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Brussels, 20th December 2005

European Commission Green Paper on damages actions for breach of EC Treaty anti-trust rules – frequently asked questions

(see also IP/05/1634)

What does the Green Paper deal with?

The Green Paper deals with the question of damages actions for breach of EC Treaty competition rules’ ban on restrictive business practices (such as cartels) and abuse of a dominant market position as contained in Articles 81 and 82 respectively of the EC Treaty (EC antitrust rules).

Damages actions for breach of these antitrust rules are part of private enforcement of these rules. “Private enforcement” means legal action brought by one private party against another party before a national court. Private enforcement of EC Treaty competition rules can take different forms, actions for damages only being one of them. Damages actions are brought against the infringer of the law to seek a monetary award to compensate the victim for the harm he has suffered. Next to this kind of actions, private enforcement can take the form of actions for nullity or actions for injunctive relief, e.g. actions to stop anticompetitive behaviour or actions for enforcement of a contract. The Green Paper deals only with damages actions.

What is in the Green Paper?

The Green Paper addresses the key issues relevant for damages actions. Obstacles to a more effective system of damages actions for breach of EC Treaty antitrust rules are identified and for each of these obstacles, the Green Paper puts forward, for debate and possible future action, various options designed to address the underlying problem.
A Commission Staff Working Paper is attached to the actual Green Paper. In that Working Paper, the considerations underlying the options presented in the Green Paper and the sources taken into account by the Commission are explained more fully. The Green Paper and the Working Paper are available on the Commission’s website at:

In order to prepare for the Green Paper, the Commission put out a tender for a comparative study on the current state of the law in the EU Member States. That study was done by the law firm Ashurst and was published in 2004. It is also available on the Commission’s website (see above).

What is the purpose of the Green Paper?

The Commission wants to make exercising the right to claim damages for breach of Community competition law easier. By publishing the Green Paper, the Commission wants to foster an open debate about the issue of private enforcement of EC Treaty competition law and about damages actions in particular. The Green Paper and the attached Staff Working Paper will serve as consultation documents and will give all interested parties the opportunity to comment.

How can stakeholders comment on the Green Paper?
Until 21 April 2006, comments can be sent to the Commission, using the following email address:

Has the Commission already decided what actions need to be taken after the Green Paper?

The Commission has not yet decided if actions – legislative or otherwise – are necessary. Nor does it yet have a view about whether any possible action is best taken at the EU level or at the level of the Member States. The Commission will take on board all comments received on the Green Paper and assess at that point what further action, if any, is needed.

What has the European Court of Justice said in its case-law on the right to claim damages for breach of EC Treaty competition law?

While there are no specific legislative rules at the EU level, it is important to recall that the European Court of Justice (ECJ) in its 2001 decision Courage vs Crehan (Case C-453/99) has ruled in the following way:

“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.”

According to this case-law, the right to claim damages suffered from an infringement of EC Treaty competition law is therefore derived from the EC Treaty directly. In publishing the Green Paper, the Commission seeks to render the exercise of that right more effective.

What is the current state of damages actions in Europe?

The study undertaken for the Commission by Ashurst indicates that there have been few cases to date in which damages have been awarded by national courts for breaches of EC Treaty competition law. In general, the study concludes that damage actions for breach of competition law are underdeveloped in Europe.

It is important to understand that private enforcement of EC Treaty anti-trust law is not new. Parties are, in theory, currently able in most if not all Member States to bring actions for damages for breach of EC Treaty anti-trust law (as for breach of other directly applicable EC rules). The aim of the Commission’s Green Paper is to look into why these kinds of action are so infrequent in practice and to propose some means of facilitating such actions.

What in the Commission’s view are the advantages of private actions for damages?

Advantages for companies and consumers: The enforcement of damage claims has the following specific advantages for private parties:

  • The victims of illegal anticompetitive behaviour are compensated for loss suffered.
  • Courts can order the unsuccessful party to pay the successful party’s legal costs. An undertaking’s legal costs are not recoverable in the case of a complaint to a public authority.
  • It is possible to combine a claim before a national court with national competition law or even entirely separate heads of claim. Courts can decide a competition-related point in the context of the resolution of a wider-ranging commercial dispute between the parties.
  • Courts are obliged to hear cases brought before them, while an administration has discretion to pursue other priorities.

Other advantages: greater private enforcement of Community competition law would also have inter alia the following advantages globally:

  • It would increase deterrence against infringements and increase compliance with the law.
  • Private actions will further develop a culture of competition amongst market participants, including consumers, and raise awareness of the competition rules. This will assist in making Europe more competitive, one of the key objectives of the Lisbon strategy.
  • The Commission and the national competition authorities do not have sufficient resources to deal with all cases of anticompetitive behaviour.

