The Private Competition Enforcement Review: Germany
Overview of recent private antitrust litigation activity
Private competition enforcement has a long tradition in Germany, and the country continues to grow as a leading jurisdiction for private competition litigation in Europe. Germany is among the three preferred jurisdictions for private cartel damages actions in Europe, along with the UK and the Netherlands. Because of Brexit and the end of the transition period on 31 December 2020, the UK may become less attractive for new cases going forward.2 In Germany, the level of private cartel enforcement is relatively high. 2020 was an active year again, even though the coronavirus pandemic slowed down activities, and hearings had to be postponed in some cases.
There are various reasons why Germany is an attractive location and a favourable forum for cartel damages claims. First, significant changes have been introduced to Germany's competition legislation over the years. In light of the decision of the European Court of Justice (ECJ) in Courage v. Crehan in 2001,3 the German legislator has amended the German Act against Restraints of Competition (GWB) with the aim of further facilitating private damages actions. Following these important amendments in 2005, referred to as the Seventh Amendment to the GWB,4 hundreds of cases have been initiated in Germany, and the courts have steadily built up relevant case law. Parties and courts have had numerous opportunities to address multiple issues that needed clarification, and many of these have been recently ruled on by the German Federal Court of Justice (BGH).
In June 2017, Germany introduced another important legislative package, the Ninth Amendment to the GWB,5 to implement the rules of the EU Damages Directive6 in German law, among other changes. The majority of the provisions contained in the Damages Directive have been incorporated in German competition law for some time. Over the years, the number of civil follow-on actions for damages following competition proceedings by the German Federal Cartel Office (FCO) or the European Commission has increased significantly, and private damage litigation in Germany has affected products as diverse as steel, rails, sugar, bathroom fixtures, electronic cash, chipboard, detergents, picture tubes for computers or televisions, packaging, cement, steel blasting agents, wallpaper, gas-insulated sound systems, drugstore items, flour, confectionery and trucks, among others.
The legislative package of June 2017 introduced significant changes to German law, including, in particular:
- a system of disclosure of evidence relevant for damages claims;
- the extension of the knowledge-dependent limitation period from three to five years; and
- the introduction of a legal presumption that a proven cartel has caused damages, among other changes for the benefit of cartel victims.
Another legislative update, the 10th Amendment to the GWB, came into effect in January 2021. This amendment will also benefit cartel victims.
Second, the German rules on pretrial interest and on costs are quite reasonable. The German court system also offers significant advantages because cartel damages cases are decided by specialist chambers in a limited number of first instance courts.
Third, the BGH and the ECJ both handed down important case law judgments and clarifications recently. In January 2020, the BGH, with its fundamental ruling in Rail Cartel II,7 recalibrated the rules for entitlement and attribution of damages in cartel infringements, taking into account the requirements of EU law, and lowered the standard of proof for plaintiffs. Following this ruling, it is not necessary to prove that the cartel agreement actually had an effect on the procurement transaction in question. This was, as the BGH freely admits in its ruling from January 2020, a significant correction of the view the BGH held in its first Rail Cartel judgment in December 2018.8 This readjustment must also be seen against the backdrop of the important ECJ Otis ruling in December 2019,9 in which the ECJ extended the attribution of damages beyond upstream and downstream product markets. In its Rail Cartel II judgment, the BGH also ruled that a factual presumption exists that long-lasting cartels lead to inflated prices and thus to damage to those purchasing the cartelised product. Moreover, the BGH provided some guidance on the use of economic expert opinions; for example, that it is not mandatory to appoint a court-appointed expert.
Another sensational ruling was handed down from the Munich Regional Court I in February 2020.10 The Court dismissed a lawsuit to which 3,266 claimants had assigned their approximately 85,000 claims against members of the Trucks cartel. The Court ruled that the assignment model, which involved a litigation financier, was null and void due to violations of the German Legal Services Act (RDG), which rendered the claims vehicle's right to sue invalid. Although the plaintiff was registered as a debt collection service provider under German law, the Court held that its activities had, from the outset, been aimed solely at the judicial enforcement of the individual claims, which did not meet the requirements of the RDG.
Another interesting ruling was issued by the Dortmund Regional Court in September 2020.11 The Dortmund Regional Court is relatively active in competition cases and well known among competition litigation experts. In its judgment, the Court made use of the possibility to estimate the amount of damages without obtaining its own expert opinion. This possibility is generally available under German law12 but has not yet been used in competition damages cases. In the specific case at hand in connection with the rail cartel complex, the Dortmund Regional Court estimated the minimum damages at 15 per cent.
