considered proof of infringement with respect to the proceedings before the national courts in the home Member State (Article 9(1) of the Directive). Where a final decision of an NCA is used in proceedings before the national courts of another Member State than the NCA's home jurisdiction, that decision will be considered at least as prima facie evidence of an infringement of competition in another Member State than the home jurisdiction (Article 9(2) of the Directive).
Regulation 1/2003 provides that the Commission can submit observations to national courts, when necessary, for ensuring a consistent application of EU competition law (Article 15 of Regulation 1/2003). By the same token, national competition authorities of the Member States can, on their own initiative, submit written observations to national courts on issues relating to the application of Article 101 or 102 TFEU (Article 15(3) of Regulation 1/2003). In particular, in the context of safeguarding the effectiveness of public enforcement, national competition authorities should be able to submit their observations to a national court for the purpose of assessing the proportionality of a disclosure of evidence included in the authorities' files.
Relevant national legislation will specify other available procedures applicable to interventions before national courts.
In judicial review proceedings before the European Courts, the Commission bears the burden of proving the infringement of Articles 101 and 102 TFEU, whilst an undertaking relying on Article 101(3) TFEU bears the burden to demonstrate that conditions for obtaining an exemption are satisfied. In Commission v GlaxoSmithKline (Case C-513/06 P), the Court of Justice confirmed that restrictions 'by object' within the meaning of Article 101(1) TFEU are capable of exemption under Article 101(3), as long as the undertaking provides relevant and credible proof that the claimed efficiencies in the form of objective advantages are 'sufficiently likely' and that this analysis is undertaken in light of the factual arguments and evidence provided by the company seeking an exemption.
The case law of the European Courts referred to the standard for judicial review as one requiring the Commission to provide a "sufficiently precise and coherent proof" (Joined Cases 29-30/83, Compagnie Asturienne des mines and Rheinzink v Commission, paragraph 20) and similarly to produce a "firm, precise and consistent body of evidence" (Joined Cases C-89/85 et. al, Ahlström (Wood Pulp)) seeking to prove the infringement. This standard is reflected in Article 2 of Regulation 1/2003. The European Courts have noted on several occasions that the body of evidence put forward must be solid, specific, corroborative, convergent and convincing. In GlaxoSmithKline v Commission (Case T-168/01), the General Court also clarified that where the court’s review requires a complex economic assessment, “the review by the Court is confined to ascertaining that there has been no misuse of powers, that the rules on procedure and on the statement of reasons have been complied with, that the facts have been accurately stated and that there has been no manifest error of assessment of those facts”.
In addition, with regard to proceedings resulting in severe fines for the defendants, the Commission should guarantee that the principle of presumption of innocence, as provided under Article 6(2) of the ECHR, is respected. In that regard, the European Courts will generally accept the existence of an infringement only upon the establishment of specific key facts by the Commission. The Commission also applies rebuttable presumptions that have been confirmed by the courts, such as the presumption of participation in an identified cartel, the presumption of the continuous nature of the infringement and the presumption of liability of the parent company/companies.
With regard to private damages claims, the standard of proof and the burden of proof in proceedings before the national courts are regulated by the laws of individual Member States. The Antitrust Damages Actions Directive, however, contains two rebuttable presumptions aimed at making it easier to prove damages.
First, in order to remedy the information asymmetry and some of the difficulties associated with quantifying antitrust harm and to ensure the effectiveness of claims for damages, the Directive introduces a presumption that cartel infringements cause harm. As explained in the Directive, "it is appropriate to presume that cartel infringements result in harm, in particular via an effect on prices. Depending on the facts of the case, cartels result in a rise in prices, or prevent a lowering of prices which would otherwise have occurred but for the cartel. This presumption should not cover the concrete amount of harm" (Recital 47).
