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Compensating victims of anti-competitive conduct

An EU law which will facilitate the filing of claims for damages by victims of anti-competitive conduct is well on its way to seeing the light of day. With an informal agreement recently reached between Council of Ministers and European Parliament representatives, it might not be too long until EU-wide harmonised rules regulating such claims are put into place.

Infringements of competition law such as cartels or abuses of dominant market positions cause serious harm, not only to the economy as a whole, but also to businesses and consumers. While the Court of Justice of the European Union has affirmed the right for all victims of antitrust infringements to be compensated for incurred damages, procedural obstacles and legal uncertainty often hinder the filing of such claims by European consumers and businesses.

In practice, this means that only few victims actually manage to obtain compensation.

A directive proposed by the European Commission last year seeks to remove such obstacles, making it easier for whoever has been harmed by a competition law infringement to effectively obtain damages.

The new rules clarify that full compensation of harm can be claimed by anyone who suffered it, irrespective of whether they suffered damages directly or indirectly.

The proposed law obliges member states to ensure that national courts have the necessary powers to order the disclosure of relevant evidence from the parties involved as well as to have at their disposal the necessary procedural safeguards to protect confidential business information from being disclosed during the proceedings.

In terms of these new rules, final decisions of national competition authorities finding an infringement will auto­matically constitute proof before the national courts of all member states that the infringement actually occurred.

This means that there is no need for the injured party to prove once again that there was a breach of competition law when filing a claim for damages.

Victims of competition infringements often find it hard and costly to quantify the actual damage suffered. The proposed law empowers national courts to estimate the amount of harm suffered by the victims so that the quantification of harm does not serve as an obstacle to anyone who would like to exercise the right to claim damages.

In order to provide a form of guidance to Courts and parties in damages actions, the European Commission has published a communication on quantifying antitrust harm together with a practical guide which – though not legally binding – ought to serve as a useful tool for both plaintiffs and national judges.

Undertakings which cooperate with competition authorities under so-called leniency programmes play a key role in detecting and stopping cartels. The proposed directive therefore contains a number of safeguards which ensure that facilitating actions for damages does not diminish the incentives for whistleblowers to cooperate with competition authorities.

There is no need for the injured party to prove once again that there was a breach of competition law when filing a claim for damages

Voluntary self-incriminating statements given by participants in a cartel will be exempted from disclosure of evidence in a claim for damages though the disclosure of all the documents accompanying such statements will be permitted.

Following the entry into force of these new rules, member states will have a two-year period within which to transpose the same into national law. However, the rights emanating from this proposed directive are not new to the Maltese legislative scene.

Our recently revamped competition law already caters for the specific right of any person who has suffered damage as a result of a cartel or an abuse of a dominant position to file an action for damages before the Civil Courts.

In all such cases, the victim is entitled to compensation for actual loss and for loss of profit, together with interest from the time the damage occurred until the capital sum awarded is actually paid. The Civil Courts seized of such claims are also in terms of our law bound by a previous final decision of the competition authorities stipulating that there has been an infringement of the competition rules and therefore the plaintiff is not obliged to prove that there has been an infringement of competition law all over again.

mariosa@vellacardona.com

Mariosa Vella Cardona is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law.

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