It will soon be easier for all European citizens and companies to claim compensation for damages suffered as a result of a breach of EU competition rules.
The recent adoption by the European Council of Ministers of the proposed directive on antitrust damages actions is surely an important step forward in this direction.
Infringements of competition rules, such as cartels or abusive practices by dominant companies, often cause harm not only to the economy but also to individual enterprises and consumers. Such harm could be in the form of higher prices paid out by consumers due to lack of competition as well as in the form of loss of profits suffered by an enterprise when it is driven out of the market due to abusive practices by dominant firms.
The Court of Justice of the European Union has long recognised the right for victims of antitrust infringements to claim compensation from the infringers for damages incurred. Nonetheless, in practice, doing so has proven to be no easy task for most victims. This is often due to national procedural obstacles and complexities of diverging legal procedures.
The new directive seeks to facilitate matters. It has been noted that victims of anti-competitive practices often find it difficult to obtain the relevant evidence to prove the harm suffered. To this end, the directive now ensures that parties will have easier access to the evidence they need. If a party requires specific evidence to prove a claim or a defence, it will, with some limited exceptions, be able to ask the court to order other parties or third parties to produce this evidence.
Of course, the judge must ensure that disclosure orders are proportionate and that confidential information is duly protected.
Claimants will also be able to rely on a final decision of a national competition authority finding an infringement.
Such decisions will automatically constitute proof before courts of the same member state that the infringement occurred.
Victims will now have at least one year to claim damages once an infringement decision by a competition authority has become final. The directive also clarifies that victims will have a right to obtain full compensation for actual loss and for loss of profit as well as payment of interest from the time the harm occurred until compensation is paid. In fact, together with the directive, the European Commission adopted a communication on quantifying antitrust harm to provide guidance to courts and parties in damages actions.
If an infringement has caused price increases and these have been “passed on” along the distribution chain, those who suffered the harm in the end will also be entitled to claim compensation.
The directive has also ensured that out-of-court resolution of damages claims will be easier to make. It provides for the suspension of limitation periods/pending court proceedings to allow parties sufficient time to try and reach a consensual settlement, without the risk of losing procedural rights in the meantime.
The next step towards the final adoption of this directive is the European Parliament’s formal endorsement during its plenary session at the end of November 2014. Member states will have two years in which to implement it.
The harm caused by anti-competitive conduct cannot be underestimated. It comes as no surprise, therefore, that the right of victims to file an action for damages due to infringements of competition law is not new to the Maltese legislative scenario. Indeed, the Maltese Competition Act already makes detailed provision for the right of any person who has suffered damages due to an infringement of either national or EU competition rules to file an action for damages.
The practical implementation of this right, however, is not an easy matter for most victims. The implementation of the new directive together with any guidelines issued by the European Commission will perhaps serve to facilitate matters for those seeking compensation for infringements of competition law.
mariosa@vellacardona.com
Mariosa Vella Cardona is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law.