I OVERVIEW OF RECENT PRIVATE ANTITRUST LITIGATION ACTIVITY
The implementation of the Damages Directive was the most significant development in 2017,2 with all but three Member States having transposed the Damages Directive into their legal systems at the time of writing.3 The Damages Directive is intended to achieve greater harmonisation between private competition enforcement regimes across Member States, in pursuit of the expressed aim of the European Commission (Commission) to encourage greater private enforcement of competition law. The Damages Directive is also intended to foster a complementary relationship between public and private enforcement.
While the Damages Directive sets out a series of minimum requirements, Member States retain discretion over a range of areas, and there remain significant variations between national regimes post-implementation. Major changes and areas of difference are discussed in greater detail below, but the effect in many jurisdictions has been to create a unique regime for competition damages claims that is distinct from general civil litigation claims.
Given the thrust of the Damages Directive, which provides a basic requirement for limitation periods, introduces minimum disclosure standards and enshrines the status of national competition authority (NCA) decisions, it seems likely overall that the new (partially) harmonised regime will encourage private actions and increase the trend towards claimant ‘venue shopping’ between Member States.
Another major development has been an increased focus on the potential introduction of a harmonised class action regime. Following the conclusion of the call for evidence on the Commission’s Recommendation 2013/396/EU in August 2017, Europe is now awaiting a report by the Commission that is expected to confirm whether the current rules of Member States are sufficient to facilitate consumer redress, or whether further European regulation ought to follow in the collective redress arena.
There have also been a number of interesting decisions by the European Court of Justice (ECJ) in 2017. Of particular note is the consideration of jurisdictional issues in the Intel case,4 where the qualified effects test was discussed. There were also interesting developments in the Evonik Degussa and AGC Glass Europe cases regarding the protection of leniency information.5
ii GENERAL INTRODUCTION TO THE LEGISLATIVE FRAMEWORK FOR PRIVATE ANTITRUST ENFORCEMENT
Articles 101 and 102 of the Treaty on the Functioning of the European Union, alongside Regulation 1/2003,6 provide the foundation of the legislative framework for private antitrust enforcement, in that these directly applicable provisions afford EU citizens the substantive right to bring damages claims for harm suffered as a result of a breach of EU competition law.
These legal instruments do not, however, address the procedural elements of private antitrust enforcement. Until the introduction of the Damages Directive, there was no single EU legal instrument addressing how antitrust claims could be brought in practice. As discussed in Section I, the Damages Directive set out to create ‘a more level playing field for undertakings operating in the internal market’7 by setting out the minimum requirements that Member States’ national laws must meet.
Despite this, the extent of harmonisation should not be exaggerated. The Damages Directive does not address a number of important practical matters, such as costs and funding, collective redress and injunctive relief. Moreover, for issues such as jurisdiction and governing law, it is necessary to turn to other pieces of EU legislation (see further below). Even where the Damages Directive does address a particular issue, there is scope for divergence in the interpretation (and therefore the implementation) of its provisions. This is apparent in, for example, how certain Member States have chosen to treat the provisions relating to limitation.
The Damages Directive has introduced a minimum limitation period of five years for cartel damages claims.8 This five-year period does not begin to run until the infringement ceases and until a claimant knows (or can reasonably be expected to know) the behaviour constituting the infringement; the fact that the infringement caused him or her harm; and the identity of the infringer.9
The Damages Directive also includes provision to suspend the limitation period during an investigation and any subsequent appeal process. This suspension must end no earlier than one year after the infringement decision has ‘become final’ (the meaning of which is open to some debate).10 The limitation period must also be suspended for the duration of any consensual dispute resolution process.11
These provisions have significantly extended the limitation periods in a number of Member States.12 Pre-implementation, this was an area where there was wide divergence between Member States, both in terms of the length of limitation periods and the point at which they began to run. Compare, for example, the UK (six years after the cause of action accrued) with Spain (one year from the date the injured party discovered the harm). This meant that limitation periods often used to play an important role for claimants when selecting the jurisdiction in which to bring a claim.
Nonetheless, some divergence will remain. The Damages Directive does not prevent Member States from imposing limitation periods in excess of five years or absolute limitation periods.13 Moreover, different interpretations of ambiguous provisions will preserve divergence in this area (as well as others).
