The Role of National Courts in the Enforcement of Articles 101 and 102 TFEU - Towards more effective antitrust damages actions in Europe.

The Role of National Courts in the Enforcement of Articles 101 and 102 TFEU - Towards more effective antitrust damages actions in Europe

AIMS OF PRIVATE ENFORCEMENT
Competition law is a form of public law that aims to protect the public interest By conferring individual rights on private parties, creating a legal regime to enforce those rights, and providing incentives for private enforcement - public interest goal of safeguarding competitive process may be advanced A regulatory scheme that incorporates private enforcement incorporates twin primary aims of prevention and deterrence that have instrumental value but also subsidiary goals of punishment and compensation

Direct effect Art 101(1) & 102 – Case 127/73 BRT v SABAM [1974] ECR 51. para 16 “AS THE PROHIBITIONS OF ARTICLES 85 ( 1 ) AND 86 TEND BY THEIR VERY NATURE TO PRODUCE DIRECT EFFECTS IN RELATIONS BETWEEN INDIVIDUALS, THESE ARTICLES CREATE DIRECT RIGHTS IN RESPECT OF THE INDIVIDUALS CONCERNED WHICH THE NATIONAL COURTS MUST SAFEGUARD .”

Case C-453/99 Courage v Crehan [2001] ECR I-6297
„29. However, in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive directly from Community law, provided that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and that they do not render practically impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness) (see Case C-261/95 Palmisani [1997] ECR I-4025, paragraph 27).”

Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty Article 3.1. Where the competition authorities of the Member States or national courts apply national competition law to agreements, decisions by associations of undertakings or concerted practices within the meaning of Article 81(1) of the Treaty which may affect trade between Member States within the meaning of that provision, they shall also apply Article 81 of the Treaty to such agreements, decisions or concerted practices. Where the competition authorities of the Member States or national courts apply national competition law to any abuse prohibited by Article 82 of the Treaty, they shall also apply Article 82 of the Treaty.

Council Regulation (EC) No 1/2003
Article 6. - National courts shall have the power to apply Articles 81 and 82 of the Treaty. Article Cooperation with national courts 1. In proceedings for the application of Article 81 or Article 82 of the Treaty, courts of the Member States may ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of the Community competition rules. 2. Member States shall forward to the Commission a copy of any written judgment of national courts deciding on the application of Article 81 or Article 82 of the Treaty. Such copy shall be forwarded without delay after the full written judgment is notified to the parties. 3. Competition authorities of the Member States, acting on their own initiative, may submit written observations to the national courts of their Member State on issues relating to the application of Article 81 or Article 82 of the Treaty. With the permission of the court in question, they may also submit oral observations to the national courts of their Member State. Where the coherent application of Article 81 or Article 82 of the Treaty so requires, the Commission, acting on its own initiative, may submit written observations to courts of the Member States. With the permission of the court in question, it may also make oral observations. For the purpose of the preparation of their observations only, the competition authorities of the Member States and the Commission may request the relevant court of the Member State to transmit or ensure the transmission to them of any documents necessary for the assessment of the case. 4. This Article is without prejudice to wider powers to make observations before courts conferred on competition authorities of the Member States under the law of their Member State.

3. Competition authorities of the Member States, acting on their own initiative, may submit written observations to the national courts of their Member State on issues relating to the application of Article 81 or Article 82 of the Treaty. With the permission of the court in question, they may also submit oral observations to the national courts of their Member State. Where the coherent application of Article 81 or Article 82 of the Treaty so requires, the Commission, acting on its own initiative, may submit written observations to courts of the Member States. With the permission of the court in question, it may also make oral observations. For the purpose of the preparation of their observations only, the competition authorities of the Member States and the Commission may request the relevant court of the Member State to transmit or ensure the transmission to them of any documents necessary for the assessment of the case. 4. This Article is without prejudice to wider powers to make observations before courts conferred on competition authorities of the Member States under the law of their Member State.

Article Uniform application of Community competition law 1. When national courts rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated. To that effect, the national court may assess whether it is necessary to stay its proceedings. This obligation is without prejudice to the rights and obligations under Article 234 of the Treaty. 2. When competition authorities of the Member States rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already the subject of a Commission decision, they cannot take decisions which would run counter to the decision adopted by the Commission.

