I OVERVIEW OF RECENT PRIVATE ANTITRUST LITIGATION ACTIVITY
In the summer of 2016, the German Federal Cabinet circulated its proposal for the ninth amendment to the Act Against Restraints on Competition (ARC).2 Among other significant changes to the ARC, not relevant here, one of the main purposes of this amendment is to implement the EU Private Damages Directive.3 The EU Private Damages Directive had to be implemented by 27 December 2016. At the time of writing, the proposal is pending in the German parliament and is expected to enter into force in the course of 2017. This means that Germany will likely miss the deadline for implementation.
In the context of antitrust enforcement the proposed amendments further detail the conditions for claims for damages (as well as cease-and-desist rights) specifically in the ARC. The amendment further reiterates that decisions of the European Commission, the German Federal Cartel Office, and those of any other EU Member State’s authority in a cartel case are binding on the German courts. In addition, the draft proposes the following main significant changes to the existing rules in Germany:
a an extension of the statute of limitations from three to five years (see Section II, infra);
b new procedural rules allowing for rather far-fetched discovery by claimants (see Section V, infra);
c the inclusion of a presumption that every cartel causes damages (see Section VIII, infra);
d the expansion of rebuttable presumptions applied in the assessment of a passing on of damages (see Section IX, infra); and
e specific rules on the joint and several liability of cartel participants, with exemptions for the immunity applicant, for small and medium-sized companies and a very useful clarification of the effect of the settlement on the joint and several liability (see Sections XII and XIV, infra).
Besides those significant legislative amendments, private antitrust enforcement in Germany continues apace. Today, almost every cartel investigation is followed by private damages claims and the German courts appear to be a venue of choice. The courts are increasingly confronted with complex individual questions arising in private damages cases, such as the validity of liquidated damages and questions of evidence in the assessment of antitrust damages cases.4 Besides private damages cases, many of the pressing antitrust questions of today are being litigated in German courts. For example, the Higher Regional Court of Frankfurt ruled that backpack manufacturer Deuter has a right to limit the resale of its products on internet market platforms such as Amazon, since its distribution system meets the requirements for a selective distribution system. However, a restriction against the use of price comparison tools was considered illegal.5 Other cases related to the use of most-favoured-nation clauses by, for example, hotel platforms, FRAND terms, the application of the antitrust laws in the context of sports rules on, for example, doping, refusal to supply and the termination of long-term dealers.6
II GENERAL INTRODUCTION TO THE LEGISLATIVE FRAMEWORK FOR PRIVATE ANTITRUST ENFORCEMENT
The legal system in Germany is a civil law system. Rules are codified in laws by the legislator and enforced by the courts. Judgments have a certain precedential value but are not generally binding. Only rulings by a higher court in the same matter are binding on a lower court in that particular case.
Public and private antitrust enforcement in Germany is primarily based on the ARC. There also exist specialised sector rules, for example, in the telecoms and energy sector. In addition, there exist the more general rules of the German Civil Code (the Civil Code) that apply as a backdrop to all relations between private parties. The rules on civil procedure are contained in the German Code on Civil Procedure (CCP).
Private parties can bring actions in the civil courts seeking a cease and desist order, or damages awards. Interim relief is available in the form of a court-ordered injunction. Typical private antitrust enforcement matters include non-compete agreements, disputes between manufacturers and distributors or agents about restrictions in the distribution or agency contract, claims of an abuse of a dominant or a relatively strong market position as well as private damages claims either directly or – mostly – as follow-on claims.
