Half a Revolution? Damages for Breaches of Competition Law in the European Union

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Elaine Whiteford, Feb 25, 2015

On June 11, 2013, the European Commission launched two initiatives relevant to competition damages. The first, which led to the adoption of the EU Damages Directive in November 2014, has enjoyed significant coverage and publicity. It obliges Member States to allow disclosure of documents to be sought from parties to competition damages litigation, as well as third parties; introduces presumptions about passing-on; clarifies aspects of joint and several liability; and introduces a limitation period of at least five years.

Member States now have until the end of 2016 to implement the Directive’ provisions, although it seems likely that their full impact will be felt only a number of years thereafter as lawyers and judges grapple with practices that have not formed part of their traditional dispute resolution processes. In particular, in many EU jurisdictions, the obligation to allow proportionate disclosure of relevant documents, and not simply documents held on a competition authority’s file, may be transformative of competition litigation, particularly relating to passing-on.

What can be said unequivocally is that the Directive is likely to stimulate further claims and one side effect of that will be to further encourage innovative ways of grouping claims by those who consider they have been harmed by particular tortious conduct. Whatever the advances that have been made in competition damages litigation in the European Union over the last decade or so, those advances have not typically concerned redress to consumers or small- and medium-sized enterprises harmed by anticompetitive conduct, but have overwhelmingly benefitted large and sophisticated legal persons.

The second of the two 2013 initiatives relevant to competition damages, and one which has enjoyed considerably less attention, sought to begin to redress this balance. Implementation of this “Recommendation on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law” is crucial if the objective of the Directive—to ensure that “anyone—be they an individual, including consumers and undertakings or a public authority—can claim compensation before national courts for the harm caused to them by an infringement” of Articles 101 and 102 TFEU—is to be made a practical reality.

The remainder of this brief contribution first describes the approach being taken in the competition field to collective redress in the Netherlands, Germany, and the United Kingdom, which are typically regarded as the leading EU jurisdictions for competition damages. It then considers the main features of the Recommendation and whether experiences in these three jurisdictions suggest that more far-reaching EU initiatives are likely to be required if everyone harmed by breaches of competition law is truly to be able to recover their losses.