EU ministers adopt new directive to tackle antitrust damages actions

Out-Law News | 10 Nov 2014 | 4:09 pm | 2 min. read

A European directive designed to help individuals and companies claim damages if they become victims of infringements of EU antitrust rules has been formally adopted by EU ministers .

The European Commission said the directive “is designed to achieve a more effective enforcement of the EU antitrust rules overall”.

The Commission said the Court of Justice of the EU has already acknowledged the right for victims of antitrust infringements to be compensated for the harm suffered. However, “due to national procedural obstacles and legal uncertainty, only few victims currently obtain compensation”.

The directive will also address what the Commission said are “widely diverging” rules of member states, which mean “the chances of victims to obtain compensation greatly depend on which member state they happen to live in”.

Competition litigation specialist Ben Lasserson of Pinsent Masons, the law firm behind Out-Law.com, said: "To date, the private enforcement of competition law by way of damages actions has significantly lagged behind the public enforcement regime and such actions have been concentrated in only a handful of member states".

"The directive seeks to rectify this by introducing a minimum procedural framework aimed at facilitating these types of claims across the EU as a whole," said Lasserson. "Whilst the underlying policy objective behind the directive is to be welcomed, there are a number of provisions which are likely to raise difficulties in practice and it therefore remains to be seen how effective it will be post-implementation. The reality is that litigants will likely continue to favour those jurisdictions which already have sufficient competition law expertise and which are experienced in handling these types of actions."   

The directive is based on a proposal submitted by the Commission to the European Parliament (EP) and ministers in June 2013. Last April, the EP approved a compromise text of the Commission's initial proposal. According to the Commission, main improvements introduced by the directive include the right of national courts to order companies to disclose evidence when victims claim compensation. “The courts will ensure that such disclosure orders are proportionate and that confidential information is duly protected,” the Commission said.

In addition, a final decision of a national competition authority finding an infringement will automatically constitute proof of that infringement before courts of the same member state in which the infringement occurred.

Victims will have at least one year to claim damages once an infringement decision by a competition authority has become final. The Commission said: “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 be entitled to claim compensation.”

The directive will also make it easier for consensual settlements to be made between victims and infringing companies “by clarifying their interplay with court actions”, the Commission said. “This will allow a faster and less costly resolution of disputes. Private damages actions before courts and public enforcement of antitrust rules by competition authorities are complementary tools.”

The directive was adopted on 10 November and is expected to be formally signed during the European Parliament’s plenary session at the end of this month. It will then enter into force 20 days after its publication in the EU Official Journal. Member states will have two years to implement the directive.