And finally, in a September 2020 judgment on damages relating to the Trucks cartel,13 the BGH made clear, among other things, that the suspension of the statute of limitations for the claims begins as soon as the preliminary proceedings are conducted (for example, the dawn raids), and not when the proceedings are formally opened by the competition authority, which can be years later. And referring to its earlier case law, the BGH confirmed that the fact that the injured party was affected by the cartel was not a question of causality giving rise to liability and that it did not otherwise pose 'a major problem' in this case. If the injured parties obtained the trucks concerned from the defendant cartelists, cartel concern would be present. For this, it was sufficient that the purchased concrete mixers and dump trucks were equipped with the cartelised chassis.
General introduction to the legislative framework for private antitrust enforcement
Private competition claims must be brought in the national courts of an EU Member State. The proceedings are governed by the national law of the Member State. In Germany, private competition actions regarding injunctive relief or damages are available in any type of cartel matter. Such claims can be made against members of a cartel, as well as against companies that abuse a dominant position or any party to a potentially anticompetitive agreement. In private competition cases, the regional courts have exclusive jurisdiction.14 The German states have the option to assign civil disputes to one or more specific regional courts in cartel cases in their state,15 which is the case in most of Germany's 16 states.
It is also possible, under German law, to object to a merger. If a customer, competitor or another affected market participant takes the position that the respective merger should have been blocked by the FCO, this claim falls within the exclusive jurisdiction of the Higher Regional Court of Düsseldorf.16
Concerning the substantive basis for a competition damages claim, German law applies in general. Since 2017, claims for removal and injunctive relief have been based on Section 33 of the GWB, and damages claims are based on Section 33(a) of the GWB. The invalidity of agreements for competition law reasons is based on Section 134 of the German Civil Code (BGB) in connection with Section 1 of the GWB.
Prior to 2005, the GWB did not provide for specific antitrust damages claims; these were based on general tort law. In the event of a culpable, intentional or negligent violation of protected rights and legal interests, the German tort system regulated in Section 823 et seq. of the BGB offers those affected by violations the possibility of asserting a claim for damages against the tortfeasor or tortfeasors.17 In 2005, the German legislator also introduced Section 33(3) of the GWB 2005, a specific basis for antitrust damages claims. This basis was not changed, but renumbered in June 2017, when the Ninth Amendment to the GWB18 was introduced. Section 33a(1) of the GWB applies to claims for damages that arose after 26 December 2016.19
Generally, it is up to the plaintiff to state and prove all facts that substantiate his or her claim. The claim for compensation for cartel damages is justified if the defendant has culpably violated cartel law, the plaintiff has suffered damage because of the cartel violation and the damage exists in the amount claimed.20 Therefore, the cartel victim would have to present and prove the cartel violation, the fault and the occurrence and amount of damage. However, the GWB and the applicable case law make some exceptions to this general rule of burden of proof. Pursuant to Section 33b of the GWB, final decisions of the European Commission or a national competition authority have a binding effect. Although a finding of infringement by a competition authority is not required to initiate a private antitrust action under German law, it is advisable in practice to await a finding because of the binding effect.21
Regarding the amount of damage caused to the injured party by the cartel, the standard of proof under German law is reduced. Pursuant to Section 33a(2) of the GWB, there is a (rebuttable) presumption that cartels lead to harm, and pursuant to Section 33a(3) of the GWB and Section 287 of the German Code of Civil Procedure (ZPO), the court may estimate the amount of harm suffered by the plaintiff. The plaintiff is not obliged to precisely calculate the damage caused by the cartel. It is only necessary that the plaintiff provides a reliable factual basis for the estimate. In cartel damages cases, when estimating the amount of damages, the court may additionally consider the profits made by the defendants through illegal cartel activities.22
The statute of limitations follows complex rules under German law. The legislative package from June 2017 implemented Article 10 of the Damages Directive in Section 33h of the GWB. The most important change compared to the previous regulation is the increase of the limitation period from three to five years. Cartel damages claims that arose after 26 December 2016 become time-barred five years after the end of the year in which the injured party became aware of the cartel infringement and of the identity of the damaging party (or would have to become aware of them without gross negligence), or 10 years after the damage arose and the infringement ended. In all other respects, the claims shall become time-barred 30 years after the infringement that caused the damage.