Study on the conditions of claims for damages in case of infringement of EC competition rules - Ashurst, 2004 COMPARATIVE REPORT - to identify and analyse the obstacles to successful action for damages existing in the Member States report - legal basis for bringing an action for demages - wich courts are comepetent to hear an action for demages? - who can bring an action for demages? - procedural and substantive condition to obtain damages - rules of evidence - grounds of justification - passing on defence - demages - interest - timing - costs

Study on the conditions of claims for damages in case of infringement of EC competition rules - Ashurst, 2004 ANALYSIS OF ECONOMIC MODELS FOR THE CALCULATION OF DAMAGES - an overview of the damages cases that have been reported to date and reviews the economic methodology that can be used to calculate damages. - no Member State's law is prescriptive as to the economic model which must be used, and all broadly calculate damages to return the plaintiff to the position but for the infringement.

Green Paper - Damages actions for breach of the EC antitrust rules, 2005
Damage s claims as part of the enforcement system of Community antitrust law MAIN ISSUES 1 Access to evidence - Should there be special rules on disclosure of documentary evidence in civil proceedings for damages under Articles 81 and 82 of the EC Treaty? If so, which form should such disclosure take? - Are special rules regarding access to documents held by a competition authority helpful for antitrust damages claims? How could such access be organised? - Should the claimant’s burden of proving the antitrust infringement in damages actions be alleviated and, if so, how?

Green Paper 2. Fault requirement 3. Damages
Should there be a fault requirement for antitrust-related damages actions? 3. Damages How should damages be defined? Which method should be used for calculating the quantum of damages? 4. The passing-on defence and indirect purchaser’s standing Should there be rules on the admissibility and operation of the passing-on defence? If so, which form should such rules take? Should the indirect purchaser have standing? 5. Defending consumer interests Should special procedures be available for bringing collective actions and protecting consumer interests? If so, how could such procedures be framed?

Green Paper 6. Costs of actions
Should special rules be introduced to reduce the cost risk for the claimant? If so, what kind of rules? 7. Coordination of public and private enforcement | How can optimum coordination of private and public enforcement be achieved? 8. Jurisdiction and applicable law Which substantive law should be applicable to antitrust damages claims? 9. Other issues - Should an expert, whenever needed, be appointed by the court ? - Should limitation periods be suspended ? If so, from when onwards ? - Is clarification of the legal requirement of causation necessary to facilitate damages actions?

Cases C-295 & 298/04 Manfredi [2006] ECR-661
- Article 81 EC must be interpreted as meaning that any individual can rely on the invalidity of an agreement or practice prohibited under that article and, where there is a causal relationship between the latter and the harm suffered, claim compensation for that harm. - it is for the domestic legal system of each Member State to prescribe the limitation period for seeking compensation for harm caused by an agreement or practice prohibited under Article 81 EC, provided that the principles of equivalence and effectiveness are observed. - to set the criteria for determining the extent of the damages for harm.., provided that the principles of equivalence and effectiveness are observed. Therefore, first, in accordance with the principle of equivalence, if it is possible to award particular damages, such as exemplary or punitive damages, in domestic actions similar to actions founded on the Community competition rules....Secondly, it follows from the principle of effectiveness and the right of individuals to seek compensation for loss caused by a contract or by conduct liable to restrict or distort competition that injured persons must be able to seek compensation not only for actual loss (damnum emergens) but also for loss of profit (lucrum cessans) plus interest.

Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) The law applicable may not be derogated from by an agreement Article 6 - Unfair competition and acts restricting free competition The law applicable to a non-contractual obligation arising out of an act of unfair competition shall be the law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected.

Rome II - Where an act of unfair competition affects exclusively the interests of a specific competitor - general rule: the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.

