1. The Antitrust Damages Directive –
much ado about nothing?
Sebastian Peyer
*
ABSTRACT
This chapter examines some of the key features of the EU Directive on
antitrust damages actions. The Damages Directive aims to ensure effect-
ive private enforcement by facilitating claims in the courts of the EU
Member States. However, the proposed measures do not address pressing
issues such as claim aggregation or the funding of claims. Instead, the
Directive introduces complex rules regarding access to information and
joint and several liability. The new EU framework for antitrust damages
actions is incoherent and unlikely to create the envisaged level playing
field.
INTRODUCTION
Shakespeare’s ‘Much Ado About Nothing’ elegantly combines comedy
with more serious politics and embarrassment. The new EU Directive on
Antitrust Damages that introduces measures to facilitate and balance
damages actions in the EU Member States also joins these elements but
rather less gracefully. Many of the provisions of the Directive are the
result of a polemical and political process that lasted for more than a
decade. The product is a mix of provisions, and not the coherent rules
one had hoped for. Unlike Shakespeare’s comedy, the Directive lacks any
comical value, as it is soon to be translated into national law in 28
Member States.
1
In this chapter, I will look closely at the key features of
*
Lecturer in Law at the University of Leicester.
1
Directive of the European Parliament and of the Council 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,
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the reform of antitrust damages actions in the EU. As I will suggest, the
new framework for EU damages actions is a seesaw between the two
antithetical goals of the Directive: compensation and the coordination of
enforcement.
THE GOALS OF THE DIRECTIVE
Article 1(1) of the Directive seeks to ensure more effective private
enforcement actions by strengthening the right to compensation. Article
1(1) reflects the jurisprudence of the Court of Justice of the European
Union (CJEU). The CJEU created an EU right to competition damages in
its Courage and Manfredi judgments.
2
According to these judgments,
every individual should be able to claim compensation for loss caused by
the breach of EU competition rules in the courts of the Member States.
The Court also explained that:
In the absence of Community rules governing the matter, it is for the domestic
legal system of each Member State to designate the courts and tribunals
having jurisdiction and to lay down the detailed procedural rules governing
actions for safeguarding rights which individuals derive directly from Com-
munity law, provided that such rules are not less favourable than those
governing similar domestic actions (principle of equivalence) and that they do
not render practically impossible or excessively difficult the exercise of rights
conferred by Community law (principle of effectiveness) […].
3
According to Article 1(2), the Directive also aims at coordinating
effective public and private enforcement. Recital 6 clarifies that coordin-
ation refers to the interaction of public and private enforcement and its
regulation, especially regarding access to information. In the context of
the Directive, this means implementing safeguards to protect law enforce-
ment by competition authorities in general, and to protect leniency
programmes in particular.
4
Over the past 15 years, the European Commission has subscribed to
the popular view that private antitrust enforcement in the EU Member
adopted by the Parliament on 17 April 2014 and by the EU Council of Ministers
on 10 November 2014 (‘Damages Directive’).
2
Case C-453/99 Courage Ltd v Bernard Crehan [2001] ECR I-6297; Case
C-295/04 Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA [2006] ECR
I-6619.
3
Manfredi, cited previous note, para 62.
4
See Section IV below.
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States is underdeveloped and that claimants face considerable obstacles
when pursuing antitrust damages claims in the courts.
5
The Commission
and other policy makers have measured the effectiveness of private
antitrust enforcement in the number of successful damages claims.
6
Consequently, compensation was declared to be one of the goals of this
reform. In more recent years, beginning with the Commission’s White
Paper, the compensation objective has been complemented by the object-
ive of coordination of public and private enforcement.
7
This coordination
aim is to be understood as a countervailing force to compensation,
especially when private enforcement interferes with public enforcement
activities. The proposition that these two enforcement modes can inter-
fere with each other is not new, but the problems posed by private actions
in Europe have become particularly obvious in recent years. Firms that
sue or are planning to sue for compensation have begun to ask for access
to information that is or was in the hands of the competition authorities,
thus interfering with leniency programmes and settlement procedures.
8
Both agencies and firms that submit evidence to the authorities clearly
consider that this material should be treated as confidential and should
not be disclosed to potential claimants. Hence, the new objective of
coordinating public and private enforcement was introduced.
9
This ‘interaction’ problem typically occurs in follow-on litigation, in
other words, litigation running in parallel with public investigations or
initiated after a decision has been adopted; it does not affect all antitrust
damages litigation. One interpretation of the coordination objective is
that national laws should refrain from encouraging follow-on actions.
5
See the Commission’s earlier consultations: European Commission,
‘Green Paper – Damages Actions for Breach of the EC Antitrust Rules’,
COM(2005) 672 final (19 December 2005); European Commission, ‘White
Paper on Damages Actions for Breach of the EC Antitrust Rules’, COM(2008)
165 final (2 April 2008).