Most damages cases in dispute today relate to infringements that arose before 26 December 2016. These are 'old cases' that must be assessed under the application of the new law, but from the perspective of the old law. The limitation rules of the GWB are subject to a complex transitional provision pursuant to Section 186(3) of the GWB. Because this rule provides for different time ranges of application of the rules on the commencement of the limitation period and the end of the limitation period, and the details on the limitation period are disputed in literature and case law, one will currently have to assume as a precautionary measure that the 'old' (stricter) rules apply to the commencement of the limitation period. The commencement of the limitation period for the period prior to the entry into force of Section 33h of the GWB is assessed according to the provisions of the BGB. For the knowledge-based limitation period, there are no differences to Section 33h of the GWB, as this period also begins at the end of the year in which the aggrieved party becomes aware of the infringement and of the identity of the wrongdoer, according to Section 199(1) of the BGB.23
In addition, according to Section 199(3)(1) of the BGB, a knowledge-independent period of 10 years from the date of the claim for damages comes into existence, to the exact day. In contrast to the new regulation of Section 33h(3) of the GWB, the beginning of this period does not depend on the termination of the cartel. In this context, it must be taken into account that the investigation of the European Commission or a competition authority of an EU Member State suspends the limitation period24 until one year after the conclusion of the investigation proceedings. On 23 September 2020, the BGH ruled in the Trucks cartel matter25 that the start of the suspension of the statute of limitations is not based on the formal initiation of the competition authorities' proceedings, but on the first externally visible investigative measures (i.e., searches (dawn raids)).26 In accordance with general opinion in Germany, claims for antitrust damages arise upon conclusion of the respective purchase agreement.
Generally, German and EU competition law applies to any anticompetitive conduct that has either taken place in Germany or caused any harm in Germany. Competition damages claims can be brought before German courts if the defendant is located in Germany, if the cartel activities have taken place in Germany or if the harm has been suffered in Germany. If a cartel consists of cartel participants domiciled in Germany and abroad, which are jointly and severally liable, international jurisdiction for compensation actions against the foreign cartel participants in Germany will result from Article 8(1) of the Brussels Regulation. Accordingly, a foreign defendant can also be sued in Germany, as the cartel provides the necessary connection. In international cartel cases, actions can be brought against all defendants; if one defendant can be sued in Germany, this 'anchor defendant' is sufficient to establish jurisdiction. Jurisdiction remains for the remaining foreign defendants even if the only anchor defendant ends its case by settlement.27
Any person or company having suffered harm can bring a private damages case in Germany. In addition to direct customers who purchased the cartelised goods or services directly from the cartelists or their competitors, indirect customers can also generally sue. In its landmark judgment in the ORWI case in 2011,28 the BGH stated that, under the German and European competition law rules, indirect purchasers and all those harmed by the infringement are entitled to claim damages. Regarding substantive law, it is now also clear from Section 33c of the GWB that indirect purchasers are entitled to claim damages. In its decision in January 2020,29 the BGH expanded the group of claimants that is entitled to seek damages, including by reference to the ECJ.30 The Court made it clear that it applies the European law requirements specified by the ECJ in the case at hand by way of an adjusted interpretation of the 'affected persons' criterion. This criterion is fulfilled if the claimant proves that it has purchased goods that were covered by the cartel. However, for indirect purchases it is more difficult to substantiate damage caused by the cartel in practice. But, as set out in Section 33c of the GWB, it is presumed that an overcharge paid by a direct purchaser has been passed on to indirect purchasers under specific circumstances.
The process of discovery
In German civil procedure there is no discovery procedure comparable to common law jurisdictions. Therefore, the concept of legal privilege is rather of little relevance in German civil procedure (see also Section XI). According to German civil procedure law, generally each party must present and prove the facts favourable to its legal position; in particular, by means of submitting documents, witnesses or expert opinions. Until 2017, there were no specific rules on evidence in private antitrust disputes. Claimants therefore had to rely on a set of rarely used provisions31 that theoretically allowed courts to order defendants or third parties to produce certain documents. The German judicial culture, however, is rather averse to disclosure, and these provisions have been used sparingly.
