EU Antitrust Private Damages Actions

Keywords: EU, antitrust, damages actions, competition law infringements

Damages Actions for EU Antitrust Law Infringements in Force

On 10 November 2014 the governments of the 28 EU Member States approved a new law that aims at facilitating claims for damages by victims of antitrust infringements in Europe. The new law entered into was adopted on 4 December 2014.1 The law, which takes the form of an EU Directive, was previously prepared by the European Commission ("Commission") and agreed with the European Parliament. It seeks to harmonize the relevant laws across the EU by setting the procedural framework under which damages actions for competition law breaches can be brought in any of the EU Member States ("Directive"). The Member States will be granted a two year deadline, starting from the publication of the Directive in the Official Journal of the EU, within which they will have to transpose its provisions into their national legal systems.

Background

The Directive is the culmination of a long process that was triggered by a seminal judgment rendered by the European Court of Justice ("ECJ") in 2001. In Courage and Crehan2, the ECJ ruled that the right to seek compensation for loss caused by infringements of the competition law rules is open to any individual. Such compensation is foreseen for all antitrust infringements, i.e. both for abusive conduct by dominant companies and for cartel-like behavior.

Historically, damages actions for antitrust infringements in the EU were few in number. Competition law enforcement had traditionally been considered as an administrative task and the fines imposed by the competent authorities (which were amongst the highest in the world) were the only deterrent for companies. Additionally, diverse legal systems across the EU (e.g. common law vs. civil law systems), and a lack of knowledge on the part of claimants of their rights, all contributed to a lack of cases. More recently, actions for damages have increased but they still constitute a minority, with only 25% of antitrust infringements found by the Commission being followed by actions for damages.

The Commission considered that the introduction of private damages actions would complement its enforcement powers against illegal antitrust conduct; adding an additional and important level of deterrence. However, its plan to encourage such actions was met with resistance because of the complexity of the task, in particular, the need to harmonize very different legal systems in the 28 Member States, to deal with process issues such as limitation periods and the quantification of the harm caused by the contested antitrust conduct. At the same time, the Commission needed to ensure that a regime for damages actions did not undermine the effectiveness of existing tools in the fight against cartels, such as the Commission's program to incentivize cooperation (that is the leniency program that avoids or reduces fines for companies cooperating with the Commission), which could be compromised by rules allowing...