There exist local, regional and higher regional courts and then the Federal Supreme Court. The local courts have jurisdiction over claims up to a total value of €5,000 (see Section 23 GVG), which is typically exceeded in antitrust cases. Thus, courts of entry for antitrust cases are typically the regional courts. The judgments of the regional courts can be appealed to the competent higher regional court and from there under certain circumstances to the Federal Supreme Court. The lower courts may and the Federal Supreme Court must consult with the ECJ by way of a preliminary ruling if national law appears to conflict with EU law. This has been relevant in the private antitrust damages setting, where the ECJ became a leader in unblocking existing practice and nudged national courts gently towards the award of antitrust damages.7
The basis for an antitrust cease and desist or a damages claim can be found primarily in Section 33 ARC, which will be expanded following the ninth amendment to the ARC. However, it is very important to keep in mind that an applicant may have many more legal bases for a claim arising out of a particular conduct, for example the parties’ contractual relationship (e.g., provisions that assure compliance with the antitrust laws), the rules governing pre-contractual relationships, the general damages rules, or the rules on unjust enrichment of the Civil Code. There may also exist other specialised rules (such as sector regulation), whether on a stand-alone basis or in combination with rules of the Civil Code. Each of these legal bases may have different legal and factual requirements, may have different consequences (an unjust enrichment claim would be for restitution of what was unjustly received rather than damages), and be subject to varying statutes of limitations. It is thus very important to analyse each particular business situation against the entire set of potential bases for a claim. Of course, for claimants it is also very important to consider upfront whether a complaint to an authority should be part of the strategy as a public investigation can often assist in the presentation of a claim.
Claims for antitrust infringements are subject to statutes of limitations. For a cease and desist order, it is necessary to show that the relevant conduct still continues or that there exists a strong likelihood of recurrence or other interest to obtain a statement of illegality from a court. The statute of limitations is more important in the context of private damages claims.8 In this context, it is important to note that the applicable statutes of limitation have been and continue to be subject to several changes, so it is very important to establish the specific rules applying to a particular claim.
The EU Private Damages Directive requires Member States to ensure the following minimum statute of limitations:
a that the statute of limitations does not start until the end of the antitrust infringement and the party concerned has knowledge or should have known of the antitrust violation;
b it has a duration of at least five years; and
c it must be tolled while the investigation by an antitrust authority is pending until that decision is final and binding.
The draft ninth amendment to the ARC implements these requirements to bring German law in line with the Directive. In particular it prescribes a five-year (instead of the previous three-year) limitation period, which starts after the claimant has knowledge of the infringement and the infringement has stopped. The new limitation periods will apply to all claims that have not expired on 27 December 2016. This is likely the case, regardless of whether the ninth amendment enters into force by then or only later, as the relevant provisions of the EU Private Damages Directive will have direct effect as of 28 December 2016.
The existing Section 33(5) of the ARC already tolls the statute of limitations pending an investigation by an authority until the infringement decision is final and binding and this provision will be retained in the new Section 33h. It is important not to forget that Section 195 et seq. of the Civil Code contain additional bases for the tolling of the statute of limitations (such as a tolling agreement, pending negotiations, the bringing of a court action, etc.) that apply to civil claims more generally and hence also to private damages claims.
There also exist two additional statutes of limitations. A claim is time barred when the first of the applicable statutes of limitations has run: according to Section 199(3) of the Civil Code, a 10-year period runs from the moment the damage occurred, and a 30-year statute of limitations runs from the moment of the act that caused the damage (even if the damage occurred later). The tolling provisions also apply to those limitation periods.
Finally, of course, where a claim is based on a different legal basis (e.g., on the contract), the statute of limitations can be significantly longer (30 years in the case of contractual claims). Note that the rules are different again for claims arising prior to 31 December 2001. This will become increasingly irrelevant, but given the long duration of cases, this could still be relevant in some cases and should be researched further if necessary.
The rules of jurisdiction and applicable law are quite complex and require careful analysis on a case-by-case basis. That said, as a basic principle, the German antitrust damages rules have a wide reach and are generally available in most potential private damages cases that have any nexus to Germany. For example:
a a defendant in Germany can be sued for all conduct if it has its headquarters in Germany (see Section 17 CPP);
b a company can be sued at the seat of a subsidiary in Germany, if this subsidiary was part of the cartel (Section 21 CCP); and
c a German court is also available if any of the damaging acts were conducted in Germany (e.g., cartel meetings, pricing decisions, or even deliveries (Section 32 CCP)).
