Competition Litigation 2021

A practical cross-border insight into competition litigation work 13th Edition

Featuring contributions from:

Advokatfirmaet Sune Troels Poulsen Economic Insight Limited Ledesma Uribe y Rodriguez Rivero S.C. Advokatfirmaet Thommessen AS Gall Nagashima Ohno & Tsunematsu Ashurst LLP Galvez Pascual Osborne Clarke Barun Law LLC Hausfeld & Co. LLP Pinheiro Neto Advogados DALDEWOLF Haver & Mailänder Rechtsanwälte Preslmayr Rechtsanwälte OG DDPV Studio Legale Partnerschaft mbB Shearman & Sterling LLP Dittmar & Indrenius Honoré & Fallesen Law Firm Stewarts ISBN 978-1-83918-071-2 ISSN 1757-2819

Published by

59 Tanner Street London SE1 3PL United Kingdom Competition Litigation 2021 +44 207 3 67 0720 [email protected] th www.iclg.com 13 Edition

Consulting Group Publisher Rory Smith

Publisher Oliver Smith

Editor Contributing Editor: Amy Norton Euan Burrows Senior Editor Sam Friend Ashurst LLP

Head of Production Suzie Levy

Chief Media Officer Fraser Allan

CEO Jason Byles

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Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. Table of Contents

Expert Chapters

To Shop or Not to Shop?: Jurisdictional Differences Following Implementation of the Damages Directive 1 Euan Burrows & Emile Abdul-Wahab, Ashurst LLP

Leading by Example: A Case of Effective Private Enforcement in England and Wales 16 Scott Campbell & Luke Grimes, Hausfeld & Co. LLP

Every Little Helps: Calculating Interest in Consumer Claims 22 Christopher Pickard & James Harvey, Economic Insight Limited

Recovering Cartel Damages in England – A Claimant’s Guide 27 Kate Pollock & Leah Keen, Stewarts

Q&A Chapters

Austria Hong Kong 34 Preslmayr Rechtsanwälte OG: Mag. Dieter Hauck 106 Gall: Nick Dealy & Ashima Sood

Belgium Italy 44 DALDEWOLF: Thierry Bontinck, Pierre Goffinet & 114 DDPV Studio Legale: Luciano Vasques & Laure Bersou Chiara Sciarra

Brazil Japan 52 Pinheiro Neto Advogados: Leonardo Rocha e Silva & 124 Nagashima Ohno & Tsunematsu: Koki Yanagisawa Alessandro P. Giacaglia Korea Denmark 132 Barun Law LLC: Gwang Hyeon Baek & 58 Honoré & Fallesen Law Firm: Michael Honoré & Seung Jae Jeon Asbjørn Godsk Fallesen Advokatfirmaet Sune Troels Poulsen: Sune Troels Mexico 138 Poulsen Ledesma Uribe y Rodriguez Rivero S.C.: Claudia de los Ríos Olascoaga & Bernardo Carlos England & Wales Ledesma Uribe 66 Ashurst LLP: James Levy, Max Strasberg & Helen Chamberlain Netherlands 144 Osborne Clarke: Steven Verschuur & Jeroen Bedaux Finland 83 Norway Dittmar & Indrenius: Ilkka Leppihalme & 151 Toni Kalliokoski Advokatfirmaet Thommessen AS: Siri Teigum, Eivind J Vesterkjær & Heidi Jorkjend France 90 Spain Osborne Clarke SELAS: Alexandre Glatz & 158 Thibaut Marcerou Galvez Pascual: Josep Galvez, Maximilian O’Driscoll & Ander Garcia Germany 98 Haver & Mailänder Rechtsanwälte Partnerschaft mbB: USA 169 Prof. Dr. Ulrich Schnelle & Elisabeth S. Wyrembek Shearman & Sterling LLP: Todd M. Stenerson, David A. Higbee & Rachel E. Mossman Welcome

From the Publisher

Dear Reader, Welcome to the 13th edition of ICLG – Competition Litigation, published by Global Legal Group. This publication provides corporate counsel and international practitioners with comprehensive jurisdiction-by-jurisdiction guidance to competition litigation laws and regulations around the world, and is also available at www.iclg.com. This year, four expert chapters cover the implementation of the Damages Directive as well as private enforcement, interest in consumer claims and cartel damages. The question and answer chapters, which in this edition cover 17 jurisdictions, provide detailed answers to common questions raised by professionals dealing with competition law. As always, this publication has been written by leading competition lawyers and industry specialists, for whose invaluable contributions the editors and publishers are extremely grateful. Global Legal Group would also like to extend special thanks to contributing editor Euan Burrows of Ashurst LLP for his leadership, support and expertise in bringing this project to fruition.

Rory Smith Consulting Group Publisher Global Legal Group Welcome Chapter 1 1

To Shop or Not to Shop?: Jurisdictional Differences

Following Implementation of Euan Burrows the Damages Directive

Ashurst LLP Emile Abdul-Wahab

Introduction In contrast, national measures adopted to comply with any other provisions of the Directive (i.e. those relating to procedure) may When the EU Directive on antitrust damages actions (the have limited retroactive effect, but shall not apply to actions “Directive”)1 was adopted on 26 November 2014, its stated aim for damages of which a national court was seized prior to 26 was to ensure “a more level playing field for undertakings operating in December 2014. the internal market and to improve conditions for consumers to exercise the However, the Directive does not provide further specifica- rights they derive from the internal market […] and to reduce the differ- tion on when national implementing legislation should enter ences between the Member States as to the national rules governing actions into force, or, rather unhelpfully, which of its provisions should for damages [for competition law infringements]”.2 It was widely be treated as substantive and which as procedural for these acknowledged at the time that this was a laudable but very ambi- purposes. Whilst the distinction will often be obvious, this is tious aim, given the mixture of common and civil law systems not always the case, in particular in relation to the key issue of in place across EU Member States, and the differing levels of limitation periods. private enforcement to date. As a result, it was left open to Member States to take differing Whilst all Member States have implemented the Directive approaches to the question of temporal application of national into national law as of 6 June 2018,3 it is still too early to tell implementing legislation and the distinction between proce- whether the Directive will ultimately achieve its stated aim. dural and substantive provisions, and this is indeed what has However, a comparative review of the implementing legisla- happened in practice. For example: tion adopted in different Member States indicates that, even to (a) in the UK, none of the provisions adopted to comply with the extent that the Directive establishes similar basic rules on the Directive apply to proceedings brought prior to 9 matters such as disclosure and limitation periods, the widely March 2017 (when the national implementing regulations differing approaches taken to the question of temporal appli- entered into force4). In addition, substantive provisions cation (i.e. when the new rules will apply) mean that it is likely (expressly specified in the UK implementing regulations, to be a number of years before we see any significant degree of and including all amendments to limitation periods) only harmonisation. In the meantime, the complexity of determining apply where the infringement and harm to which the claim exactly which substantive and procedural rules will apply to a relates also occurred on or after 9 March 2017; competition law claim in any given Member State remains high. (b) in the Netherlands, measures relating to non-substantive Moreover, given that the Directive only sets out minimum provisions (deemed to include new or amended measures requirements, and does not cover certain key issues such as in relation to requesting assistance of the Dutch national the possibility of collective actions, the availability of interim competition authority (“NCA”) in the quantification of injunctions in stand-alone private actions, or crucial practical loss, the prescribed binding nature of an irrevocable deci- matters such as costs and funding, significant differences are sion of the Dutch NCA, disclosure applications and appli- likely to remain between private enforcement regimes across the cations or decisions for a stay of proceedings for out-of- EU even once the implementation of the Directive takes full court dispute resolution) do not apply to actions for effect. As a result, the choice of jurisdiction (where available) damages of which a Dutch court was seized prior to 26 seems likely to continue to be a key strategic question for both December 2014. Measures relating to substantive provi- defendants and claimants (and their legal advisors). sions are stated to apply with effect from 10 February 2017 This chapter considers the approach to implementation taken (when the national implementing legislation entered into in the UK, the Netherlands, Germany, France and Spain, high- force5) with no retroactive effect, but it remains unclear lighting the key differences between the new regimes and the whether this will be interpreted to mean that it is suffi- likely future impact on antitrust damages actions. It also briefly cient that proceedings have been commenced on or after considers how the UK’s decision to leave the EU (“Brexit”) may this date, or whether – as in the UK – it will also be affect the UK regime and its desirability as a jurisdiction for private necessary that the relevant infringement of EU compe- enforcement of competition law, viewed in conjunction with the tition law occurred on or after that date as well. As the impact of the Directive on the EU’s remaining Member States. latter interpretation most likely seems correct, its impact might be limited because the Dutch Supreme Court, in Temporal Application of New Regimes a follow-on damages case pending before the entry into force of the national implementing legislation, acknowl- Article 22 of the Directive provides that Member States shall edged that it was deemed desirable to interpret the law ensure that national measures adopted to comply with the substan- “pre-implementation”, such that the outcomes are compatible tive provisions of the Directive shall not be applied retroactively.

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with the Directive and the national implementing legisla- considering whether there may be strategic benefits to bringing/ tion (notwithstanding that the case did not fall within the defending a claim in a particular jurisdiction, depending on temporal scope of the Directive).6 Reference has frequently exactly when proceedings are being brought and, in particular, been made to this consideration in recent cases, including when the relevant infringement/harm occurred. by both the Amsterdam District Court and the Rotterdam These difficulties will be further exacerbated in some jurisdic- District Court in circumstances where the court explicitly tions by other transitional provisions relating to earlier private ruled that the case fell outside the temporal scope of the enforcement reforms, whose interaction with the legislation Directive and national implementing legislation;7 implementing the Directive must also be taken into account. (c) in France, procedural provisions relating to amendments For example, as discussed further in chapter 9, for competi- to the disclosure regime required by the Directive apply tion claims brought before the Competition Appeal Tribunal to all damages actions brought on or after 26 December (“CAT”) in the UK there are now, at the time of writing, five 2014. All other implementing provisions will only apply different potential sets of rules relating to the application of to claims which relate to a competition law infringe- limitation periods, depending on exactly when proceedings are ment that occurred on or after 11 March 2017 (when the initiated and when the cause of action originally arose. national implementing legislation entered into force8), with the notable exception of provisions relating to limita- Disclosure tion periods, which apply immediately to any claims which were not already time-barred on 11 March 2017 (including Antitrust litigation is often characterised by information asym- where proceedings have already been commenced); metry, and the extent to which a claimant can require disclosure (d) in Germany, provisions adopted to comply with the of relevant documents from a defendant is crucial to success- substantive aspects of the Directive have limited retro- fully establishing liability (in a stand-alone action), causation active effect in so far as they came into force on 27 and quantum (in both follow-on and stand-alone actions). In December 2016 and apply to all claims which arose on a small number of cases, contemporaneous documents in the or after 27 December 2016 (the date of the deadline for possession of the defendant(s) may record direct commentary implementation of the Directive), rather than the later date on key elements of a cartel’s “effects” (for example, its duration of entry into force of other aspects of the relevant legis- and scope, and possibly even the extent of any resulting over- lation (9 June 2017).9 In addition, the new provisions on charge); and even where such direct commentary does not exist disclosure and the provisions empowering a court to esti- (which is more common), data and other records in the posses- mate the scope and amount of passing-on of an overcharge sion of the defendant(s) are likely to be critical to any attempt to (but not the rebuttable presumption that an overcharge has deduce the scale and scope of the alleged illegal price inflation been passed on to an indirect purchaser) will apply to all resulting from the cartel. claims where proceedings are commenced on or after 27 The scope of national laws on disclosure has therefore tradi- December 2016 (irrespective of whether the infringement tionally been a key factor in the popularity of certain jurisdictions to which the claim relates occurred prior to that date). with claimants seeking to bring damages actions for infringe- In relation to limitation periods, the German legislator ments of competition law. The broad disclosure regime of the has adopted an approach which combines aspects of the UK in particular has often been viewed as “claimant-friendly”. approach adopted in France and the Netherlands: the new The Directive seeks to impose minimum disclosure require- five-year limitation period will apply to all claims which ments for competition damages claims brought in national courts were not already time-barred as at 9 June 2017 (irrespec- of all EU Member States, effectively introducing an EU-wide tive of when the infringement to which the claim relates disclosure mechanism. Pursuant to Articles 5–7 of the Directive, occurred), but the amendments to the rules relating to the national courts are empowered to order defendants, claimants and starting point and the suspension of the limitation period third parties to disclose relevant evidence in their possession or will be of more limited application: in principle they will control, and also to order disclosure of information contained in apply to all claims which were not yet time-barred as at 9 the file of an NCA or evidence obtained via the “access to the file” June 2017, but if the claim arose prior to 27 December 2016 process. Such disclosure is subject to a number of safeguards and then the old rules as regards the starting point and suspen- restrictions aimed at protecting defendants from very wide and sion of the limitation period should apply until 8 June vague disclosure requests, and ensuring that leniency programmes 2017, for the purpose of determining whether the claim are not undermined. In particular, corporate leniency statements 13 was time-barred as at 9 June 2017.10 The complexity of and settlement submissions are granted absolute protection from these rules on the temporal applicability of the new provi- disclosure, disclosure of “investigation materials” from an NCA’s file sions therefore add to the complexity of the old provisions, is restricted until the investigation has been closed, and national which may still be applicable in some circumstances;11 and courts must have regard to the scope, cost and proportionality of (e) in Spain, all of the provisions implementing the Directive disclosure of all other documents. are stated to apply only in proceedings initiated after 27 These new minimum requirements markedly broaden the May 2017 (when the national legislation entered into disclosure regimes in many EU Member States where disclosure force).12 In relation to amendments to the procedural rules, requirements were previously quite narrow, including Germany, it does not matter whether the relevant infringement caused the Netherlands, France and Spain. In particular, the move to harm prior to that date, provided the proceedings are initi- disclosure of relevant “categories” of evidence (in recognition of ated after that date. It is unclear whether it is intended that the fact that it will not always be possible for a claimant to know the same approach will apply to substantive amendments. in advance precisely which relevant documents the defendant The net result of these differing approaches is that the “level has in its control) mark a significant change in jurisdictions playing field ” envisaged in the recitals to the Directive seems where disclosure was previously limited to specific documents unlikely to materialise any time soon. Claimants and defend- identified in the claimant’s request. Even for those jurisdictions ants (and their advisors) will – in the short to medium term at which already had extensive pre-trial disclosure, most notably least – instead face increased levels of complexity when initially the UK, the disclosure provisions of the Directive will have assessing the rules which will apply to any potential claim and at least some impact; for example, in relation to the absolute

