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Competition: Commission launches consultations on facilitating damages claims for breaches of EU competition law

European Commission - IP/05/1634   20/12/2005

Other available languages: FR DE

IP/05/1634

Brussels, 20th December 2005

Competition: Commission launches consultations on facilitating damages claims for breaches of EU competition law

The European Commission has published a Green Paper on how to facilitate actions for damages caused by violations of EC Treaty competition rules’ ban on restrictive business practices and abuse of dominant market positions (Articles 81 and 82 respectively). Violations of these rules, in particular by price fixing cartels, can cause considerable damage to companies and consumers but numerous obstacles can hinder actions for damages by injured parties in national courts. The Green Paper identifies certain of these obstacles, such as access to evidence and the quantification of damages, and presents various options for debate for their removal. The options set out in the Green Paper would seek to ensure that companies and consumers were compensated for their losses, while avoiding vexatious claims. Comments on the Green Paper can be submitted by 21 April 2006.

Competition Commissioner Neelie Kroes said: “Businesses and individuals who suffer losses because of illegal activities such as cartels have a right to compensation. Currently, this right is all too often theoretical because of obstacles to exercising this right in practice. This Green Paper sets out options for making that right a reality, and so making companies that break the competition rules pay for the harm that they do.”

In its 2001 judgment, in Courage v Crehan (case C-453/99), the Court of Justice explicitly recognised a right to damages for breaches of EC competition law. The Court stated that:

“the full effectiveness of Article [81] of the Treaty and, in particular, the practical effect of the prohibition laid down in Article [81](1) 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. Indeed, the existence of such a right strengthens the working of the Community competition rules and discourages agreements or practices, which are frequently covert, which are liable to restrict or distort competition. From that point of view, actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the Community.”

However, there have so far been very few damages claims before courts of the Member States for breach of the competition rules. A study carried out for the Commission in 2004 revealed the main reasons for the low number of damages actions, reasons which are now addressed in the Green Paper. Following this study, the Commission discussed the issue with academics, experts from EU Member States’ governments and a number of other interested third parties before preparing this Green Paper.

Strengthening damages claims by companies and consumers has several advantages:

  • it ensures that businesses and consumers harmed by anti-competitive activity are compensated for their losses
  • it enhances the overall level of respect for the EC competition rules by discouraging companies from engaging in anti-competitive activity
  • it brings the benefits of Community law closer to the citizen.

The Green Paper identifies the main obstacles to a more efficient system for bringing damages claims, such as access to evidence, the defence that companies claiming damages may have simply passed on any price increases to their own customers and the quantification of damages. For each of the obstacles, several options are put forward for debate. As the Green Paper also addresses the protection of consumer interests harmed by a violation of EC antitrust rules, the Commission will closely coordinate any follow up with other initiatives on consumer redress.

Consultation
The texts of the Green Paper and an accompanying Staff Working Paper are available at:

http://ec.europa.eu/competition/antitrust/others/actions_for_damages/index_en.html

The Commission invites all interested parties to comment on the issues discussed and on the options formulated with regard to these issues, as well as on any other aspects of damages claims for violations of Articles 81 and 82. The comments will help the Commission to decide whether initiatives need to be taken at Community level to improve the conditions for competition damages claims.
Comments should be sent to the following email address by Friday 21 April 2006:

comp-damages-actions@ec.europa.eu

For further information, see also MEMO/05/489.


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