Other bases for jurisdiction in Germany may be available and will need to be carefully evaluated on a case-by-case basis. Furthermore, once a court has jurisdiction over one defendant, other defendants can be added to a case, even if they do not meet any of the conditions for a German court to take jurisdiction. This has recently been confirmed by the ECJ, even for a case where the so-called anchor defendant settled shortly after the filing of the action.9
Finally, according to Section 130(2) ARC as well as Article 6(3) of the Rome II Regulation,10 German law can in principle be applied to all conduct that had an effect in Germany. This is quite broad and will cover most cases. It may in certain cases include conduct entirely outside Germany but part of a single and continuous infringement that also had an effect in Germany.
Any person concerned can bring an action for a cease-and-desist order and for damages in antitrust cases. In cease-and-desist cases, the applicant has to show that it has been affected by the infringement and has an interest in it stopping or at least not recurring. Actions for damages claims can be brought by the person that suffered damage, including direct and indirect purchasers. The draft ninth amendment to the ARC provides for more detailed cease, desist and damages claims than previously, although there are no material changes to these rights.
What seems rather obvious today was a major block to antitrust damages claims in Germany not too long ago. Until the early 2000s, it was necessary to show that the infringed provision was intended to protect the claimant specifically rather than the public good. Defendants successfully argued that the competition rules protect competition as such, not competitors or individual customers. This argument had already weakened significantly in the wake of the Vitamin Damages cases and was ultimately discarded following the ECJ judgments in Courage v. Crehan and Manfredi.11 This development was also reflected in the amended Section 33 of the ARC with changes adopted in the context of the seventh ARC amendment.
Besides individuals, Sections 33(3) and 34a of the ARC accord standing to trade or public interest groupings under certain conditions. However, this provision has not been used a lot (or possibly not at all), mainly because these groups are not allowed to keep any damages, which can only be obtained for the benefit of the federal budget. Finally, CDC has pioneered a group action model where claims are aggregated, which will be discussed in Section VII, infra.
V THE PROCESS OF DISCOVERY
A US-style discovery process does not exist in Germany. The civil process is a party-based process. Each party is required to submit evidence for those elements of their claim or counterclaim for which they carry the burden of proof. Except in very specific circumstances, no party can be compelled to provide evidence against its own interest.
The draft ninth amendment to the ARC arguably breaks with this fundamental principle of German procedural law and establishes in Section 33g a right for claimants to request discovery of evidence required for a private damages claim from anyone possessing such evidence (i.e., in particular the defendant but also from public authorities). The provision explicitly excludes immunity, leniency applications and related communication from the reach of the provision. Furthermore, any materials from a pending investigation that has not been completely closed are also exempt from the reach of the discovery provision. Finally, the draft provision acknowledges other potential reasons for withholding the information, including for example business secrets or the right to refuse to testify.
This (draft) provision must be read against the existing law of access to file, which to date has been the main (and in many cases only) way to obtain additional information, facts and evidence about a particular cartel to provide damages. There exist a significant number of cases before the EU courts aiming to clarify the rules around access to a European Commission file.12 In a recent case, the Federal Supreme Court found that an authority may not refuse access to the entire file on account of the fact that the matter had been settled, but instead needed to evaluate on a case-by-case basis what information might be disclosed to a third-party claimant.13 The local court of Bonn refused access to the leniency application following a preliminary ruling from the ECJ.14 The Higher Regional Court of Hamm allowed a court (the Regional Court of Berlin) access to the entire file held by the public prosecutor including the leniency application and confidential decision of the European Commission, noting that the requesting court would have to ensure that disclosure to the parties was limited appropriately.15
VI USE OF EXPERTS
German courts have discretion on whether to appoint an expert based on Section 402 et seq. of the CCP. If the court does decide to appoint an expert and the parties agree, the court should usually follow and appoint the desired expert. In all other cases, the expert must be ‘neutral’ (i.e., cannot have been employed by one of the parties). This is an important tactical point. It can be advantageous to ensure that a potentially desired expert is left free to become the court-appointed expert.
