White Paper on Damages Actions for
Breach of Articles 81 and 82 EC
European Commission, DG Competition 1
Overview
General approach
Specific issues:
– Damages
– The passing-on of overcharges
– Standing: indirect purchasers and collective
redress
– Limitation periods
– Binding effect of NCA decisions
European Commission, DG Competition 2
Overview (cont‟d)
– Fault requirement
– Access to evidence: inter partes disclosure
– Costs of damages actions
– Interaction between leniency programmes
and actions for damages
European Commission, DG Competition 3
General approach
European Commission, DG Competition 4
General approach
Compensation as primary objective
Effective legal framework for victims to exercise their
rights under the Treaty
Balanced measures based on European legal cultures
and traditions
Legal certainty and more level playing field
Preserving strong public enforcement
European Commission, DG Competition 5
Specific issues
European Commission, DG Competition 6
Damages
Objective
To ensure full compensation for the victims of
competition law infringements, thereby avoiding
unjust enrichment of victims and infringers alike
To avoid disproportionally burdensome calculation
methods
European Commission, DG Competition 7
Damages (cont„d)
Acquis communautaire
Full compensation implies compensation for actual
loss, loss of profit and interest
Principle of equivalence: where punitive damages
may be awarded in case of an infringement of
national competition law, such should also be
available in case of an EC competition law
infringement
European Commission, DG Competition 8
Damages (cont„d)
Proposed measures to enhance effectiveness
Codifying the acquis communautaire
Non-binding guidance on the calculation of damages
European Commission, DG Competition 9
The passing-on of
overcharges
Objective
To ensure as much as possible that
– those who suffered a harm are compensated;
– those who did not suffer any harm do not receive any
compensation;
– those who infringed the rules are ordered to compensate
European Commission, DG Competition 10
The passing-on of
overcharges (cont„d)
Proposed measures to enhance effectiveness
To allow the passing-on defence while putting the burden
on the defendant;
To lighten the victim‟s burden by a rebuttable
presumption that the overcharge was entirely passed on;
To avoid under- or over-compensation in case of joint,
parallel or consecutive actions
European Commission, DG Competition 11
Standing: indirect purchasers
and collective redress
Objective
To ensure compensation for all categories of victims
Including in particular:
– victims with scattered low value damages (e.g. small
businesses; consumers)
– victims further down the distribution chain (indirect
purchasers)
European Commission, DG Competition 12
Standing (cont„d)
Standing of indirect purchasers is acquis
communautaire: Courage 2001, Manfredi 2006
“It follows that any individual can claim compensation for
the harm suffered where there is a causal relationship
between the harm and an agreement or practice prohibited
under Article 81 EC”
=> This principle (no a priori exclusion of any group of victims)
also applies to indirect purchasers
Necessity to provide for means of collective redress
for victims of competition law infringements
European Commission, DG Competition 13
Standing (cont„d)
Proposed measures to enhance effectiveness
Representative action by designated or ad hoc certified
entity
Opt-in collective action
Relationship with other Commission initiatives in the field
of collective redress
European Commission, DG Competition 14
Limitation periods
Objective
To preserve the possibility of stand-alone and follow-
on actions, while providing for an appropriate level of
legal certainty
European Commission, DG Competition 15
Limitation periods (cont„d)
Acquis communautaire
Principle of effectiveness: limitation periods cannot
make antitrust damages actions practically impossible
or excessively difficult
(e.g. a short limitation period that cannot be
suspended and which starts to run from the moment
of the infringement is incompatible with the said
principle).