Second, the Directive sets out a presumption that cartel overcharges are at least in part passed on to indirect purchasers. As explained in the Directive, "it may be commercial practice to pass on price increases down the supply chain […]. It is therefore appropriate to provide that, where the existence of a claim for damages or the amount of damages to be awarded depends on whether or to what degree an overcharge paid by a direct purchaser from the infringer has been passed on to an indirect purchaser, the latter is regarded as having proven that an overcharge paid by that direct purchaser has been passed on to its level where it is able to show prima facie that such passing-on has occurred. This rebuttable presumption applies unless the infringer can credibly demonstrate to the satisfaction of the court that the actual loss has not or not entirely been passed on to the indirect purchaser" (Recital 41).
This rebuttable presumption gives indirect purchasers much higher chances to obtain compensation as compared to the previous systems in most EU countries. Under those, in fact, indirect purchasers had the burdensome task of proving that the harm had been passed on down the supply chain.
The passing-on defence is specific to private damages actions brought before national courts. Available procedures before national courts are determined by national legislation. The Antitrust Damages Actions Directive allows antitrust infringers to demonstrate that the price increase was, at least partially, passed on by the claimant to its own customers. When applying this defence, the defendant bears the burden of proving the existence and extent of the pass-on of the overcharge (Article 13). The Directive also addresses the situation of indirect purchasers and makes it easier for them to prove that passing-on occurred further in the supply chain. For that purpose, the indirect purchaser must merely establish that:
The right to civil compensation for antitrust infringement is recognised for any natural or legal person — consumers, undertakings and public authorities alike — irrespective of the existence of a direct contractual relationship with the infringing undertaking, and regardless of whether or not there has been a prior finding of infringement by a competition authority (Antitrust Damages Actions Directive, Recital 13).
In Manfredi (Joined Cases C-295/04 to C-298/04), the Court of Justice confirmed that indirect purchasers who had no direct dealings with the infringer should have standing to claim damages. In Bundeswettbewerbsbehörde v Donau Chemie AG and Others (Case C-536/11), the Court of Justice also confirmed that: “Article 101(1) TFEU produces direct effects in relations between individuals and creates rights for individuals, the practical effect of the prohibition laid down in that provision would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition.”
However, the Antitrust Damages Actions Directive states that over-compensation should be avoided. To this end, Member States must ensure that compensation for actual loss at any level of the supply chain does not exceed the overcharge harm suffered at that level.
With regard to judicial review proceedings before the European Courts, the Court of Justice’s 2018 Annual Report on Judicial Activity ('Report') states that the average duration of court proceedings before the General Court was estimated at 38.3 months for competition cases (judgments and orders) for the year 2018, against 21.6 months for the year 2017 (P. 243 of the Report). The average duration of court proceedings before the Court of Justice, across all areas of EU law, was estimated at 16 months for references for a preliminary ruling and 13.4 months for appeals for the year 2018, against 15.7 months and 17.1 months respectively for the year 2017 (P. 134 of the Report).
On application made by one of the parties, and having heard the other parties and the Advocate General, the General Court may apply an expedited procedure, in which case the court will impose conditions limiting the volume and presentation of the pleadings. In 2016, the Court of Justice adopted a simplified procedure for dealing with appeals brought in the context of access to documents, as well as relating to public procurement and intellectual and industrial property.
With regard to damages actions brought before national courts, available rules and procedures are determined by national legislation.
There is no harmonised approach to collective redress, such as group or class actions throughout the EU, and each Member State has its own approach. The EU has a comprehensive set of consumer rights in place and all Member States have collective redress mechanisms available for infringement of consumer law in the form of injunctive relief under the Injunctions Directive 2009/22/EC. However, compensatory collective redress is not presently available in all Member States and, where it is an option, it is often limited to specific sectors, generally those where claims are made by consumers. The Antitrust Damages Actions Directive does not require Member States to introduce collective redress mechanisms for the enforcement of Articles 101 and 102 TFEU (Recital 13).
In June 2013, the Commission issued a non-binding Recommendation on common principles for collective redress for violation of rights under EU law, including competition law infringement (Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under European Union Law). The Recommendation lays out a series of 'principles' that all Member States should follow in devising and implementing collective redress mechanisms. Two important principles should be noted.