In 2017, however, significant changes to the procedural rules on the disclosure of evidence were introduced with Section 33g of the GWB.32 In general, both plaintiffs and defendants can demand access to information held by others.33 Restrictions only apply to leniency statements and admissions in connection with settlement discussions with competition authorities. The same applies to access to the files of a competition authority. Communications between the accused and internal or external lawyers can be found in the file of the FCO, as the concept of attorney–client privilege does not exist when the FCO conducts cartel investigations and seizes documents. The FCO is entitled to seize all documents in the possession of the in-house counsel unless they are defence correspondence. Defence correspondence is correspondence that is produced with the knowledge of, and directly relates to the actual defence in, quasi-criminal cartel investigations or other cartel proceedings that may lead to the imposition of a fine. Pursuant to Section 33g(6) of the GWB, documents in the possession of the defendant's outside counsel are protected and cannot be seized.
Use of experts
Germany is rather a claimant-friendly jurisdiction with respect to the calculation of cartel damages, even though a passing-on defence is generally available (see Section IX). The legislative package of June 2017 also introduced a legal presumption that a proven cartel has caused damages.34 However, it is quite common in Germany for parties to use experts and economists to establish violations and to prove the amount of an overcharge. This is also true for initial settlement negotiations in larger cases, before litigation is initiated. In court proceedings, the plaintiff can, if there is insufficient time to obtain an expert opinion, make the case pending and sue for a declaratory judgment that the defendant is obliged to pay damages. In the course of the trial, however, there will be sufficient time to obtain an economic regression analysis, which is usually done if the potential damage is large enough and the cost of such an expert opinion is not out of proportion. Provided that the potential damage is of sufficient volume, the plaintiffs usually submit an economic expert opinion to prove the damage. As a rule, the defendants then submit a counter-assessment, which naturally leads to the result that no damage can be ascertained. In some cases, the court then appoints its own expert to determine the amount of damages by an expert who is as independent as possible. However, in January 2020, the BGH decided in its Rail Cartel II ruling35 that it is not mandatory to appoint a court-appointed expert. In its judgment of September 2020,36 the Dortmund Regional Court made use of the possibility to estimate the amount of damages, without obtaining its own expert opinion. This possibility is generally available under German law,37 but had not been used in competition damages cases prior to this case. In the specific case at hand in connection with the Rail cartel, the Dortmund Regional Court estimated the minimum damages at 15 per cent.
Under German civil procedure law, class actions are not (yet) available. However, despite the lack of a class action, it is possible to file bundled claims for damages through third parties and claim vehicles. There are no restrictions per se on the assignment of claims for damages under German law. Some restrictions apply regarding assignments to special purpose entities whose financial resources might be considered insufficient to cover subsequent claims for costs in court proceedings.38 Further restrictions may apply regarding the RDG, which regulates the licensing of extrajudicial legal services. In its judgment of February 2020,39 the Munich Regional Court I dismissed a lawsuit to which 3,266 claimants had assigned their approximately 85,000 claims against members of the Trucks cartel. The Court ruled that the assignment model, which involved a litigation financier, was null and void due to violations of the RDG, which rendered the claims vehicle's right to sue invalid. Although the plaintiff was registered as a debt collection service provider under German law, the Court held that its activities had, from the outset, been aimed solely at the judicial enforcement of the individual claims, which did not meet the requirements of the RDG. Although this ruling puts a damper on innovative class action models under German law, the BGH will soon have to rule on the admissibility of this model; the plaintiff has already announced an appeal. To avoid the litigation risk associated with the assignment model under German law, all parties concerned can also file one lawsuit. It is quite possible under German law to file a lawsuit with more than 100 plaintiffs against one or several cartel members.
Although a certain type of civil class action was introduced in Germany in 2005 with the Capital Investor Model Proceedings Act and, in November 2018, in support of the Dieselgate victims with the model declaratory action,40 these procedures are not suitable for conducting class antitrust damages actions under German law. However, in June 2020, the European Commission, the European Parliament and the European Council concluded their informal trialogue and agreed on the introduction of a European representative action, the scope of which is significantly broader than the model declaratory action under Section 606 of the ZPO. It remains to be seen if and how this type of class action will be implemented in German law.