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protection granted to leniency statements, and the restrictions It also remains to be seen whether significant differences will on disclosure of the so-called “grey-list” documents from the file emerge between national courts in terms of their approach to of an NCA whilst the relevant investigation is still ongoing.14 deciding key questions, such as whether particular documents/ It appears that all Member States have implemented the information fall within the Directive’s definition of protected provisions of the Directive relating to disclosure as “procedural ” “leniency statements” or “settlement submissions”. Even in Member provisions for the purposes of determining when the new rules States where such documents are perfectly identifiable, there should apply (as one would logically expect). However, as noted is scope for debate on the treatment of parts of documents above, this has still not resulted in a harmonised approach to containing literal quotations from,17 or making reference to, a the question of temporal application: Article 22(2) provides that leniency statement or a settlement submission.18 The European national measures adopted to implement the procedural provi- Commission’s communication on the protection of confidential sions of the Directive should not apply in actions for damages information provides limited guidance on these important ques- of which a national court was seized prior to 26 December 2014, tions. It may well be that references to the European Court of but it does not mandate that they must apply in proceedings initi- Justice (“ECJ”) for preliminary rulings on these sorts of issues ated after that date. may be required in due course. As discussed above, this has resulted in differing approaches being adopted, such that existing claims pending before Effect of National Decisions national courts at the time of entry into force of the national implementing legislation may be affected by the new disclosure Infringement findings by the European Commission are binding regime in some jurisdictions (such as France, Germany and the on national courts in competition damages actions pursuant to Netherlands) but not in others (such as the UK and Spain). Article 16(1) of Regulation 1/2003. Article 9 of the Directive That said, looking to the future, it seems likely that the provides further that an infringement of competition law found minimum disclosure regime required by the Directive will at in a final decision of an NCA in one EU Member State shall be least apply in all EU Member States in proceedings lodged on or legally binding on national courts in damages actions brought after the date of entry into force of the relevant national imple- in its own jurisdiction, and shall constitute “at least prima facie menting legislation (irrespective of whether the infringement/ evidence” of an infringement when relied upon before the court harm to which the claim relates occurred prior to that date15). of another EU Member State. This was a compromise position As a result, the period of time before harmonisation is achieved adopted in light of the reluctance of many Member States to in respect of the Directive’s disclosure requirements will be accept that infringement findings by NCAs – in particular less limited (in contrast to aspects involving substantive provi- experienced authorities – should be legally binding on national sions, where effective implementation of the Directive is likely courts outside their own jurisdiction. to take much longer in practice due to the approach taken by Whilst infringement findings of NCAs were already binding some Member States – such as the UK – in requiring both the on national courts in some EU Member States (at least in the proceedings to be brought and the relevant infringement/harm same Member State) prior to implementation of the Directive, to have occurred after the entry into force of the implementing such as the UK and Germany, this is a significant change for legislation). others, where infringement findings by NCAs were not previ- However, even once that degree of harmonisation is achieved, ously legally binding on national courts (for example, in France there will still remain scope for differences between national and Spain; although, in practice, NCA decisions were gener- disclosure regimes, given that the Directive merely sets out ally relied upon by their national courts). This should estab- minimum requirements. Furthermore, it is likely to take some lish a follow-on action regime in all EU Member States, and time for national courts with little or no previous experience of seems likely to result in proceedings being commenced more the processes envisaged in the Directive (in particular regarding often in the jurisdiction in which they are first investigated, as protection of confidential information) to develop a predict- well as leading to an overall increase in the number of follow-on able approach under the new regime. For example, in Spain, antitrust damages actions being brought in the EU. it is anticipated that there may be an initial reluctance to order However, differences in approach will remain between disclosure of sensitive information. In contrast, this is less likely EU Member States. The majority of EU Member States have to be an issue for the German courts (which already have, for followed the minimum requirements of this aspect of the instance, experience of in camera proceedings in the context of Directive in their national implementing legislation, in terms of IP litigation) or the English courts (which have already shown providing that decisions of NCAs of other EU Member States themselves to be willing to engage in the necessary balancing act will be treated as “prima facie evidence” of an infringement or – between protection of sensitive information and ensuring claim- as in the Netherlands and in Spain – by leaving the apprecia- ants have access to key evidence required to substantiate their tion of such evidence to the discretion of the courts. However, claims, in particular through the use of confidentiality rings, in Germany the national law goes further than this, providing although such arrangements are not without difficulties, as illus- that a final decision by an NCA of any EU Member State shall trated by the Air Cargo litigation). be treated as binding proof of an infringement before German To assist national courts that may not have sufficient expe- courts. This maintains the position under German law prior rience with disclosure exercises, the European Commission to implementation of the Directive, but the German legislator published a communication in July 2020 on the protection of has taken the opportunity to clarify the scope of the binding confidential information in the context of competition damages effect of such decisions in the explanatory notes to the German actions.16 The communication is intended to give practical guid- legislation implementing the Directive. It is made clear that ance to national courts in selecting effective protection meas- the scope of the binding effect extends to findings of fact ures that strike a balance between a claimant’s right to access included in the infringement decision, findings relating to the information and the right of the information owners to protect geographic and product market definition, and findings relating confidential information. However, as the communication is to the temporal scope of the infringement. This seeks to clarify non-binding and without prejudice to existing national proce- some points on which German courts had previously reached 19 dural rules, its impact is likely to be more limited in experienced diverging conclusions. Whilst recent practice suggests that the jurisdictions with established disclosure regimes. German courts will continue to adopt a liberal interpretation of

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the facts established in decisions by other competition author- other Member States should be treated as final, but it remains ities,20 the German courts have rejected claims for follow-on to be seen whether they will do so, and whether national courts damages in cases where the defendants were not mentioned in across the EU will adopt a consistent approach. the competition authority’s decision.21 In France, it appears that Disputes may also arise as to whether an NCA’s infringe- the combined effect of the national legislation implementing ment decision is “final ” where it is the subject of a substantive the Directive and the existing loi Hamon regarding collective appeal by some addressees of the decision but not others. Again, damages actions for infringement of competition law22 may be there is precedent from the English courts on this question in such that an infringement decision of another Member State’s the context of limitation periods, where the Supreme Court has NCA will be treated as non-binding prima facie evidence of an held that an infringement decision becomes final as against a infringement in the context of a damages action brought by an particular addressee once it can no longer be appealed by that individual consumer or business, but may be deemed binding addressee (even if appeals by other addressees are ongoing at proof of an infringement if the damages claim is brought by that point in time).27 As noted in chapter 9, such an approach consumers on a collective basis. It remains to be seen how the gives rise to a risk that undertakings that apply for leniency, and French courts will approach this issue in practice. therefore choose not to appeal substantive infringement deci- Furthermore, there is clearly scope for differing approaches sions, become strategic targets for follow-on litigation. To the between the courts of Member States even where the national knowledge of the authors, a similar approach is anticipated in implementing legislation is phrased in an identical/similar at least Spain and Germany.28 It remains to be seen whether manner. For example, it is unclear to what extent a national national courts in other Member States might take different court will consider that it needs to go into the detailed facts approaches. of a case itself when assessing what weight should be properly References to the ECJ for preliminary rulings may be required attached to an infringement decision of an NCA of another to obtain clarity on points such as these (and others) in order Member State. In the UK, it is anticipated that the courts may to ensure a consistent approach across all EU Member States. well insist on doing so, by analogy with the approach taken in For the parties involved in the first claims to raise these issues, cases such as Ferrexpo v Gilson Investments (a shareholder dispute), this would be likely to result in significant delays to proceed- where the English High Court held that, whilst decisions of ings. Following the end of the Brexit transition period, when other courts could be relied upon by the claimants as admis- it is anticipated the UK would no longer be subject to the juris- sible evidence, the court could not assess what weight should be diction of the ECJ, it has been suggested that such difficulties properly attached to a decision of another court without going may in fact increase the attractiveness of the English courts into the facts for itself.23 In contrast, in France, the Paris Court as a forum for dealing with competition damages claims. In of Appeal has held that the French NCA’s non-binding prelimi- particular, the UK’s position outside the EU could circumvent nary assessment of competition, undertaken prior to adopting a years of uncertainty and preliminary references regarding the commitments decision, could nonetheless be used as prima facie interpretation and application of the Directive.29 evidence of an infringement in the context of a damages claim (despite the fact that a commitments decision does not, by itself, Limitation Periods amount to finding a breach of competition law).24 It is also unclear whether any distinctions will be drawn by Article 10 of the Directive introduced a minimum five-year national courts in terms of the weight given to infringement limitation period within which an antitrust damages action must decisions of less experienced NCAs compared to those of their be brought. This period must not start to run until: more well-established counterparts. Scope for differences in (a) the infringement has ceased; and approach is clearly also an issue in relation to the assessment of (b) the victim knows or can reasonably be expected to have any other evidence adduced by the parties which runs counter to knowledge of: the relevant infringement decision – for example, in relation to (i) the behaviour constituting the infringement; the duration of the cartel, or its geographic scope. (ii) the qualification of such behaviour as an infringement; Questions are also likely to be raised with regard to the issue of (iii) the fact that the infringer caused harm to him; and when an infringement decision will be deemed “final ” for these (iv) the identity of the infringer who caused such harm. purposes: whilst the Directive provides that a final infringement In addition, this limitation period must be suspended during decision is one that “cannot be, or that can no longer be, appealed by an investigation by the European Commission or an NCA, and ordinary means”, it does not address some key related issues. For must re-start no earlier than one year after any infringement example, the question of whether a decision which is subject to decision has become final or proceedings are otherwise termi- an appeal in respect of the penalty imposed (but not the substan- nated. Pursuant to Article 18(1) of the Directive, the limitation tive infringement finding) should be treated as “final ” for this period must also be suspended during any consensual dispute purpose. The French implementing legislation has addressed resolution negotiations. this issue by providing that an anti-competitive practice will be Prior to implementation of the Directive, limitation periods irrefutably presumed to be established when its existence and were one of the most divergent features of EU private enforce- its imputation have been established by a decision “that can no ment, with widely different rules being applied in different longer be appealed by ordinary means for the part relating to that finding”.25 Member States as to both the time within which a claim could Accordingly, administrative guidelines confirm that claimants be brought and the point in time from which the relevant time do not have to wait for the outcome of an appeal that concerns period began to run. For example, in Spain, claims for damages only the nature or amount of the sanction imposed. The English arising from competition law infringements had to be brought courts have followed a similar approach in the context of limita- within one year from the date the injured party obtained knowl- tion periods, concluding in BCL Old Co v BASL26 that the exist- edge of the harm caused by the infringement. In contrast, in ence of a penalty appeal should not prevent a substantive infringe- the Netherlands the absolute limitation period could ultimately ment finding being deemed final for the purposes of deciding last for up to 20 years after the cause of action first arose (a when a limitation period before the CAT should start to run. similar maximum limitation period also applies in France). This It would seem logical for the English courts to also adopt this significant divergence in limitation periods has often been a approach when determining whether decisions by NCAs from key consideration when choosing where to file a claim (when a

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choice of jurisdiction has been available), and the application of (c) in France, all of the amendments required by the Directive limitation rules has also been the subject of interlocutory chal- in relation to limitation periods apply immediately to any lenges by defendants in cases before national courts, sometimes claims which were not already time-barred on 11 March resulting in significant delays in practice. 2017 (including where proceedings have already been Implementation of the Directive has sought to simplify the commenced). However, it remains unclear whether position, and will result in at least a degree of harmonisation amendments to the rules relating to the suspension of the across Member States (largely in favour of claimants, who will limitation period of claims apply only after the implemen- generally benefit from much longer limitation periods than were tation of the loi Hamon (i.e. 19 March 2014). To date, the previously the case in most, if not all, Member States). However, French courts have rendered contradictory judgments;33 there will still be scope for differences between Member States (d) in Germany, the new five-year limitation period applies on this key issue, as the five-year period specified by the to all claims which were not already time-barred as at 9 Directive is only a minimum requirement. For example, in the June 2017, but the amendments to the rules relating to the UK, the implementing regulations maintain the existing six-year starting point and suspension of the limitation period of limitation period for competition damages claims (amended to claims which have arisen before 27 December 2016 only reflect the Directive’s requirements as to the point at which the apply after that date (i.e., 9 June 2017). In the interim limitation period starts to run, and the circumstances in which period, until 8 June 2017, the old rules on the starting point it is extended). In the Netherlands, alongside a five-year subjec- and suspension of the limitation period apply; and tive limitation period, a 20-year “long-stop” limitation period (e) in Spain, it is not clear whether the amended limitation will also continue to apply (but now calculated from the day rules only apply to proceedings initiated on or after 27 following the date on which the relevant infringement ceased). May 2017 which relate to infringements that occurred This is in line with recital 36 of the Directive, which provides on or after that date, or also to those infringements that that “[…] Member States should be able to maintain or introduce absolute occurred before that date. A preliminary reference by limitation periods that are of general application, provided that the dura- the Spanish courts to the ECJ seeking guidance on the tion of such absolute limitation periods does not render practically impos- temporal scope of the Directive, and thus the application sible or excessively difficult the exercise of the right to full compensation”. of limitation rules, is currently pending. Differences in approach are also likely to emerge in terms of The effect of this complex web of differing approaches is how national courts determine when claimants are deemed to perhaps best illustrated by considering a hypothetical example. know (or reasonably ought to have known) of the competition Imagine a scenario where a price-fixing cartel is operative infringement for the purpose of determining when the limi- from 1 March 2007–1 January 2012. A European Commission tation period starts. German courts have ruled, for instance, investigation results in an infringement finding dated 5 May that a claimant could not have been deemed to have sufficient 2014. That decision is confirmed following an appeal to the knowledge of an infringement until it was aware of the deci- General Court, which hands down its judgment on 5 December sion to issue a fine and knowledge of a dawn raid has also been 2016. No further appeal to the ECJ is lodged within the rele- held to be insufficient for the purposes of starting the limita- vant two-month time limit, such that the infringement decision tion period.30 Likewise, in France, the Paris Court of Appeal has becomes final on 5 February 2017. A potential claimant who recently confirmed that interim measures decisions do not give suffered loss as a result of the cartel is interested in bringing a potential claimants sufficient knowledge of an infringement.31 damages claim, and it appears that there is likely to be a wide In contrast, in the UK, the English Court of Appeal has previ- choice of jurisdiction as the cartel involved a number of defend- ously confirmed that the limitation period may commence prior ants, each domiciled in different EU Member States. The to an infringement decision if claimants are capable of pleading claimant is therefore considering bringing a claim in one of the a prima facie case; for example, in circumstances where the inves- five jurisdictions referred to above. tigation is well publicised and relevant facts are available in the If the claim were to be lodged in the UK or the Netherlands, public domain.32 none of the substantive amendments to the national private Furthermore, as discussed above in relation to the temporal enforcement regimes in those jurisdictions reflecting the Directive application of the new national regimes, Member States have requirements would apply (albeit the Dutch Supreme Court deems taken significantly different approaches to the question of a Directive-compatible interpretation desirable even for cases that whether national provisions implementing the limitation period do no fall within the Directive’s temporal scope). Instead, the requirements of the Directive should be treated as “procedural ” claimant would need to look to the “old ” limitation periods (which or “substantive”, and when the amended rules will properly take would mean differing applicable rules in the UK, depending on effect in practice. By way of re-cap, in the jurisdictions which whether the claim was brought before the English High Court or are the focus of this chapter: the CAT (see chapter 9),34 and nevertheless a five-year limitation (a) in the UK, on their face, the amended limitation rules do period in the Netherlands but with a potentially different regime not apply unless proceedings were commenced on or after regarding the starting date).35 If the claim were lodged in Germany, 9 March 2017, and the relevant infringement and harm also some aspects of the amendments relating to the Directive would occurred on or after that date; apply, but not others. In particular, whilst the five-year limitation (b) in the Netherlands, the existing five-year subjective limi- period required by the Directive would apply (assuming the claim tation period and 20-year absolute limitation period was not already time-barred as at 9 June 2017), the amendments to were maintained by the implementing regulation but on the rules relating to the starting point and suspension of the limita- the understanding that they only start to run on the day tion period would not apply in Germany. If the claim were lodged following the date that the infringement has ceased. The in France, most of the amendments to limitation periods reflecting additional or new provisions will only apply to actions for the Directive requirements would apply, although other amend- damages commenced on or after 10 February 2017, with ments to provisions on the suspension of limitation periods and to uncertainty currently surrounding the question of whether substantive provisions would not. Finally, if the claim were lodged the relevant infringement/harm or the claim to which the in Spain, it remains unclear whether the new or the old limitation action relates must also have occurred or arisen on or after rules would apply, and guidance on this matter is currently sought that date; from Spain’s national courts.