First, the Recommendation sets out that the claimant party should be formed on the basis of the 'opt-in' principle, and any deviation from this should be justified by 'reasons of sound administration of justice'.
Second, the Recommendation explains that representative actions should be brought only by public authorities or representative entities that have been designated in advance or certified on an ad hoc basis by a national court for a particular case and:
In January 2018, the Commission published a report showing that the availability of collective redress mechanisms and the implementation of safeguards against the potential abuse of such mechanisms is still not consistent across the EU and that a number of Member States still do not provide for collective compensatory redress mechanisms for 'mass harm' situations where a large number of consumers are affected by EU law breaches (Commission Communication of 25 January 2018 COM (2018) 40 final).
In light of these findings, on 11 April 2018, the Commission published a "New Deal for Consumers" comprising a draft directive on representative actions for the protection of the collective interests of consumers and designed to introduce an EU-wide harmonised, compulsory and compensatory redress mechanism to protect the collective interests of consumers (ie, a group of collective damages actions).
The Commission cited large-scale cross-border proceedings, such as the diesel emissions case, as examples of the difficulties currently faced by consumers seeking to claim collective redress across disparate national regimes (Proposal for a Directive on representative actions for the protection of the collective interests of consumers and repealing the Injunctions Directive 2009/22/EC, 11 April 2018, COM (2018) 184 final, 2018/0089(COD)). The text will, however, become law only when both the European Parliament and European Council reach an agreement on the proposal.
Private actions for damages take place at national level pursuant to the national rules and procedures of each Member State, which are discussed in the national chapters within this guide.
As noted in 3.1 Availability, the Commission's 2013 Recommendation on common principles for collective redress, although non-binding, recommends that representative actions be brought only by public authorities or by representative entities that have been designated in advance or certified on an ad hoc basis by a national court for a particular case and that:
Furthermore, there is currently no harmonised approach to class action throughout the EU. That may change if the Commission's "New Deal for Consumers", which was published April 2018 and proposes an EU-wide compensatory redress mechanisms to protect the collective interest of consumers, is adopted.
Private actions for damages take place at the national level pursuant to the national rules and procedures of each Member State. Collective settlements are allowed in principle, but specific rules are set out or will be determined at the national level. These rules are discussed in the national chapters within this guide.
The Antitrust Damages Actions Directive does not require Member States to introduce collective redress mechanisms for the enforcement of Article 101 and 102 TFEU. However, the Directive does encourage consensual dispute resolution mechanisms, such as out-of-court settlements.
Private actions for damages take place at the national level pursuant to the national rules and procedures of each Member State. The Antitrust Damages Actions Directive does not address this subject.
Private actions for damages take place at the national level pursuant to the national rules and procedures of each Member State. There are no specific rules at the EU level governing jurisdictional matters for competition law claims and the Antitrust Damages Actions Directive does not address this subject. The jurisdiction of the European Courts is determined by the scope of its judicial review.
With regard to private actions for damages, Regulation (EC) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ('Recast Brussels Regulation') provides that a defendant who is domiciled in an EU Member State can be sued in that Member State, irrespective of where the contract was concluded or the damage was suffered. Regulation (EC) 864/2007 on the law applicable to non-contractual obligations (commonly referred to as 'Rome II') generally provides that the law applicable to non-contractual obligations is the law of the country in which the damage occursor is likely to occur.
Private actions for damages take place at national level pursuant to the national rules and procedures of each Member State. The Antitrust Damages Actions Directive, however, requires Member States to clarify or introduce national rules on limitation periods applicable to damages claims. The Directive sets out a minimum limitation period of five years, which should not begin to run before the infringement ceases and before a claimant knows, or can reasonably be expected to know:
In Cogeco (Case C-637/17, judgment of 28 March 2019), the very first preliminary ruling on the interpretation of the Directive, the Court of Justice recalled that principles of EU law prevent Member States from introducing shorter limitation periods that would effectively render the exercise of the right to claim compensation practically impossible or excessively difficult. Moreover, the Directive requires that Member States ensure that a limitation period is suspended or, depending on national law, interrupted, if a competition authority starts investigating the alleged infringement to which the damages claim relates (Article 10(4)). The suspension will end, at the earliest, one year after the infringement decision has become final (Article 10(4)). In practice, this means that claimants will have at least one full year to bring a civil claim for damages following the competition authority’s final decision.