Generally, the claimant must demonstrate and provide evidence for the facts forming the basis of the loss incurred. However, the claimant may benefit from a shift in the burden of proof or from presumptions in certain situations. A point of reference for the estimated amount of damages can be derived from the 'profit and damage potential' in the amount of 10 per cent of the offence-related turnover, which the FCO uses as a basis for the assessment of fines in its Guidelines on Fines of 25 September 2013. The plaintiff is not obliged to precisely calculate the damage caused to him or her by the cartel; it is only necessary that the plaintiff provides a reliable factual basis for the estimate.
Pursuant to Section 33a(2) of the GWB, there is a rebuttable presumption that a cartel causes harm.41 And, pursuant to Section 33a(3) of the GWB, the court may additionally consider the profits made by the defendants through illegal cartel activities when estimating the amount of the damages incurred. A plaintiff may also claim lost profits. In this respect, the burden of proof is additionally eased by Section 252 of the BGB, according to which lost profit is, for example, that which the plaintiff would probably have achieved in the normal course of events.
If the potential damage is of sufficient volume, the plaintiffs usually submit an economic expert opinion to prove the damage. The defendants then generally submit a counter-assessment, which often leads to the result that no damage can be ascertained. Sometimes, the court then appoints its own expert to determine the amount of damages by an expert who is as independent as possible. However, in January 2020, the BGH decided in its Rail Cartel II ruling42 that it is not mandatory to appoint a court-appointed expert. Following this guidance, in its judgment of September 2020,43 the Dortmund Regional Court made use of the possibility to estimate the amount of damages without obtaining its own expert opinion. This possibility is generally available under German law,44 but had not been used in competition damages cases prior to this case. In the specific Rail cartel case, the Dortmund Regional Court estimated the minimum damages at 15 per cent.
German law only provides for actual loss; treble or punitive damages are not available. However, the loss also includes lost profits and statutory interest, which can double the claim after several years. Pursuant to Section 33a(4) of the GWB, the defendant shall pay interest from the occurrence of the damage.45 The general interest rate is 5 percentage points above the base rate of the European Central Bank base rate.46 Due to changes to the law, the interest rate for damages incurred before 1 July 2005 is regulated differently and is generally set at 4 per cent or 5 per cent, and is not linked to the base rate.
Under German law, the legal costs are generally borne by the losing party. If there is no complete loss or gain, the court will divide the legal costs between the parties proportionately according to the outcome of the proceedings. Legal costs include both the costs of the court proceedings and the lawyers' fees. However, the legal fees are calculated based on statutory fees, which are usually significantly lower than the actual fees incurred in complex antitrust damages cases. In other words, the cost risk for the injured party is relatively low and can be determined in advance. Moreover, the amount in dispute can be adjusted in cartel cases if certain conditions are met.47
The passing-on defence is generally available under German law. Members of a cartel can defend themselves against a claim for damages by pleading that the plaintiffs passed on the price surcharge to their customers (passing-on defence). This principle was introduced by the German legislature in Section 33c of the GWB in June 2017, following the landmark decision of the BGH in the ORWI case in 2011.48 However, the passing-on defence is only possible according to the principle of 'adjusting the damages to the benefits received'. Consequently, the burden of proving that the direct purchaser passed on the damage to the next level of customers lies with the defendant. This means that the defendant must prove, first, that the overcharge was passed on and, second, the extent to which the overcharge was passed on. In cases where an indirect buyer claims that the overcharge was passed on to it by the direct buyer and therefore wants to claim damages, the indirect buyer can benefit from a reversal of the burden of proof, pursuant to Section 33c(2) of the GWB. Passing on is presumed if the defendant has infringed competition law, the infringement of competition law has led to higher prices for the direct customer and the indirect customer has acquired the cartelised products. It is then up to the defendant to prove that no passing on has taken place.
Although a finding of infringement by a competition authority is not required to initiate a private antitrust action under German law, it is advisable in practice to await a finding because of the binding effect of a final decision of the European Commission or a national competition authority under Section 33b of the GWB.49 In consequence, most cartel damages claims in Germany have been brought following a decision of the European Commission or the FCO. Under the rule, the binding effect of the facts should relate solely to the determination of a violation of antitrust law; all other questions, in particular regarding the causality of the damages and the quantification of the damages, should not be prejudiced by these rules, but should be subject to the free assessment of evidence by the court.
