European Union: Competition Litigation 2019

Last Updated: 24 September 2018
Article by Stephane Dionnet and Antoni Terra

1 General

1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition law.

For the purposes of this discussion, we will refer to claims that can be brought before the General Court and the Court of Justice of the European Union (hereafter the "European Court of Justice") (together the "European Courts") or the national courts of the European Union (hereafter "EU") Member States in general. The scope of claims that may be brought before the national courts of the EU Member States for breach of EU competition law (i.e., violation of Articles 101 and/or 102 of the Treaty on the Functioning of the European Union (hereafter "TFEU")) includes: (i) actions for a declaration of nullity of contractual arrangements that are contrary to EU competition law; (ii) interim measures (including cease and desist orders in relation to conduct violating EU competition law); and (iii) actions for damages.

The scope of claims that may be brought before the General Court includes: (i) actions for the annulment of a European Commission (hereafter "Commission") "act", defined as any Commission measure capable of affecting the interests of the applicant by bringing about a distinct change in his legal position (Case C-60/81, IBM v Commission); (ii) actions for failure to act; (iii) interim measures and (iv) damages actions for excessive delay in proceedings before the EU courts. Appeals on points of law against the judgments of the General Court may be brought before the European Court of Justice. The EU courts have confirmed in many instances that only measures which produce binding legal effects such as to affect the interests of an applicant, by bringing about a distinct change in his legal position, may be the subject of an action for annulment under Article 263 TFEU. See in particular the European Court judgment of 20 December 2017 in Case C-364/16 P, Trioplast Industrier v Commission (and case-law cited), where the Court stated that "it is also apparent from settled case-law that only measures or decisions which seek to produce legal effects which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position may be the subject of an action for annulment. Thus, an action for annulment is, in principle, only available against a measure by which the institution concerned definitively determines its position upon the conclusion of an administrative procedure. On the other hand, intermediate measures whose purpose is to prepare for the definitive decision, or measures which are mere confirmation of an earlier measure or purely implementing measures, cannot be treated as 'acts open to challenge', in that such acts are not intended to produce autonomous binding legal effects compared with those of the act of the EU institution which is prepared, confirmed or enforced".

The European Court of Justice confirmed that an excessive delay in proceedings before the General Court is an actionable breach which can only be addressed by bringing a damages action before the General Court under Articles 268 and 340 of the TFEU and not to the European Court Justice in the context of an appeal (see Case C-40/12 P, Gascogne Sack Deutschland GmbH v Commission, Case C-58/12 P, Groupe Gascogne SA v Commission, and Case C-50/12 P, Kendrion v Commission, judgments of 26 November 2013).

The European Court of Justice may also be consulted for a preliminary ruling, whereby the Court, at the request of a national court of an EU Member State, renders an interpretative ruling on a point of EU law that has arisen in the context of litigation before the national court.

1.2 What is the legal basis for bringing an action for breach of competition law?

Articles 101 and 102 TFEU and Regulation 1/2003 on the implementation of Articles 101 and 102 TFEU, as interpreted by the European Courts, form the substantive basis for an action for breach of EU competition law.

According to the case-law of the European Court of Justice, Articles 101/102 TFEU have 'direct effect', which means they create rights for individuals which the National Competition Authorities and the national courts of the EU must safeguard (Case C-127/73, BRT v SABAM, Case C-282/95 P, Guérin Automobiles v Commission, and Case C-453/99, Courage and Crehan ). In addition, the TFEU, and in particular Articles 101 and 102, have primacy over the national laws of the EU Member States (Case C-6/64, Costa v ENEL). The procedural grounds for bringing a claim before the European Courts include Article 263 TFEU, which permits the European Courts to annul a Commission decision on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaty or misuses of powers. Article 265 TFEU enables action to be taken against the Commission's failure to act, and Article 278 TFEU provides for interim relief.

1.3 Is the legal basis for competition law claims derived from international, national or regional law?

Articles 101 and 102 TFEU are integrated into the national legal order of each EU Member State. National courts are required to set aside any national legislation and/or contractual arrangements that contravene Articles 101/102 TFEU (see question 1.2 above).

1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned?

The European Courts are not specialist competition law courts. In addition, they do not have jurisdiction to rule on matters between private litigants, except pursuant to the procedure of preliminary rulings, described above.

At national level, there may be specialist courts to which competition law cases are assigned depending on the EU Member State in question. However, all national courts and authorities in the EU Member States are required to ensure the full effectiveness of the EU competition rules (see question 1.3 above).

1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions by representative bodies or any other form of public interest litigation? If collective claims or class actions are permitted, are these permitted on an "opt- in" or "opt-out" basis?

As discussed in questions 1.2 and 1.3 above, Articles 101 and 102 TFEU as well as Regulation 1/2003 have primacy over national law and are directly applicable. As a result, they can be invoked by any individual or undertaking in civil disputes before national courts, in accordance with the procedural rules of the Member State and court in question.