Under EU law, jurisdiction is regulated by the Recast Brussels Regulation (Recast Brussels),14 which applies to proceedings issued on or after 10 January 2015. Under Recast Brussels, the default position is that a claim should be brought in the jurisdiction in which the defendant is domiciled, irrespective of where the contract was concluded or the harm suffered.15
Where there are multiple defendants domiciled in different jurisdictions, the claimant can opt to bring a claim in any of those jurisdictions. A defendant may then become an ‘anchor defendant’, with others being joined on to the claim, provided that the claims are so closely connected that it is expedient to hear them together.16
Actions may also be brought in the jurisdiction where the harmful event occurred (meaning either where the cartel was definitively concluded or where the claimant company has its registered office).17 Alternatively, if the action is being brought by a consumer, the action may be brought in the jurisdiction where the consumer is domiciled.
iii Governing law
For events that gave rise to damage after 11 January 2009, the governing law applicable to a restriction of competition is determined by the Rome II Regulation (Rome II).18 Under Rome II, the governing law will be the law of the country where the market is affected.19 When the market is affected in multiple countries, a claimant may choose to base its claim on the law of the Member State where it is bringing its claim, as long as the market of that Member State is directly and substantially affected by the restriction of competition that gives rise to the claim.20 This enables claimants to have their case for antitrust damages heard by one court applying one law, even where more than one defendant is involved or damage occurred in several EU Member States.
Rome II also allows parties expressly to agree a law to govern their non-contractual obligations, either before or after the occurrence of an event that gives rise to damage.21
EU competition law applies to any conduct that has an appreciable effect on trade between Member States. The EU courts and the Commission have long considered to what extent, and in what circumstances, EU competition law can apply extraterritorially (i.e., to non-EU undertakings and to conduct that takes place outside the EU) without infringing the principles of public international law. The two main legal tests that have been developed to limit the extraterritorial reach of EU competition law are the ‘implementation test’22 and the ‘qualified effects test’.23 The former requires that the practices that restrict competition are implemented in the EU (e.g., by direct sales into the EU), and the latter requires that such practices have immediate, substantial and foreseeable effects in the EU. On 6 September 2017, the ECJ handed down a widely-anticipated judgment in Intel v. Commission24 clarifying the relationship between the ‘implementation test’ and the ‘qualified effects test’. The ECJ observed that the tests pursue the same objective and that EU competition law is applicable if either one is satisfied.
In recent years, domestic courts of EU Member States have started to examine the limits of extraterritorial application of EU competition law in the context of private enforcement. The domestic jurisprudence on this topic is developing, and it remains to be seen whether a consistent approach will be adopted across the EU.
Any individual or undertaking may claim compensation before national courts for harm suffered as a result of an infringement of EU competition law – a longstanding position which has been entrenched by the Damages Directive.25 The exercise of the right to sue will be governed by national law provisions in the particular jurisdiction in which an action is brought, but the rules and procedures facilitating such actions must not be less favourable than those governing similar actions resulting from infringements of national law.26
The causal relationship between the harm and the infringement need not be direct, and the Damages Directive has now granted indirect purchasers standing to sue.27 A party need not have a contractual link to a cartelist, and will have a claim against the cartelists where loss was suffered as a result of an undertaking not party to the cartel (having regard to the practices of the cartel) setting its prices higher than would otherwise have been expected under competitive conditions (‘umbrella pricing’).28
v THE PROCESS OF DISCOVERY
The move towards harmonisation of the disclosure regimes across Member States is one of the most significant changes brought about by the implementation of the Damages Directive. Previously, there was a wide disparity between jurisdictions with sophisticated and well-established disclosure regimes (such as the UK), which were considered ‘claimant-friendly’, and jurisdictions where extensive disclosure did not feature in civil litigation (notably Germany and the Netherlands, although these nevertheless remained popular jurisdictions for bringing proceedings). EU legislators considered the lack of extensive disclosure regimes in such countries to be an obstacle to effective private enforcement of competition law on the basis that it maintained the ‘information asymmetry’ that may exist between a party allegedly having suffered loss and an infringer of competition law.