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Joint and Several Liability (with the potential for differing conclusions, or delays pending a reference to the ECJ for a preliminary ruling). Article 11 of the Directive introduced the concept of joint For example, it is not clear how or when it will be determined and several liability in antitrust damages actions across all EU whether co-infringers are unable to compensate victims, such Member States, by providing that, as a general rule, a person that immunity recipients should be liable to compensate other who has suffered harm as a result of a competition law infringe- purchasers of the affected products, beyond their own direct and ment should be able to claim compensation for the entire harm indirect purchasers. Likewise, it is unclear how it will be deter- suffered from any of the co-infringers. Whilst this principle mined whether the conditions for the SME exemption are met in already existed under the national laws of some EU Member a particular case, especially the requirement that the application States, including all five of the jurisdictions focused on in this of the normal rules would “irretrievably jeopardise [the] economic value” chapter (i.e. the UK, the Netherlands, France, Germany, and of the SME and cause its assets to “lose all their value”. Member Spain), this aspect of the Directive represents a significant States with a tendency to follow a literal interpretation of legisla- change for some other jurisdictions.36 It is anticipated that the tion, for example, may exclude circumstances that Member States adoption of the principle of joint and several liability across all would consider to constitute irreparable economic harm. EU Member States will make it easier for a claimant to bring a The concept of joint and several liability inevitably also raises claim for the entire harm caused against the defendant with the the question of contribution claims, in circumstances where a “deepest pockets” across the EU. defendant has paid more compensation than its “fair share”. This Moreover, even for those jurisdictions which already recog- is expressly dealt with in Article 11(5) of the Directive, which nised the principle of joint and several liability, amendments provides that the amount payable by way of contribution by a to national laws have been required to reflect additional provi- co-infringer must be determined in light of the “relative respon- sions of the Directive which grant a degree of protection from sibility” of each infringer for the harm caused by the infringe- the standard joint and several liability rule to small and medium ment of competition law. Immunity recipients are once again enterprises (“SMEs”)37 and immunity recipients: granted a degree of protection in this regard: Article 11(5) Article 11(2) provides that an SME should only be liable to its further provides that the amount of contribution payable by own direct and indirect purchasers, provided that: its relevant an immunity recipient shall not exceed the amount of harm it market share was less than 5% at all times during the infringe- caused to its own direct and indirect purchasers or providers. ment;38 the application of the normal rules would irretrievably This is, however, subject to Article 11(6), which provides that jeopardise its economic viability and cause its assets to lose all in circumstances where the infringement has caused harm to their value; and the SME in question is not a coercer or a recid- parties other than the direct or indirect purchasers or providers ivist; and of the infringers (i.e. so-called “umbrella claims”), the amount Article 11(4) provides that immunity recipients should only be of any contribution payable by an immunity recipient shall be liable to compensate their own direct and indirect purchasers, determined in light of its “relative responsibility” for that additional unless the other co-infringers are unable to compensate the harm. Considerable protection from contribution claims is also remaining claimants. provided (pursuant to Article 19(2) of the Directive) for defend- In this regard, there is an interesting difference worth high- ants who opt to settle a damages claim, as discussed further lighting between the wording of Article 11(2) of the Directive below in “Effect of Consensual Settlement”. (in the English language version) and the wording of the corre- It is notable that the key question of how to determine the sponding paragraph of the UK implementing legislation. “relative responsibility” of each infringer is not addressed in any Article 11(2) of the Directive sets as one of the conditions for detail by the Directive: recital 37 simply provides that this is the SME exemption that the entity’s “market share in the relevant a matter for national courts, having regard to “relevant criteria” market was below 5% at any time during the infringement ” (emphasis such as turnover, market share, or the role of the infringer added). In contrast, paragraph 12(1)(b) of Schedule 8A inserted in the cartel. National implementing legislation of the EU into the Competition Act 1998 by the UK implementing regula- Member States focused on in this chapter (and others, as far as tions phrases that condition as “throughout the period of the infringe- the authors are aware) has not further addressed this important ment, the undertaking’s share of the relevant market (or, if there was more issue either, despite the fact that the assessment envisaged by the than one, each relevant market) was less than 5%” (emphasis added). Directive is likely to be a complex matter, particularly for courts However, a closer inspection of other language versions of the in those jurisdictions which have not previously had to consider Directive (including the definitive French language version) such issues in this context. suggests that there is a translation error in the English version, In jurisdictions where the courts are already experienced and that the requirement is indeed correctly expressed in the UK in assessing questions of contribution based on the degree of implementing regulations. The French version of the Directive responsibility for the harm, national courts are likely to continue refers to the market share being “inférieure à 5% à quelque moment to apply their existing approach post-implementation of the que ce soit de la durée de l’infraction”, and the Dutch version refers Directive. Indeed, the UK implementing regulations expressly to the market share “te allen tijde tijdens de inbreuk”, both of which provide for the continued application of section 2 of the UK Civil equate to “at all times/throughout the period of the infringement”. The Liability (Contribution) Act 1978 to contribution proceedings Dutch implementation legislation also refers to “voortdurend ”, relating to competition damages claims, subject to the immunity which means “continuously” below 5% during the infringement. recipient exemption required by Article 11(5) of the Directive.39 It therefore appears that the UK implementing legislation does That section provides that the amount of contribution recover- accurately reflect the intention of the Directive on this point. able from a co-defendant shall be “such as may be found by the court Prior to implementation of the Directive, a number of ques- to be just and equitable having regard to the extent of that person’s responsi- tions had been raised about how these exemptions to joint and bility for the damage in question”. The UK Government appears to several liability would work in practice, given the lack of further have taken the view that this is equivalent to the concept of “rela- detail provided in the Directive or the recitals thereto. National tive responsibility” contained in the Directive, even though the “just implementing legislation has not clarified the position any and equitable” requirement arguably adds a degree of additional further, and it appears likely that national courts will be asked flexibility for national courts faced with determining questions to determine difficult questions of interpretation in the future of contribution. The explanatory memorandum to the Dutch

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implementation legislation makes similar reference to existing equitable remedies to ensure that unlawful profits are disgorged Dutch law, which also includes a requirement that such appor- and repaid, often in circumstances where it may be difficult for tionment is deemed “fair”. By way of contrast, French imple- the claimant to establish quantum and/or causation of loss in menting legislation has adopted the arguably narrower language the ordinary measure. It remains to be seen the extent to which of the “gravity of the wrongful conduct and causal role in the damage”. In national courts will consider claims for such forms of damages Germany, it is anticipated that the national courts will continue in appropriate cases. However, whilst the possibility of resti- to follow well-established case law which provides for an assess- tutionary damages was theoretically left open under the UK ment of all the circumstances of an individual case, taking into implementing regulations,44 the case law of the English courts account the individual contribution of each infringer for the would appear to provide limited scope for non-compensatory damage caused and the extent of their respective participation damages in practice.45 in the cartel.40 It therefore remains to be seen how other jurisdictions will approach this assessment, to what extent differ- Passing-on “defence” ences in approach may emerge between Member States and the extent to which other factors, such as differences in limitation periods in which to bring contribution claims, will affect the In line with the emphasis on compensatory damages, Article choice of jurisdiction for bringing or defending competition 12 of the Directive requires Member States to ensure that the damages claims.41 compensation awarded in a competition damages claim does The interplay between the provisions on joint and several not exceed the actual loss suffered at any particular level of the liability and those setting out minimum limitation periods supply chain. In other words, the passing-on defence should also raises some further interesting questions which are not be available. Member States have taken different approaches addressed in the national implementing legislation of the EU to the question of whether it is necessary to introduce express Member States focused on in this chapter (or others, as far as provisions of national law to confirm the availability of the pass- the authors are aware). Article 11(4) of the Directive states that ing-on defence in competition damages actions, as the defence EU Member States must ensure that for cases where there is an has been in principle available prior to the introduction of the immunity recipient who may benefit from protection from joint Directive. For example, the UK Government followed a “light and several liability, the limitation period shall be “reasonable touch” approach to implementation (making only the changes and sufficient to allow injured parties to bring such actions”, i.e. to seek necessary to implement aspects of the Directive not already compensation from the co-infringers or the immunity recipient covered by existing UK law), and concluded that only minimal in the event that co-infringers prove unable to compensate the changes were required following the CAT’s 2016 judgment in victims. No cross-reference is made to this provision in Article Sainsburys-v-Mastercard (currently on remittal back to the CAT 46 10 of the Directive, which deals with limitation periods gener- following an appeal to the UK Supreme Court in 2020). The ally, but it appears to be envisaged that the limitation period CAT’s judgment confirmed the rights of indirect purchasers applicable in such circumstances could be significantly longer to claim damages for infringements of competition law and 47 than would normally be the case.42 However, this possibility the principle of the passing-on “defence” (see chapter 9). The is not expressly dealt with in national implementing legislation. changes introduced by the UK implementing regulations were It remains to be seen whether national courts may take into therefore limited to provisions dealing with the issue of where account the risk of a potential claim against an immunity recip- the burden of proof lies when proving that an overcharge has ient becoming otherwise time-barred when determining how been passed on (which had not been expressly dealt with by the 48 long a claimant should have to wait before determining that the CAT). Similarly, it was not considered necessary to codify the relevant co-infringers are unable to compensate him (and there- passing-on defence in the Netherlands, but the prohibition on fore permit him to proceed with a claim against the immunity overcompensation was made more explicit by the legislator. In recipient). contrast, whilst the passing-on defence was also already recognised by the German courts prior to implementation of the Remedies Directive, the German legislature chose to codify the relevant case law into statute and has recently proposed further amendments in response to case law developments.49 General principle of full compensation The Directive provides partial assistance in relation to the crucial question of how this division of actual loss between At the outset, Article 1 of the Directive makes clear that it is different levels of the supply chain is to be proven and assessed. intended to facilitate the exercise of the right to “full compen- Articles 13 and 14 introduce varying presumptions in respect of sation” for losses suffered by parties along the supply chain in the burden of proof to be applied to direct and indirect claims, respect of harm caused by competition law infringements. This but the resulting position has the potential to lead to consider- includes compensation for actual loss and loss of profit, together able complexity. Perhaps recognising this, Article 16 states that with payment of interest, so as to “place a person who has suffered in assessing whether the burden of proof is satisfied, national harm in the position in which that person would have been had the infringe- courts shall be able to take account of various matters including ment not been committed ”.43 competing actions arising at different levels of the supply chain Overcompensation – which is stated to include “punitive, in connection with the same infringement, judgments resulting multiple or other types of damages” – is expressly excluded by Article from such actions, and any other relevant information in the 3(3). This is a clear policy statement intended to distinguish the public domain resulting from the public enforcement of compe- EU approach from systems that employ “punitive” or multiple tition law. damages, such as are available under the US Clayton Antitrust However, national courts might be excused from thinking Act, which provides for treble damages in antitrust private that such insights offer only moderate assistance at best. It is action damages cases. However, it would also appear to rule out obvious that such issues will need to be taken into account: the the application of awards for restitutionary damages or other difficulty will be in how to assess and quantify the competing measures seeking to return unjust enrichment. Such awards are claims between them. Article 16 of the Directive provides that not, strictly speaking, loss-based measures, but are employed as the European Commission shall issue non-binding guidelines

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for national courts on how to estimate the share of the over- 17(3) of the Directive). This is a new power for the courts of charge which was passed on to the indirect purchaser. many EU Member States, and raises important and interesting The Commission published the final version of its guidelines possibilities. It may be, for example, that in the course of the on 1 July 2019, following a consultation that ran between July administrative procedure the regulator receives a wide variety of and October 2018. The 53-page text is intended to provide prac- confidential information on effects of conduct upon prices and tical guidance on how national courts may estimate the pass- volume of sales in the affected market. This information may ing-on of overcharges. It builds on previous economic studies have been received from third parties and never fully disclosed gathered by the Commission,50 and is to be read alongside the to the cartel defendants or, most likely, the damages claimants. Commission’s Practical Guide on Quantifying Harm. The guidelines The possibility of creating important asymmetries of infor- provide, among other things, an overview of techniques avail- mation in this regard is obvious, as is the scope for unfairness able to quantify passing-on, including methods for measuring should a court seek to take account of materials not disclosed volume effects (which, in the context of the passing-on defence, to the parties before it. Whilst the European Commission may concern the loss of profit due to reduced sales that result from be prepared to take decisions on the basis of information that it passing-on). In general terms, the guidelines state a prefer- alone has been given opportunities to review, such practices are ence for comparator-based approaches where available, which generally rejected by the courts on the grounds that damages compare prices set by the purchaser during the infringement should be awarded on the basis of evidence that all parties have period with prices in comparator markets. had the opportunity to comment upon and contest. The guidelines may be of greatest assistance to national courts It is also notable that in cases involving “object” infringe- that do not have previous experience in dealing with the passing-on ments of competition law, NCAs tend not to include any anal- defence in damages claims. However, the non-binding nature of ysis of the likely harm caused in their cartel decisions, as the the guidelines also mean that Member States shall remain free impact on the market does not need to be evaluated in order to to adopt alternative approaches. In practice, the approach that reach a finding of infringement. Having not undertaken such national courts prefer for measuring pass-on is likely to depend on (often very complicated) analysis as part of their own investi- the availability of economic evidence, which may in turn depend gation, NCAs may not be best placed to advise and indeed may on the applicable rules governing disclosure. The guidelines also be reluctant to devote resources to undertaking such an exer- focus exclusively on the passing-on of price increases, but provide cise on behalf of the courts, particularly in light of the adver- limited assistance for measuring non-price effects, other than to sarial context. It will, therefore, be interesting to see to what acknowledge that similar tools may be available. extent national courts make use of this new power, and how It is accordingly suggested that the guidelines will have only NCAs respond. For example, the Spanish courts have already modest impact in jurisdictions that, respectfully, have more requested assistance from the Spanish NCA (an established experience than the European Commission in assessing complex practice in Spain that precedes implementation of the Directive). claims for compensatory damages, whether or not in the context This is, to some degree, unsurprising as the approximation of of antitrust. In recent years, national courts have developed harm is a factor that the Spanish CNMC takes into account considerable expertise in the UK, Germany and Spain, handling when calculating applicable fines. The Spanish NCA has also passing-on claims in damages claims arising from high-profile announced its intention to publish a guide on the quantifica- cartel decisions including Multilateral Interchange Fees and Trucks. tion of losses in damages claims.51 In the UK, where the CAT The level of experience of national courts in dealing with and the courts already had the power to seek assistance from passing-on issues is likely to remain a factor when considering third parties in determining damages prior to the implementa- the choice of jurisdiction, although this is an area of doctrine in tion of the Directive,52 the Competition and Markets Authority which legal precedents may take many years to establish. (“CMA”) is not generally asked for its advice, and it is anticipated that there will be no change in approach in light of the Directive. However, the approach of national courts and NCAs Quantification of harm of other Member States remains to be seen.