Rome II - The law applicable to a non-contractual obligation arising out of a restriction of competition shall be the law of the country where the market is, or is likely to be, affected. - When the market is, or is likely to be, affected in more than one country, the person seeking compensation for damage who sues in the court of the domicile of the defendant, may instead choose to base his or her claim on the law of the court seised, provided that the market in that Member State is amongst those directly and substantially affected by the restriction of competition out of which the non-contractual obligation on which the claim is based arises; where the claimant sues, in accordance with the applicable rules on jurisdiction, more than one defendant in that court, he or she can only choose to base his or her claim on the law of that court if the restriction of competition on which the claim against each of these defendants relies directly and substantially affects also the market in the Member State of that court.

Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios - 671 pages - potential impact of more effective private damages actions for breach of the rules prohibiting cartels and other types of anticompetitive behaviour - more effective enforcement of antitrust laws in Europe (with public and private enforcement) could bring about yearly social benefits as high as 1% of GDP, or €113 billion in The contribution of private enforcement to this impact is expected to be substantial.

White paper on damages actions for breach of the EC antitrust rules, 2008.
conjunction with two Commission staff working documents: a Commission staff working paper on EC antitrust damages actions (“the SWP”) which explains in greater detail the considerations underlying the White Paper and also provides a concise overview of the already existing acquis communautaire ; and an Impact Assessment Report (the “IAR”) analysing the potential benefits and costs of various policy options, and an executive summary of this report. The primary objective - is to improve the legal conditions for victims to exercise their right under the Treaty to reparation of all damage suffered as a result of a breach of the EC antitrust rules

White paper Standing: indirect purchasers and collective redress
- direkt and indirect purchasers - collective redress - Individual consumers, but also small businesses, especially those who have suffered scattered and relatively low-value damage , are often deterred from bringing an individual action for damages by the costs, delays, uncertainties, risks and burdens involved. Two complementary mechanisms : - representative actions , which are brought by qualified entities, such as consumer associations, state bodies or trade associations, on behalf of identified or, in rather restricted cases, identifiable victims and - opt-in collective actions - in which victims expressly decide to combine their individual claims for harm they suffered into one single action.

White paper Access to evidence - disclosure inter partes
Fault requirement - require fault to be proven, that once the victim has shown a breach of Article 81 or 82 , the infringer should be liable for damages caused unless he demonstrates that the infringement was the result of a genuinely excusable error an error would be excusable if a reasonable person applying a high standard of care could not have been aware that the conduct restricted competition. Damages - the Commission therefore intends to draw up a framework with pragmatic, non-binding guidance for quantification of damages in antitrust cases Passing-on overcharges - defendants should be entitled to invoke the passing-on defence against a claim for compensation of the overcharge.

White paper Limitation periods - should not start to run in the case of a continuous or repeated infringement , before the day on which the infringement ceases before the victim of the infringement can reasonably be expected to have knowledge of the infringement and of the harm it caused him and a new limitation period of at least two years should start once the infringement decision on which a follow-on claimant relies has become final . Costs of damages actions - design procedural rules fostering settlements, court fees in an appropriate manner so that they do not become a disproportionate disincentive to antitrust damages claims; to give national courts the possibility of issuing cost orders derogating, in certain justified cases, from the normal cost rules, Interaction between leniency programmes and actions for damages - protection to all corporate statements submitted by all applicants for leniency in relation to a breach of Article 81 of the EC Treaty

Case C-360/09 Pfleiderer AG v Bundeskartellamt [2011]
The provisions of European Union law on cartels.... must be interpreted as not precluding a person who has been adversely affected by an infringement of EU competition law and is seeking to obtain damages from being granted access to documents relating to a leniency procedure involving the perpetrator of that infringement. It is, however, for the courts and tribunals of the Member States, on the basis of their national law, to determine the conditions under which such access must be permitted or refused by weighing the interests protected by European Union law.

ELEVATOR AND ESCALATOR
The four elevator and escalator manufacturers (Kone, Otis, Schindler and ThyssenKrupp) were found guilty of participation in bid-rigging cartels for the installation and maintenance of lifts and escalators in Belgium, Germany, Luxembourg and the Netherlands the European Commission, representing the European Union, initiated an action before the Brussels Commercial Court as a private plaintiff seeking damages. The European Commission alleged that as an owner or occupant of buildings with elevators and escalators supplied and maintained by the four cartel members, the European Union had paid an overcharge as a result of the cartel.