To address this, the Damages Directive requires Member States to ensure that national courts are able to order defendants or third parties to disclose relevant evidence that lies within their control in response to a ‘reasoned justification’ by a claimant.29 Member States are also to ensure that national courts are able, on the request of a defendant, to order a claimant or a third party to disclose relevant evidence.30 To address concerns regarding excessive disclosure or ‘fishing expeditions’, the Damages Directive requires Member States to ensure that national courts are able to limit disclosure to what is ‘proportionate’ having regard to the legitimate interests of all parties concerned.31 While Member States are to ensure that national courts have the power to order the disclosure of relevant confidential information, national courts are also to have at their disposal effective measures to protect such information32 and to give full effect to applicable legal professional privilege rules.33
For legal systems unaccustomed to extensive disclosure exercises, these new rules may require a significant cultural change (although a combination of transitional rules34 and the need for national courts to acclimatise may mean it is a number of years before the full effects become apparent). In particular, the references in the Damages Directive to disclosure of relevant ‘categories’ of evidence will mark a significant change in jurisdictions where disclosure was previously limited to specific documents identified in a disclosure request.35 However, while there is likely to be some degree of harmonisation between Member States going forward, the Damages Directive sets only minimum requirements36 and a number of jurisdictions have taken the opportunity to go further by creating a substantive right to disclosure (as opposed to giving national courts a mere discretion). It remains to be seen whether such regimes will develop to match the extensive disclosure seen in the UK.
As a further protection against excessive disclosure, the Damages Directive contains a number of limits on disclosure of evidence included in a competition authority’s file. In particular, ‘leniency statements’37 and ‘settlement submissions’38 are granted absolute protection from disclosure,39 as well as verbatim quotations from such documents.40 Disclosure of the following materials from a competition authority’s file is to be permissible, but only after the competition authority has closed its proceedings: information prepared specifically for the proceedings of a competition authority; information drawn up by the competition authority and sent to the parties in the course of its proceedings; and settlement submissions that have been withdrawn.41 Even then, national courts should (as part of the proportionality assessment) consider the need to safeguard the effectiveness of public enforcement when choosing whether to order disclosure of such documents.42
The ECJ has recently examined the scope of publication of leniency material in a Commission decision in the Evonik Degussa and AGC Glass Europe cases.43 In Evonik Degussa, the ECJ found that the content of a leniency statement can be referred to in a Commission decision, provided that the source cannot be identified and the precise contents of the submission cannot be reconstructed. These principles were affirmed in AGC Glass Europe. These cases are part of an ongoing line of cases concerning the confidential nature of materials relating to Commission decisions, which is very significant in the context of private actions for damages in the national courts. The primary motivation for these appeals was to reduce civil claims risk.
vi USE OF EXPERTS
The Damages Directive is silent on the issue of experts, but the Commission recognises the importance of expert advice in private competition actions, and has published, commissioned and contributed to various guidelines for judges and other practitioners on obtaining and assessing expert evidence.44 This is driven in particular by the complexities of quantifying harm, which in practice requires significant data, with both claimants and defendants routinely engaging economic experts to assess the amount of loss suffered.
The use of experts and their role in court proceedings vary from Member State to Member State. Rules differ, for example, regarding whether experts should be party-appointed or court-appointed, and the weight given to their findings. Dutch, English, French and German courts are willing to deal directly with economic reports prepared by experts appointed by the parties, for example, while judges in certain other jurisdictions tend to rely solely on court-appointed experts when addressing economic questions.
Member States also differ significantly in the level of partiality permissible to a party-appointed expert, and this question will clearly bear on the weight that the court places on expert evidence. For example, in English courts, party-appointed experts owe a duty to the court, while in Germany there is no express requirement towards objectivity, and so party-appointed experts are treated as potentially partisan extensions of the party in question.
Experts need not always be economics or accounting professionals. There is a growing trend in antitrust cases for industry experts to testify, lending their knowledge of the dynamics and operation of certain markets, particularly in cases concerning complex distribution chains. This serves the dual purpose of educating the court on the market in question and ensuring that economists approach the market on the basis of correct assumptions.
vii CLASS ACTIONS
On the same day that the Commission published its proposal for the draft Damages Directive (11 June 2013), it also published a Recommendation on collective redress mechanisms for breaches of citizens’ rights granted under EU law (Recommendation).45 The Recommendation followed a Green Paper on antitrust damages actions published in 200546 and a White Paper published in 2008,47 which included suggestions on competition-specific collective redress mechanisms. Due in part to concerns about the potential for US-style class actions, a consensus was not reached on this subject, and provision for collective redress was not included within the Damages Directive. Instead, the Commission issued a non-binding Recommendation (and an accompanying Communication)48 to Member States to implement collective mechanisms for violations of EU law rights by 26 July 2015 (concerning both injunctive and compensatory relief). The Recommendation applied not only in the competition sphere, but also in relation to claims for other breaches of citizens’ rights under EU law, including consumer protection, environmental protection, protection of personal data, financial services legislation and investor protection.49
On 22 May 2017, the Commission published a call for evidence to assess the implementation of the Recommendation to determine whether further measures should be considered. The call for evidence closed on 15 August 2017, and a response from the Commission is awaited. Any attempt to make the introduction of collective redress mandatory (whether in relation to competition claims or more generally) is likely to be controversial.
