Thursday, October 10, 2013
The Proposal for a Directive on Antitrust Damages Actions: The European Commission Set the Stage for Private Enforcement in the European Union
Daniele Calisti & Luke Haasbeek (DG Comp) provide an overview of The Proposal for a Directive on Antitrust Damages Actions: The European Commission Set the Stage for Private Enforcement in the European Union.
ABSTRACT: On June 11, 2013, the Commission adopted a proposal for a Directive on Antitrust Damages Actions, as well as a Commission Communication and a Practical Guide on the quantification of antitrust harm. The private enforcement of EU competition law has its roots in 1974, when the ECJ held that the prohibitions laid down in Articles 101 and 102 of the Treaty have direct effect. In the landmark judgment from 2001 in Courage v. Crehan, the ECJ more specifically held that victims of infringements of EU competition law have an EU right to obtain full compensation for the harm they suffered. Subsequent ECJ case law has confirmed and elaborated this principle.Despite the existence of the EU right to compensation, to date only very few victims of antitrust infringements have been able to obtain compensation. During the period 2006-2012, less than 25 percent of the Commission's infringement decisions were followed by damages actions.Moreover, far from reaching all victims, the vast majority of these actions were brought by large businesses. From an internal market perspective, it is interesting to observe that cases are generally brought in very few Member States, and mostly in the United Kingdom, Germany, and the Netherlands, while no follow-on actions to Commission decisions whatsoever were reported in 20 out of 28 Member States. Actions for damages following the Commission's infringement decisions thus have led to a very low level of compensation for the victims of those infringements. The situation is no different for follow-on actions to decisions by National Competition Authorities ("NCAs"), of which there have been very few, and the very scarce stand-alone actions where no infringement has been found by a public enforcer. It can thus be concluded that the lack of effective compensation has created a considerable cost for European consumers and businesses. Most obstacles to civil redress for victims of antitrust infringements, which may explain the current ineffectiveness of the EU right to compensation, are to be found in procedural and substantive rules that govern its exercise. The Commission's proposal for a Directive intends to remove these obstacles. In this respect, it must be stressed that the focus of the Directive is on compensation, not on litigation. Therefore, the proposal contains measures facilitating out-of-court settlements, as consensual dispute resolution is regarded as a potentially fast and cost-efficient means to obtain compensation. The proposal does not contain provisions on collective redress. However, on the same day the Commission also adopted a Recommendation on collective redress. Collective redress is an essential tool for consumers and Small- and Medium-sized Enterprises ("SMEs") to obtain compensation for the often low-value harm they have suffered as a result of infringements in several areas of EU law, including beyond competition law. That is why the Commission has recommended Member States to allow for collective redress mechanisms in all these cases, and has indicated the principles that should be observed when providing for collective redress. Member States will have two years to implement the principles set out in the recommendation, after which the Commission will have to evaluate within two years the effectiveness of its "non-binding" approach.