In judicial review proceedings before the European Courts, an action for annulment of a Commission decision must be lodged with the General Court within two months of the notification of the decision to the addressees, or the day on which it came to the knowledge of the addressees, or its publication in the Official Journal of the European Union. Similarly, appeals before the Court of Justice against judgments of the General Court must be brought within two months of the notification of the final judgment of the General Court (Article 56 of the Statute of the Court of Justice). The two months period is increased by a single period of ten days on account of the parties' distance from the European Courts in Luxembourg (Article 263 TFEU; Article 60 of the Rules of Procedure of the General Court; and Article 51 of the Rules of Procedure of the Court of Justice).
In judicial review proceedings before the European Courts, both the General Court and the Court of Justice have the power to require the parties to the proceedings, as well as third parties, to disclose documents and information (Article 24 of the Statute of the European Court of Justice).
With regard to private damages claims, Regulation 1049/2001, which governs access to the documents of the European Institutions, has been used increasingly by damages claimants as a legal basis to request access to leniency material and other documents in the European Commission’s file relevant to findings of infringement of Articles 101 and 102 TFEU. In parallel to Regulation 1049/2001, Regulation 773/2004 relates to the conduct of proceedings by the European Commission under Articles 101 and 102 TFEU and grants addressees of a Statement of Objections the right to access the European Commission’s administrative file. However, damages claimants are not granted access to file under Regulation 773/2004.
Both Regulations contain limitations as to the types of documents to which access may be obtained, including limitations relating to business secrets or commercially sensitive information. There have been a number of judgments by the European Courts on the application of Regulation 1049/2001 and the courts have refined the rules applicable to undertakings, seeking to obtain access to the administrative files of the Commission in relation to Articles 101 and 102 TFEU investigations.
Pursuant to the Antitrust Damages Actions Directive, the legislation of the Member States must provide for access to evidence once the plaintiff “has presented a reasoned justification containing reasonably available facts and evidence sufficient to support the plausibility of its claim for damages” (Article 5 of the Directive). Member States must ensure the disclosure of evidence by order of the courts relevant to their claim without it being necessary for the claimants to specify individual items of evidence. Disclosure will extend to third parties, ie, including public authorities.
The Directive does not cover the disclosure of internal documents of competition authorities and correspondence between competition authorities. The Directive, however, states that national courts must limit the disclosure of evidence to what is proportionate. In determining whether any disclosure requested by a party is proportionate, national courts will have to consider the legitimate interests of all parties concerned.
The Directive clarifies that national courts cannot, at any time, order the disclosure or permit the use of leniency statements or settlement submissions. It also notes that information prepared specifically for the proceedings of a competition authority, as well as information drawn up by a competition authority in the course of its proceedings, can only be disclosed or used by national courts after a competition authority has closed its proceedings.
In judicial review proceedings before the European Courts, "any papers and documents" of agents, advisers and EU-qualified lawyers relating to the proceedings "are exempt from search and seizure" (Article 52 of the Rules of Procedure of the General Court and Article 44 of the Rules of Procedure of the Court of Justice).
With regard to private damages claims, the Antitrust Damages Actions Directive provides that national courts should have the power to order the disclosure of evidence containing business secrets or any other confidential information where they consider it relevant to the action for damages (Article 5). However, such confidential information needs to be adequately protected and disclosure of evidence must be appropriate. Within the framework of the rules on disclosure in the Directive, a range of measures to protect confidential information from being disclosed during the proceedings is envisaged, such as redaction, hearings in camera, limitation of the number of individuals entitled to access the evidence and production of expert summaries. Furthermore, the Directive requires that Member States ensure that national courts give full effect to applicable legal professional privilege under EU or national law when ordering the disclosure of evidence (Article 5).
