Vice President of the European Commission responsible for Competition Policy
Public enforcement and private damages actions in antitrust
European Parliament, ECON Committee
Brussels, 22 September 2011
Ladies and Gentlemen:
I would like to thank you for this opportunity to exchange our views on collective redress in antitrust.
I welcome the keen interest shown by the Parliament on this issue. I am sure that, also thanks to your contributions, we will find solutions that meet the demands and the expectations of our citizens and firms.
It seems to me that – sometimes – the debates on this topic tend to lose sight of the broader context. So, let me briefly recall the terms for our discussion today.
Enforcement of competition law in the EU comprises two main aspects: public and private.
Europe has a well-developed system of public enforcement; the Commission and the national authorities apply the same articles of the EU Treaty and we maintain a high level of co-operation thanks the European Competition Network.
Regarding private actions – individual or collective – the main point is that, because of disparities of national legislations, not everyone in Europe has the same effective right to obtain compensation for the harm caused by antitrust infringements.
Our legislative action must make possible that every victim of the companies that breach competition law should exercise their right to be compensated for damages regardless of where they are in the EU and regardless of whether they bring individual or collective actions.
To this end, we need to address several challenges that shape the relations between public enforcement and private damages actions; and collective redress – although important – is just one of them.
Let us see what are those challenges from the standpoint of competition enforcement are and how we can tackle them.
Damages actions can start before or after a competition authority has issued a decision. In either case, we need to regulate access to the evidence held by competition authorities.
This is absolutely necessary if we want to preserve our leniency programmes, which are crucial for the effectiveness of our fight against cartels.
The vast majority of damages actions in Europe are brought after a public authority takes a decision – these are the so-called follow-on actions.
In these cases, the findings and conclusions of a competition authority can actually help the victims bring their complaint before a court.
However, in some countries statutory deadlines don’t take account of ongoing public proceedings and the victims of antitrust infringements cannot bring their actions in time.
Because follow-on actions must wait for an infringement decision, we need rules that give victims enough time to go to court.
We also need to clarify the binding effect of the decisions taken by national competition authorities on national courts. I believe that, in all EU national courts, victims should be able to rely on their findings once the decisions are final.
These are some of the points we need to address to regulate the relations between public enforcement of competition law and private damages actions – whether individual or collective.
We are all aware of the risks of bad regulation of collective actions; such as the abusive litigation that the US class-action system makes possible.
Whatever solutions we will eventually find, I want to state in the clearest of terms that we are not going to import the instruments that make these abuses possible.
For instance, EU legislation should make no room for punitive damages and contingency fees for lawyers. In fact, the EU should have a system designed to prevent abusive litigation and preserve the effectiveness of public enforcement.
In the competition domain, a focus on follow-on actions would offer the best guarantees in this respect, because these actions are only brought against companies that a public authority has already found guilty of infringing EU law.
So, what are the next steps?
As you know, the Commission is planning to adopt a Communication setting out common principles on collective redress by the end of the year and I am co-operating closely with my colleagues Vice-President Reding and Commissioner Dalli in this process.
These principles will cut across several EU policies – such as consumer protection and the environment – and they will also apply to competition policy.
However, to regulate the interaction with EU public enforcement and to respond to all the challenges of private redress in our domain – individual or collective – the scope will have to be wider.
I know you are also in favour of a pragmatic and effective solution; the resolution on our Competition Report you approved last January called for a EU-wide approach for antitrust damages actions.
The broad principles of collective redress that we are working on will certainly be applied to collective actions in antitrust, but these have to be regarded as just one of the aspects of private enforcement in competition policy – and I have just illustrated some of them to you.
I have no doubt that we will eventually find a balanced proposal and our debate today is another step towards this goal.