Separately, the parties are of course free to use experts to prepare the case or the defence and frequently do so. While there exist a number of studies and statements that the average antitrust damage caused by a cartel infringement amounts to (insert your favourite arbitrarily picked percentage here),16 causation and the actual calculation of the amount of damages (whether direct, indirect or possibly umbrella damages) are far from clear. Thus, most parties include economists in the team from the start to ensure a good foundation of claim or defence.
Finally, the European Commission and the Federal Cartel Office may intervene as amicus curiae in pending proceedings that raise antitrust questions. This is at the discretion of the European Commission and the President of the Federal Cartel Office respectively. Both use this tool sparingly, not least because of the resources required.
VII CLASS ACTIONS
The EU Private Damages Directive refrained from mandating the introduction of class actions. German law does not include class actions (whether of the opt-in or opt-out variety). One procedural instrument that is often used in other disputes is the instrument of a model process, where one case is brought before the courts and litigated to resolution coupled with a tolling agreement or settlement agreement for all other parties facing the same issue. This can be quite efficient and in particular cost-effective. However, it is not comparable to a class action model.
As is by now widely known, CDC, a Belgian-incorporated company (founded and run by a German lawyer), has pioneered a group action model under which it acquired claims from customers of the Cement cartel and enforced them under its own name. This is in principle a valid and admissible model. The CDC action in the Cement case was confirmed as admissible by the Federal Supreme Court. However, on substance, the regional court (confirmed by the higher regional court and now binding) ultimately decided that the CDC model circumvented the loser pays principle and dismissed the action on substantive grounds.17
In the meantime, CDC has brought a new claim against one cartel member. It is not entirely clear how CDC intends to deal with the statute of limitations in that case. From press reports it would seem that CDC may have slightly varied the claim or that the claim has been brought against a defendant for whom the statute of limitations may not have run yet.
Furthermore, CDC claims that it fixed the reasons for the invalidity a while ago and that other pending cases are not affected. This remains to be seen, in particular in the pending Hydrogen Peroxide case.
Finally, as noted above, public interest groupings may have standing to bring claims that concern a number of companies under Sections 33(3) and 34a of the ARC. However, these provisions are not frequently used, mainly because any funds obtained will have to be handed over to the federal budget.
VIII CALCULATING DAMAGES
There are no punitive damages under German law but interest accrues on claims ultimately successful from the date they arose at base rate plus 5 per cent18 and the loser pays the court and attorney fees of the winner.
Given the significant amounts at stake, the typically long duration of private damages cases and the otherwise low-interest economic environment, the interest accruing can be punitive in and of itself. Court fees are based on the value of the claim brought and the procedural steps involved and are not typically a prohibitive cost factor. The reimbursable attorney fees are also based on the value of the claim brought, but the relevant value is capped at €10 million. For defendants this means that they are unlikely to be able to recover all attorney fees if they win, for applicants the fees can be prohibitive despite the cap as they do not have control over how many parties are drawn into the proceeding. Fees were cited as a reason for CDC not to appeal the adverse ruling by the Higher Regional Court of Düsseldorf in the Cement cartel case.
The calculation of damages itself is a complex and evolving area of practice. There are perhaps three key items to start with: causation, damages and the right of the judge to estimate the damages under Section 287 of the CCP. However, it is important to note that the draft ninth amendment to the ARC proposes to establish a rebuttable presumption that cartels cause damage, which will make it significantly harder for a defendant to defend against the assessment of damages.
