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Damages actions for breach of the EU antitrust rules
In this White Paper the Commission proposes to improve victims’ rights to compensation following breaches of European Union (EU) anti-trust rules by addressing legal and procedural obstacles currently standing in the way of injured parties receiving the compensation to which they are entitled.
White Paper of 2 April 2008 on damages actions for breach of the EC antitrust rules [COM(2008)165 final – Not published in the Official Journal].
As the Court of Justice has stated on several occasions, anyone who has been harmed by an infringement of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) (“the EU antitrust rules”) has a right to claim compensation for that harm. The aim of this White Paper is to identify the obstacles currently standing in the way of victims’ access to full compensation for breaches of the EU antitrust rules and to define policy solutions to these problems. The right to obtain compensation for the harm suffered concerns all types of victims of antitrust infringements and all sectors of the economy, regardless of whether damages actions do or do not rely on a prior finding of an infringement by a competition authority.
The policy choices set out in the Commission’s White Paper aim at ensuring that those who have suffered harm can have effective means at their disposal to obtain the compensation to which they are entitled. At the same time, measures in this regard must be rooted in European legal culture and traditions.
Standing: indirect purchasers and collective redress
According to the European Court of Justice, everyone who suffers losses from a violation of Articles 101 and 102 TFEU is entitled to compensation of that loss. Both direct and indirect purchasers should therefore have standing to claim damages. However, victims of antitrust infringements often do not claim compensation due to scattered and relatively low-value damage suffered. The White Paper therefore discusses how civil collective redress mechanisms, which are one of the subjects of a wider Commission consultation could be used to address the specific situation of mass claims in the antitrust area, while at the same time ensuring that proper safeguards exist against abusive litigation.
This White Paper suggests collective civil redress mechanisms are based on both representative actions through qualified entities such as consumer associations, state bodies or trade associations and group actions bringing individual claims together.
Access to evidence and disclosure inter partes
Victims of antitrust damages often do not have access to evidence which is necessary to prove their claim, in particular the amount of damages. Getting access to evidence in the possession of defendants is therefore essential in order to alleviate the information asymmetry between victims and defendants in anti-trust cases. However, exchange of evidence inter partes should only be ordered by national courts and under strict controls, in particular with regard to the proportionality of such access.
Before disclosure of certain pieces of evidence is ordered by the court, the claimant should present all available evidence showing plausible grounds to suspect that he has indeed suffered harm from an infringement of the antitrust rules. The court should also be satisfied with the claimant’s inability to produce the required evidence himself. Precise categories of evidence to be disclosed should be specified. Disclosure should be relevant, necessary and proportional, taking into account confidential information and business secrets as well as the protection of documents submitted to the Commission by applicants for leniency.
Binding effect of national competition authorities (NCA) decisions
The Commission’s decisions finding an infringement on Articles 101 and 102 TFEU are binding upon national courts in civil proceedings for damages. Currently, EU law does not foresee the same effect for decisions by national competition authorities (NCAs). The White Paper suggests that a binding effect similar to the one inherent in Commission decisions be installed for decisions by NCAs.
The White Paper suggests that, where proof of fault is required in a claim for damages, the infringer is presumed to have acted with fault unless he can prove that the infringement was due to a genuinely excusable error.
In line with the ruling of the European Court of Justice, victims should receive full compensation of the real value of the loss incurred, consisting of the actual loss, the loss of profit and a right to interest.
To increase legal certainty, the Commission intends to publish non-binding guidance to national courts in the difficult task of quantifying damages in antitrust cases.
Direct customers of infringers in some instances (depending on market conditions) pass on part or the entirety of the illegal overcharges to their own customers. Infringers should be entitled to invoke the passing-on defence against claims from direct customers. However, the burden of proof for pass-on should lie with the infringer.
On the other hand, indirect customers cannot easily prove they have suffered harm from an overcharge passed-on to them. Indirect purchasers should thus be able to rely on the rebuttal presumption that they have received the overcharge in its entirety.
To ensure legal certainty, the Commission proposes to set rules as regards the commencement of limitation periods so as not to hamper the recovery of damages. The limitation period should not begin before the infringement ceases. For claimants who cannot reasonably have known of the infringement, the period should start as soon as they become aware of it.
For follow-on actions, the limitation period should not expire while public proceedings are still ongoing.
Costs of damages actions
Costs may deter claimants from bringing damages actions. The Commission therefore proposes that EU countries should examine cost allocation rules in order to allow meritorious actions to go ahead and not be hampered by cost rules.
Interaction between leniency programmes and actions for damages
To maintain the attractiveness of leniency programmes, protection of the corporate statements against disclosure in civil actions should be ensured. This should apply to all corporate statements submitted by all leniency applicants in relation to Article 101 TFEU regardless of the decision of the competition authority
Furthermore, the White paper suggests to reflect on a possible limitation of the civil liability of successful leniency applicants.