The Directive introduced some basic principles relating to quan- Effect of Consensual Settlement tification of harm which are intended to avoid a situation where national laws of procedure make it difficult in practice to begin The Directive has introduced three key measures aimed at any form of antitrust claim. Pursuant to Article 17, Member increasing the incentives for parties to reach consensual resolu- States are required to ensure that the standard of proof under tion of antitrust damages actions in all EU Member States: national law does not render it excessively difficult to exercise (a) the limitation period for bringing an action for damages the right to damages and that judges are given the opportu- must be suspended for the duration of any consensual nity to estimate losses (i.e. a claim is not to fail simply because settlement process; harm cannot be quantified on an exact basis). In addition, cartel (b) NCAs have been given discretion to consider whether a infringements are to be presumed to cause harm (thus ensuring settlement reached prior to a fining decision should be a that a ground of action does not fail in some jurisdictions mitigating factor in setting the level of any such fine; and simply because the losses cannot be measured at the outset), (c) settling parties are permitted to agree that, in so far as the although the Directive refrains from prescribing any presump- settling injured party is concerned, it will not come back to tion as to the amount of harm caused. Whilst most practitioners the settling defendant for any further sums in connection welcomed the decision not to include a rebuttable presumption with its own losses, reinforcing the finality of settlement. of a certain level of overcharge (as initially proposed when the However, whilst these provisions will result in a degree of Directive was being negotiated), it is anticipated that as a result harmonisation across Member States, a number of important national courts may well take differing approaches and reach questions remain open for Member States to determine at the different conclusions on questions of quantification. national level. For example, how will it be determined whether a Differing approaches by national courts may also emerge “consensual dispute resolution process”, for the purposes of the oblig- in relation to their use of the power to request assistance from atory suspension of the limitation period, has arisen and/or NCAs on the issue of quantification of loss (pursuant to Article continues to exert a suspensory effect? How many NCAs will

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make use of the option to treat a settlement agreement as a miti- agreed and adopted an amended version of the Draft Directive gating factor in setting fine levels, and what level of discount on 22 June 2020,59 which will be subject to a final plenary session will be applied?53 How will national courts approach contri- of the European Parliament before publication in the Official bution claims where a consensual settlement has been reached Journal, probably in early 2021. Member States will then have with some defendants but not others? This latter question is two years to transpose the provisions into national legislation, addressed in part by Article 19 of the Directive (which limits and a further six months within which the legislation must enter liability of a settling defendant for contribution claims from into force. This would indicate that the new consumer redress non-settling co-infringers),54 but such claims are still likely to mechanism is unlikely to enter into force before 2023. raise complex questions in practice, and it remains to be seen At present, the UK currently has probably the most how these will be handled by national courts. well-developed collective actions regime amongst EU Member As a result, the availability of clear settlement procedures – in States, following reforms in 2015 which expanded the regime to particular in relation to collective settlement (expressly excluded include the possibility of bringing a claim on an “opt-out” basis from the scope of the Directive55) – is likely to remain a key point (i.e. where members of a defined class are automatically included of difference between jurisdictions, and an important consid- if they fall within the relevant definition, unless they actively eration for both claimants and defendants. A detailed assess- choose to “opt out” of the action), in addition to the option of ment of the settlement procedures available in Member States an “opt-in” claim (i.e. on behalf of named consumers who have is beyond the scope of this chapter, but it is interesting to note taken active steps to opt in to the action).60 Whilst successful in this regard that two of the jurisdictions which are currently certification of the first opt-out collective claim under this new amongst the most popular for bringing antitrust damages regime is still awaited,61 it is anticipated that the broad collective actions – the Netherlands and the UK – have both introduced actions regime in the UK will contribute to its continued popu- “opt-out” collective settlement regimes that enable businesses to larity as a jurisdiction for bringing antitrust damages claims settle competition claims from multiple claimants quickly and (subject to potential issues raised by Brexit, as discussed below). easily on a voluntary basis. Neither regime has yet been success- However, collective actions regimes have also been introduced fully used in relation to a competition law claim,56 but it is antic- or proposed in a number of other Member States. For example, ipated that the possibility of such collective settlement will be a as mentioned above (in “Effect of National Decisions”), in factor in the continued popularity of both jurisdictions. France the loi Hamon introduced the possibility of collective actions seeking damages for material harm caused to consumers Continued Differences in Approach to Key as a result of a competition law infringement (with effect from 1 Issues not Covered by the Directive October 2014). In the Netherlands, a bill has been adopted on the redress of mass damages in collective actions, which allows Finally, it is important to remember that there are a number of claims for monetary damages on an opt-out basis (for Dutch key practical issues which are likely to be critical to the rela- inhabitants) and, in principle, on an opt-in basis (for persons who tive popularity of different jurisdictions for antitrust damages are not domiciled or resident in the Netherlands).62 According actions which are not covered at all by the Directive, and in to the bill, a representative is able to bring a collective claim on relation to which important differences will continue to exist behalf of a defined class, who would be automatically included between different EU Member States. in the claim unless they opted out, provided that the claim had a One of these is the availability of a collective action regime, “sufficiently close connection” with the Netherlands. The bill entered allowing claimants to join together to bring an antitrust into force on 1 January 2020. In Germany, the legislature damages action, on either an “opt-in” or “opt-out” basis. Where adopted the “Act to Introduce Civil Model Declaratory Proceedings” in available, this is often an attractive option for consumer claims November 2018, which provides for a collective redress mecha- in particular, where the individual loss suffered as a result of a nism for consumer claims. The new mechanism, which is broad competition law infringement may not be sufficient to justify in the respect that it covers many areas of law, including poten- the costs involved in bringing an action, but the aggregate loss tially competition law, is limited to model declaratory actions suffered by a particular class of claimants is significant. The for collective redress in consumer matters (and in this regard availability of collective redress was considered at EU level at is nearer in scope to France’s loi Hamon). The right to bring the same time as the Directive, but this proved too controversial actions under this new mechanism is also limited to so-called to include in the Directive itself and a non-binding Commission “registered qualified institutions” being, in essence, consumer associ- Recommendation was adopted instead, which set out some ations that satisfy certain criteria. However, further limitations common principles for collective redress mechanisms in EU to the scope of the model declaratory action are likely to impact Member States.57 This was intended to enable Member States its usefulness to private competition law claims. In particular, to pursue the implementation of collective redress mechanisms the mechanism is designed to resolve recurring issues of fact as they saw fit. or law (for example, a breach of legal duty), but cannot itself be In April 2018, the Commission published a report concluding used to establish causation or quantum and, accordingly, cannot that limited legislative progress has been made by Member States result in an award of compensation. to establish consumer redress mechanisms,58 and proposed a Another key practical issue relates to costs and funding. There new Directive on representative actions for the protection of the has been a steady rise in third-party litigation funding in many collective interests of consumers (the “Draft Directive”). The EU Member States, and such funding is often crucial in enabling Draft Directive will provide Member States with a mechanism antitrust damages claims to be brought. For example, in the through which “qualified entities” may bring collective actions on UK, the Road Haulage Association has reportedly secured full behalf of EU consumers harmed by infringements of EU law. funding from Therium Capital Management for its GBP 4 billion Although the Draft Directive does not strictly apply to infringe- follow-on damages claim in the English courts against trucks ments of competition law, Members States shall “remain competent manufacturers, in connection with the European Commission’s […] to apply the provisions of this Directive to areas not falling within its Trucks decision. Therium is also known to be actively funding scope” and, in principle, could extend the collective action regime competition litigation in Spain, including a large number of to domestic competition law damages claims through imple- claims being brought against Cepsa, BP and Repsol following menting legislation. The European Parliament and Council on from a 2009 infringement of the Spanish NCA relating to

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price-fixing of fuel and claims arising from the European and the European Union is successfully concluded. Similar Commission’s Trucks decision. A number of other third-party uncertainty applies in other areas of the UK–EU relationship, funders are also known to be active in Germany, including firms including the applicability of the recast Brussels Regulation and and investment funds that specialise in acquiring and pursuing related EU Regulations governing international torts and cross- cartel damages claims; however, such arrangements have recently border litigation (see chapter 9).68 been scrutinised by the courts.63 In the Netherlands, the number The terms of the UK’s future relationship with the EU is and activity of litigation funders is understood to be on the likely to impact the UK’s current status as a preferred jurisdic- rise due to, amongst other things, the large number of claims tion for antitrust damages actions after Brexit, particularly with arising in connection with the Trucks decision. In contrast, third- respect to: party funding of claims is increasing at a more limited pace in (a) whether European Commission infringement decisions France,64 and formally prohibited in certain other Member continue to be treated as binding proof of infringement by States, including Ireland. It is anticipated that the availability of English courts and the CAT; funding, and the terms thereof, is likely to become an increas- (b) the nature of the agreement reached on matters relating to ingly important consideration for claimants when deciding where jurisdiction; and to lodge a claim, alongside the more “traditional ” considerations (c) the future approach to enforceability of English court such as disclosure and limitation periods. judgments in Europe. It is plainly the case that, if the outcome of the political nego- The Potential Impact of Brexit tiations is such that future European Commission infringement decisions can no longer be relied upon as the basis for follow-on The United Kingdom exited the European Union on 31 January damages actions before English courts or the CAT, and the rules 2020. In accordance with the terms of a withdrawal agree- on jurisdiction and enforceability of judgments are significantly ment agreed between the United Kingdom and the European amended in a way which impacts negatively on claimants, the Union on 17 October 2019 (the “Withdrawal Agreement”), UK’s position at the forefront of private enforcement of compe- the United Kingdom has now entered into a transition period tition law in Europe could diminish in the medium to long term. that is scheduled to end on 31 December 2020 (the “Transition That said, it is important to recall that in the short term nothing 65 Period”). Until the end of the Transition Period, EU compe- has changed; until the end of the Transition Period, the provi- tition rules – including the Damages Directive – continue to sions of EU competition law and infringement decisions of the apply under the Withdrawal Agreement as though the United European Commission will remain binding in the UK, and the Kingdom remains a Member State of the European Union. pre-Brexit approach to questions of jurisdiction and enforce- At the time of writing (August 2020), the relationship between ability of judgments will continue. Moreover, the Competition the United Kingdom and the European Union after the Transition SI (as enacted) includes transitional arrangements preserving a Period, including its implications for private competition litigation, party’s right to make (or continue) follow-on claims relating to remains uncertain and subject to the outcome of ongoing polit- an infringement or alleged infringement of EU competition law ical negotiation. Whilst it remains difficult to predict what the that occurred before the end of the Transition Period. As a result, post-Transition Period relationship will look like, in principle, the any new post-Brexit regime may not fully apply in practice for a UK Parliament’s enactment of the European Union (Withdrawal) number of years. Act 2018 (the “Brexit Act”) currently ensures that, for the period Moreover, even in the event of a No-Deal Scenario, the UK immediately following the end of the Transition Period (31 will still offer a well-established competition litigation infra- December 2020), “EU-derived domestic legislation” and “direct EU structure, which is likely to remain an attractive proposition for legislation” that was operative immediately before the end of the claimants (and indeed, in many respects, also for defendants). Transition Period will continue to form part of UK domestic law. In particular, and in contrast to many other Member States with However, as explained further in chapter 9, in the event that less well-developed private enforcement regimes, the UK will no agreement is reached following trade negotiations between continue to offer experienced specialist judges, legal advisors the United Kingdom and the European Union (a “No-Deal and economists, as well as favourable procedural rules which the Scenario”), then the UK Government has published emer- courts have considerable experience in applying, and a reputation gency legislation that will immediately come into force after the for efficient and effective case management. As noted above, 66 Transition Period (the “Competition SI”). The Competition the well-established presence of a number of litigation funders SI will revoke the application of, inter alia, Article 101, Article is also likely to offer significant advantages. Whilst the long- 102 and Regulation 1/2003 under national law. In January 2020, term effect of the Directive may well have been to “kick-start ” the UK CMA issued guidance indicating that, in the event of private enforcement of competition law in Member States that a No-Deal Scenario, European Commission decisions reached have not seen many antitrust damages actions before national before the end of the Transition Period (including cases that have courts to date, it seems clear that this will not occur overnight, not exhausted the appeals process) can still form the basis of and the traditionally popular jurisdictions – including the UK – future follow-on claims. On the other hand, infringement deci- are likely to continue to be perceived in a favourable light. sions reached by the European Commission after the end of the Furthermore, even if it proves difficult post-Transition Period Transition Period, even if relating to pre-Brexit facts which have to claim damages before the English courts for harm suffered in effect in the UK, will no longer provide a basis for follow-on EU Member States, the prospect of bringing an antitrust claim damages claims under UK law. Moreover, UK courts will no in the UK in respect of damage suffered in the UK as a result longer be required to treat infringement decisions of an EU of a Europe-wide or global cartel may well still be an attrac- 67 Member State NCA as prima facie evidence of an infringement. tive option for claimants. In particular, commencing claims in It is important to note that the Competition SI was originally the UK would be likely to lead to extensive disclosure of docu- prepared as emergency legislation in the event that the UK was ments relating to the cartel, which could then place claimants unable to successfully negotiate the Withdrawal Agreement. in a much better position to settle claims relating to damage Therefore, it remains to be seen whether the UK Government suffered outside the UK. would seek to retain, amend or repeal the Competition SI in Finally, as mentioned above, it has been suggested that the the event that a trade agreement between the United Kingdom attractiveness of the English courts as a forum for dealing with

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competition damages claims could even be increased after the traditional popularity of the UK, Germany and the Netherlands Transition Period, on the basis that claimants would be in a as claimant-friendly jurisdictions in the future. In the UK, position to circumvent years of uncertainty and preliminary the post-Brexit Transition Period has ensured limited change references from national courts of remaining Member States during the short term, but in the medium and longer term regarding the interpretation and application of the Directive. much will depend on the precise terms of the future UK–EU relationship. In Germany and the Netherlands, the approach Conclusions taken by the domestic courts to key questions of interpretation of their amended private enforcement regimes continues Whilst it is still too early to reach definitive conclusions about to develop. But it is clear that the Damages Directive has not the long-term impact of the Directive on private enforcement been a zero-sum game; growth in domestic enforcement activity of competition law across the EU, a comparison of the national has, to the knowledge of the authors, been a common experi- implementing legislation adopted by Member States suggests ence between Member States. This outcome is likely to have an that it is unlikely that the Directive will fully achieve its stated inherently significant impact on competition, beginning from aim of a “level playing field ” for private enforcement. That said, the risks of participating in anti-competitive practices in the it appears likely that the total number of antitrust damages first place, to the strategic implications of leniency applications actions being brought across the EU will continue to increase. and settlement agreements and, finally, to the opportunities that The Directive has already had an impact on jurisdictions where consumers now have available for redress. private enforcement of competition law is not as well developed, such as in Spain, where more than 160,000 consumers Endnotes opted in to a claim lodged against car manufacturers following a cartel decision by the Spanish NCA.69 The transposition of 1. Directive 2014/104/EU of the European Parliament and the Directive into French law has also coincided with a drive of the Council of 26 November 2014 on certain rules to promote the attractiveness of French courts in international governing actions for damages under national law for commercial disputes, illustrated in particular by the creation of infringements of the competition law provisions of the EU Member States and of the European Union (OJ L 349/1, 5 an “International Chamber” in the Paris Court of Appeal, which December 2014). will be responsible for follow-on damages actions relating to 2. Recital 9 of the Directive. international cartels.70 3. An implementation status table is available on the Where a choice of jurisdiction is available (as will often be European Commission’s website at: http://ec.europa.eu/ the case in multi-jurisdictional cartels), “forum shopping” seems competition/antitrust/actionsdamages/directive_en.html. likely to continue, and it will be critical for potential claimants 4. Claims in respect of Loss or Damage arising from and defendants to seek expert advice in assessing the strategic Competition Infringements (Competition Act 1998 and advantages of one possible jurisdiction over another. This will Other Enactments (Amendment)) Regulations 2017 (SI be particularly important in the short to medium term, when the 385/2017). differing approaches taken to the question of temporal appli- 5. Law amending Book 6 of the Civil Code and the Code cation of amendments to national laws to reflect the Directive of Civil Procedure in relation to the implementation of requirements will add an extra layer of complexity to the assess- Directive 2014/104/EU (“Implementatiewet richtlijn privaatre- ment, and many unanswered questions will remain as to how chtelijke handhaving mededingingsrecht”). national courts will interpret key provisions of the relevant 6. Supreme Court, 8 July 2016, ECLI:NL:HR:2016:1483. implementing legislation. 7. District Court Rotterdam 26 September 2018, ECLI: It is to be noted with emphasis that Germany has continued to NL:2018:8001; District Court Rotterdam 29 May 2019, consolidate its position as a key jurisdiction for claimants seeking to ECLI:NL:RBROT:2019:4441; District Court Amsterdam file competition damages claims. Several hundred cartel damages 11 September 2019, ECLI:NL:RBAMS:2019:9965. claims are reported to be pending in Germany at the time of writing, 8. Ordinance no. 2017-303 and Decree no. 2017-305. with damages actions ranging from sausages, beer and confec- 9. 9th amendment to the German Act against Restraints of tionary to air cargo carriers, car glass and trucks, including multiple Competition. This legislation also introduces various claims that individually exceed EUR 1 billion. A substantial sum of other changes to German competition law, including noti- recovered damages can be attributed to a single claimant, Deutsche fication thresholds for the merger control regime. Bahn AG, which has successfully recovered in excess of EUR 400 10. In contrast, if the claim arose on or after 27 December 2016, million in connection with cartels in various Member States but, in the new rules regarding the starting point and suspension particular, Germany. The UK has also maintained its reputation as of the limitation period will apply for the purpose of deter- an important jurisdiction for private competition litigation, which mining whether the claim was time-barred as at 9 June 2017. includes the pending judgment of the Supreme Court for certifica- 11. For example, it was confirmed on 12 June 2018 by the tion of a GBP 14 billion opt-out collective action on behalf of 46.2 German Federal High Court that, under the German Act million consumers arising from the Multilateral Interchange Fees saga, against Restraints of Competition, the staying effect of inves- as well as collective proceedings brought against six major banks tigations by NCAs apply to investigations where claims have for damages in respect of the European Commission’s FOREX arisen before 1 July 2005 provided that the claims had not decisions. This growth of enforcement activity is symptomatic of yet been time-barred on 1 July 2005. The controversy that a wider European phenomenon. In July 2020, Mastercard alone preceded the German court’s decision concerned whether a reported an aggregate of approximately GBP 3 billion in alleged provision on limitation periods introduced to the German damages claims from UK and pan-European merchants, of which Act against Restraints of Competition on 1 July 2005 had approximately GBP 2 billion has been resolved through settlement retroactive effect (see Judgment of the Federal High Court, or judgment.71 The European Commission’s Trucks decision has KZR 56/16 – Grauzementkartell II ). The ruling, which in this given rise to more than 400 cartel damages claims being filed across case concerned a cement cartel between 1993 and 2002, will EU Member States and outside the EU. have a significantly claimant-friendly impact on the enforce- It remains to be seen whether the combined effect of the ment of private damages claims in the German courts in implementation of the Directive and Brexit will affect the relation to long-running cartels for years to come.