Causation is a much overlooked topic that is likely to be of key importance in most cases. While in follow-on cases, the actual infringement is considered proved by the decision of the authority, these decisions do not typically address the question of whether the conduct in question has actually caused any damages. Fines are imposed for conduct and it has long been the established and court-sanctioned practice of the European Commission and the Federal Cartel Office that there is no need to show the conduct actually caused any damages. In some cases, causation will be quite apparent. For example, where a cartel agreed to increase prices, prices were increased and paid by customers, it will be difficult to contest causation. Likewise, where two or three companies agree to rig bids and proceed with this scheme through one or more bid scenarios, causation will be easy to prove. At the other end of the scale are the talking clubs that are fined for meeting and talking, possibly even agreeing on some action items, but where there is no follow-up and decisions are not implemented. One example is the frantic industry meetings, calls, email exchanges or chat protocols in markets with overcapacity and falling prices, where all concerned acknowledge that ‘something must be done’. Often these discussions are not followed up by concerted action, which, for example, would have a decisive impact on existing capacity and then also on the price. In these cases, the discussions may be considered an antirust infringement and may lead to fines, but they cause as much damage as adding a bucket of water to an already overflowing River Rhine.
Damages are assessed by a comparison of the current position of the applicant with the situation in which he or she would have been but for the infringement. The starting point is typically a comparison of the price paid (the cartelised price) with a hypothetical competitive price. This will certainly cover most damages in cartel cases, however, it is important to consider all potential consequences for the applicant. One hotly debated topic is whether the applicant is entitled also to ‘umbrella damages’ (e.g., for higher prices paid to non-cartel members) from those who were able to take advantage of the situation caused by the cartel and charge a higher price.19 There is also a question of whether the applicant is entitled to damages because a higher cartelised price led to a higher sales price and thus lower sales volumes for the applicant’s product. Finally, Section 33(5) of the ARC points out that the judge can also consider the profits made by the defendant in the calculation of the damages.
iii Judges’ estimates
Most of these questions can be rather complex and difficult to prove to the required legal standard. That said, the CCP does not require judges to calculate a 100 per cent precise amount of damages. Based on Section 287 of the CCP, judges have discretion to decide the final amount after consideration of all facts. It is of course advisable to provide such facts ideally supported by expert testimony.
IX PASS-ON DEFENCES
German law allows the pass-on defence, although the precise scope is subject to change. The problem with the pass-on defence has always been that it is difficult to prove that an overcharge was or was not passed on, so whoever carries the burden of proof loses. For a long time, the direct purchaser had to prove that it had not passed on the overcharge in order to make a successful claim for damages against the cartel members. In most cases, the defence argued successfully that the direct purchaser had incorporated the overcharge in its pricing calculation and passed them on to the indirect purchasers, and direct purchasers had difficulty proving otherwise. This situation has been reversed. Section 33(3) of the ARC clarifies that a damage is not excluded simply because the good or service was sold on and so the burden of proof is on the defendant. Thus, at present the defendant must prove that the direct purchaser passed on the overcharge, rather than having absorbed it (e.g., in his or her own margin).
The draft ninth amendment of the ARC now proposes a second rebuttable presumption, which would apply in favour of indirect purchasers and presume that the damage has been passed on to them. If this becomes law, the ARC will contain two immediately contradictory rebuttable presumptions both working against the cartel participant, namely (1) that the direct purchaser absorbed the damage and (2) that the direct purchaser passed it on to the indirect purchaser. This will lead to parallel claims against the cartel participant, both of which he or she is likely to lose. While the rules currently in force include a certain risk that different regional courts could come to opposite conclusions in the same cartel case, now this contradiction is built in. In other words, if the proposal becomes law, it is not just possible but in fact highly likely that even the same court possibly in the same case would have to award damages to the direct purchaser and to the indirect purchaser, because quite typically it is next to impossible to rebut either presumption.
X FOLLOW-ON LITIGATION
Many antitrust damages actions in Germany are brought as a follow-on claim following an infringement proceeding. Antitrust damages claims are, however, also brought from time to time in scenarios outside of hard-core cartel enforcement. There are frequent disputes between, for example, manufactures and retailers, or franchisees on antitrust grounds, which are often accompanied by damages claims.
As regards follow-on claims, the EU Private Damages Directive requires that decisions of a national authority of the relevant Member State are binding on the national courts in that country and that decisions of other authorities of EU Member States are at least accorded a status of prima facie proof. In fact, the EU Private Damages Directive is silent on European Commission decisions. However, it is important to realise that those are already binding on national courts by their nature. German law already goes beyond those provisions and declares that final European Commission decisions, German decisions as well as decisions by authorities of other EU Member States constitute binding proof of infringement.