The concept of legal privilege, as known in the United Kingdom, the United States and other common law jurisdictions, does not exist in Germany. German law follows a different approach and provides secrecy provisions to protect the attorney–client relationship. In German civil procedure, the concept of legal privilege is less relevant, as there is no discovery procedure comparable to common law. In 2017, however, a limited disclosure procedure for competition cases was introduced under Section 33g of the GWB. In general, both plaintiffs and defendants can demand access to information held by others. Restrictions only apply to leniency statements and admissions in connection with settlement discussions with competition authorities. The same applies to access to the files of a competition authority. Communications between the accused and his or her internal or external lawyers can be found in the FCO's file, as the concept of attorney–client privilege does not exist when the FCO conducts cartel investigations and seizes documents (see Section V).
Business and trade secrets are generally not privileged under German civil procedure law. However, confidentiality aspects must be considered in the context of a request for information under Section 33g of the GWB. If access to the information is granted, the court must ensure that business or trade secrets are protected (e.g., by redactions).
In practice, most private competition damages cases are settled in Germany. Private antitrust damages claims can be settled at any time prior to litigation and during ongoing court proceedings. A settlement generally follows German civil law principles, but specific rules to facilitate cartel damages settlements were introduced in 2017 under Section 33f of the GWB.50 Settlements are often reached after a lawsuit has been initiated; on the one hand because of the pressure built up by the lawsuit and the publicity of this process, and on the other hand, because of the ongoing interest, which can double the claim for damages after a number of years. If the parties agree to a settlement, no further court approval is required under German law. For procedural reasons, however, it can be helpful to have a settlement recorded in court. When structuring a settlement, German tax law must be taken into account (out-of-court settlements may be subject to VAT) and, in particular, the effect of the settlement on non-settling co-defendants, which are usually jointly and severally liable. In this respect, Section 33f of the GWB must be observed, under which a limited overall effect of the settlement is essentially to be assumed, among other things. The limitation period is suspended for the duration of a consensual dispute resolution,51 and German courts may suspend damages proceedings if the parties engage in settlement negotiations.
If the parties have agreed to arbitration in relation to antitrust damages in connection with a contract, or later, private competition cases may be adjudicated in arbitration. There is no restriction on resolving antitrust issues through arbitration or mediation. In principle, the parties are not obliged to pursue alternative dispute resolution before trial. However, there are individual courts that require parties to engage in alternative dispute resolution prior to trial. Although there are cases in which the parties engage in arbitration or other alternative dispute resolution before trial, this is rather rare in Germany.
Indemnification and contribution
If several parties are involved in an antitrust violation, each party is fully responsible for the complete damages,52 and several responsible parties are jointly and severally liable.53 Each defendant is liable for the totality of the damages incurred by the claimant, but the claimant is only entitled to claim the totality of the damages once.54 This self-evident fact of tort law was introduced in 2017 as Section 33d of the GWB. The internal compensation of damages between the tortfeasors is governed by Section 426(1) and (2) of the BGB. Specific provisions apply to small and medium-sized enterprises with small market shares, limited financial resources and minor participation in the cartel,55 leniency applicants56 and cartel members that participated in a settlement.57
If parties are jointly and severally liable as cartel members, each member may sue another cartel member in internal recourse, pursuant to Section 426 of the BGB after compensation has been paid to the plaintiff. In cases where plaintiffs seek damages from only selected participants in an infringement, it is common in Germany for defendants to issue third-party notices against the other participants in the infringement, as these notices have the effect of binding the factual findings of the court hearing the main action and on the courts hearing subsequent actions for internal contribution. Settlements are usually limited to damages resulting from deliveries by the settling parties and do not cover damages resulting from deliveries by other cartel members. Pursuant to Section 33f(2) of the GWB, actions for internal contribution in settlement cases are not possible for the settled part of the claim.
Pursuant to Sections 33h(7) and 33d(2) of the GWB, the limitation period according to Section 195 of the BGB for the recourse claim (Section 426(1) of the BGB) only begins with the satisfaction of the injured party (i.e., not from its accrual as an indemnity claim). This is to prevent the previous situation in which claims for compensation under Section 426(1) of the BGB arise along with the claim for damages, but often become time-barred before the claim for damages is even asserted.