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12. Royal Decree 9/2017 of 26 May 2017. claim in circumstances where the defendant was not 13. Provided they have not been withdrawn. mentioned at all in the decisions of the NCA. 14. “Grey-list” documents are listed in Article 6(5) of the 22. Loi Hamon, no. 2014-344 of 17 March 2014, enacted by Directive. They include: (i) information prepared specif- Decree no. 2014-1081 of 24 September 2014. The law ically for the proceedings of an NCA, other than leniency entered into force on 1 October 2014. See further section 9. corporate statements and settlement submissions (which 23. Ferrexpo v Gilson Investments [2012] EWHC 721. The English benefit from absolute protection from disclosure under High Court also noted that the difficulties in assessing the Article 6(6)); (ii) information that the NCA has drawn up weight to be attached to the other decision were magnified and sent to parties in the course of proceedings; and (iii) if, as in the Ferrexpo case, the party relying on the judgment settlement submissions that have been withdrawn. of another court puts it forward without any information 15. Although this is generally understood to be the case under about how the argument before the other court proceeded. German law, a decision of the Düsseldorf Higher Regional 24. Paris Court of Appeal, 12 September 2018, RG no. 18/04914. Court of 4 March 2018 has found that the new disclosure 25. Article L. 481-2 of the French Commercial Code and regime shall not be applicable to claims which arose before explanatory sheet no. 5 of the administrative directive 27 December 2016 (file no. VI-W (Kart) 2/18, NZKart JUSC1708788C of 23 March 2017 (Circulaire de présentation 2018, 228). It remains to be seen how other courts will des dispositions de l’ordonnance n° 2017-303 du 9 mars 2017 rela- respond to the Düsseldorf court decision. tive aux actions en dommages et intérêts du fait des pratiques anti- 16. Communication on the protection of confidential infor- concurrentielles et du décret d’application n° 2017-305 du 9 mars mation by national courts in proceedings for the private 2017 ). enforcement of EU competition law (OJ C 242/1, 22 July 26. BCL Old Co Limited & Ors-v-BASF SE & Ors [2012] UKSC 2020). 45. 17. For example, as discussed in chapter 9, the English High 27. Deutsche Bahn AG & Ors-v-Morgan Advanced Materials Plc Court ruled in favour of disclosing limited extracts from (formerly Morgan Crucible Company Plc) [2014] UKSC 24. leniency documents in National Grid Electricity Transmission 28. In Germany, the Stuttgart District Court has stayed Plc-v-ABB & Ors [2012] EWCH 869, having applied the proceedings for a damages claim against the truck manu- “balancing exercise” of competing interests required by the facturer Scania pending the outcome of its appeal of the Court of Justice in Case C-360/09, Pfleiderer. European Commission’s decision before the General 18. Recital 24 to the Directive provides that the protection Court. However, the German court has also stayed the granted to leniency statements and settlement submissions proceedings against addressees of the Trucks settlement in Article 6(6) extends to literal quotations of a leniency decision – for whom there is no option of appeal – on statement or a settlement submission in other documents. the basis that the damages claim is based on the same However, it appears from recital 28 and the definitions in cartel-related facts (decision of 14 March 2019, file no. 30 Article 1 of the Directive that this protection will not extend O 234/17). to, for example, pre-existing evidence referred to in an appli- 29. “Brexit: exit stage left for competition damages?”, Anneli Howard, cation for leniency, or other documents relating to the appli- CLJ: Brexit Special Online Edition (14 July 2016). cation other than the actual corporate statement itself. It 30. See, for example, Stuttgart Regional Court, file no. 45 O appears inevitable that claimants and defendants will often 1/17, decision of 30 April 2018; Hannover Regional Court, disagree on where exactly the line should be drawn, and that file no. 18 O 21/17 and file no. 18 O 23/17, decisions of 16 there may well also be scope for differing interpretations by April 2018; Hannover Regional Court, file no. 18 O 8/17, national courts of different Member States. decision of 18 December 2017. 19. For example, whilst the Munich Higher Regional Court 31. Paris Court of Appeal, 6 March 2019, RG N. 17/21261. had not considered the product and geographic market 32. Arcadia Group Brands Ltd and others-v-Visa Inc and others definition contained in a fining decision of the German [2014] EWHC 3561 (Comm). See chapter 9 on the extent NCA to be binding on the court (file no. U 5006/11, deci- to which deliberate concealment of the facts relevant to a sion of 21 February 2013), the Karlsruhe Higher Regional right of action may give rise to an extension of the limita- Court adopted a different approach just a few months tion period. later, deciding that the product market definition reached 33. See, for example, Paris Court of Appeal, 6 March 2019, RG by the German NCA was binding on the court (file no. 6 17/21261 (the new rules regarding the suspension of the U 51/12 (Kart.), decision of 31 July 2013). limitation of claims apply to facts (for instance, investiga- 20. For example, in June 2018 the Stuttgart Regional Court held tions by the French competition authority) which occurred that, despite a European Commission decision finding that before 2014); and Paris Commercial Court, 1 October truck manufacturers had co-ordinated their behaviour in 2019, RG 2017053369 (the new rules only apply to facts respect of gross prices for trucks contrary to Article 101 TFEU, which occurred after 2014). it could be derived from the European Commission’s finding 34. In the UK, a claim made in the English High Court that the net prices for trucks (ultimately paid by the claim- would be subject to a six-year limitation period, probably ants) must have also been impacted. See further “Effect of calculated from the date of the European Commission’s National Decisions”, paragraph 4 and the discussion of the infringement finding, i.e. until 5 May 2020, and that suffi- English High Court case of Ferrexpo v Gilson Investments. cient information relating to the infringement was not 21. See, for example, decision of 18 December 2017, file no. in the public domain to enable the claimant to plead a 18 O 8/17, in which the Hannover District Court rejected prima facie case prior to the infringement decision. If the a damages claim relating to the Trucks cartel, on the basis claim were to be brought in the CAT (in theory, now the that the claimant had not substantiated why the defend- preferred forum for competition claims in the UK), the ants, who were not addressees of the decision (but rather limitation period would instead be two years from the their subsidiaries), should be liable for the cartel. See also date the infringement decision became final, i.e. until 5 decision of 17 May 2018, file no. 19 O 9546/16, in which February 2019 (due to the transitional provisions of Rule the Nuremberg-Fürth District Court rejected a damages 119 of the CAT Rules 2015). See further chapter 9).

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35. The Rotterdam District Court has recently found that, for 46. Sainsbury’s Supermarkets Ltd v Mastercard Incorporated and claims bundled by assignment, the key question for the Others [2016] CAT 11. Whilst recognising the rights of starting date of the limitation period is when the assignors indirect claimants and the passing-on “defence”, the Court were in fact able to submit a claim against the defend- of Appeal overturned the CAT’s ruling in 2018 ([2018] ants. The Court held that the assignors in the proceed- EWCA 1536 (Civ)), which was subsequently upheld by the ings had sufficient knowledge of the factual basis of UK Supreme Court on appeal ([2020] UKSC 24). The the claims on the date of the decision of the European Supreme Court’s judgment provides important guidance Commission (Rotterdam District Court, 23 October 2019, in relation to pass-on, noting that defendants and indi- ECLI:NL:RBROT:2019:8230). rect claimants are not required to demonstrate “unrea- 36. It is also notable that in Spain, implementation of the sonable precision” when asserting the pass-on of any over- Directive will lead to a broadening of the concept of joint charge. Instead, in line with the “broad axe” principle and several liability. Under the previous Spanish law, joint under English law, the degree of precision when asserting and several liability was only imposed where the particular pass-on requires a balance between achieving justice by intervention of each party in the damaging behaviour precisely compensating the claimant and dealing with the could not be individualised. Following implementation of dispute at a proportionate cost. The case has now been the Directive, it will no longer be necessary to maintain remitted to the CAT for a determination on quantum and that the damaging behaviour cannot be individualised in pass-on, which is likely to be heard during 2021. order to bring an action against only one co-infringer. 47. In the particular circumstances of the case, the CAT ruled 37. For this purpose, an SME is defined as set out in at first instance that Mastercard’s passing-on defence Commission Recommendation C (2003) 1422, i.e. fewer failed. However, the CAT must now redetermine the than 250 employees and less than EUR 50 million annual question of pass-on in light of the Supreme Court’s ruling turnover. ([2020] UKSC 24). 38. It is interesting to note that the English language version of 48. Paragraphs 8–11 of Schedule 8A to the Competition Act the Directive states that the entity’s market share must be 1998, as inserted by the UK implementing regulations. below 5% “at any time during the infringement of competition law”, 49. In the Draft of the 10th Amendment of the German rather than at all times/throughout the period of infringe- Act against Restraints of Competition, the German ment. However, it appears that this is a translation error in Government has proposed that the presumption of harm the Directive, and that the condition in fact requires that is to be supplemented by a rebuttable presumption, which the entity’s market share be below the 5% threshold at all also applies to indirect purchasers, that companies involved times during the infringement – see further the discussion in transactions with the cartel and falling within its scope below regarding implementation of this provision in the (in terms of subject matter, timing and geography) are also UK. affected by the cartel. It remains to be seen whether the 39. Reflected in paragraph 16(2) of Schedule 8A of the Draft Amendments will enter into force in this regard. Competition Act 1998, as inserted by the UK imple- 50. The guidelines complement a detailed 2016 study into menting regulations. passing on of overcharges by RBB Economics and 40. In this regard, it is anticipated that the German courts will Cuatrecasas, Gonçalves Pereira (commissioned by the also draw on case law relating to determining responsibility European Commission), which was intended to help with for and allocation of cartel fines among group compa- the drafting of guidelines for national courts. nies. In November 2014, the German Federal Court held 51. Comisión Nacional de los Mercados y la Competencia, that the following factors were relevant in such circum- 2018 Strategic Plan. stances: (a) the level and nature of contribution to the 52. Rule 19(3) of the CAT Rules 2015 empowers the CAT to illegal conduct; (b) the level of fault in relation to the illegal request information from third parties. Section 70 of the conduct; (c) the profits and other benefits derived from Senior Courts Act 1981, section 63 of the County Courts the cartel arrangements; (d) the economic capacity of the Act 1984 and Part 35 of the Civil Procedure Rules provide companies involved; and (e) the amount of sales affected by for the courts to be given assistance from assessors. the cartel (Case KZR 15/12, NZKart 2015, 101). 53. In the UK, section 49C of the Competition Act 1998 and 41. For example, in the UK, contribution claims must the Competition Act 1998 (Redress Scheme) Regulations be brought within two years under section 10 of the 2015 already provided for formal approval by the CMA of Limitation Act 1980. In Spain, the time limit is five years voluntary redress schemes set up by potential private action under Article 1964 of the Civil Code. defendants (either before or after a public enforcement 42. As discussed above, Article 10(3) of the Directive only infringement decision is issued). The CMA’s guidance on requires that the limitation period should be “at least ” five the associated requirements and procedures provides that in years, which leaves open the possibility of different limi- the majority of cases, where a voluntary redress scheme is tation periods applying in different circumstances (albeit approved, the companies involved will benefit from up to a starting to run from the same point in time, in accordance 20% reduction in fines imposed in respect of the infringe- with Article 10(2)). ment. It is as yet unclear whether a similar discount would 43. Article 3(2) of the Directive. be applied by the CMA following implementation of the 44. Paragraph 36 of Schedule 8A of the Competition Act 1998, Directive where a settlement agreement was reached, but the as inserted by the UK implementing regulations. formal requirements of the voluntary redress scheme (which 45. Devenish Nutrition Limited v Sanofi-Aventis SA (France) & is primarily designed for cases involving multiple claimants others [2008] EWCA Civ 1086. The Court of Appeal and consumer products) were not met. recently followed Devenish in BritNed Development Limited v 54. Article 19(2) of the Directive prevents any non-set- ABB AB & ABB Ltd [2019] EWCA Civ 1840 (a ruling that tling co-infringers from seeking to recover contribution post-dates the implementation of the Damages Directive for the remaining claim (reduced by the relative share of in the UK). harm caused by the settling co-infringer, not the amount of the settlement) from the settling co-infringer. Article

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19(4) also expressly requires national courts to “take due 62. However, at the request of a party, the Dutch court may account ” of any damages paid pursuant to a settlement decide that the opt-out regime applies to the persons agreement when determining the amount of contribu- belonging to a precisely specified group of persons whose tion that a co-infringer may recover from any other co-in- interests are being represented in the collective action and fringer in accordance with their relative responsibility for who are not domiciled or resident in the Netherlands. the harm caused by the infringement of competition law. 63. One of the key challenges under German law is whether It is not entirely clear how these two provisions inter-re- third-party funders or legal service companies collecting late, or how national courts will interpret national legisla- claims claim for the (sole) purpose of bringing a court tion implementing these provisions in potentially complex action are compliant with the German Legal Services Act circumstances. (“Rechtsdienstleistungsgesetz”). In its judgment of 7 February 55. Recital 13 states that the Directive “should not require Member 2020 (Case no. 37 O 18934/17), the Regional Court of States to introduce collective redress mechanisms”. Munich dismissed Financialright’s action in connec- 56. The Dutch regime has been in operation since 2005, tion with the Trucks litigation, finding that Financialright pursuant to the Dutch Act on Collective Settlement of acted as a legal service provider without having sufficient Mass Damage Claims. As from 1 January 2020, a bill on permission to do so. As a consequence, the Court consid- the redress of mass damages in collective actions entered ered the related assignments to Financialright null and into force. As at the time of writing, it has not yet been void, and Financialright was found never to have owned successfully used in relation to a competition law claim the claims that it had lodged. (although it has been used in other types of mass claim). 64. Cartel Damage Claims, a specialist competition litigation The UK regime, which is closely modelled on the Dutch funder, announced the opening of a Paris office in June approach, was introduced by the Consumer Rights Act 2019. 2015 and is limited to the competition claims context. 65. Article 132 of the Withdrawal Agreement provides for the 57. Commission Recommendation of 11 June 2013 on Joint Committee to adopt a single decision, before 1 July common principles for injunctive and compensatory 2020, extending the transition period for up to one or two collective redress mechanisms in the Member States years. However, no extension was exercised by the Joint concerning violations of rights granted under Union law Committee before this date, which means that there is no (OJ L 201/60, 26 July 2013). longer a possibility to extend the Transition Period under the 58. On 25 January 2018, the Commission published a report terms of the Withdrawal Agreement. Whilst there are theo- on the implementation of its recommendations, which retical legal mechanisms available that could still be used concluded that nine Member States have not provided for to extend the Transition Period outside of Article 132 (for collective redress mechanisms tailored for mass harm situ- example, a variation to the Withdrawal Agreement agreed ations, whereas others that provide for such a possibility by the EU and respective heads of government), it is unclear do not use it “due to the rigid conditions set out in national legisla- whether such steps are likely to materialise in practice. tion” (COM(2018) 40 final). 66. The Competition (Amendment etc.) (EU Exit) Regulations 59. Proposal for a Directive of the European Parliament and 2019 no. 93. of the Council on representative actions for the protec- 67. CMA, “UK Exit from the EU: Guidance on the function of the collective interests of consumers, and repealing tions of the CMA under the Withdrawal Agreement” (28 Directive 2009/22/EC (2018/0089 (COD)). January 2020). 60. Section 47B of the Competition Act 1998, as amended by 68. As noted in chapter 9, the UK deposited an application the Consumer Rights Act 2015. See further in chapter 9. to accede to the Lugano Convention on 8 April 2020. 61. Several applications for certification opt-out collective However, at the time of writing, approval from the EU is actions have now been made to the CAT, including one currently awaited. claim brought on behalf of 46.2 million customers for 69. OCU press release, “Concesionarios de coches: Reclama contra GBP 14 billion in follow-on damages arising from the los precios pactados” (15 September 2015): https://www.ocu. European Commission’s Mastercard I decision. The Court org/coches/coches/noticias/reclamacion-concesionarios of Appeal set aside the CAT’s order refusing certification (last accessed 18 August 2018). in April 2019, but Mastercard was granted permission to 70. Protocol relating to the proceedings before the appeal to the UK Supreme Court. At the time of writing, a International Chamber of the Paris Court of Appeal (7 ruling by the Supreme Court is awaited following a hearing February 2018). in May 2020. Hearings in several certification applications 71. Mastercard Inc., Quarterly Report for the period ending have been vacated until the judgment is handed down (see 30 June 2020 (SEC filing Form 10-Q). further chapter 9).