While this is of course very helpful for any applicant, it does not necessarily guarantee the successful outcome of a damages action. Applicants need to prepare their application very carefully and need to ensure, inter alia, that the action they bring is admissible, is not time barred and that the infringement has caused damages (see Section VIII, supra).
Legal privilege is not typically relevant in civil proceedings; issues may arise in the context of access to the authorities’ file. However, it may become more important in the future, as the draft ninth amendment to the ARC contains a proposal to allow discovery between private parties in private damages actions in the German court and with a view to the rights of claimants to access the file. In those cases, it will become very important to ensure that legal advice remains privileged and thus exempt from the disclosure requirement.
Legal privilege might also become relevant in cases where a party requests access to the file of an authority and where the file contains legally privileged documents. However, in principle legally privileged documents should not have become part of the authorities’ file in the first place or should be removed from it during the procedure and certainly before any access to the file. In this context it is important to keep in mind that German legal privilege is rather limited and relates to correspondence between an attorney and his or her client in the defence of an actual matter. For example, the results of compliance monitoring or internal investigations may not always be covered by legal privilege under German law, in particular if they are not directly linked to an investigation by an authority. Thus, it is possible that some documents may be part of an authority’s file that may be considered legally privileged by other legal systems, and those documents would then become accessible to parties requesting access to the file.
XII SETTLEMENT PROCEDURES
German law encourages parties to resolve disputes quickly and efficiently also through settlements. In fact since 2002, the CCP has required settlement negotiations to take place before the first hearing takes place. Parties are also free to settle a case at any time during the process. These tools are regularly used in private antitrust enforcement and most matters never proceed to trial.
That said, so far, settling a cartel damages case can pose complex problems. One significant problem is joint and several liability. The settling defendant will remain subject to claims for contribution by the other defendants and could thus lose most of the benefits drawn from the settlement. The draft ninth amendment to the ARC addresses this issue in the proposed Section 33f, which exempts the settling defendant from first line joint and several liability and in particular from recourse from its co-defendants. It is important to note that according to this provision the settling defendant may remain liable for secondary liability, for example, in the case another defendant is unable to pay, although one would expect that the applicant would wiave such right in a settlement.
Another typical settlement problem is paradoxically caused by the fact that no class action is available. Class actions have many disadvantages in particular for defendants, but they do provide one important benefit: they close the class and allow the parties to clearly identify the hold outs. Without this tool, a settling defendant is exposed to an unknown number of future claimants who, seeing the success of the first claimant, may decide to bring their own claims. Finally, once settled, it can become procedurally complex to remain sufficiently involved in the defence of a matter, although the outcome may be relevant in light of potential contribution claims.
Companies in Germany have settled antitrust claims, although the fact of a dispute and subsequent settlement is often kept confidential, as are the terms. There also exists one publicly known settlement so far of a defendant in a group action. In a group action brought by CDC against the Hydrogen Peroxide cartel, Degussa settled the claim against it. However, as the terms of this settlement are not public, it is not clear if or how Degussa is protected or indemnified by CDC against contribution claims from other defendants.
The parties can agree to submit a private antitrust claim to arbitration once it has arisen by way of an agreement to arbitrate. The advantages are usually that the matter will be resolved more quickly and in a less formalistic manner, often with participation of well-known experts. This process is used quite extensively in antitrust matters between companies.
That said, given the requirement for each party to consent, it would appear difficult for a damages claim against multiple parties to proceed to arbitration and it does not appear to have occurred in Germany. Arbitration clauses in, for example, sales contracts are not sufficient to subject a subsequent antitrust damages claim to arbitration.