The key principles for collective redress systems outlined in the Recommendation included that collective redress should be on the basis of the express consent of the relevant claimants (i.e., the opt-in model), and any exceptions to this principle (such as opt-out proceedings) should be ‘duly justified by reasons of sound administration and justice’;50 and there should be safeguards for minimising the risk of excessive litigation.
Some Member States already have some form of collective redress in their national systems. For example, in October 2015 the UK implemented a collective proceedings regime in its specialist Competition Appeal Tribunal (CAT), which diverges from the Recommendation in that it only applies to claims for breach of competition law and allows for both opt-in and opt-out collective proceedings.51 Other examples include France and Belgium, which have recently adopted collective proceedings regimes that extend beyond the competition law sphere. While the Netherlands has a longstanding collective action regime, this only allows representative organisations to seek declaratory or injunctive relief. In November 2016, the Dutch government presented a draft bill proposing to extend the collective action regime to allow claims for monetary damages on an opt-in basis, and it remains to be seen whether the bill will pass in this form.
viii CALCULATING DAMAGES
With a view to assisting in relation to the complicated issue of quantification, the Commission has published a Communication on quantifying harm in antitrust damages actions,52 together with a more detailed Practical Guide,53 to provide national courts and parties to damages actions with an overview of the main economic methods and empirical insights available. The Practical Guide covers various techniques for estimating prices in a counterfactual non-infringement scenario, including observation of comparator data, interpolation and regression analysis.
While the right to compensation is an EU right, the actual methodology for quantifying damages is largely a matter for national law. However, the following broad principles have been established at EU level under the Damages Directive:
- There must be a rebuttable presumption that cartels cause harm. This presumption was deemed necessary because the inherently secret nature of cartels may create an information asymmetry between parties that makes it more difficult for claimants to obtain the evidence necessary to prove the harm.54
- Compensation must place claimants in the position in which they would have been had the infringement of EU competition law not been committed. Compensation must therefore cover actual loss, loss of profit and interest, and should not result in overcompensation, whether by means of punitive, multiple or other damages.55
- National courts are entitled to estimate the amount of harm a claimant suffered if it is impossible or excessively difficult to quantify that harm on the basis of the evidence available.56
- Member States must nonetheless ensure that neither the burden nor the standard of proof required for the quantification of harm renders the exercise of the right to damages practically impossible or excessively difficult.57
- e Where requested, and if they deem it appropriate, NCAs may provide guidance to national courts on the determination of the quantum of damages.58
ix PASS-ON DEFENCES
Member States are required under the Damages Directive to ensure the availability of the ‘passing-on’ defence. This means that any defendant may invoke as a defence that the claimant passed on the whole or part of the overcharge resulting from the infringement. The burden of proof that any overcharge was passed on falls to the defendant, who may reasonably require disclosure from the claimant or from third parties.59
The Damages Directive also addresses the position of indirect purchasers, making it easier to claim damages incurred as a result of any overcharge that was passed on down the supply chain. Although the burden lies with the indirect purchaser to prove the existence and extent of any pass-on, there is a rebuttable presumption that this burden is satisfied if the indirect purchaser can establish that the defendant has committed an infringement of competition law (which is automatically the case in any follow-on action); 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 subject of the infringement, or has purchased goods or services derived from or containing them.60
The passing-on defence was already recognised in many Member States prior to implementation of the Damages Directive, but some changes to national legislation have been required, for example, to transfer the burden of proof from the claimant to the defendant (as in France) or to introduce a presumption in favour of indirect purchasers (as in Hungary and the Netherlands).
x FOLLOW-ON LITIGATION
The Damages Directive is intended to facilitate greater follow-on litigation in the Member States, as well as to ensure the optimal interaction between private and public enforcement.