European Commission, DG Competition 16
Limitation periods (cont„d)
Proposed measures to enhance effectiveness
Stand-alone cases: limitation period does not start before
victim could have been aware
Follow-on cases: new limitation period of minimum 2
years from final infringement decision onwards
European Commission, DG Competition 17
Binding effect of decisions by
competition authorities
Objective
avoiding costly & time-consuming „relitigation‟ of
issues already settled in final decisions of an
authority or a review court
fostering consistent application of Articles 81 & 82 EC
reducing uncertainty of outcome
European Commission, DG Competition 18
Effect of decisions (cont„d)
Acquis communautaire
Article 16(1) Reg. 1/2003:
“When national courts rule on [conduct] under Article 81 or Article
82 of the Treaty which [is] already the subject of a Commission
decision, they cannot take decisions running counter to the decision
adopted by the Commission.”
=> Commission decisions finding a breach of Article 81
or 82 EC are sufficient legal proof of this
infringement by the addressee(s) of the decision
European Commission, DG Competition 19
Effect of decisions (cont„d)
Proposed measure to enhance effectiveness
A rule for NCA / review court decisions similar to Article
16 Reg. 1/2003
Important further limitations
Decisions from other MS
European Commission, DG Competition 20
Fault
Objective
overcoming difficulties for victims to show negligence
in behaviour within the sphere of the defendant
limiting costly & time-consuming litigation where a
breach of Article 81 / 82 has clearly been established
reducing uncertainty of outcome
European Commission, DG Competition 21
Fault (cont„d)
Acquis communautaire
ECJ (Brasserie du Pêcheur): very limited scope for national
law to make the reparation of damages conditional on the
existence of fault
(in the context of Member State liability for infringing directly applicable EC law)
Principle of effectiveness suggests that, if at all, fault
requirements under national law must be limited to
exceptional situations
Principle of equivalence requires that Member States
applying strict liability in comparable domestic cases must
do the same in EC antitrust cases
European Commission, DG Competition 22
Fault (cont„d)
Proposed measures to enhance effectiveness
Presume fault once an infringement has been established;
Limit the possibilities of exculpation to excusable errors
European Commission, DG Competition 23
Evidence
Objective
addressing the information asymmetry inherent in
most antitrust cases
preventing that victims do not start, or do not win, a
case simply because they had no access to the facts
European Commission, DG Competition 24
Evidence (cont„d)
Acquis communautaire
Principle of equivalance
Principle of effectiveness
– e.g. ECJ in Lab. Boiron*:
“[where] […] evidence relates to data which such a [company] will
not have, the national court is required to use all procedures
available to it under national law, including that of ordering the
necessary measures of inquiry, in particular the production by one
of the parties or a third party of a particular document.”
– Domestic rules that make the exercise of the right to
compensation excessively difficult must not be applied
* C-526/04 at para. 55, emphasis added
European Commission, DG Competition 25
Evidence (cont„d)
Proposed measures to enhance effectiveness
Inter partes disclosure based on fact-pleading and strict
judicial control
Claimants must show a plausible case
Disclosure measure must be necessary and proportionate
in scope
Effective sanctions for refusal to disclose or destruction of
evidence
European Commission, DG Competition 26
Costs of damages actions
Objective
Avoiding that potentially high costs, or uncertainty
about costs, lead to non action
Without incentivising unmeritorious claims
European Commission, DG Competition 27
Costs (cont„d)
Proposed measures to enhance effectiveness
Reflecting on national cost rules so as to facilitate
meritorious actions
Taking existing practices into consideration
– settlements
– cost allocation rule
– court fees
– funding
European Commission, DG Competition 28
Interaction with leniency
programmes
Objective
Creating an effective private pillar of enforcement
while at the same time maintaining a strong public
enforcement system
Maintaining the attractiveness of leniency
programmes
European Commission, DG Competition 29
Interaction with leniency
programmes (cont„d)
Proposed measure to enhance effectiveness
Exclusion of discoverability of corporate statements
submitted by leniency applicants
Continued reflection on
The limitation of liability for the immunity recipient
European Commission, DG Competition 30
Follow-up
Public consultation until 15 July 2008
The Commission will thereafter decide
whether it is appropriate to submit a
legislative proposal
European Commission, DG Competition 31