Case C-199/11 (Europese Gemeenschap v Otis NV and Others) [2012]
... the European Commission is not precluded from representing the European Union before a national court hearing a civil action for damages in respect of loss caused to the EU by an agreement or practice prohibited by Articles 81 EC and 101 TFEU which may have affected certain public contracts awarded by various institutions and bodies of the European Union, there being no need for the Commission to have authorisation for that purpose from those institutions and bodies. Article 47 of the Charter of Fundamental Rights of the European Union does not preclude the European Commission from bringing an action before a national court, on behalf of the European Union, for damages in respect of loss sustained by the Union as a result of an agreement or practice which has been found by a decision of the Commission to infringe Article 81 EC or Article 101 TFEU.

- EC claimed €6 million in damages from all defendants.
- prices during the cartel period were inflated, with a sudden drop in prices after the cartel period ended - during the hearings EC did not adequately explain how many contracts formed the basis of its claim. - In a November judgment the Brussels Commercial Court dismissed the claim, as the EC had not provided sufficient evidence that it had actually sustained any damage. The court assessed the claim under the Belgian tort law in force in 2008, emphasising that under that law, the claimant was required to make a plausible – not merely hypothetical – case that it had sustained damage. The court also rejected the EC request for the appointment of an expert to assess the damages, as there were serious doubts that the claim could succeed. Also the causal link between the forming of a cartel and the claimed damage is not sufficient established. - appeal

Before the Court of appeal the EU asked first of all a judgment in which the lifts builders should be condemned to produce a number of documents that can establish the damage (the EU cannot produce the documents communicated in the leniency procedure) In a first decision of the Court of appeal (28 October 2015) the Court of appeal has required the lifts builders to produce a number of documents. It was a complicated scheme providing the respect of the confidential and non-confidential documents. - After presentation of the documents the EU is of the opinion that too many documents were regarded as confidential. - the Court decided that before sanctioning the lift builders for inadequate execution of the October 2015 verdict, the EU shall submit to the European Union on an Excel table indicating all very punctual and specific pages, documents, sensu lato, all data from the pieces bundle that by the lifts builders have submitted in implementation of the 2015 verdict, in which Excel-table the EU have to indicate which is her complaint, document by document. In order to organize that procedure the different parties to the proceedings will be heard on September 19

Production of the documents
the EU - to prove that the unauthorized formation of cartels has had an impact on the market. Experts - finalize their report Verdict of the Court a possibility to appeal before the Supreme Court

Case C-536/11 Donau Chemie [2013]
European Union law, in particular the principle of effectiveness, precludes a provision of national law under which access to documents forming part of the file relating to national proceedings concerning the application of Article 101 TFEU, including access to documents made available under a leniency programme, by third parties who are not party to those proceedings with a view to bringing an action for damages against participants in an agreement or concerted practice is made subject solely to the consent of all the parties to those proceedings, without leaving any possibility for the national courts of weighing up the interests involved.

Case C-557/12 Kone [2014] ‘Umbrella pricing’ Article 101 TFEU must be interpreted as meaning that it precludes the interpretation and application of domestic legislation enacted by a Member State which categorically excludes, for legal reasons, any civil liability of undertakings belonging to a cartel for loss resulting from the fact that an undertaking not party to the cartel, having regard to the practices of the cartel, set its prices higher than would otherwise have been expected under competitive conditions.

Commission proposal for a European Parliament & Council Directive on certain rules governing actions for damages, COM(2013) 404 final Directive 2014/104/EU of the European parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union was signed into law on 26 November 2014 and published in the Official Journal of the European Union on 5 December 2014. The deadline for transposing the Directive on Antitrust Damages Actions into Member States' legal systems expired on 27 December 2016. ve_en.html

Directive 2014/104/EU make it easier for victims of antitrust violations to claim compensation, and fine-tunes the interplay between private damages claims and public enforcement. This Directive sets out certain rules necessary to ensure that anyone who has suffered harm caused by an infringement of competition law by an undertaking or by an association of undertakings can effectively exercise the right to claim full compensation for that harm from that undertaking or association. It sets out rules fostering undistorted competition in the internal market and removing obstacles to its proper functioning, by ensuring equivalent protection throughout the Union for anyone who has suffered such harm. sets out rules coordinating the enforcement of the competition rules by competition authorities and the enforcement of those rules in damages actions before national courts.

