Volume 42 | Number 3 Summer 2007
III. Private Enforcement
A further element of the modernization of EC competition law may be a shift towards private enforcement. Private enforcement has always been contemplated as a shield against private claims as far as the function of Article 81 is concerned.39 In fact, claims arising from anticompetitive agreements have always been countered by defendants invoking the nullity of the contract under Article 81(2) EC. The recent debate focuses on the offensive use of Articles 81 and 82 as a “sword” in the hands of the victims of anticompetitive behaviour. It is well-known that private claims for compensation of the losses suffered from cartels and monopolistic abuses play a significant role in the enforcement of U.S. antitrust law, where the plaintiff is entitled to three times the amount of his loss.40 In Europe, such claims have not been recognized until recently in Community law. While Member States would usually provide for a cause of action for damages resulting from the violation of Articles 81 and 82 EC in their municipal laws, no Member State is as generous to the plaintiff as U.S. law.
As early as 1999, when presenting the proposal for the later Regulation 1/2003, the Commission pointed out that the “proposal aims at promoting private enforcement through national courts.”41 In fact, the direct applicability of Article 81(3) allows national courts to give judgement on actions for compensation based upon the violation of Article 81 EC without staying proceedings, until the Commission decides upon a possible exemption under Article 81(3) EC. But at that stage there was no cause of action under Community law for such claims. This changed in September 2001, when the European Court of Justice handed down its opinion in Courage v. Crehan.42 The Court pointed out that the practical effect of the prohibition of restrictive agreements in Article 81(1) “would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition.”43 In the Court’s view, “actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the Community.”44 However, “in the absence of Community rules governing the matter” the Court referred such claims to the domestic legal systems of the single Member States.45
The explicit reference to the lack of Community rules was immediately understood by the Commission. It placed an order for a comprehensive comparative survey with the international law firm Ashurst; the report was published on the website of the Directorate General Competition in 2004.46 Thereafter, it convened an expert group consisting of five judges and scholars to give advice on the various issues raised by private enforcement.47 The resulting Green Paper on the matter was published in December 2005.48
It follows that the law in this field has not developed as far as it has regarding decentralization and the more economic approach. It is therefore too early to go into details. But it is worth raising some questions that might help foster understanding for the considerable difficulties of private enforcement. Given the coexistence of Articles 81 and 82 on the one side and national competition law on the other, the Commission must clarify the relation between Community and national law. Accordingly, it will have to decide whether the approximation of national laws or the creation of a uniform liability regime is appropriate. Since Community law will be somehow embedded in national private law, it will be important to know which national law should supplement a Community instrument. This issue of private international law will have to be answered in view of the proposal for a Rome II Regulation49 on the law applicable to non-contractual obligations, which will be adopted and promulgated shortly.
A further basic issue relates to the type of claim that is to be granted to the victims of a cartel: Should the undertakings involved in anticompetitive behaviour be put under an obligation to make restitution of the rent earned from the cartel, as a kind of unjust enrichment? Or should the victims be entitled to claim damages for compensation of their losses? The most important question that arises in this context deals with the so called passing-on defence of the cartel members.50 If the victims have not suffered any loss because they were able to pass the higher input prices on to their customers, should this exclude their claims? In that case it would be up to the clients on the downstream market, and perhaps eventually the consumers, to claim compensation from the undertakings involved in anticompetitive practices. Since the losses dissipate as the goods are traded downstream, they get smaller and smaller and experience shows that the final consumers do not have sufficient incentive to file an action for compensation. If the plea of the European Court of Justice for full effectiveness of Article 81 is to be taken seriously, the law must therefore allow for some kind of aggregation of small claims in a class action or other type of group action. Other issues would relate to the alleviation of proof, to the interest owed by the cartel members on the compensation, and to additional incentives which potential plaintiffs would need in order to bring action, i.e., eventually to the recognition of double or treble damages.
It is my impression that the European Commission is pushing forward impatiently in this field, as it has done in the other fields mentioned before. The Green Paper is based on thorough research into the antecedents of comparative and Community law. But it is uncertain whether all the concepts and options are well thought-out. Here, as in the other fields, a certain trend of Community policy becomes visible: one that gives greater weight to setting a new policy afloat than to a thorough investigation into its consequences. The Community should avoid the premature implementation of another unfinished concept. It is now up to the European public to subject the Green Paper to close scrutiny.
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Footnotes
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