To this end, the Damages Directive provides that a final decision by a Member State’s NCA (or review court) finding an infringement irrefutably establishes that infringement for the purposes of follow-on litigation in the courts of that Member State.61 An equivalent EU-level provision, preventing national courts taking a contrary view to the Commission where the Commission has found an infringement, has been in place for some time.62
The Damages Directive further provides that a final decision in another Member State must be taken as prima facie evidence by a court that an infringement occurred.63 It is noteworthy that some Member States have already gone further in this regard, with German law providing that a final decision by any Member State’s NCA will be treated as binding proof of an infringement before the German courts. Implementation has differed significantly across other Member States ranging from Austria (which has followed Germany in making other NCA decisions binding on national courts) to Hungary (which has taken a more restrictive approach by implementing a rebuttable presumption of an infringement in this situation). Regardless of these discrepancies, the overall effect should be to reduce the base evidentiary hurdle to establishing a breach of competition law for follow-on claimants in the EU.
As explained above, the Damages Directive has also introduced changes to other key issues that affect follow-on damages, such as limitation and disclosure. The net effect has been to increase venue choice for claimants, with many jurisdictions where the private enforcement regimes were arguably underdeveloped now adopting broadly similar rules.
The Damages Directive stipulates that Member States must ensure that national courts give full effect to applicable legal professional privilege under EU or national law when ordering the disclosure of evidence.64 It is otherwise silent on the issue of privilege. There is no requirement to apply EU privilege laws,65 meaning that the privilege regimes of individual Member States will be applicable to damages proceedings brought in national courts.
The rules protecting communications between a lawyer and his or her client vary considerably between Member States. Broadly, a distinction can be drawn between common law and civil law jurisdictions, with the scope of privilege generally more extensive in the former.66 This stems from the fact that disclosure obligations in civil law jurisdictions were typically (prior to the transposition of the Damages Directive) much narrower than they were under common law.67 This reduced the need for the protection of sensitive legal advice in such jurisdictions. Overlaying this broad distinction is a patchwork of different specific rules. For example, German law hardly recognises the concept of legal privilege at all. In Ireland, the UK, Poland, the Netherlands and Portugal, legal privilege is recognised for in-house counsel as well as external counsel. In the Netherlands and the UK, privilege is extended to communications with lawyers qualified outside the EEA.
It will be interesting to observe whether Member States with narrower concepts of legal privilege will adapt their regimes in light of the increased disclosure obligations under the Damages Directive to provide defendants with additional protection.
xii SETTLEMENT PROCEDURES
While the Recitals to the Damages Directive emphasise that damages actions represent only one element of an effective private enforcement system (which should also involve consensual dispute resolution),68 the Directive does not mandate any alternative dispute resolution mechanisms. Nor does it regulate settlement procedures generally. However, the Directive does introduce three measures aimed at incentivising the use of consensual dispute resolution mechanisms and increasing their effectiveness.
First, as noted above, to provide both sides with an opportunity to engage in settlement discussions before bringing proceedings, limitation periods are required to be suspended for the duration of a consensual dispute resolution process.69 Likewise, if proceedings have already been issued, national courts may suspend their proceedings for up to two years to enable settlement discussions to take place.70
Secondly, the Damages Directive provides that a competition authority may consider compensation paid as a result of a consensual settlement as a mitigating factor when making its decision in imposing a fine.71
Thirdly, and most significantly, the Damages Directive seeks to ensure that an infringing party that pays damages through consensual dispute resolution should not be placed in a worse position in relation to its co-infringers than it would otherwise have been absent the consensual settlement. This might be the case, for example, if a party, even after a consensual settlement, continued to be fully jointly and severally liable for the harm caused by the infringement and therefore remained open to contribution proceedings from other co-infringers. To address this, Member States are to ensure that, following a consensual settlement, the claimant’s claim is reduced by the settling co-infringer’s share of the harm72 (which is not necessarily the amount it has actually paid),73 and the claimant can only pursue its remaining claim against non-settling co-infringers.74 Importantly, non-settling co-infringers shall not be permitted to recover contribution for the remaining claim from the settling co-infringer.75 This creates significant incentives for defendants to offer an early settlement.
Further, in addition to a collective actions regime (discussed in Section VII), a number of Member States have collective settlement regimes pursuant to which groups of claims can be settled, including on an opt-out basis. For example, in the UK the collective action regime available in the CAT also includes an opt-out collective settlement regime. In the Netherlands, the Dutch Act on the Collective Settlement of Mass Claims similarly provides for an opt-out mechanism that facilitates collective settlement through a binding declaration from the Amsterdam Court of Appeal.