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Euan Burrows is Ashurst’s EMEA Competition & Antitrust Practice Head. He specialises in all aspects of EU and UK competition law, has full rights of audience and undertakes a wide range of contentious and non-contentious work. He has considerable experience in dealing with the European Commission, UK regulators, UK Competition Appeal Tribunal and private courts (including advocacy higher rights of audience). His work centres on competition law investigations, competition litigation, procurement law and the application of competition law to a wide range of commercial agreements and practices. He has acted in a number of high-profile cartel cases, including leniency and settlement cases, and acted for the defendant and the claimant in, respectively, the UK’s first and second “follow-on” damages actions. He also advised Imperial Tobacco on its wholly successful appeal against the largest collective fine ever imposed by the UK’s Office of Fair Trading in Imperial Tobacco & Others-v-OFT. Euan was appointed to the working party that designed the new Competition Appeal Tribunal Rules to govern UK Competition Litigation Class Actions under the Consumer Rights Act 2015.

Ashurst LLP Tel: +44 20 7638 1111 London Fruit & Wool Exchange Fax: +44 20 7638 1112 1 Duval Square Email: [email protected] London E1 6PW URL: www.ashurst.com United Kingdom

Emile Abdul-Wahab is an associate in the Competition department of Ashurst’s London office. He joined the department in March 2018, having previously trained with the firm. He advises on all aspects of contentious and non-contentious competition law. Prior to joining Ashurst, Emile spent one year working for the UK’s Competition & Markets Authority. He holds an LL.B. Law degree from the University of Manchester and has postgraduate research experience in EU Competition Law. He was also awarded the Law Society’s highly commended Horsfall-Turner essay competition prize in 2017.

Ashurst LLP Tel: +44 20 7638 1111 London Fruit & Wool Exchange Fax: +44 20 7638 1112 1 Duval Square Email: [email protected] London E1 6PW URL: www.ashurst.com United Kingdom

Ashurst is a leading global law firm with a rich history spanning almost Our clients value us for being approachable, astute and commercially 200 years. Our in-depth understanding of our clients and commitment to minded. As a global team, we have a reputation for successfully managing providing exceptional standards of service have seen us become a trusted large and complex multi-jurisdictional transactions, disputes and projects, adviser to local and global corporates, financial institutions and govern- and delivering outstanding outcomes for clients. ments on all areas of commercial law. www.ashurst.com Our people are our greatest asset. We bring together lawyers of the highest calibre with the technical knowledge, industry experience and regional know-how to provide the inclusive advice our clients need. We currently have 28 offices in 16 countries and a number of referral relationships that enable us to offer the reach and insight of a global network, combined with the knowledge and understanding of local markets. With more than 1,700 partners and lawyers working across 10 different time zones, we are able to respond to our clients wherever and whenever they need us.

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Leading by Example: A Case of Effective Private Enforcement

in England and Wales Scott Campbell

Hausfeld & Co. LLP Luke Grimes

Introduction of differentiating between the substantive and procedural provisions, the Damages Directive will likely provide – in the long- The public and private enforcement pillars of competition term – a boost to ensuring the ability of claimants to pursue law enforcement seek to achieve the same policy goal, but via damages claims in any Member State, where appropriate. This very different means. Whilst public enforcement – brought is not least supported by the progressive thinking of the CJEU, by regulatory authorities with wide powers – is often neces- which has – at least on the basis of two recent preliminary issues sary to investigate and sanction anti-competitive behaviour in – confirmed the wide notion of an “undertaking” to ensure response to complaints of their own volition, it is the separate that a would-be defendant’s corporate restructuring (such as the role of private enforcement which aims to compensate victims liability of successor entities to certain liquidated subsidiaries, of anti-competitive conduct, which also has a deterrent effect in as was the case in Skanska) does not equate to litigation immu- unison with public enforcement. Within this context, England nity,6 and furthermore that a Member State’s limitation provi- and Wales (“E&W”) has grown to be the leading jurisdiction sions (prior to the application of the Damages Directive) may for the private enforcement of competition law in Europe, with be deemed to contravene the effet utile of competition law and claimants relying upon European Commission (“EC”) and the EU principle of effectiveness.7 The ECN+ Directive,8 to National Competition Authority (“NCA”) decisions to pursue be transposed in Member States by February 2021, will assist in 1 damages claims in the English Courts on a very regular basis. ensuring a level playing field amongst competition authorities as This trend has caught the attention of in-house lawyers, as regards the procedural aspects of enforcement. cartel damages claims in particular have been shown to constitute an attractive business proposition in terms of adding value The Story of Private Enforcement in E&W to the entities harmed by anti-competitive conduct. In this chapter, we take stock of the landscape for litigating competi- Here we survey the seminal case-law in the English Courts which, tion damages claims in E&W by reviewing enforcement mech- on the whole, demonstrates a flexible but pragmatic approach to anisms and seminal case-law since private enforcement gained competition damages litigation. traction in E&W, and look to what is currently on the horizon. Jurisdiction The Legal Framework Enabling Enforcement Regulation 1/2003 (“Regulation”) is the main implementing Interlocutory jurisdictional challenges have been one of the key regulation for Articles 101 and 102 TFEU, as it ensures (amongst battlegrounds in private enforcement before the English Courts, other things) that these Articles are directly applicable in Member resulting in a suite of judgments that set a comparatively low bar States.2 This means that they can be applied in their own right by for claimants – often seeking to recover damages sustained in national Courts and NCAs alike. The Regulation was intended multiple Member States in the E&W Courts alone – to success- as an attempt to de-centralise the enforcement of competition fully resist strike-out/summary judgment applications brought law from the EU institutions. From the very outset, the English by defendants on jurisdictional grounds. This is noted above in Courts have demonstrated a purposive approach to their duties respect of Vitamins, but was also considered subsequently in the as regards the Regulation, which has helped some claimants context of the Synthetic Rubber 9 and Copper Tubes 10 cartel damages clear the numerous hurdles posed in pursuing successful cartel claims, and more recently as explored below. One of the issues damages claims. hard fought by defendants is whether a damages claim can be Whilst it may be true in some Member States that the Regulation grounded in E&W through an “anchor” UK-domiciled subsid- was a catalyst for bringing private actions for breaches of competi- iary, even though that subsidiary is not an addressee of the rele- tion law, the English Courts had been grappling with cartel damages vant EC or NCA decision. claims even prior to the implementation of the Regulation. This The recent High Court (“HC”) judgment in Vattenfall 11 confirms, is most neatly demonstrated by English judges dealing with the and further develops, the principle, established in the context of question of jurisdiction brought in relation to the Vitamins cartel.3 the Synthetic Rubber and Copper Tubes cartel damages claims, that an In the contemporary setting, the underlying raison d’etre of “anchored” claim will withstand a jurisdiction challenge where the Regulation has in many ways been bolstered by the recently there is a real prospect that the anchor subsidiary “knowingly implemented Damages Directive4 (as implemented in the UK implemented” the cartel. Importantly, in rejecting the defendants’ by the UK Damages Implementation Act).5 Notwithstanding arguments that Vattenfall had not adduced evidence of knowing the fact that the introduction of the Directive was late in most implementation, the HC accepted that Vattenfall faced difficulties Member States, and that Member States have been left the task

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particularising its case prior to disclosure of contemporaneous decisions22 in the Trucks litigation, the UK Competition Appeal documents and access to the unredacted version of the decision, Tribunal (“CAT”) has been willing to adopt a purposive inter- and noted that it could be reasonably expected that the necessary pretation of the new procedural rules and the provisions of the evidence may emerge following disclosure.12 This recognises the Damages Directive. The CAT, in particular, did not appear to obvious information asymmetry faced by claimants resulting from view those rules as being inconsistent with the continued oper- the secretive nature of cartels. Similarly, the HC set a low threshold ation of the broad, relevance-based disclosure rules that exist in for claimants by providing a generous, non-exhaustive list of activ- English litigation. It is important to emphasise that the deci- ities which would amount to implementation of the cartel by the sions were made in the context of parallel follow-on damages anchor subsidiary, in addition to selling the cartelised goods and claims arising from the same facts but subject to different proce- services.13 dural rules (i.e., some pre- and some post-Damages Directive), Similarly, in iiyama,14 the Court of Appeal (“CoA”) considered where the Courts were faced with the need to maintain internal the issue of “territorial” jurisdiction, namely whether the appli- consistency. It therefore remains to be seen whether they will cation of Article 101 TFEU extends to indirect purchases of set a credible precedent for future cases. cartelised products that are manufactured outside the EEA and In the context of claims following on from a settlement deci- subsequently re-supplied within the EEA. Relying upon the sion of the EC, the CAT’s ruling in PSA v NSK & Others 23 clari- “qualified effects” doctrine endorsed by the CJEU in Intel,15 the fies that disclosure will be ordered where it is necessary to ensure CoA held that it was at least arguable that the effects within the EU that the Court has a full and comprehensive understanding of market of a worldwide cartel fall within the scope of Article 101 the detailed workings of the cartel, and where the evidence in TFEU, and that the production of such effects, if substantial and question is likely to be relevant to the level of damages awarded. systemic, may properly be characterised as “immediate” effects of The CAT helpfully noted that, in contrast to EC infringement the cartel. The mere existence of a prior sale to an innocent third decisions, EC settlement decisions focus upon fines and not party outside the EU at an early stage of the supply chain is not upon facts, which is why further disclosure is likely to be needed enough to fail the test for immediacy;16 in other words, “direct- to obtain the requisite level of detail.24 ness” of effects is not required. The judgment therefore provides a persuasive precedent for claimants to argue in favour of a wide The role of the Regulation extra-territorial scope to Article 101 TFEU (and to the English Courts’ jurisdiction), and an appeal by the defendants was refused 25 by the UK Supreme Court (“UKSC”) in July 2018. The recent judgment of the CAT in the Trucks litigation provides clarity on the proper application of Article 16 of the Regulation, and useful guidance for claimants in follow-on claims stemming Disclosure from EC settlement decisions. First, the CAT acknowledged that Article 16(1) prevents Given the asymmetry of information that claimants face in national Courts from making a decision that would run counter follow-on claims, as noted previously, it is not surprising that to a decision of the EC. Recitals constituting an “essential basis” the extensive disclosure obligations placed on parties to English or “necessary support ” for the operative part of a decision, or proceedings make E&W a popular forum for private enforce- those which are “necessary to understand ” the scope of the opera- ment. Whilst orders for disclosure are (inevitably) highly tive part, are binding upon the parties and national Courts for dependent upon the facts of the specific case, the English Courts the purposes of Article 16(1).26 Whilst the application of this have generally adopted a pragmatic and principled approach to test will, of course, always be case-specific, the CAT’s approach disclosure, including with regard to access to the EC’s case file, could well be followed in future claims and, importantly, even prior to the implementation of the Damages Directive. confirms that it is not open to defendants to argue that none of The judgment in National Grid v ABB 17 is an example of the the non-operative findings of a decision are binding. HC conducting a balancing exercise between the need to main- Secondly, the CAT ruled that, subject to limited exceptions, it tain an effective leniency programme and the right to effective is an abuse of process for defendants who have agreed the settle- compensation of cartel victims, as prescribed by the CJEU in ment decision with the EC to later simply deny (or not admit) Pfleiderer.18 Having carried out that exercise, Mr. Justice Roth findings in that decision when follow-on damages claims are ordered disclosure of selected parts of the confidential version brought against them. Broadly, a defendant may advance a posi- of the EC’s decision as well as parts of the leniency appli- tive case that is inconsistent with an EC finding where: (i) its cants’ responses to the EC’s information requests, noting that positive case seeks to show that a finding in the decision does the disclosure was proportionate and would not place leniency not accurately reflect the underlying document it refers to; or applicants in a worse position than non-cooperating parties.19 (ii) it relies upon new evidence it could not reasonably have had Whilst the balancing exercise as set out in Pfleiderer has arguably access to at the time of the EC investigation.27 This point is been superseded by the Damages Directive (i.e., if the operative currently under appeal by the defendant truck manufacturers, provision applies, written leniency and settlement statements and at the time of writing due to be heard in early October 2020. (provided they have not been withdrawn) are “black-listed” from disclosure), this approach is nevertheless demonstrative of Quantification of damages a pragmatism in terms of ensuring that claimants’ efforts are not unwound at the first hurdle. In that regard, the regulations implementing the Damages The jurisprudence in E&W has established that damages for Directive20 introduced specific rules governing access to the breaches of competition law should be compensatory in nature; case file which restrict certain categories of documents from this in and of itself satisfies the EU principle of effectiveness and 28 disclosure21 and, therefore, arguably represent a minor deviation is line with the spirit of the Regulation. 29 from the pre-existing regime. Since 9 March 2017, claimants The recent HC and CoA judgments in Britned v ABB, the first seeking disclosure of the EC’s file must make an application to follow-on cartel damages claim to reach full trial and judgment 30 the Court and satisfy certain conditions relating to plausibility, in E&W, are particularly important in this context as not only specificity and proportionality. Nonetheless, in a series of recent do they reaffirm this principle, but they also provide guidance