In essence, private enforcement of the EC Treaty competition rules in parallel to public enforcement by the Commission and the Member States’ national competition authorities (NCAs) should lead to greater enforcement of the EC Treaty competition rules by an increased number of enforcers. This in turn should contribute to the competitiveness of European industry, a central objective of the Lisbon Strategy. Damage claims are a particularly important way of private enforcement of competition law, as they serve not only the general function of providing for a better enforcement of the law in general, but also for the recovery of losses suffered by those who have been the victims of anti-competitive behaviour.

What types of infringement does the Commission think private damage actions should enforce?

Private enforcement of EC Treaty competition rules should have a complementary role to public enforcement. The activities of the public authorities will continue to be of critical importance in, for example, bringing to light hidden anti-competitive practices such as price-fixing cartels.

The Commission is keen to see increased private enforcement of the full range of competition infringements under EC law and not just additional enforcement in cases already dealt with by the public authorities (so called “follow-on actions”). Damage actions can complement public enforcement activities by providing additional financial sanctions against the infringer and by providing compensation for those who have suffered losses.

What does the Green Paper say about access to evidence and why is that an important problem?

Obtaining evidence of the alleged antitrust infringement constitutes one of the major obstacles to damages actions for private litigants. That is particularly the case when there is no prior decision from a competition authority establishing the infringement. Furthermore, the proof of the actual damage and the quantification of damage can be very difficult in competition cases. Evidence is often held by the infringer. This is why the question of evidence is of particular importance in this field.

The Green Paper puts forward for debate several options designed to deal with problems faced by a potential claimant. These options deal – in various ways – with obligations of the defendant to turn over certain documents to the claimant. Also, the burden and standard of proof required could be adapted to the information asymmetry existing between the claimant and the defendant. One option in this respect could be to make decisions of national competition authorities which establish an infringement of EC Treaty competition rules binding on civil courts in follow-on actions.

Should collective actions for damages claims be introduced?

Given the costs of litigation and the low value of their individual claim, it is unlikely that individual consumers will in practice be in a position to bring a damages action against the infringer. There may, however, be value in fostering the recovery of losses suffered by consumers. Therefore, the Green Paper puts forward for debate several options designed to address this problem:

  • firstly, it must be considered whether Small Claims Procedures can play a role in providing effective redress for consumers
  • alternatively, thought should be given as to whether a form of collective consumer redress should be available, such as a right of action for consumer associations. This option for pursuing protection of consumer interests harmed by a violation of EC antitrust rules would have to be closely coordinated with other initiatives on consumer redress.

Will private damages claims not endanger the effectiveness of the leniency programme?

Private damage claims and leniency programmes share a common aim: the prevention of cartels being entered into in the first place. Companies understand that anti-competitive agreements are illegal under EC and national competition law and that infringement of these rules carries great risks both in terms of fines and in terms of civil liability. By increasing the likelihood of discovery of secret cartels, the leniency programme is part of this system of deterrence (see IP/02/247 and MEMO/02/23). The likelihood of being found out because of leniency applications and the strength of both public enforcement (fines) and private enforcement (civil liability through damage claims) all serve to deter undertakings from entering into anti-competitive agreements in the first place, thus driving the number of cartels down.

It is, however, possible that some degree of influence exists between damage actions and the operation of leniency programmes. It must therefore be carefully considered how to bring about an optimal coordination of public and private enforcement. In this respect, the Green Paper puts forward several options. These include:

  • non-discoverability of leniency applications. By making sure that such applications do not have to be turned over to claimants in those jurisdictions where disclosure requirements exist, this option ensures the confidential nature of the leniency programme
  • the possibility to lessen the civil liability of a leniency applicant. A reduction of the claim against the leniency applicant would concern only the leniency applicant and would leave the civil liability of the other cartel members – who are jointly and severally liable for the entirety of the loss suffered – unchanged.

Is the Commission considering introducing treble damages claims in Europe?

In the US, damage awards based on infringement of US federal antitrust law are automatically trebled. While a jury decides on the award itself, the trebling of the award as found by the jury is done at a later stage by the court.

The Commission does not put forward as an option the introduction of treble damages. However, in order to create a sufficient incentive to bring the action in relation to the most serious infringements (cartels), the Commission suggests, for debate, the option of introducing double damages for cartels. The award of such double damages could be automatic, or at the discretion of the court hearing the case.

Does the Commission want to introduce a US-style litigation culture in Europe?

No - the Commission seeks to encourage a competition culture, not a litigation culture. The Commission is aware that there is a fear that fostering private damage actions might lead to a litigation culture and might increase the risk of unmeritorious claims being brought. However,

  • the options put forward by the Commission for debate would not lead to a rise in unmeritorious litigation.
  • The Commission has confidence in the judges of the Member States to properly adjudicate and deal with the cases brought before them. The Commission trusts judges to take the appropriate actions – according to their own national legal systems – to avoid unmeritorious litigation and abuse of process.
  • The Commission is striving for a balanced approach to these questions and will certainly take these concerns into account in deciding on any possible follow up to the Green

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