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Kent Bernard, Oct 29, 2007
I. Introduction On December 19, 2005 the European Commission published for public consultation a Green Paper on Damages Actions for Breach of EC Antitrust Rules (“the Green Paper”). The stated aim was to design a more efficient system for bringing private damages actions for infringement of EC antitrust law. The source of many of the suggested changes was United States antitrust litigation practice. In the debate that has followed, a key point seems to have been overlooked-U.S. antitrust litigation goes together with U.S. substantive antitrust law. Regardless of what one thinks of the U.S. litigation system in the context of U.S. substantive law, to graft that system onto the very different approach embodied in EC competition law raises a whole host of potential problems. This may well not be a hybrid that the EC wants to create.
II. The Structure of the Two Systems U.S. antitrust law is based on a common law tradition; a broad statute with details to be filled in by case law. Section 1 of the Sherman Act of 1890 states: “Every contract, combination – or conspiracy, in restrain to trade of commerce – is hereby declared to be illegal.” However, since 1918 U.S. courts have applied the so-called “Rule of Reason” under which only unreasonable restraints of trade are barred. This is key to understanding U.S. law and practice – freewheeling competition is allowed and encouraged. Only if the party challenging the conduct can prove that the adverse impact on competition (not just a competitor) outweighs the pro-competitive impact, is the contested conduct banned. There are some exceptions (such as cartel price-fixing which is condemned as illegal per se), but these are indeed the exceptions, and the rule of reason is the general rule for evaluating potentially anticompetitive conduct. There is no counterpart to the Rule of Reason in EU law. In fact, the analytical structure created by the combination of Article 81(1) and 81(3) of the EC Treaty is the reverse of the U.S. structure. In the EU, the party defending the conduct must show that the pro-competitive aspects outweigh the anticompetitive ones.
