1. Private enforcement – Why and how?
Anna Vernet
Head of Unit
ECN & Private Enforcement
DG Competition
Rome November 2018

2. Overall effective enforcement
EU antitrust rules
NATIONAL COURTS
ECN
Private enforcement
Public enforcement

3. Damages Directive Two complementary goals:
to help victims of antitrust infringements get compensation; and
to optimise the interplay between public and private enforcement.
First goal is to help victims:
Based on established case law of the Court of Justice of the European Union (hereafter "CJEU") any person is entitled to claim compensation for the harm suffered where there is a causal relationship between that harm and an agreement or practice prohibited under Articles 101 and 102 Treaty on the Functioning of the European Union (hereafter "TFEU") (see CJEU C-557/12 (Kone) EU:C:2014:1317, paragraph 22; CJEU Case C-295/04 (Manfredi) EU:C:2006:461, paragraph 61). This right is fundamental to the principle of full compensation in private enforcement of EU competition law. (Deterrance only side-effect of private enforcement in the EU model).
Groundbreaking: "The full effectiveness of Art. 101 TFEU 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" (ECJ, C-453/99, Courage v Crehan, para. 26)
"Any individual" means in particular (i) direct/indirect purchasers and/or suppliers, (ii) umbrella customers, (iii) end consumers
The Damages Directive sets out rules to remove practical obstacles to compensation for victims of infringements of EU antitrust law and Article 3 of the Damages Directive codifies the right to full compensation which covers: (i) actual loss; (ii) loss of profit; and (iii) payment of interest from the time the harm occurred until compensation is paid.
But second (also important) goal is to optimise the interplay between public and private enforcement. Goal here in particular is to ensure that private enforcement does not cause harm to public enforcement. As we will see later this could be the case if e.g. no protection/special status was given to documents in which companies voluntarily come forward to admit infringements of EU competition law.

4. Highlights: Right to compensation
Disclosure of evidence available beyond the UK
Longer/suspended limitation periods: claimants have more time
Claimants’ burden of proof made lighter:
NCAs' final infringement decisions are binding
cartel harm is presumed
a passing-on is presumed (to the benefit of an indirect claimant)
Full compensation: interest since occurrence of harm
Joint and several liability of undertakings
Harmonised effects of partial out-of-court settlements

5. Highlights: Public/private interplay
Limits to disclosure of evidence in a competition authority’s file:
Avoiding interference with ongoing investigations
Protecting leniency programmes and settlement procedures
Limited joint and several liability of the immunity recipient:
Protecting & strengthening leniency programmes
Binding effect & suspension of limitation periods:
Avoiding conflicting outcomes
Promoting follow-on damages claims

6. Disclosure of evidence (Art. 5)
Court can order a party or a third party to disclose relevant evidence (specified pieces or categories) which lies in their control.
Conditions:
plausibility of the claim for damages
the evidence must be relevant for substantiating the claim
categories of evidence must be defined as precisely and narrowly as possible
scope of the disclosure must be proportionate
Court can order disclosure of evidence containing confidential information, subject to ensuring effective protection thereof.

7. Disclosure of evidence (Art. 6)
In addition to standard rules (Art. 5), special rules apply to disclosure of evidence included in the file of a competition authority:
Leniency statements and settlement submissions can never be disclosed (Art. 6(6))
Three categories of evidence can be disclosed only after the investigation is closed (Art. 6(5)):
Information prepared by a person specifically for the proceedings of a competition authority (such as replies to questions from the authority)
Information drawn up by the authority and sent to the parties in the course of the proceedings (such as statements of objections)
Settlement submissions that have been withdrawn

8. Disclosure of evidence (Art. 6)
Further special rules on evidence in the file of a competition authority:
Additional criteria for assessing the proportionality of a disclosure request, including – under certain circumstances - the need to safeguard the effectiveness of public enforcement
Competition authority can submit observations on the proportionality of a disclosure request concerning evidence included in its file.
Court can order a competition authority to disclose evidence from its file if the evidence concerned cannot be reasonably obtained from a party or a third party.

9. Limits on the use of evidence (Art. 7)
To protect the full effect of the limits on disclosure of evidence (Art. 6), Art. 7 provides for corresponding limits concerning the use of evidence which was obtained by a person solely through access to the file of a competition authority:
Evidence which can never be disclosed (Art. 6(6)) or can only be disclosed after the investigation is over (Art. 6(5)) will be deemed (forever or temporarily) inadmissible in actions for damages. (Member States can choose to achieve the same effect through other means than inadmissibility.)
Evidence not covered by Art. 6(5) or 6(6), if obtained solely through access to the file, can only be used in an action for damages by those who obtained it or by their successors (legal succession, claim acquisition).