In landmark cases Akzo, AM&S and Hilti, the Court of Justice clarified that legal professional privilege under EU rules encompasses:
The mere fact that a document has been discussed with a lawyer is not sufficient for it to be covered by legal professional privilege. EU legal professional privilege cannot be claimed for communications with in-house counsel or non-EU-qualified attorneys.
As explained in 5.1 Disclosure/Discovery Procedure, the Antitrust Damages Actions Directive clarifies that national courts cannot, at any time, order a party or a third party to disclose leniency statements or settlement submissions. The Directive clarifies that that exemption from disclosure should also apply to verbatim quotations from leniency statements or settlement submissions included in other documents.
However, in order to ensure that this exemption from disclosure does not unduly interfere with damages claims, the Directive limits it to voluntary and self-incriminating leniency statements and settlement submissions (Recital 26 and Article 6(6)). The Directive also notes that information prepared specifically for the proceedings of a competition authority, as well as information drawn up by a competition authority in the course of its proceedings, can only be disclosed or used by national courts after a competition authority has closed its proceedings (Recital 26 and Article 7).
In judicial review proceedings before the European Courts, both the General Court and the Court of Justice can summon a witness to testify. A penalty may be imposed on a witness who failed to appear or refused to give evidence or take the oath (Articles 26 and 27 of the Statute of the European Court of Justice; Articles 93 and 95 of the General Court’s Rules of Procedure; and Articles 66 and 69 of the European Court of Justice’s Rules of Procedure).
With regard to private damages claims, available rules and procedures before Member State courts are determined by national legislation.
In judicial review proceedings before the European Courts, both the General Court and the Court of Justice may, at any time, order that an expert's report be obtained – the courts may entrust any individual, body, authority, committee or other organisation they choose with the task of giving an expert opinion; the expert may give an opinion only on points that have been expressly referred to the expert (Article 25 of the Statute of the European Court of Justice, Articles 91 and 96 of the Rules of Procedure of the General Court and Articles 64 and 70 of the European Court of Justice’s Rules of Procedure).
With regard to private damages claims, available rules and procedures before Member State courts are determined by national legislation.
Under EU law, damages that can be sought by private claimants are compensatory and not exemplary nor punitive. In Manfredi, the Court of Justice held that victims of antitrust infringements should be able to obtain full compensation of the real value of the loss suffered. The entitlement to full compensation extends not only to the actual loss due to an anticompetitive conduct, but also to the loss of profit as a result of any reduction in sales. It also includes a right to interest.
While there is no guidance on the actual methodology to be used for the quantification of damages at EU level, the Commission issued a Communication on quantifying harm in actions for damages based on breaches of Articles 101 or 102 TFEU and a Practical Guide accompanying the Communication prepared by the Commission’s staff. The aim of the Practical Guide is to "offer assistance to national courts and parties involved in actions for damages by making more widely available information relevant for quantifying the harm caused by antitrust infringements." The Guide illustrates types of harm typically caused by anticompetitive practices and offers an overview of the main methods and techniques available to quantify such harm in practice.
The Antitrust Damages Actions Directive does not provide specific guidance on the quantification of harm but establishes a rebuttable presumption of harm in the case of cartels. It is for the domestic legal system of each Member State to quantify harm, and for the Member States and the national courts, to determine the requirements the claimant has to meet to prove the amount of the harm suffered. However, these domestic requirements should not be less favourable than those governing similar domestic actions, nor should they render the exercise of the right to damages practically impossible or excessively difficult. The Directive specifies that full compensation should not lead to overcompensation whether by means of punitive, multiple or other damages (Recital 13).
At EU level, the Court of Justice confirmed that an excessive delay in proceedings before the General Court is an actionable breach which can be addressed by bringing a damages action before the General Court under Articles 268 and 340 of the TFEU, yet not brought to the European Court Justice in the context of an appeal (Case C 40/12 P, Gascogne Sack Deutschland GmbH v Commission, Case C 58/12 P, Groupe Gascogne SA v Commission, and Case C-50/12 P, Kendrion v Commission, judgments of 26 November 2013).