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as to how the compensatory principle should be applied when the level of pass-on and that there was, or was likely to be, data quantifying damages. The CoA recognised that quantification available to operate that methodology; however, it was not of the claimant’s loss in competition cases is characterised by necessary for him to be able to produce all of that evidence and uncertainty, and that in those circumstances an “exercise of a sound demonstrate its probative value at certification stage. Moreover, imagination and the practice of the broad axe” should be followed. the CoA rejected the suggestion that the lack of a plausible loss- In other words, the fact that it is not possible for a claimant to based method of distribution of damages could be a reason for prove the exact sum of its loss is not a bar to recovery. Although refusing certification, as distribution ought to be a matter for the on the specific facts of the case, the Courts found that the avail- trial judge following the making of an aggregate award. Overall, able evidence did not support some aspects of Britned’s damages the judgment has thrown a welcome lifeline to the prospects of claim, this realistic approach to the calculation of damages sets a the UK’s young opt-out regime. welcome precedent for claimants in future cases. Mastercard filed an appeal with the UKSC, which was subse- More recently, the UKSC adopted a consistent approach in quently heard in May 2020. The judgment is eagerly awaited, its landmark judgment 31 in the Interchange litigation, albeit in the particularly by proposed class representatives in other opt-out context of pass-on, holding that the same “broad axe” standard actions that have been stayed in the CAT pending clarification must be met by claimants and defendants alike when seeking to by the UKSC on the threshold to be met for certification. Such prove, on the one hand, that the overcharge has not been passed claims that remain waiting in the wings include Trucks,38 FX,39 on and, on the other hand, that the loss has been mitigated and Ro-Ro40 in respect of follow-on damages, and also the first through downstream pass-on. The UKSC reconfirmed that the stand-alone proposed collective for Train Fares41. English common law takes a pragmatic view of the degree of certainty with which damages must be pleaded and proved, and Funding within collective actions therefore does not require unreasonable precision in the quantification of loss (or any mitigation of the same).32 It remains to be seen how the English Courts – in particular, the CAT by virtue Following the Jackson Report in 2010, and subsequently the of the remittal/quantum hearing following the UKSC’s judg- formation of the Association of Litigation Funders (“ALF”), ment – will apply the principles laid down by the UKSC, and third-party litigation funding (alongside adverse cost arrange- this will remain an area to watch. ments such as after-the-event insurance, “ATE”) is now well-established in E&W and approached pragmatically by the English Courts. In fact, the success of the new collective Collective redress proceedings regime for competition claims is highly dependent upon the availability of third-party litigation funding, without Perhaps one of the most unique features which sets out E&W which the vast majority of claimants would not be able to fund as a jurisdiction in Europe is the ability to pursue “opt-out” their claim. collective proceedings. This change – from a former “opt-in”- The CAT expressly acknowledged this in a recent judgment42 only regime – was introduced by the Consumer Rights Act 2015 in the Trucks collective actions.43 In rejecting several arguments (“CRA 2015”) and intended to make it easier for class representa- by the truck manufacturers that the proposed class represent- tives to bring damages actions in E&W on behalf of a given class atives’ funding and ATE insurance arrangements were inade- of claimants. To appease concerns that permitting claims to be quate, the CAT confirmed that it would be wrong for it to “place brought on an opt-out basis could lead to an increase in unmer- [third party litigation funding] for the purpose of collective proceedings […] itorious claims, the new provisions include, amongst other safe- into a straightjacket” and a flexible approach should be adopted, guards, a certification process pursuant to which the CAT must the only concerns being whether: (i) the terms of the funding certify an opt-out action before it can proceed. As part of the agreement do not impair the ability of the class representative process, the CAT must consider whether the claims “are suitable to act in the interests of the class members; and (ii) adequate to be brought in collective proceedings”,33 which includes an assessment funding has been arranged to pursue the litigation in the inter- of the CAT’s ability to award an aggregate amount in damages. ests of the class members. The CAT has so far taken a rigorous approach to the certi- Looking ahead, although some limited aspects are subject to fication demonstrated by the second collective proceeding to appeal by the truck manufacturers (which has been granted by have had a hearing for certification, in which it set a high “suita- the CoA and is currently due to be heard in January 2021), the bility” bar.34 In its judgment35 in Merricks v Mastercard, the CAT judgment offers proposed class representatives greater clarity as refused certification on the basis that Mr. Merricks (the proposed to how the CAT will interpret the requirements for authorisa- class representative): (i) was unable to point to sufficient data tion of funding arrangements in collective claims. supporting the methodology proposed by his experts to determine how overcharges arising from Mastercard’s unlawfully high CAT’s fast-track procedure interchange fees may have been passed on to consumers; and (ii) had not put forward any plausible means of calculating the losses sustained by individual class members so as to allow for The CAT’s fast-track procedure is another of the changes intro- the appropriate distribution of an aggregate award of damages duced by the CRA 2015 with a view to making it easier for claim- (i.e., one that would otherwise be in line with the compensatory ants – particularly individuals, micro-businesses and SMEs – to principle).36 obtain damages and/or injunctive relief in the CAT. Although 44 The CoA, however, granted Mr. Merricks permission to appeal its use has been somewhat limited to date, the procedure prom- and subsequently overturned the CAT’s findings.37 It ruled that ises significant benefits to claimants with smaller claims and the CAT was wrong to have conducted a “mini-trial” by carrying smaller pockets, such as the ability to “cost-cap” and a direction out a detailed economic analysis of the claim at the certification for limited disclosure. In the first (and as yet only) fast-tracked stage and instead should only have asked whether the claim had claim to reach trial and judgment (albeit on the issue of liability a “real prospect of success”. On pass-on, Mr. Merricks had to satisfy only), it is noted that the litigation timetable was condensed into the CAT that the expert methodology was capable of assessing seven months between claim issue and trial, although judgment

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was not given until over six months after trial. In light of the 3. Provimi Limited v Roche Products Limited & Others [2003] slow up-take of the fast-track procedure, it remains to be seen EWHC 961 (Comm) (2 May 2003). which types of cases appear to be appropriate candidates for the 4. Directive 2014/104/EU of the European Parliament and regime and whether better use of this mechanism will be made of the Council of 26 November 2014 on certain rules by would-be claimants in the future. governing actions for damages under national law for infringements of the competition law provisions of the The Future of Private Enforcement in E&W – Member States and of the European Union. What is on the Horizon? 5. The Claims in respect of Loss or Damage arising from Competition Infringements (Competition Act 1998 and As mentioned above, an important development that can be Other Enactments (Amendment)) Regulations 2017. expected in the short term, and most likely by the autumn of this 6. Case C 724/17 – Vantaan kaupunki v Skanska Industrial year, is the UKSC’s judgment in Merricks. Regardless of whether Solutions Oy & Others (14 March 2019). the UKSC will side with the CoA or with the CAT, the judgment 7. Case C-637/17 – Cogeco Communications Inc. v Sport TV is expected to clarify the test to be met by proposed class repre- Portugal SA & Others (28 March 2019). sentatives in opt-out collective proceedings. 8. Directive (EU) 2019/1 of the European Parliament and of As for longer-term developments, Brexit remains the elephant the Council of 11 December 2018 to empower the compe- in the chapter. Predictions on its impact on E&W private tition authorities of the Member States to be more effec- enforcement vary considerably, and are heavily dependent upon tive enforcers and to ensure the proper functioning of the the relationship that is ultimately established between the UK internal market. and the EU following the transition period. It remains to be 9. Cooper Tire & Rubber Company Europe Limited & Others v Dow seen whether EC decisions will remain of persuasive value, Deutschland Inc & Others [2010] EWCA Civ 864 (23 July and whether follow-on claims will increasingly be premised on 2010). CMA decisions. Notwithstanding how the future relationship 10. Toshiba Carrier UK Limited & Others v KME Yorkshire Limited may transpire, the experience of the English Courts in compe- & Others [2012] EWCA Civ 1190 (13 September 2012). tition damages claims, the existence of the opt-out collective 11. Vattenfall AB & Others v Prysmian SPA & Others [2018] regime and the largely claimant-friendly body of case-law (the EWHC 1694 (Ch) (4 July 2018). best examples of which we have tried to illustrate in this chapter) 12. Ibid., at paragraph 86. are likely to remain attractive factors for bringing competition 13. Ibid., at paragraphs 72–74. damages claims in E&W. 14. The LCD Appeals [2018] EWCA Civ 220 (16 February As noted above, despite the fact that the implementation of the 2018). Damages Directive is not strictly a recent phenomenon, we are 15. Case 413/14 P – Intel Corporation Inc. v European Commission only beginning to see the impact of some provisions (given E&W (6 September 2017). was largely compliant with most provisions pre-implementation); 16. Supra 14, at paragraph 98. other provisions will take more time to bear fruit. This is also 17. National Grid Electricity Transmission PLC v ABB Limited in part due to the differential treatment between the substantive [2012] EWHC 869 (Ch) (4 April 2012). and procedural provisions. However, the changes introduced by 18. Case C-360/09 – Pfleiderer AG v Bundeskartellamt (14 June the Damages Directive (and as implemented by the UK Damages 2011). Implementation Act) are set to remain after Brexit and may bear 19. The principles established in the judgment, and in Pfleiderer, more interesting fruit in the longer term, given their temporal are endorsed in the Damages Directive. scope covering infringements from 9 March 2017 onwards. 20. Supra 5. Whilst we have seen the procedural rules on disclosure at play 21. These are: (i) settlement submissions that are not subse- (to some extent) in recent case-law, as explored in this chapter, quently withdrawn; (ii) cartel leniency statements; and (iii) some of the more substantive provisions, such as the suspen- a competition authority’s investigation materials prior to sion of limitation periods and the new rules on the burden of the conclusion of the investigation. proof in respect of pass-on, are likely to assist and provide greater 22. Suez Groupe SAS & Others v Fiat Chrysler Automobiles N.V. legal certainty to future claimants in E&W private enforcement & Others [2018] EWHC 1994 (Ch) (16 July 2018); and Ryder proceedings. Limited & Others v MAN SE & Others [2020] CAT 3 (15 January 2020), [2018] EWHC 1994 (Ch). Note 23. Peugeot S.A. & Others v NSK Limited & Others [2018] CAT 3 (5 March 2018). This chapter is based upon the laws of England and Wales only, 24. Ibid., from paragraph 28 onwards. and as at the date of publication. 25. Royal Mail Group Limited & Others v DAF Trucks Limited & Others [2020] CAT 7 (4 March 2020). The seven cases Acknowledgment comprising the Trucks litigation are: Royal Mail Group Limited v DAF Trucks Limited & Others; BT Group plc & The authors wish to express particular thanks to Ginevra Bicciolo, Others v DAF Trucks Limited & Others; Ryder Limited & also of Hausfeld & Co. LLP, for her invaluable assistance in the Another v MAN SE & Others; Suez Groupe SAS & Others v drafting of this chapter. Fiat Chrysler Automobiles N.V. & Others; Veolia Environnement S.A. & Others v Fiat Chrysler Automobiles N.V. & Others; Endnotes Wolseley UK Limited & Others v Fiat Chrysler Automobiles N.V. 1. “English” in this sense also captures the Courts of Wales. & Others; and Dawsongroup plc & Others v DAF Trucks N.V. 2. Article 1, Council Regulation (EC) No 1/2003 of 16 & Others. December 2002 on the implementation of the rules on 26. Ibid., at paragraph 64. competition laid down in Articles 81 and 82 of the Treaty. 27. Ibid., at paragraph 141.

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28. Devenish Nutrition Limited v Sanofi-Aventis SA (France) & 39. CAT Case No. 1336/7/7/19 – Mr Phillip Evans v Barclays Others [2008] EWCA Civ 1086 (14 October 2008). Bank PLC & Others; CAT Case No. 1329/7/7/19 – Michael 29. Britned Development Limited v ABB AB & Another [2018] O’Higgins FX Class Representative Limited v Barclays Bank EWHC 2616 (Ch) (9 October 2018), [2019] EWCA Civ PLC & Others. 1840 (31 October 2019). 40. CAT Case No. 1339/7/7/20 – Mark McLaren Class 30. The first follow-on damages claim to reach trial in E&W Representative Limited v MOL (Europe Africa) Limited & was the case of Enron Coal Services Limited (in liquidation) Others. v English Welsh & Scottish Railway Limited (CAT Case No. 41. CAT Case No. 1305/7/7/19 – Justin Gutmann v London & South 1106/5/7/08), based upon a decision of the Office of Rail Eastern Railway Limited; and CAT Case No. 1304/7/7/19 – Regulation. Justin Gutmann v First MTR South Western Trains Limited and 31. Sainsbury’s Supermarkets Limited v Visa Europe Services LLC & Another. Others, Sainsbury’s Supermarkets Limited & Others v Mastercard 42. UK Trucks Claim Limited & Another v Fiat Chrysler Automobiles Incorporated & Others [2020] UKSC 24 (17 June 2020). N.V. & Others [2019] CAT 26 (28 October 2019). 32. Ibid., at paragraph 217. 43. The judgment in question concerns CAT case numbers 33. Section 47B(6) Competition Act, 1998. 1282/7/7/18 (UK Trucks Claim Limited v Fiat Chrysler 34. Dorothy Gibson v Pride Mobility Products Limited [2017] CAT 9 Automobiles N.V. & Others) and 1289/7/7/18 (Road Haulage (31 March 2017). The claim was not certified and was Association Limited v Man SE & Others). subsequently withdrawn by the class representative on 25 44. To date, only three claims have been designated to the May 2017. fast-track procedure, two of which settled before trial. 35. Walter Hugh Merricks CBE v Mastercard Incorporated & These are: (i) CAT Case No. 1249/5/7/16 – Socrates Training Others [2017] CAT 16 (21 July 2017). Limited v The Law Society of England and Wales; (ii) CAT Case 36. Ibid., at paragraphs 75–78 and 87–89. No. 1247/5/7/16 – Shahid Latif & Mohammed Abdul Waheed 37. Walter Hugh Merricks CBE v Mastercard Incorporated & Others v Tesco Stores Limited; and (iii) CAT Case No. 1303/5/7/19 – [2019] EWCA Civ 674 (16 April 2019). Melanie Meigh (trading as The Prinknash Bird and Deer Park) v 38. CAT Case No. 1282/7/7/18 – UK Trucks Claim Limited v Prinknash Abbey Trustees Registered. As at the time of writing, Fiat Chrysler Automobiles N.V. & Others; and CAT Case No. an application has been made for fast-track designation in 1289/7/7/18 – Road Haulage Association Limited v Man SE & CAT Case No. 1359/5/7/20 – Rest & Play Footwear Limited Others. v George Rye & Sons Limited.

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Scott Campbell is Head of the Competition Disputes team at Hausfeld in London and has extensive experience of acting on behalf of individual corporates or groups of claimants in a range of complex multijurisdictional disputes arising out of infringements of EU and UK competition law. Scott has acted on some of the largest cartel damages cases to date in England and has successfully litigated many of the leading competition damages cases of the last decade or so in the English Courts. He also coordinates competition damages claims in other EU jurisdictions. Scott has strong relationships with all leading funders and is well-placed to assist clients with managing their litigation costs and risks through alternative fee arrangements – including DBAs, CFAs, third-party litigation funding and after-the-event insurance.

Hausfeld & Co. LLP Tel: +44 20 7665 5000 12 Gough Square Email: [email protected] London EC4A 3DW URL: www.hausfeld.com United Kingdom

Luke Grimes is an Associate at Hausfeld in London and his practice focuses primarily on competition damages litigation. Luke has been a pivotal part of the legal teams dealing with the most renowned competition damages actions in recent years, such as the interchange fee litigation. Prior to joining Hausfeld, Luke was involved in a follow-on damages claim resulting from the Smart Card Chips cartel, as well as the first fast-tracked proceedings which went to trial in the CAT. Luke is currently advising a UK energy company on its follow-on damages claim resulting from the Power Cables cartel.

Hausfeld & Co. LLP Tel: +44 20 7665 5000 12 Gough Square Email: [email protected] London EC4A 3DW URL: www.hausfeld.com United Kingdom

Hausfeld is a leading disputes-only specialist law firm with offices in Where settlement is not possible, Hausfeld is one of the few claimant firms London, Amsterdam, Brussels, Paris, Berlin, Düsseldorf, Stockholm and with experience in taking cartel damage claims to trial and have appeared throughout the US. The firm is reputed for its claimant-friendly, dynamic, against the world’s largest defence firms. entrepreneurial and innovative approach to dispute resolution. Rarely www.hausfeld.com conflicted, Hausfeld can act against banks and major financial institutions where other firms cannot. The firm pioneered competition damages actions in 2009 and manages some of the most high-profile and complex cases. Having the largest dedicated competition damages actions team in Europe, Hausfeld has been involved in more recoveries than any other firm. As market leaders, the firm regularly acts for some of the world’s largest organisations.