Arbitration is listed among the ‘consensual dispute resolution mechanisms’ that are actively promoted by the Damages Directive,76 Although the Damages Directive does not prevent claimants from submitting damages claims to arbitration, it is silent on more specific issues such as whether (and how) to include contractual arbitration clauses in respect of competition claims.
Arbitration is still relatively rare as a means of resolving competition disputes in Europe, due in part to an inherent tension between arbitration as a private system of dispute resolution and EU competition law as a public system designed to protect consumer welfare and the integrity of the internal market. There are other more specific obstacles to the widespread adoption of arbitration in this field; for example, competition claims often involve a large number of claimants or defendants, or both, from different levels of the distribution chain, which can be problematic where each party has an independent contract with its own arbitration clause (or lack thereof).
On the other hand, both arbitration and antitrust claims invariably arise in an international context, and arbitral tribunals are accustomed to complex, multiparty cases. Further, a decision in February 2017 by the English High Court77 to stay court proceedings so as to give effect to an arbitration clause indicates that antitrust arbitration may be becoming increasingly accepted in the sphere of private enforcement.
xiv INDEMNIFICATION AND CONTRIBUTION
The Damages Directive requires that cartelists are jointly and severally liable for the full harm caused by the infringement to which they were a party, and that the claimant has the right to full compensation from each of the infringers.78 However, immunity applicants will only be jointly and severally liable to their own direct and indirect purchasers, and will only be liable to other injured parties where full compensation cannot be obtained from the other infringers.79
The Damages Directive further provides that Member States must ensure any individual infringer can recover a contribution from co-infringers, in accordance with the ‘relative responsibility for the harm’ of each co-infringer.80 Again, a carve-out is in place to ensure that immunity applicants can only be required to contribute an amount up to the harm caused to their own direct and indirect purchasers.81 The Damages Directive does not explain what is meant by ‘relative responsibility for harm’, and this will be left to the Member States to decide.82 Notably, the Damages Directive does not specify a limitation period for contribution claims, meaning that this too will be a matter to be decided at a national level.
As long as they have not led the infringement,83 coerced other undertakings to participate in the infringement or previously been found to infringe competition law,84 small and medium-sized enterprises (SMEs) also gain protection from joint and several liability.85 Absent these circumstances, SMEs are liable only to their own direct and indirect purchasers provided their market share was below 5 per cent at some point during the infringement, and applying normal joint and several liability rules would irretrievably jeopardise their economic viability.86 These changes represent a novel development for many jurisdictions, including the UK, France, Germany and the Netherlands, and could complicate the recovery process for contribution claimants.
xv FUTURE DEVELOPMENTS AND OUTLOOK
A major development on the horizon is the UK’s withdrawal from the EU in March 2019. What impact Brexit will have on private competition enforcement in Europe remains unclear, but greater clarity should emerge during the course of the following year. At present, the UK is one of the most important jurisdictions within Europe for private enforcement actions, and claimant firms have expressed confidence that it will remain as such after the UK leaves the EU. Fundamental to whether this will be the case is the extent to which claimants will be able, post-Brexit, to rely on infringement decisions issued by the Commission as a basis for founding a follow-on claim in the UK.
More generally, it is only over the next few years that the effect of the Damages Directive will become clear. It seems likely at this stage that a major impact will be to increase venue choice for claimants, as jurisdictions that might not previously have been considered become more appealing to claimants.
Another area to watch is the work that the Commission is doing in relation to class actions, with Europe at the time of writing still waiting for a Commission paper on Member States’ current rules in this area. This may include proposed European-wide legislative amendments, which may lead to further significant changes in private enforcement.
Finally, there appears to be an increasing appetite for direct litigation funding (including from non-traditional sources, such as private equity houses) of competition litigation claims in Europe, which is likely to prompt ever-higher levels of activity in the private competition enforcement arena in the short to mid term.
1 William Turtle is a partner and Camilla Sanger is a senior associate at Slaughter and May. The authors would like to thank Jack Dickie, an associate at Slaughter and May, for his help in preparing this chapter.