The passing on defence is specific to private actions for damages, which are brought before national courts. Available procedures before national courts are determined by national legislation.
The Antitrust Damages Actions Directive, however, provides that Member States should ensure that the defendant in an action for damages can invoke, as a defence against a claim for damages, the fact that the claimant passed on part or all of the overcharge resulting from the infringement of Article 101 or 102 TFEU (Article 13). When invoking this defence, the defendant must prove the existence and extent of the pass-on of the overcharge.
The Directive also addresses the situation of indirect purchasers and makes it easier for them to prove that passing on occurred further in the supply chain. For that purpose, the indirect purchaser must merely show that:
The Antitrust Damages Actions Directive provides that the entitlement to full compensation extends, not only to the actual loss resulting from a breach of competition law, but also to the loss of profit as a result of any reduction in sales and includes a right to interest (Article 3). The Directive stipulates that the payment of interest is an essential component of compensation and should be due from the time when the harm occurred to the time when compensation is paid, without prejudice to the qualification of such interest as compensatory or default interest under national law and to whether effluxion of time is taken into account as a separate category or as a constituent part of actual loss or loss of profit (Recital 12). It is however incumbent on the Member States to lay down the rules to be applied for that purpose. Available rules and procedures before national courts are, therefore, determined by national legislation.
Available rules and procedures before national courts are determined by national legislation. However, the Antitrust Damages Actions Directive provides that the laws of the Member States should ensure that undertakings that have infringed competition law through joint conduct are jointly and severally liable for the harm caused by their infringement of competition law; with the effect that each of those undertakings is bound to compensate for the harm in full, and the injured party has the right to require full compensation from any of them until full compensation has been obtained (Article 11).
Immunity recipients, however, are not jointly and severally liable to all claimants. Immunity recipients would only be liable to claimants who are their own direct or indirect purchasers or providers, except when other claimants show that they are unable to obtain full compensation from other defendants (Article 11(3)).
Available rules and procedures before national courts are determined by national legislation. The Antitrust Damages Actions Directive does not discuss the bringing of contribution proceedings against a third party. The Directive, however, establishes that a co-infringer should have the right to obtain a contribution from other co-infringers if it has paid more than its share of compensation. The determination of the share of compensation is a matter of national law (Recital 37 and Article 11(5)).
With regard to an immunity recipient, the Directive limits the amount of any contribution it must make to its co-infringers to the proportion of the amount of the harm it caused to its own direct or indirect purchasers or, in the case of a buying cartel, to its direct or indirect providers. That share should be determined in accordance with the same rules used to determine the contributions between infringers. The immunity recipient should remain fully liable to the injured parties (other than its direct or indirect purchasers or providers) only where they are unable to obtain full compensation from the other infringers (Recital 38 and Article 11(5)). To encourage consensual settlements, the Directive additionally provides that, in principle, non-settling co-infringers should not be allowed to recover contribution for the remaining claim from the settling co-infringer and should only exercise their right against non-settling co-infringers (Article 19).
In judicial review proceedings before the European Courts, both the General Court and the Court of Justice are empowered to grant interim measures under Articles 278 and 279 TFEU in relation to actions pending before them. Interim measures granted by the General Court typically consist of the suspension, in whole or in part, of the enforceability of a Commission decision being challenged before the court. Interim measures granted by the General Court may be appealed to the Court of Justice on points of law. The Court of Justice may decide to suspend the application of a judgment of the General Court, in whole or in part, while appeal proceedings against the judgment are pending. The Court of Justice may also prescribe any necessary interim measures if it considers that the circumstances of the proceedings require it to do so.
The European Courts can grant interim measures when a prima facie case for a violation of EU competition law is established and when there is urgency, ie, there will be serious and irreparable damage absent interim measures before the judgment on the substance of the case. These two conditions are cumulative. There is urgency only if the serious and irreparable harm feared by the party is so imminent that its occurrence can be foreseen with a sufficient degree of probability (Case C-65/18 P(R), Nexans v Commission, order of 12 June 2018). It is settled case-law that damage of a pecuniary nature cannot, otherwise than in exceptional circumstances, be regarded as irreparable. Interim measures are without prejudice to the final decision on the substance (Cases C-60/81 R and C-190/81 R, IBM v Commission).