Future developments and outlook
The legislative process of enacting the 10th Amendment to the GWB commenced with a first draft bill, which was published in January 2020. As well as implementing the ECN+ Directive,58 which also deals with an expansion of the procedural rights of competition authorities, the reform brings major changes for the digital economy and new provisions regarding fines, damages claims and merger control. The government draft was adopted by the Federal Cabinet on 9 September 2020, and after certain last minute changes were made, the law came into force on 19 January 2021. Because the part of the GWB concerning damages claims was fundamentally reformed in 2017, only minor adjustments have been made in this 10th Amendment. The new law introduced a rebuttable presumption that legal transactions with cartel members falling within the scope of a cartel in terms of subject matter, time and place are affected by the cartel.59 This presumption also applies in favour of indirect buyers of these goods.60 However, the new law does not yet provide for the introduction of a provision on the determination or presumption of the amount of damages.
1 Sebastian Jungermann is a partner at Arnecke Sibeth Dabelstein.
2 If an infringement decision is reached by the European Commission or another EU Member State authority after 31 December 2020, claimants wishing to pursue follow-on private damages claims in the UK courts will no longer be able to rely on that decision as a binding finding of a competition infringement under the UK Competition Act 1998.
3 Judgment of the European Court of Justice of 20 September 2001 in Case C-453/99, Courage Ltd v. Bernard Crehan and Bernard Crehan v. Courage Ltd and Others.
4 BGBl, 2005, Part I, No. 42, 12 July 2005, p. 1954.
5 BGBl, 2017, Part I, No. 33, 8 June 2017, p. 1416.
6 Directive 2014/104/EU 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, dated 5 December 2014, pp. 1–19.
7 Judgment of the Federal Court of Justice (BGH) of 28 January 2020, KZR 24/17 (Rail Cartel II).
8 Judgment of the BGH of 11 December 2018, KZR 26/17 (Rail Cartel).
9 Judgment of the Court (Fifth Chamber) of 12 December 2019, Case C-435/18, Otis Gesellschaft m.b.H. and Others v. Land Oberösterreich and Others, request for a preliminary ruling from the Austrian Supreme Court of Justice.
10 Judgment of the Munich Regional Court I of 7 February 2020, 37 O 18934/17.
11 Judgment of the Dortmund Regional Court of 30 September 2020, 8 O 115/14 (Kart).
12 The possibility to estimate the damages is provided for in Section 287(1) of the German Code of Civil Procedure (ZPO): 'If it is disputed between the parties whether damage has been suffered and the amount of the damage or interest to be compensated, the court shall decide on this in its own discretion, taking into account all the circumstances. Whether and to what extent a requested taking of evidence or an ex officio expert opinion is to be ordered shall be left to the discretion of the court. . .'.
13 Judgment of the BGH of 23 September 2020, KZR 35/19.
14 Section 87, Act against Restraints of Competition (GWB).
15 id., Section 89.
16 id., Section 63 et seq.
17 In addition to tort law, general laws of enrichment (Sections 812 et seq. and 826, German Civil Code (BGB)) and contractual claims (Section 280(1), BGB) are available.
18 See footnote 5.
19 Pursuant to Section 186(3) of the GWB, new Section 33a of the GWB is only applicable to claims for damages that arose after 26 December 2016 (i.e., after the expiry of the transposition period pursuant to Article 21 of the Damages Directive). For claims that arose before then, Section 33(3) of the GWB 2005 continues to apply, and Section 823 of the BGB applies for older claims.
20 Sections 33a(1) and 33(1), GWB.
21 Section 33b of the GWB corresponds to old Section 33(4) of the GWB 2005, which introduced a factual effect for follow-on actions in 2005. However, pursuant to Section 186(3) of the GWB, new Section 33b of the GWB is only applicable to claims for damages that arose after 26 December 2016 (i.e., after the expiry of the transposition period pursuant to Article 21 of the Damages Directive). Section 33(4) of the GWB 2005 continues to apply to claims that arose before then.
22 Section 33a(3), GWB.
23 Concerning the Trucks cartel cases based on the Commission decision dated 19 July 2016 (Case AT.39824), for instance, the violations all arose before 26 December 2016. All civil damages cases based on these claims are considered 'old cases', for which Section 186 of the GWB applies. It is therefore necessary to examine whether potential claims were time-barred by 9 June 2017, the date on which the June 2017 legislative package came into force. The start of the statute of limitations for the period before Section 33h of the GWB came into force in June 2017 must be assessed according to the provisions of the BGB. For the knowledge-dependent limitation period, there are no differences to the new regulation in Section 33h of the GWB. According to Section 199(1) of the BGB, claims for cartel damages (which arose before 26 December 2016) were originally subject to a limitation period of three years after the end of the year in which the claim arose and the injured party became aware of the cartel infringement and the identity of the injuring party, or would have to become aware of them without gross negligence. If a cartel victim did not have any such knowledge before 19 July 2016 (when the EC published its Trucks decision), the three-year period had not elapsed by 9 June 2017, and the five-year limitation period of the new law (Section 33h, GWB) applies accordingly.