6
European Commission, ‘Antitrust: Commission proposal for Directive to
facilitate damages claims by victims of antitrust violations – frequently asked
questions’ (MEMO/14/310 of 17 April 2014); White Paper (cited previous note),
at page 2. For a critical view of this benchmark, see Sebastian Peyer, ‘Private
Antitrust Litigation in Germany from 2005 to 2007: Empirical Evidence’ (2012)
8 Journal of Competition Law and Economics 331.
7
See Recital 6 of the Damages Directive.
8
Case C-536/11 Bundeswettbewerbsbehörde v Donau Chemie AG, 6 June
2013, EU:C:2013:366; Case C-365/12 P Commission v EnBW Energie Baden-
Württemberg AG, 27 February 2014, EU:C:2014:112.
9
White Paper (cited above note 5), at page 3; Damages Directive, Article
1(1).
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Such actions are more likely to interfere with investigations if, for
example, potential claimants request information from the authority. The
rules proposed in the Directive partly support this reading, as they do not
facilitate follow-on actions as far as access to information is concerned
but they do encourage stand-alone damages claims.
10
If the Damages
Directive indeed places limits on follow-on claims, then the two main
aims of the Directive are mutually inconsistent.
11
The compensation
objective means fostering private actions, while the coordination object-
ive demands restrictions on private claimants. The objective of effective
compensation cannot be achieved without compromising the coordination
objective, and vice versa. The effective coordination of public and private
enforcement may thus be a euphemism for curtailing private enforcement
when it interferes with agency activity. Overall, the two objectives are
contradictory and have obscured the scope of the Directive. Its unclear
scope, in turn, bears on several provisions.
KEY FEATURES OF THE DAMAGES DIRECTIVE
Before discussing certain aspects of the Directive in more detail in the
following subsections, I will outline the general features contained in the
Damages Directive. As will become obvious in this section, the Directive
does not create a complete or coherent framework for damages actions in
the Member States. It only addresses selected issues while avoiding
politically sensitive and important problems: class litigation and litigation
funding. Chapter I of the Directive states the scope of the Directive and
provides some definitions in Article 2. Article 3 incorporates the Man-
fredi and Courage jurisprudence of the CJEU, articulating the right to
compensation.
12
Full compensation is achieved if the position of an
injured individual is restored as if the infringement had not taken place.
The Member States must ensure that a successful compensation claim
includes redress for actual loss, loss of profits and the payment of
interest.
13
10
Articles 6 and 7 of the Damages Directive. Article 9 declares final
(domestic) infringement decisions of a competition authority to be binding in
private disputes, thus supporting follow-on litigation. Article 9 is discussed later
in this chapter.
11
In a recent press release, the Commission stresses the lack of follow-on
damages actions. See MEMO/14/310 (cited above, note 6).
12
The Courage and Manfredi judgments are cited above, note 2.
13
Article 3(2) of the Directive.
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Chapter II of the Directive deals exclusively with disclosure and access
to information. Article 5 introduces disclosure of evidence in competition
law damages proceedings in the courts of the EU Member States. The
Directive then proposes, in Articles 7 and 8, a stricter test for disclosure
of evidence that is included in the file of a competition authority. This
narrower test limits the disclosure of information from competition
authorities and excludes access to leniency statements and settlement
submissions from general disclosure.
Chapter III of the Directive concerns three different issues. Article 9
declares final infringement decisions of competition authorities or review
courts regarding EU and national competition law as binding (in the
sense that a national court is precluded from adopting decisions running
counter to such final decisions) and irrefutably established. This ‘‘bind-
ing’’ effect is limited to national decisions but foreign decisions are to be
given the status of prima facie evidence, pursuant to Article 9(2). Article
10 regulates limitation periods. The minimum statutory period must be
no less than five years from the time the infringement has ceased and the
claimant knows or should reasonably have known about the infringement.
In follow-on actions, the period of limitations must be suspended for the
duration of a public investigation (Article 10(4)). In Article 11(1), the
Directive requires the Member States to ensure that joint and several
liability applies to companies that have jointly breached competition law.
The principle of joint and several liability is relaxed, however, for small-
and medium-sized enterprises and for leniency applicants that have been
granted immunity.
14
The exemption from joint and several liability does
not apply to repeat offenders and ring leaders. Article 11 also limits
contribution from an immunity recipient to its co-infringers so that the
contribution does not exceed the harm it caused to its direct and indirect
purchasers or providers.
15
Articles 12 and 13 of Chapter IV of the Directive recognize the
passing-on defence. Specifically, Member States must allow a defendant
to show that the claimant did not actually suffer harm because the
overcharge was passed on to the next level in the supply chain. Articles
14 and 15 of Chapter IV give indirect purchasers standing to sue. Every
individual, independent of its position in the supply chain as direct or
indirect purchaser, has the right to claim compensation.
16
In this regard,
the Directive facilitates the proof that part of the overcharge was passed
14
Article 11(2)(a) and (b) and Article 11(4).
15
Article 11(4).
16
Article 14(1).
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