Finally, in some cases agreements to arbitrate concluded prior to an actual infringement were considered to be void, at least where it was not fully clear that the other party had knowingly, willingly and entirely voluntarily submitted to arbitration.20
XIV INDEMNIFICATION AND CONTRIBUTION
Cartel infringements are torts and each cartel participant is jointly and severally liable for the full amount of damages to the applicant. The applicant has a choice of which defendant or how many are pursued for the damages. The defendants then have a claim for contribution against each other, provided such claim is not time barred.21 Currently, the applicable provision is Section 426 of the Civil Code. This provision will be replaced for antitrust damages claims by Section 33d after the ninth amendment to the ARC. Section 426 of the Civil Code states that unless a different rule is agreed on, the total is divided based on heads. This is a very simple rule and although the law states that this is the general rule, in practice the contribution shares are allocated based on more equitable methods. The proposed new Section 33d specifies that the required contribution depends on the specific circumstances and in particular the scope of the damage caused.
Thus, in the case of a cartel, sales or market shares might be a proper reference, although it is open whether value or volume-based. The debate has just begun and it is very unclear at this stage how the damages will ultimately be allocated among defendants. As noted above, companies should also always consider indemnification clauses in settlement agreements. Where such agreement is with an individual company, the settlement agreement should include indemnification against claims from other (direct or indirect) purchasers to avoid double exposure. Where the settlement agreement is concluded with an entity that brings group claims against the entire cartel, there must also be some form of indemnification for the inevitable contribution claims as well as protection against claims from direct or indirect purchasers (as the case may be).
As regards claims for indemnification in, for example, purchase contracts, the seller of a business may agree to indemnify the purchaser for any claims arising out of a previous cartel infringement and the purchaser is well advised not to purchase without such an indemnity. Investors who own controlling shareholdings in companies should make sure to include a standard indemnification obligation by the portfolio company for cartel infringements in management agreements to hedge the very significant risk that applicants pursue them for damages claims.
XV FUTURE DEVELOPMENTS AND OUTLOOK
Germany has always had an active antitrust litigation culture and it should be anticipated that disputes involving antitrust claims will continue, whether this relates to the enforceability of non-compete obligations or to disputes between manufacturers and retailers relating to restrictions, such as internet sales or sales on platforms. There is no reason to anticipate that companies and individuals would not continue to pursue such claims.
When looking at private damages claims, it is clear that Germany has experienced a paradigm shift with regard to private damages claims. It will be very interesting to follow the next steps and the timing of the ninth amendment to the ARC as this will further facilitate private damages claims in the German courts. Other than that, today, almost every cartel decision is followed by private damages claims and it would appear that the German courts are one of the venues of choice in Europe. It stands to reason that the new rules – if (when) they enter into force – will further facilitate making a claim and will make it significantly harder to defend a claim. At the same time, it is important to remember that private antitrust damages claims are just one facet of private antitrust enforcement in Germany. There are a multitude of antitrust issues litigated in the German courts, including internet retailing restrictions, hotel platforms and FRAND licences, to name but a few. This shows that private parties do not simply rely on public enforcement and pursue antitrust related claims in the courts where required.
1 Susanne Zuehlke is a partner at Willkie Farr & Gallagher LLP. The author is grateful to Dr Philipp Heuser and Rapahel Reims for their contributions to this chapter.
2 Entwurf eines Neunten Gesetzes zur Änderung des Gesetzes gegen Wettbewerbsbeschränkungen, www.bmwi.de/BMWi/Redaktion/PDF/E/entwurf-eines-
neunten-gesetzes-zur-aenderung-des-gesetzes-gegen-wettbewerbsbeschraenkungen.pdf (accessed on 25 November 2016).
3 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 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, OJ L 349, page 1 et seq. of 5 December 2014 (the EU Private Damages Directive).
4 See, e.g, Federal Court of Justice, KZR 25/15, judgment of 12 July 2016 (Lottoblock); Higher Regional Court Frankfurt, Case No. 11 U 73/11, judgment of 17 November 2015 (Grey Cement); Regional Court Düsseldorf, 37 O 27/11 (Kart), judgment of 8 September 2016 (Elevators and Escalators), Regional Court Potsdam, Case 2 O 23/15, judgment of 13 April 2016 (Rails), Regional Court Berlin, 16 O 348/15, judgment of 14 June 2016, and many others.