Directive 2014/104/EU National courts may order disclosure of evidence
Leniency statements not to be disclosed Binding effect of NCA & EU infringement decisions Limitation period Protection of immune defendants Passing on of overcharges Rebuttable presumption of harm Quantification

Directive 2014/104/EU Right to full compensation
any natural or legal person actual loss and for loss of profit, plus the payment of interest shall not lead to overcompensation, whether by means of punitive, multiple or other types of damages. In accordance with the principle of effectiveness, MS shall ensure that all national rules and procedures relating to the exercise of claims for damages are designed and applied in such a way that they do not render practically impossible or excessively difficult the exercise of the Union right to full compensation for harm caused by an infringement of competition law. In accordance with the principle of equivalence, national rules and procedures relating to actions for damages resulting from infringements of Article 101 or 102 TFEU shall not be less favourable to the alleged injured parties than those governing similar actions for damages resulting from infringements of national law.

Directive 2014/104/EU Disclosure of evidence Claimant will be able to ask for disclosure of categories of evidence, which need to be identified by reference to their common features, such as nature, object or content of the documents. - Disclosure order can also be directed to third parties not involved in the damages actions - To avoid fishing expeditions (non-specific or overly broad searches for information that is unlikely to be relevant for the parties to the proceedings) and other abuses, judges have the final say in disclosure system - The judge had to assess the relevance and proportionality of the request - national courts have the power to order the disclosure of evidence containing confidential information where they consider it relevant to the action for damages.

Directive 2014/104/EU Disclosure of evidence included in the file of a competition authority protection of internal documents of competition authorities and of correspondence between competition authorities National courts cannot at any time order a party or a third party to disclose any of the following categories of evidence: - leniency statements; and - settlement submissions. MS shall ensure that national courts are able effectively to impose penalties on parties, third parties and their legal representatives in the event of any of the following: - their failure or refusal to comply with the disclosure order of any national court; - their destruction of relevant evidence; - their failure or refusal to comply with the obligations imposed by a national court order protecting confidential information; - their breach of the limits on the use of evidence

Directive 2014/104/EU Effect of national decisions 1. Member States shall ensure that an infringement of competition law found by a final decision of a national competition authority or by a review court is deemed to be irrefutably established for the purposes of an action for damages brought before their national courts under Article 101 or 102 TFEU or under national competition law. 2. Member States shall ensure that where a final decision referred to in paragraph 1 is taken in another Member State, that final decision may, in accordance with national law, be presented before their national courts as at least prima facie evidence that an infringement of competition law has occurred and, as appropriate, may be assessed along with any other evidence adduced by the parties.

Directive 2014/104/EU Disclosure of evidence included in the file of a competition authority protection of internal documents of competition authorities and of correspondence between competition authorities National courts cannot at any time order a party or a third party to disclose any of the following categories of evidence: - leniency statements; and - settlement submissions.

Commission proposal for a European Parliament & Council Directive on certain rules governing actions for damages, COM(2013) 404 final Directive 2014/104/EU on antitrust damages actions was signed into law on 26 November 2014 and published in the Official Journal of the European Union on 5 December 2014. The deadline for transposing the Directive on Antitrust Damages Actions into Member States' legal systems expired on 27 December 2016. ges/directive_en.html

Quantifying Harm Compensation must cover actual loss, loss of profit, & interest No exemplary damages or double/triple damages National courts quantify damages but must be in accordance with principles of effectiveness & equivalence Commission issued a Practical Guide for national courts on quantifying harm – SWD(2013) 205

The Role of National Courts in the Enforcement of Articles 101 and 102 TFEU - Towards more effective antitrust damages actions in Europe.

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The Role of National Courts in the Enforcement of Articles 101 and 102 TFEU - Towards more effective antitrust damages actions in Europe.

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