EU Council of Ministers formally adopts Directive on antitrust damages actions
On 10 November 2014, the European Council of Ministers formally adopted the European Commission's proposal for a Directive on antitrust damages actions. The Directive will help citizens and companies claim damages if they are victims of infringements of antitrust rules. Among other things, the Directive establishes a presumption that cartels cause harm, and gives easier access to evidence, especially to indirect victims. The Directive needs to be transposed into national law. Nevertheless, it can already influence the interpretation of current law.
The Directive clarifies that anyone who is a victim of an infringement of antitrust rules has a right to obtain full compensation for actual losses and for loss of profit, plus payment of interest (Art. 3 of the Directive).
Disclosure of evidence by the defendant
National courts can order the disclosure of evidence by the defendant. The claimant has to present a reasoned justification for the disclosure. The courts will ensure that such disclosure orders are proportionate and especially that confidential information is protected (Art. 5 of the Directive).
Disclosure of evidence by a competition authority
For the order of disclosure of evidence by a competition authority, the Directive distinguishes between the different types of documents (Art. 6 of the Directive).
- Leniency statements and settlement submissions can never be disclosed.
- Certain information produced within public enforcement proceedings can only be disclosed after the investigation is closed (information drawn up by a competition authority or prepared by a party specifically for the proceedings).
- Other documents need to be disclosed at any time.
Binding effect of an authorities decision
National courts are bound by a final decision of a national competition authority finding an infringement (Art. 9 of the Directive).
Limitation / Period for bringing the action
The limitation period commences at the end of the day on which the victims have obtained or could reasonably be expected to obtain knowledge of
- the behaviour,
- the unlawfulness of the behaviour,
- the damages caused for the victim, and
- the identity of the infringer.
The limitation period amounts to at least five years and is interrupted or suspended from the moment a competition authority starts investigating an infringement. Victims will have at least one year to claim damages once an infringement decision by a competition authority has become final (Art. 10 of the Directive).
Joint and several liability
Undertakings which have infringed competition law through joint behaviour are jointly and severally liable for the harm caused by the infringement of competition law. If the infringer is a small or medium-sized enterprise (SME), the infringer is in principle only liable to its own direct and indirect purchasers. For the definition of SME: LINK
An immunity recipient is also only liable to its direct or indirect purchasers or providers, as long as the injured parties cannot obtain full compensation from the other involved undertakings (Art. 11 of the Directive).
The Directive allows infringers to defend themselves against a damage claim by proving that the price increase was (partially) passed on by the claimant to its own customers (Art. 13 of the Directive).
In principle, indirect purchasers have a right to claim compensation of damages from the infringer, but the burden of proving the existence of such passing-on rests with the claimant (indirect purchaser). An indirect purchaser e.g. in case of a producer cartel would be the customer of the wholesaler which is the customer of the producer. For indirect purchasers, there is a significant simplification of the burden of proof. The passing-on is proven in case it is demonstrated that:
- The defendant has committed an infringement of competition law,
- the infringement of competition law has resulted in an overcharge for the direct purchaser of the defendant
- and the indirect purchaser has purchased the goods or services that were the object of the infringement of competition law, or has purchased goods or services derived from or containing the former (Art. 14 of the Directive).
The Directive establishes a presumption that cartels cause harm. Infringers have the right to rebut this presumption. Concerning the quantification of harm, rules should be applied which do not render the right to claim damages practically impossible or excessively difficult. Furthermore, the national courts have the right to estimate the amount of harm (Art. 17 of the Directive).
During consensual settlement negotiations, the limitation period is suspended. National courts seized of an action for damages can suspend their proceedings for up to two years in order to allow a consensual resolution of disputes (Art. 18 of the Directive).
The Directive enters into force 20 days after its publication in the EU Official Journal. Member States will have two years to implement it.
Directive on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (http://ec.europa.eu/competition/antitrust/actionsdamages/documents.html)
European Commission press release from 10 November 2014 (http://europa.eu/rapid/press-release_IP-14-1580_en.htm)