1. Konrad Ost CLF-Meeting London 15/03/2006
Private Enforcement – What for? The perspective of the competition authorities
Konrad Ost
CLF-Meeting
London
15/03/2006

2. Overview The valuable role of private enforcement
The current situation…
…and a misconception
Reform of German law
Appraisal of current reform proposals
A paradox
Conclusion
CLF 15/03/2006

3. The valuable role of private enforcement
Why private enforcement:
compensation (no reason to deviate from other areas of law)
role in the public interest?
competition culture
helps to fill the enforcement gap
In what respect?
deterrence (no need as there are public authorities)
limited resources of the public enforcers
CLF 15/03/2006

4. The current situation ... Bundeskartellamt data on Germany
more than 900 cases decided since 2002
only 80 pecuniary damage claims between 2000 and 2004
bulk of cases are on
injunctions (abuse) and
claims for invalidity of a contract
CLF 15/03/2006

5. ... and a misconception Where is an enforcement gap?
hard core cartels – no
(in any event, hardcore cartels are virtually never detected by private parties)
grey area – yes
abuse control – yes
What is the current debate aiming at?
follow-on actions after detection of hardcore cartels
CLF 15/03/2006

6. The new German Act against Restraints of Competition
private claims to be “on hold” during authority investigations
interest to be paid from the moment an antitrust injury occurs
decisions of EU member state competition authorities or courts binding upon national courts
violator of antitrust laws has to prove passing-on
locus standi for victims of hardcore cartels uncontroversial
CLF 15/03/2006

7. Reform proposals under review
Double damages
 penalizing element is alien to German law (public policy)
 interferes with leniency programs
Pre-trial discovery
 violates the principle of “equality of arms”
 high risk of abuse
 probably not very effective in the case of hardcore cartels
Main problem for follow-on actions (calculation of damages) cannot effectively be solved by a legislative reform
CLF 15/03/2006

8. A paradoxical approach ?
weakening of private actions, which contributed significantly to the overall enforcement of competition law, by making the material rules too complex (burden of proof concerning economic data)
strengthening of private actions which have a high potential of abuse and whose impact on enforcement in the public interest is rather limited or even negative
CLF 15/03/2006

9. Thank you for your attention!
Konrad Ost Ph.D. (Heidelberg), LL.M. (Cantab.)
Head of Unit ‚German and European Antitrust Law
Bundeskartellamt
Kaiser-Friedrich-Straße 16, Bonn
Tel.: – 213
CLF 15/03/2006