1 European Commission, DG Competition Filip Kubik European Commission, DG Competition Brno, 12 November 2008 White Paper on Damages Actions for Breach of Articles 81 and 82 EC

2 European Commission, DG Competition Background n ECJ in Courage v Crehan (2001): -full effectiveness of Article 81 requires that any individual can claim damages n Ashurst study (2004): - astonishing diversity and total underdevelopment n Green paper (2005) n White paper (April 2008)

3 European Commission, DG Competition General approach n Compensation as primary objective n Effective legal framework for victims to exercise their rights under the Treaty n Preserving strong public enforcement n Balanced measures based on European legal cultures and traditions n Legal certainty and more level playing field

4 European Commission, DG Competition Specific issues – Damages – Passing-on of overcharges – Standing: indirect purchasers and collective redress – Access to evidence: inter partes disclosure – Binding effect of NCA decisions – Fault requirement – Limitation periods – Costs of damages actions – Interaction between leniency programmes and actions for damages

5 European Commission, DG Competition Indirect purchasers Objective: n To ensure compensation for all categories of victims Courage 2001, Manfredi 2006) (Courage 2001, Manfredi 2006) n Including indirect purchasers, i.e.: – victims further down the distribution chain → need for rules on passing-on of overcharges – victims with scattered and small (individual) damage → need for collective redress

6 European Commission, DG Competition Passing-on Proposed measures: n To allow the passing-on defence while putting the burden on the defendant n To lighten the victim’s burden by a rebuttable presumption that the overcharge was entirely passed on n To avoid under- or over-compensation in case of joint, parallel or consecutive actions

7 European Commission, DG Competition Collective redress Issues: n Follow-on or Stand-alone n Opt-in or Opt-out n Strict opt-in often does not work, e.g.: – Replica football shirts (Which?) – Mobile phone charges (Que Choisir) n Opt-out involves risks and is often viewed negatively in Europe (fear of US style class actions)

8 European Commission, DG Competition Collective redress Proposed measures: n Opt-in collective action – combining individual damages claims into a single action n Representative action – brought by qualified entities on behalf of a group of victims

9 European Commission, DG Competition Representative action Qualified entities: n designated in advance to bring representative actions n certified ad hoc to bring a representative action on behalf of its members in relation to a specific infringement Key issues: n criteria to be fulfilled by qualified entities n identified/identifiable victims n information obligation n right not to be represented n distribution of damages

10 European Commission, DG Competition Access to Evidence Objective: n addressing the information asymmetry inherent in most antitrust cases n preventing that victims do not start, or do not win, a case simply because they had no access to the facts

11 European Commission, DG Competition Access to evidence Proposed measures: n Inter partes disclosure based on fact-pleading and strict judicial control n Claimants must show a plausible case n Disclosure measure must be necessary and proportionate in scope n Effective sanctions for refusal to disclose or destruction of evidence

12 European Commission, DG Competition After the White Paper n Public consultation until 15 July 2008 – over 170 submissions n Large agreement on – existence of obstacles to compensation – something needs to done – compensation as primary objective – need for balanced & European measures n Divergent views on – features of specific measures – who should tackle the issues n Follow-up & timing