5 Higher Regional Court of Frankfurt, Case 11 U 84/14, judgment of 22 December 2015 (appeal pending at the Federal Court of Justice under KZR 3/16). Higher Regional Court of Frankfurt a. M., judgment of 19 April 2015, Case 11 U 96/14), pending at the European Court of Justice (ECJ) (Case C-230/16). See also Higher Regional Court of Karlsruhe, Case 6 U 47/08, judgment of 25 November 2009, Higher Regional Court of Munich, Case U 4842/08, judgment of 2 July 2009. Against restrictions: Higher Regional Court Berlin, Case No. 2 U 8/09, judgment of 19 September 2013, Higher Regional Court of Schleswig, Case 16 U 154/13, judgment of 5 June 2014; Regional Court of Kiel, Case No. 14 O 44/13, judgment of 8 November 2013.
6 See, e.g., Higher Regional Court Düsseldorf, Case VI-Kart 1/16, judgment of 4 May 2016 (HRS); Higher Regional Court Düsseldorf, I-15 U 124/14, judgment of 15 September 2015 (no-challenge clause); Federal Court of Justice, KZR 6/15, judgment of 7 June 2016 (Pechstein/Doping), Federal Court of Justice, KZR 87/13, judgment of 6 October 2015 (Porsche Tuning), Federal Court of Justice, KZR 41/14, judgment of 26 January 2016 (Jaguar).
7 Cf. ECJ, Case C-453/99, Courage v. Crehan, judgment of 20 September 2001; ECJ, Case 295/04, Manfredi, judgment of 13 July 2006; ECJ, Case C-360/09, Pfleiderer, judgment of 14 June 2011, ECJ, ECJ, Case C-352/13, CDC Hydrogen Peroxide, judgment of 21 May 2015.
8 Contribution and indemnification claims will be discussed below, but defendants should not forget to analyse the statutes of limitations with regard to claims for contribution or indemnification and take required safeguards (e.g., tolling agreement or inclusion in a lawsuit) to avoid a surprise after a lengthy defence in the court.
9 See ECJ, CDC Hydrogen Peroxide (cited above).
10 Regulation (EC) No. 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II).
11 See ECJ, Courage v. Crehan and ECJ, Manfredi, cited above.
12 See, e.g., ECJ, C-365/ 12 P, EnBW, judgment of 27 February 2014.
13 See Federal Court of Justice, Case KVR 55/14, decision of 14 July 2015.
14 See local court of Bonn, Case 51 Gs 53/09, decision of 18 January 2012 dismissing request for access to file insofar as it includes leniency applications.
15 See Higher Regional Court of Hamm, Cases III-1 VAs 116/13 to 120/13 and 122/13, decision of 26 November 2013.
16 See, for example, Oxera, Quantifying antitrust damages. Study prepared for the European Commission, pp. ix and 90. The estimate appears to be based on various pieces of work by US economists Connor and Lande in 2008, ‘Cartel Overcharges and Optimal Cartel Fines’, chapter 88, pp. 2,203–18, in S W Waller (ed.), Issues in Competition Law and Policy, volume 3, ABA Section of Antitrust law.
17 Higher Regional Court Düsseldorf, Case VI-W (Kart) 1/15), decision of 18 February 2015.
18 Section 33(5) of the ARC and Section 288 of the Civil Code.
19 See ECJ, Case C-557/12 Kone, judgment of 5 June 2014.
20 Higher Regional Court Munich, Case U 1110/14 Kart, judgment dated 15 January 2015.
21 Procedurally, it is important to make sure that all potential contributors are included at the time the action is brought. A claimant may bring a case only against some cartel participants. In such case, defendants should draw in others by way of a ‘Streitverkündung’, which will also ensure that the findings of the court are binding on such additional parties, or conclude at least a tolling agreement to avoid expiry of applicable statutes of limitation.