10. Protection of confidential information
The Damages Directive empowers national courts to order disclosure of evidence containing confidential information (Art. 5(4))
However, the Damages Directive also requires that national courts have at their disposal effective measures to protect such information.
Practical examples: redactions, closed proceedings, hearings in camera, expert reports, confidentiality ring (club), data rooms
Potentially relevant criteria when deciding which of the tools to apply: Amount of documents, parties affected, stage of the proceedings
Special situation: commercially sensitive information vis-à-vis other party (e.g. pricing information to be disclosed to a competitor)
Procedural measures to ensure that parties do not reveal information obtained to third parties

11. Disclosure of confidential information
DISCLOSURE WITH NO ADEQUATE PROTECTION
ISSUE How to ensure effective access to relevant evidence, while respecting the interest of the parties or third parties in maintaining the confidentiality of their information?
RISKS:
NO DISCLOSURE

12. Disclosure - penalties (Art. 8)
National courts will have the power to impose effective, proportionate and dissuasive penalties on parties, third parties and their legal representatives in case of:
Failure to comply with disclosure orders;
Destruction of relevant evidence;
Failure to protect confidential information; or
Breach of limits on the use of evidence.
The court can also draw adverse inferences against a party (which e.g. failed to disclose evidence), such as by presuming the relevant issue to be proven or by dismissing claims and defences in whole or in part. The court can also order the payment of costs.

13. Effect of decisions of NCAs (Art. 9)
The finding of an infringement in a final decision of a national competition authority constitutes:
Irrefutable proof of the infringement, before national courts in the same MS as the competition authority
At least prima facie evidence of the infringement, before national courts in other MS
Effects are limited to material, temporal, personal and geographical scope of the decision.

14. Limitation Periods (Art 10)
More legal certainty on limitation periods within which a victim can bring an action and providing victims with an effective possibility to bring an action after the public investigation is closed.
Limitation periods cannot start to run before a victim can be aware of the infringement.
Limitation periods cannot start before an infringement has ceased.
Limitation periods should last minimum 5 years.
Limitation periods should be suspended or interrupted during the investigation of a competition authority - allows to take up the action after a competition authority concludes the investigation

15. Joint and several liability (Art. 11)
Standard rule on liability (Art. 11(1)): Undertakings which have infringed competition law through joint behaviour are jointly and severally liable for the harm caused, i.e.
each co-infringer is liable to compensate for the entire harm; and
an injured party has the right to require full compensation from any of the co-infringers until it has been fully compensated.
Standard rule on contributions (Art. 11(4)): The amount of contributions between the co-infringers is to be determined in the light of their relative responsibility for the harm caused (criteria – such as turnover, market share, or role in the cartel - left for national law).

16. Immunity recipient's liability (Art. 11)
Liability towards victims (Art. 11(3)): The immunity recipient is jointly and severally liable to:
its direct or indirect purchasers or providers; and
other injured parties only where full compensation cannot be obtained from the co-infringers
Cap on contributions (Art. 11(4), Art. 11(5)): As regards harm caused to purchasers or providers of the infringers, the immunity recipient's contribution shall not exceed the harm it caused to its own direct or indirect purchasers or providers. As regards harm caused to other categories of victims (such as competitors or umbrella customers), standard rules apply.

17. Passing-on: Who suffered what harm
Direct and indirect purchasers can claim.
Infringer can use passing-on defense
Indirect purchasers profit from a rebuttable presumption of a pass-on to their level
Overcharge harm ≠ loss of profit
Avoid over-compensation / under- compensation
Power to estimate
Price increase
Price increase

18. Passing-on of overcharges (Art. 13)
Legal Certainty on the Passing-on Defence
When Direct Purchaser claims compensation, the infringer can raise the ‘passing-on defence’
Burden of proof is on the infringer
Price increase
Price increase

19. Passing-on of overcharges (Art. 14)
Facilitation for Passing-on Claims
Indirect purchasers have problems proving pass-on
Indirect Purchaser profits from a rebuttable pass-on presumption
Rebutted if defendant demonstrates, to the satisfaction of the court, that there was no (entire) pass-on
Price increase
Price increase

20. Quantification of antitrust harm (Art. 17)
National court has the power to estimate the amount of harm, if it is practically impossible or excessively difficult to precisely quantify such harm.
There is a presumption that cartels cause harm  based on Oxera Study and other economic literature: more than 90 per cent of Cartels cause overcharge harm.
Possibility for NCA to assist national courts in quantifying harm

21. Consensual dispute resolution (Art. 18 - 19)
Suspensive effect: limitation periods, power to stay pending court proceedings (no more than 2 years).
Possibility for competition authority to take account of consensual settlements prior to its infringement decision as mitigating factor in setting the fine
Effect of partial settlements on subsequent damages actions:
After a settlement, the claim of the settling injured party is reduced by the settling co-infringer's share of the harm
Settling co-infringers do not pay contributions, except as last resort debtors (unless expressly excluded in the settlement)
When determining contributions, national courts shall take due account of prior (partial) settlements by any of the co-infringers

22. Going the extra mile
Member States can do more by going beyond the Directive's
minimum harmonization rules
scope

23. Thank you for your attention!