The judge hearing an application for interim measures will order suspension of a Commission decision before the General Court or prescribe other interim measures only in exceptional circumstances (Case T-423/17 R, Nexans v Commission, order of 23 November 2017 and case-law cited). Moreover, the European Courts have generally been reluctant to grant a request for interim relief against strictly procedural decisions of the Commission.
It is settled case-law that interim relief may also be granted by the national courts in relation to actions concerning rights stemming directly from EU law, including Articles 101 and 102 TFEU (Case C-213/89,The Queen v Secretary of State for Transport, ex parte: Factortame Ltd and others (19 June 1990)). The two main conditions set out by the European Courts for the granting of interim relief are also generally followed by the national courts of the EU Member States. However, the specific application of these conditions and the related procedures for seeking and obtaining interim relief are a matter of national law.
With regard to private damages claims, available procedures before Member State courts are determined by national legislation. While the Antitrust Damages Actions Directive makes it easier for victims of competition law violations to claim damages, the Directive aims also to facilitate and encourage alternative methods of redress. The Directive clarifies that Member States should ensure that actions for damages are complemented by alternative means of consensual dispute resolution (eg, out-of-court settlements - including those where a judge can declare a settlement binding such as in arbitration, mediation or reconciliation) as well as by public enforcement decisions that give parties an incentive to provide compensation.
Consensual dispute resolution should cover as many injured parties and infringers as legally possible and Member States should adopt rules on procedure that give all parties a genuine opportunity to engage in consensual dispute resolution before, or after, bringing proceedings before national courts, eg, limitation periods and court proceedings should be suspended for the duration of the consensual dispute resolution process; court proceedings should be suspended for the duration if the consensual dispute resolution process (Recitals 5 and 48-51 and Articles 18 and 19).
In the context of judicial review proceedings before the European Courts, there are no rules regulating or prohibiting third party funding of appeals before the European Courts.
With regard to private damages claims, available procedures before national courts are determined by national legislation. As explained in 3.1 Availability, the Commission’s 2013 Recommendation on common principles for collective redress sets out a series of non-binding principles that Member States should follow when devising collective redress mechanisms in their respective jurisdiction, including third party funding. Under the Recommendation, the claimant party should be required to declare to the court at the outset of the proceedings the origin of the funds that will support its legal action (Paragraph 14). Moreover, private third-party funding should be allowed but only under certain conditions. In particular, the private third party should be prohibited from:
The Recommendation also sets out that the court should be allowed to stay the proceedings if:
Lastly, compensation to third party funders may not be based on the amount of the settlement reached or compensation awarded to the claimant unless this funding arrangement is regulated by a public authority (Paragraph 32).
In judicial review proceedings before the European Courts, the court will generally order the unsuccessful party to pay the legal costs at the successful party’s specific request. In the event that there is more than one unsuccessful party, the court will decide how the costs should be shared. Where each party succeeds on some grounds and fails on others, the court may order that either each party bears its own costs or that one party, in addition to bearing its own costs, pay a proportion of the costs of the other party. The court also has discretion to order a party, even if successful, to pay the whole or part of the legal costs incurred by the other party or parties where it finds that the successful party unreasonably caused these costs (Articles 134 and 135 of the Rules of Procedure of the General Court and Articles 138 and 139 of the Rules of Procedure of the Court of Justice).
With regard to private damages claims, available procedures before national courts are determined by national legislation.
Judgments of the General Court are subject to appeal before the Court of Justice, within two months of the notification of the judgement being appealed. That time period is increased by a single period of ten days on account of the parties' distance from the European Courts in Luxembourg (Article 263 TFEU and Article 51 of the Rules of Procedure of the Court of Justice). Appeals to the Court of Justice are strictly limited to points of law, including lack of competence of the General Court, breach of procedure or incorrect application of EU law.
Available appeal procedures before national courts are determined by national legislation.