2 Directive 2014/104/EU of 26 November 2014 (Damages Directive).
4 Case C-413/14 P Intel Corp v. Commission (2017).
5 Case C-162/15 P Evonik Degussa v. Commission (2017) and Case C-517/15 AGC Glass Europe and Others (2017).
6 Council Regulation (EC) No. 1/2003 of 16 December 2002.
7 Recital 9, Damages Directive.
8 Article 10(3), Damages Directive. The limitation period in a number of jurisdictions (e.g., the UK and the Netherlands) already met this requirement, while in others (e.g., Germany and Spain), it was extended by the implementing legislation.
9 Article 10(2), Damages Directive.
10 Article 10(4), Damages Directive. There has been some criticism, for example by the City of London Law Society in its response to the UK government’s consultation on the legislation transposing the Damages Directive, that Article 10(4) is not clear as to (whether an appeal on penalty alone will suspend the limitation period, and whether an appeal by one addressee suspends the limitation period for all addressees. Such questions have previously been addressed by the English courts in relation to its former limitation provisions, in the cases of BCL Old Co v. BASF  EWCA Civ 434 and Deutsche Bahn AG v. Morgan Advanced Materials plc  UKSC 24. At EU level, these ambiguities could result in a preliminary reference to the ECJ.
11 Article 18(1), Damages Directive. Recital 48 states that ‘consensual dispute resolution mechanisms’ will include out-of-court settlements, arbitration, mediation and conciliation.
12 By way of example, say that the Commission opens an investigation into a company’s anticompetitive conduct in 2018 in respect of behaviour that took place between 2010 and 2016. The Commission reaches an infringement decision in 2021, and the appeals process lasts until 2024. The limitation period would begin to run in 2025, and would last a minimum of five years, until 2030. Therefore, the company would be at risk of a damages claim for almost 15 years after it ceased its anticompetitive conduct.
13 The Damages Directive does allow for long-stop dates to be put in place. Recital 35 states that ‘Member States should be able to maintain or introduce absolute limitation periods that are of general application, provided that the duration of such absolute limitation periods does not render practically impossible or excessively difficult the exercise of the right to full compensation’. For example, in the Netherlands a 20-year ‘long-stop’ limitation period will apply, starting on the date on which the damage was inflicted, irrespective of whether the victim is aware.
14 Regulation No. 1215/2012 of 12 December 2012 (Recast Brussels).
15 Article 4(1), Recast Brussels.
16 Article 8(1), Recast Brussels.
17 Article 7(2), Recast Brussels. See also Case C-352/13 Cartel Damage Claims (CDC) Hydrogen Peroxide SA
v. Akzo Nobel and Others (2015).
18 Regulation No. 864/2007 of 11 July 2007 (Rome II).
19 Articles 4 and 6, Rome II.
20 Article 6(3)(b), Rome II.
21 Article 14, Rome II.
22 See, for example, Case C-89/85 A Ahlström Osakeyhtiö and others v. Commission of the European Communities (commonly known as Woodpulp I) (1994).
23 See, for example, Case T-102/96 Gencor v. Commission (1999).
24 Case C-413/14 P Intel Corp v. Commission (2017).
25 Article 3(1), Damages Directive.
26 Article 4, Damages Directive.
27 Article 12(1), Damages Directive.
28 Case C – 557/12 Kone AG and others v. ÖBB-Infrastruktur AG (2014).
29 Article 5(1), Damages Directive.
30 Article 5(1), Damages Directive.
31 Article 5(1), Damages Directive. Competition authorities are also expressly permitted to submit observations to the national courts on the proportionality of such disclosure requests (Article 6(11)).
32 Article 5(4), Damages Directive. For instance, through redacting sensitive passages in documents, conducting hearings in camera, restricting the persons allowed to see the evidence, and instructing experts to produce summaries of the information in aggregated or otherwise non-confidential form (see Recital 18).
33 Article 5(6), Damages Directive.
34 For instance, the new provisions on disclosure only apply to claims where proceedings are commenced on or after 27 December 2016 in Germany and 27 May 2017 in Spain.
35 Article 5(2), Damages Directive.
36 Article 5(8), Damages Directive.
37 Defined as an oral or written presentation voluntarily provided to a competition authority (or a record thereof), describing the provider’s knowledge of a cartel and describing its role therein, which presentation was drawn up specifically with submission to the competition authority with a view to obtaining immunity or a reduction of fines under a leniency programme, and not including pre-existing information (i.e., evidence that exists irrespective of the proceedings of a competition authority: e.g., contemporaneous documents) (Articles 2(16) and 2(17), Damages Directive).