24 Pursuant to Section 33h(6) of the GWB, which corresponds to old Section 33(5) of the GWB 2005.
25 See footnote 13.
26 For German Trucks cartel damages cases following the decision from June 2016 (Case AT.39824), this means that the start of the suspension of the statute of limitations is not based on the formal initiation of the Commission proceedings, which occurred on 20 November 2014, but on the first externally visible investigative measures (i.e., the searches) on 18 January 2011.
27 Judgment of the Court (Fourth Chamber) of 21 May 2015, Case C-352/13, Cartel Damage Claims (CDC) Hydrogen Peroxide SA v. Evonik Degussa GmbH and Others; request for a preliminary ruling from the Dortmund Regional Court.
28 Judgment of the BGH of 28 June 2011, KZR 75/10 (ORWI).
29 Judgment of the BGH of 28 January 2020, KZR 24/17.
30 Reference was made to Manfredi (C-295/04), Skanska (C-724/17) and Otis (C-435/18).
31 Such as Sections 142 and 421 et seq. of the ZPO.
32 Section 33g of the GWB implements Articles 5(1), 5(2) and 14 of the Damages Directive. Pursuant to Section 186(4) of the GWB, Section 33g of the GWB is applicable to claims for damages for which an action was brought after 26 December 2016 (i.e., after the expiry of the transposition period pursuant to Article 21 of the Damages Directive). The old law applies to claims for which an action was brought prior to this date.
33 Essential for the understanding and enforcement of Section 33g of the GWB are Section 89b and 89c of the GWB, which regulate the details of the enforcement of claims under Section 33g of the GWB. Pursuant to Section 33g of the GWB, the claims for information and production may be asserted by the injured party with an action at any time if the requirements are met, and by the tortfeasor with an action upon the pendency of a claim for damages pursuant to Section 33a(1) of the GWB or a claim for information and production, namely against the injured party, the tortfeasor and against third parties (independent assertion). Alternatively, in pending proceedings for damages, a court order for information and production can be made pursuant to Section 89b(1) of the GWB and Section 142 of the ZPO.
34 Section 33a(2) of the GWB states: It is rebuttably presumed that a cartel causes damage.
35 See footnote 7.
36 See footnote 11.
37 See footnote 12
38 Judgment of the Düsseldorf Higher Regional Court of 18 February 2015, Case VI U 3/14.
39 See footnote 10.
40 Section 606 et seq., ZPO.
41 This rebuttable presumption applies to claims for damages that arose after 26 December 2016 (Section 186, GWB). According to a judgment of the BGH of 11 December 2018 (KZR 26/17), and in contrast to the previous case law of the lower courts in Germany, there is no prima facie evidence but a factual presumption that cartels lead to damages for claims for damages that arose before this date. It remains to be seen whether and how this differentiation will affect the standard applied by the courts.
42 See footnote 7.
43 See footnote 11.
44 See footnote 12.
45 Sections 288 and 289(1) of the BGB apply accordingly.
46 Pursuant to Section 33a(4), GWB and Section 288(1), BGB.
47 Pursuant to Section 89a, GWB.
48 See footnote 28.
49 Section 33b of the GWB was introduced in June 2017; it corresponds to the prior rule of Section 33(4) of the GWB 2005, which introduced a factual effect for follow-on actions in 2005. Pursuant to Section 186(3) of the GWB, new Section 33a of the GWB is only applicable to claims for damages that arose after 26 December 2016. The prior rule of Section 33(4) of the GWB 2005 continues to apply to claims that arose before then.
50 Section 33f of the GWB only applies to claims for damages that arose after 26 December 2016. For claims that arose before then, the old law applies.
51 Section 203, BGB.
52 id., Section 830.
53 id., Section 840(1).
54 id., Section 421.
55 Section 33d(3), GWB.
56 id., Section 33e.
57 id., Section 33f.
58 Directive (EU) 2019/1 of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, OJ L 11, 14.1.2019, pp. 3–33.
59 Section 33a(2), GWB.
60 id., Section 33c(3).