Answer ... A private enforcement claim can be brought following a Commission or NCAs’ decision establishing a cartel (the more common route), or can be brought as a standalone action independent of any authority investigation.
In December 2014, the Damages Directive was published in the Official Journal of the EU; member states were required to implement it nationally by 27 December 2016. The date it was actually implemented depends on the date on which each member state enacted its own domestic legislation transposing the directive into national law. All Member States have now implemented the directive.
The directive sought to harmonise national rules and procedures across Member States governing private damages actions and ensure that full compensation could be available for all victims of cartels (purchasers of a cartelised product with a higher price as well as downstream customers, to the extent that the higher cost of the cartelised goods was passed on). In particular, it:
- ensures that parties will have easier access to evidence via disclosure procedures;
- makes infringements found by final decisions of NCAs deemed irrefutably established in the courts of that member state and at least prima facie evidence of infringement in the courts of other member states; and
- establishes a rebuttable presumption that cartels subject to Commission’s decisions have caused harm to victims.
Answer ... In the context of private enforcement actions against cartels, it typically follows that such actions are brought against undertakings. As noted in question 2.4, while individuals may fall under the definition of an ‘undertaking’, undertakings are mainly companies in the context of cartel enforcement.
Generally, however, private enforcement rights are a question of the national laws and procedure in the member state in question. It usually makes more sense to bring a damages claim against a company rather than an individual for the purposes of enforcing a successful damages claim.
Answer ... The extent of availability of collective proceedings varies across member states. The United Kingdom and Netherlands allow for collective compensatory relief, for example, but there is no such mechanism in Estonia and a number of other member states. While the United Kingdom is a popular forum for follow-on competition litigation in the EU, its collective action mechanism is yet to be used successfully in a competition law claim. This is despite the Commission Recommendation of 11 June 2013 on Common Principles for Injunctive and Compensatory Collective Redress Mechanisms in the Member States, which recommends that all member states have collective redress mechanisms for both injunctive and compensatory relief in accordance with the various principles (e.g., that the claimant party is formed on an opt-in basis and that the loser pays the costs of the winning party).
On 26 January 2018, the Commission published a report on the implementation of the recommendation, finding that only 19 member states provide for collective compensatory redress (and in a significant proportion of these, its availability is limited to certain sectors).
In April 2018, the Commission published a proposal for a directive on representative actions that would require all member states to implement and/or harmonise their collective redress mechanisms for breaches of consumer protection law for the protection of the collective interests of consumers. The directive will become law if the new European Parliament, following elections in May 2019, and the European Council agree on the Commission’s proposal.
Answer ... Process and procedure in private enforcement actions depend on the rules of procedure in the member state in which an action is brought. Generally, an injured party will make a claim before the competent court in the jurisdiction in question, either following on from a finding of an infringement by the Commission or an NCA or on a standalone basis (i.e., where an NCA has not already found an infringement of competition law; in that case, the claimant must prove the existence of an anti-competitive infringement as well as its harm suffered from the infringement).
Typically, claimants will have to prove to the court that they have ‘standing’ – that is, they have suffered or are likely to suffer harm as a result of the anti-competitive behaviour – and why the member state’s court has territorial jurisdiction in its case (e.g., if the cartel occurred in that jurisdiction or the claimant purchased cartelised products or services in that jurisdiction). Claimants will also have to show that the injury they suffered was caused by the infringing behaviour.
Answer ... Relief available in a private enforcement action may be injunctive (i.e., an order to cease or, less commonly, to remedy certain anticompetitive behaviour) or compensatory (i.e., monetary damages for harm caused by anticompetitive behaviour).
The relief available in such cases varies across member states. In the main forums in the EU for competition litigation – Germany, the Netherlands and the United Kingdom – it is possible to obtain injunctive and/or compensatory relief depending on the circumstances of the case. In Germany, it is also possible to obtain an injunction for performance in order, for example, to remedy an anti-competitive harm. In these three jurisdictions, interim remedies in cases where the claimant has an urgent requirement or as a preventive measure may also be sought whilst the main proceedings in front of the court are still ongoing.
The Commission has issued a communication on quantifying harm in damages actions in order to provide guidance to national courts in relation to the key principles in quantifying damages, and has issued a comprehensive practical guide to aid national courts and parties that explains types of harm and techniques to quantify such harm. In July 2019, the Commission also published guidance for national courts on how to quantify the amount of overcharge passed on to indirect purchasers of cartelised goods and services. Given the rebuttable presumption under the Damages Directive that cartel overcharges are passed on down the supply chain, the calculation of passed-on prices is important in relation to the quantum of damages awards.
Answer ... Appeals of private enforcement are a question of national laws and procedures. Generally, Member States will have some form of appeal available to a higher court.
The Netherlands, Germany and the United Kingdom all possess a two-tier appeal system. For example, in England and Wales, claimants may bring a competition-related claim in either the High Court or the Competition Appeal Tribunal (CAT) (except collective proceedings cases, which may be brought only in the CAT). The High Court may order that a competition case be transferred to the CAT – for example, Sainsbury’s v MasterCard was brought in the High Court and then transferred to the CAT, with the judge noting that the case was complex and lengthy and would be best heard before the CAT (CAT panels may include economic experts as well as judges). First-instance appeals from the High Court or CAT to the Court of Appeal may be permitted on certain grounds (from the High Court only on a point of law and from the CAT on a point of law or the amount of damages), and a second-instance appeal to the Supreme Court is permissible on a point of law only.