38 Defined as a voluntary presentation to a competition authority acknowledging the provider’s participation in an infringement of competition law, which was drawn up specifically to enable the competition authority to apply a simplified or expedited procedure (Article 2(18), Damages Directive).
39 Article 6(6), Damages Directive. Previously, national courts were expected to undertake a balancing exercise of weighing up the need to facilitate private enforcement of competition law by allowing disclosure of leniency documents versus the public interest in protecting the effectiveness of leniency regimes.
40 Recital 26, Damages Directive.
41 Article 6(5), Damages Directive.
42 Article 6(4)(c), Damages Directive.
43 Case C-162/15 P Evonik Degussa v. Commission (2017) and Case C-517/15 AGC Glass Europe and Others (2017).
44 See, for example, ‘Study on the Passing-on of Overcharges’, RBB Economics et al (2016); Communication from the Commission on quantifying harm in action for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union (2013/C 167/07); and Commission Staff Working Document: Practical Guide – quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union (SWD (2013) 205).
45 Commission Recommendation of 11 June 2013 on ‘common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union law’ (2013/396/EU).
46 Green Paper on ‘Damages actions for breach of the EC antitrust rules’ (COM(2005) 672 final).
47 White Paper on ‘Damages actions for breach of the EC antitrust rules’ (COM(2008) 165 final).
48 Communication of 11 June 2013 titled ‘Towards a European Horizontal Framework for Collective Redress’ (COM(2013) 401 final).
49 Recital 7, the Recommendation.
50 Paragraph 21, the Recommendation.
51 Other jurisdictions with opt-out collective redress systems include Belgium, Bulgaria, Germany and Spain.
52 Communication from the Commission on quantifying harm in actions for damages based on breach of Article 101 or 102 of the Treaty of the Functioning of the European Union (2013/C 167/07).
53 Commission Staff Working Documents: Practical Guide – quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union (SWD(2013) 205).
54 Article 17(2) and Recital 47, Damages Directive.
55 Article 3, Damages Directive.
56 Article 17(1), Damages Directive.
57 Article 17(1), Damages Directive.
58 Article 17(3), Damages Directive.
59 Article 13, Damages Directive.
60 Article 14, Damages Directive.
61 Article 9(1), Damages Directive.
62 Article 16(1) Council Regulation (EC) No. 1/2003, codifying Case C-344/98 Masterfoods Limited v. HB Ice Cream Limited (2000).
63 Article 9(2), Damages Directive.
64 Article 5(6), Damages Directive.
65 Note that under EU law, legal professional privilege is considered a limitation on the Commission’s investigatory powers and has consequently been defined narrowly. For example, the EU concept of privilege does not extend to advice given by in-house counsel.
66 In common law jurisdictions (such as the UK, Ireland and Cyprus), privilege will protect confidential documents or communications that have been created for the purpose of giving or obtaining legal advice or in preparation for litigation.
67 For example, under English common law a party is required to disclose all documents on which it relies; which adversely affect or support its or another party’s case; or that it is required to disclose by a relevant practice direction.
68 Recital 5, Damages Directive.
69 Article 18(1), Damages Directive.
70 Article 18(2), Damages Directive.
71 Article 18(3), Damages Directive.
72 Article 19(1), Damages Directive.
73 According to Recital 51 of the Damages Directive, ‘the claim of the injured party should be reduced by the settling infringer’s share of the harm caused to it, regardless of whether the amount of the settlement equals or is different from the relative share of the harm that the settling co-infringer inflicted upon the settling injured party’.
74 Article 19(2), Damages Directive.
75 Article 19(2), Damages Directive.
76 See Recital 48, Damages Directive.
77 Microsoft Mobile OY (Ltd) v. Sony Europe Limited et al  EWHC 374 (Ch).
78 Article 11(1), Damages Directive.
79 Article 11(4), Damages Directive.
80 Article 11(5), Damages Directive.
81 Article 11(5), Damages Directive.
82 Recital 37, Damages Directive does provide that relevant criteria for assessing contribution to harm will include turnover, market share, or role in the cartel.
83 Article 11(3)(a), Damages Directive.
84 Article 11(3)(b), Damages Directive.
85 Article 11(2), Damages Directive.
86 Article 11(2), Damages Directive.