Any individual or undertaking with direct and individual concern may bring an action before the European Courts (Article 263 TFEU). In addition, under the Courage v Crehan (C-453/99) and Manfredi (joined cases C-295/04 to C-298/04) judgments of the European Court of Justice, any individual who has suffered harm caused by an antitrust infringement must be allowed to claim damages before national courts. This was further confirmed in Case C-360/09, Pfleiderer AG v Bundeskartellamt, which found that "it is settled case-law that any individual has the right to claim damages for loss caused to him by conduct which is liable to restrict or distort competition" stressing that "actions for damages before national courts can make a significant contribution to the maintenance of effective competition in the European Union".

Moreover, the European Court of Justice, in Case C-199/11, Europese Gemeenschap v Otis NV and Others, indicated that the Commission itself was entitled to bring a damages claim before national courts. In that respect, the Court of Justice noted that "the Charter [of Fundamental Rights of the European Union] does not preclude the Commission from bringing an action before a national court, on behalf of the EU, for damages in respect of loss sustained by the EU 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".

The Manfredi judgment also stated that indirect purchasers who had no direct dealings with the infringer should have standing to sue. The exercise of the right to sue is governed by national law provisions, but the right to sue for damages pursuant to EU competition law may not be less favourable than the equivalent domestic law right. Indeed, as explained in Case C-536/11, Bundeswettbewerbsbehörde v Donau Chemie AG and Others, given that "Article 101(1) TFEU produces direct effects in relations between individuals and creates rights for individuals, the practical effect of the prohibition laid down in that provision 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".

Whilst the right for compensation for harm caused by an infringement of the EU competition rules is an EU right, its exercise is governed by national rules. In practice, most victims rarely claim compensation because national rules often make it difficult for them to bring antitrust damages actions. For that reason, the Commission proposed a Directive to remove the main obstacles to effective compensation throughout the EU Member States. Directive 2014/104 on antitrust damages actions entered into force on 26 December 2014. The purpose of the Directive is to foster private enforcement in Europe while protecting the efficacy of the Commission's leniency programme. The Directive set forth measures to be implemented in Member States' legislation by no later than 27 December 2016. All Member States have now transposed the measures into their national system. Portugal was last to implement the rules. Whilst Portugal sought the views of the European Court of Justice on the interpretation of the Directive and its compatibility with its national legislation (see Case C-637/17, Cogeco Communications), on 20 April 2018, Portugal's Parliament eventually voted in favour of a transposition of the Directive into national law.

As a complement to the Directive, the Commission issued a Recommendation on collective redress (see Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under European Union Law). Although the Recommendation is non- binding, it invited all Member States to introduce by 26 July 2015 collective redress principles and mechanisms, including actions for damages in those Member States where such mechanisms were not yet available. The Recommendation, along with a Communication, set out the Commission's views as to the appropriate mechanisms for enabling citizens to obtain effective redress through collective actions while limiting the potential for excessive and abusive litigation. This Recommendation applies not only to collective redress for infringements of competition law, but also for infringements of, inter alia, consumer protection, environmental, and financial services laws.

The Recommendation lays out a series of "principles" that all Member States should follow in devising and implementing collective redress mechanisms. In particular, two important aspects should be mentioned. First, the Recommendation sets out that the claimant party should be formed on the basis of the "opt-in" principle, any deviation from which should be justified by "reasons of sound administration of justice".

Second, the Recommendation explains that representative actions should be brought only by public authorities or by representative entities that have been designated in advance or certified on an ad hoc basis by a national court for a particular case and that: (i) are non-profit entities; (ii) have a direct relationship between their main objectives and the rights claimed to have been violated; and (iii) have sufficient financial resources, human resources, and legal expertise to adequately represent multiple claimants.

In January 2018, the Commission published a report looking at the progress made by Member States on the implementation of collective redress measures and principles following the 2013 Recommendation (see Commission Communication of 25 January 2018 COM(2018) 40 final). In particular, the report shows that the availability of collective redress mechanisms and the implementation of safeguards against the potential abuse of such mechanisms is still not consistent across the EU and that a number of Member States still do not provide for collective compensatory redress mechanisms for "mass harm" situations where a large number of consumers are affected by EU law breaches. In light of these findings, the Commission intends to further promote the principles set out in the Recommendation and to strengthen the consumer redress and enforcement aspects of the Injunctions Directive 2009/22/EC. For that purpose, on 11 April 2018 the Commission proposed a new Directive on representative actions for the protection of the collective interests of consumers which will repeal the Injunctions Directive (see COM(2018) 184 final). The proposal was presented together with amendments to four EU consumer law Directives as part of a "New Deal for Consumers" designed, inter alia, to improve the effectiveness of the injunction procedure and collective redress. In particular, the Commission proposes to improve the rules on representative actions by qualified entities and the rules on injunctive and compensatory redress. The proposal concerns not only collective redress for infringements of competition law but also infringements of EU law across all policy fields.

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Originally published in International Comparative Legal Guide

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