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Every Little Helps: Calculating Interest in Consumer Claims Christopher Pickard

Economic Insight Limited James Harvey

Introduction ■ One possibility is that the consumer could have put the money into a bank account or used it to buy shares in a The principle that claimants should be compensated for interest company. In this case, the appropriate rate of interest losses on past damages, in addition to the damages themselves, would be the rate of return on the financial product they is well established in competition litigation between businesses. would have used. The greater scope for consumer redress, following the reforms ■ Alternatively, consumers could have used the money to of the Consumer Rights Act 2015, means that we need to think pay down their existing debts, including credit cards, bank about the rate of interest (if any) that should be applied in claims loans and mortgages. In such cases, the consumer would for consumer losses that occurred in the past. have used the money to avoid interest costs, and the appro- While quantifying interest losses is generally complex enough priate rate of interest would be the rate that the consumer in business claims, it may be even more so in consumer claims. borrowed at. For example, in business claims, evidence such as internal Supposing instead that the consumer would have spent the company documents and board meeting notes can be used loss, there are two important considerations. to infer what the businesses would have done with any addi- ■ The fact that prices generally rise over time means that tional cash amounts, and data is generally available for a range every £1 that the consumer lost out on in the past would of potential rates, including company debt and capital costs. In probably have bought more goods or services than £1 deciding the appropriate weight to attach to these sources of today. In other words, if consumers would have spent the evidence, precedent is available from previous judgments. loss, then they will require additional compensation to In contrast, in consumer claims it is unlikely that there will be account for the fact that inflation is likely to have reduced material documentary evidence to inform what the appropriate their spending power in the time since the loss occurred. rate of interest would be and there is little direct UK legal prece- ■ In addition, consumers are generally impatient and prefer dent on which to base the selection of the interest rate. Further, to have goods and services sooner rather than later. This in consumer claims, decisions about relevant interest rates will suggests that it may be appropriate to compensate consumers be required in both calculating the aggregate damages amount for the delay in being able to spend the money, using a measure of impatience called a ‘time preference rate’. and in distributing any awards to individual consumer claimants. Importantly, in all of these situations, consumers suffer some In this chapter, we discuss the rationale for applying interest form of interest loss. This implies that, in most cases, interest in consumer claims, the challenges associated with determining sums will need to be awarded to ensure that consumers receive the appropriate rate of interest in these claims and practical fair compensation for the damages they suffered. options for overcoming them. We also set out potential interest The above considerations suggest four broad categories of rates rate measures and their implications for the size of consumer that could be used to calculate consumer interest, depending on interest claims. Our overall conclusion is that, in most circum- what the consumer would have done with the loss. These are stances, awarding interest to consumers will be necessary to summarised in the table below. If the consumer would have saved avoid under-compensation, and that, while there are some prac- the loss, then interest could be calculated based on investment tical challenges, there are several viable and justifiable ways of rates or borrowing rates, depending on whether the consumer determining fair interest awards for consumers. would have tried to generate a return or pay down their existing debt. If the consumer would have spent the loss, then additional The Rationale for Interest in Consumer Claims compensation may be required to address reductions in their spending power over time, and the delay in being able to buy In principle, the purpose of compensating consumers for losses goods or services. that occurred in the past is the same as for business claims. In addition to the direct loss incurred, the consumer would have Table 1: Categories of consumer interest rate lost out on the productive use of the money between the time the loss occurred and now. To determine an appropriate rate of Save it Spend it interest, we therefore need to consider what the consumer would Generate a Investment Lower spend- Inflation rates have done with the money that they lost out on. For consumer return rates ing power claims, this raises two broad possibilities: the consumer could Pay down Borrowing Time prefer- have saved the money and used it to generate a return; and/or Impatience debt rates ence rates they could have spent the money on goods or services. There are several ways in which consumers could have saved Source: Economic Insight. the money.

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The nature of consumer claims has implications for how these individual interest losses. This can be achieved either by split- rates are measured in practice. In contrast to business claims, ting the aggregate loss and applying the relevant interest rate for which may only take place between small numbers of compa- each group, or by applying a weighted average of the interest nies, consumer claims could potentially include a very large rates for the groups to the total loss. In addition to determining number of parties. As such, the rates used to calculate interest the relevant interest rate for each group, this requires informa- in consumer claims will need to be capable of being applied to tion on the proportion of consumers in each group. large numbers of consumers without this leading to material In some cases, it may be that claimants’ particular circum- over- or under-compensation. stances will not be known until after the aggregate award needs to be calculated. Where this occurs, it may be possible to use Determining What Consumers Would Have publicly available information to understand consumers’ situa- Done tions at the time of the loss. For example, where the loss relates to the purchase of a particular product, market research reports While the categories of interest rate described above are concep- may be useful in understanding purchasers’ demographic char- tually simple, in practice it is challenging to conclude with confi- acteristics. Alternatively, consumer surveys could be used to fill dence what a consumer would have done with additional cash, identified evidence gaps. several years in the past. It is doubtful that informative documen- Where different groups of consumers would have done tary evidence would exist and, even if it did, it is unlikely to be different things with the loss, determining individual interest practical to examine it for large numbers of individual consumers. losses will also be more complicated. Interest losses per £1 of In such cases, the particular circumstances of the case loss in each year can be calculated for each group, but some may instead provide some guidance. The size of the loss that form of proof will be required to determine the group to which consumers suffered could be useful in helping to understand how any individual consumer belongs. In these circumstances, the consumers would have used additional sums. For example, it appropriate form of proof will depend on how each rate of seems implausible that consumers would buy shares or pay down interest was determined. For example, different sizes of loss their mortgage with an additional £20. Instead, it seems more could attract different rates of interest, and proof of purchase likely that they would have left this amount in their bank account could be used to determine both the size of loss and the relevant and eventually spent it. On the other hand, for a more substan- interest rate. Alternatively, the interest rate for an individual tial loss of, say, £500, then they may have taken active steps to consumer could depend on their demographics and other forms make the most of their money. of proof could be required to determine the appropriate rate of The demographic characteristics of the consumers may also interest, in addition to proof of the loss. be relevant. In general, higher-income consumers save a greater proportion of their income than lower-income consumers and Measuring Interest are likely to have greater access to investment possibilities. Even where detailed information is not readily available on consumer Once a decision has been made as to what consumers would demographics, the nature of the product may help in this have done with the loss, and therefore whether investment, respect. For example, consumers buying luxury goods are more borrowing, inflation or time preference rates should be used likely to be savers than those buying everyday consumer goods. when calculating interest, a practical decision needs to be made to select a particular measure of these rates. We therefore set Calculating Aggregate and Individual Damages out possible measures for each of these, before comparing their different implications for interest amounts. A further complication arises in that interest rates will need to be applied both to calculate the aggregate damages amount and Investment Rates to determine the damages payable to individual members of the class that incurred the loss. In some cases, this may be relatively Where consumers would have saved the loss, an obvious possi- simple. If there are good grounds to believe that consumers bility is that they would have put it in their bank account, where would have done the same thing with the loss, then the same it would have generated interest. While the logic here is simple interest rate can be applied in calculating aggregate and indi- enough, in practice the issue is somewhat more complicated. vidual damages. This could be the case if consumers were Rates on consumers’ bank accounts vary, depending on the bank demographically similar to one another, or if they generally they use, the type of account (current, savings, etc.), the size of incurred losses of a similar size. deposit, restrictions on when consumers can withdraw money, Helpfully, in these circumstances, it is a relatively simple task and tax status. Rates change over time, and consumers often to calculate the correct level of interest compensation, even if have multiple bank accounts. different consumers suffered losses at different points in time. This means that, in practice, it is unlikely to be practical to look Aggregate interest losses can be calculated using the relevant at individual consumers’ bank account deposit rates when deter- rate, and interest losses for each consumer can be determined mining either aggregate or individual damages. Instead, where based on the years in which their losses were incurred, with £1 it is likely that consumers would have left the loss in their bank of loss in each separate year attracting a different associated account, data on average current account or savings rates in the interest award. This has the advantage that demonstrating that UK could be used as a reasonable approximation of the rate that a loss occurred, for example by providing proof of payment, is would have been earned. While this will not exactly match the rate likely to provide all of the information relevant to calculating for every consumer, it is likely to be a reasonable approximation. interest for each consumer. Data on average interest rates on various types of accounts On the other hand, there may be cases in which different are available from the Bank of England. The figure below groups of consumers would have done different things with shows annual average rates from 2011 to 2019 for three types of the loss, making different rates of interest appropriate. Where accounts: instant access accounts, which attract the lowest rates this occurs, it will be important to ensure that aggregate interest of interest; cash ISAs; and one-year fixed bond deposits, which losses are sufficient to compensate (but not overcompensate) give consumers a higher rate in return for limiting their access to the deposit.

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Figure 1: Current and savings account rates As such, while data is available on average rates for the above types of debt, a decision would need to be made as to which type was appropriate for the consumers in question. Further, as these products serve a variety of purposes and have very different risk profiles, the rates charged are themselves very different. For example, because loans are secured against property and facilitate long-term borrowing, rates on mortgage debt are generally lower than other types of debt. In contrast, credit card lending is generally unsecured and intended for short-term borrowing, with consequently higher rates. Again, data on average interest rates on various types of consumer borrowing are available from the Bank of England. The figure below shows annual average rates from 2011 to 2019 for: two-year fixed and variable mortgages (75% loan-to- value); personal loans of £5,000; and credit card borrowing. This demonstrates the scale of differences between different Source: Bank of England data. borrowing rates. While credit card rates are consistently above 15%, mortgage rates are consistently below 5%. In general, instant access accounts are likely to represent the ‘default’ saving position, being where customers would tend to Figure 2: Borrowing rates leave money without making an active decision on how to save it. Cash ISA and fixed rate bond rates would be more appropriate where consumers would have made active decisions to save loss amounts. While bank accounts represent a low-risk way of saving money and generating a fixed percentage return, consumers also have access to investments that offer higher returns in exchange for higher risk. Examples include stocks and shares ISAs and investment portfolios, which do not offer a specified rate of return but have, on average, higher returns in the long term. These potential investments are more varied than bank accounts, and as a consequence there are even more rates that could potentially apply. It would, in theory, be possible to calculate either aggregate or individual consumer interest using data on average returns for particular types of financial investment – for example, using data on an equity index such as the FTSE 100. There are, however, Source: Bank of England data. several reasons to be cautious about using such rates. In the first place, because these higher-risk investments are more varied Inflation Rates than bank accounts, average rates earned on investments are less likely to be reflective of what individual consumers would actu- The fact that the purchasing power of money generally falls ally have earned. This would make it difficult to ensure aggre- over time means that, where consumers would have spent the gate damages were consistent with individual interest awards. loss they incurred, they will require additional compensation for In addition, because of their higher risk, these financial prod- the impact of inflation. For example, if a consumer were over- ucts are owned by a smaller share of the population than own charged last year and the prices of the goods or services they bank accounts, concentrated among the wealthiest in society. would otherwise have spent this money on have increased by 2% For example, while approximately 97% of UK adults have a in the meantime, every £1 they are awarded will buy 2% fewer day-to-day bank account,1 only 19% are estimated to own stocks goods or services than it would have done at the time the loss or shares directly.2 Using investment rates from high-risk prod- occurred. Because the prices of different goods and services tend ucts could imply that higher-income consumers should receive to change at different rates, how much consumers’ purchasing higher compensation than lower-income consumers. While power would have fallen depends on which particular goods or this may be less controversial where an individual claim encom- services they would have bought, and how much their prices passes only one type of consumer (so that the same interest have changed in the meantime. rate is applied when calculating aggregate damages and to all While data are available on the prices of many individual goods consumers in the claim), this may be more controversial when a and services, in practice it will be difficult to establish precisely claim encompasses multiple consumer groups. which goods and services each consumer would have bought. For this reason, when calculating aggregate damages, it is likely to be Borrowing Rates more practical to use data on average inflation across a sample of consumer goods. Inflation indices, such as the Consumer Prices If, instead, consumers would have used the loss to pay off Index (CPI), measure the weighted average change in prices for existing debts, interest losses need to compensate them for the a ‘basket’ of consumer goods and services, and are likely to be borrowing costs that they would have avoided, had the loss not useful in this context. As these indices measure price inflation occurred. In practice, calculating interest using borrowing rates faced by an ‘average’ consumer, in many cases they are likely to is also likely to be more complicated than using bank account be useful for establishing individual interest losses. rates. For example, not all consumers have debts, while those Data on rates of price inflation are available from the Office that do may have a range of different types of debt, including for National Statistics. The figure below shows two of the main credit card debt, bank loans and mortgages.

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measures of consumer price inflation, CPI and CPIH, for 2011 Comparison of Measures to 2019. Both indices measure the rate of inflation faced by UK households, with CPIH including a measure of owner occupiers’ The measures we have described above suggest a wide range housing costs. of potential rates that could be applied to calculate interest in consumer claims. To illustrate their potential implications for Figure 3: Inflation rates the size of interest awards, the table below sets out the interest on a loss of £100, incurred in 2011. The interest amounts vary in size, from £6.26 when the rates on instant access bank accounts are used, to £341.62 when rates on credit card borrowing are used. This shows the importance of using an appropriate rate, to avoid the risk of under- or over-compensation.

Table 2: Implications of rates for consumer interest claims Interest claim Type of rate Measure for £100 loss incurred in 2011 Instant access bank Investment £6.26 account Borrowing Credit card £341.62 Inflation CPI £20.72 Source: Office for National Statistics. Time preference STPR £36.29 Where the consumers that suffered a loss are obviously atypical, Source: Economic Insight calculations. average inflation measures may be less appropriate. In such cases, it may be necessary to construct a bespoke measure of inflation to reflect the characteristics of the consumers in question. For Conclusion example, data on different demographic groups’ spending patterns The relevant interest rate in consumer claims depends on what are available from the Office for National Statistics’ Living Costs consumers would have done with the money, had the loss in ques- and Food Survey. This information could be used in conjunction not occurred. Ultimately, this rests on whether consumers tion with the individual sub-components of CPI to produce a new would have saved the money or spent it. While this is difficult weighted average inflation rate for these consumers. to answer with certainty, we can be confident that not awarding interest would, in most circumstances, lead to unfairness and Time Preference Rates under-compensation. Savers would not be compensated for the Although calculating consumer interest claims based on infla- return they would have earned from investing their money, and tion would ensure consumers were compensated for changes spenders would suffer because their award would have lower in the purchasing power of the loss they incurred, it would not purchasing power than when the loss occurred. Getting the rate compensate them for the delay in being able to use the goods itself right is an important task, as the various measures we have or services that they would have bought. Consumers are inher- outlined can have very different implications for the size of the ently impatient, and their degree of impatience can be measured interest claim. As set out, practical steps are available that can using a time preference rate. This is the rate at which consumers help to narrow down the most appropriate rate to use and ensure discount the future, relative to the present. For example, the fairness of damages awards. abstracting from the impact of inflation, if a consumer regarded receiving £100 this year as just as good as receiving £110 next Endnotes year, then their time preference rate would be 10% per year. 1. Statista. It is likely to be impractical to estimate time preference rates 2. ‘Unfinished Business: The ownership agenda thirty years for individual consumers, so the same rate would need to be on.’ ResPublica Essay (October 2015), p.15. applied both to aggregate and individual damages. In this 3. ‘The Green Book: Central Government Guidance on context, estimates of ‘average’ time preferences could be used. Appraisal and Evaluation.’ HM Treasury (2018), pp.27–28. For example, since 2003 UK Government appraisals have used a Social Time Preference Rate (STPR) to inform decisions about expenditure that incurs immediate costs but generates benefits in the future. The STPR is 3.5% for time horizons of up to 30 years, declining thereafter.3

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Christopher Pickard is a Principal at Economic Insight. Over the last decade, Chris has advised clients involved in several high-profile competition and regulatory disputes. He has particular expertise in designing and undertaking quantitative analyses to help calculate the harm caused by breaches of competition law, including overcharge, pass-on and interest rate estimation. Chris has a B.A. in PPE from the University of Oxford and an M.Sc. in Economics from the London School of Economics. Prior to joining Economic Insight, Chris worked in the Chief Economist’s team at the UK Financial Conduct Authority. He has published numerous articles and spoken at conferences on a wide range of topics, including how competition policy should respond to the growth of digital platforms.

Economic Insight Limited Tel: +44 207 100 3746 125 Old Broad Street Email: [email protected] London EC2N 1AR URL: www.economic-insight.com United Kingdom

James Harvey is a co-founder and Director of Economic Insight Limited. He has over 15 years of experience advising clients involved in competition and regulatory investigations, covering market studies and investigations, mergers, agreements and abuse of dominance cases. He also has extensive experience of providing expert advice in competition-related commercial litigation, including in relation to the European air cargo and trucks cartels. He has advised companies such as Centrica, Everything Everywhere, Royal Mail Group, Tesco, Hutchison Whampoa and Thames Water. James has an M.Sc. in economics (with distinction) from the University of York. He has published in various journals, including the European Competition Law Review, which he edits. He is also an expert adviser to the UK Bar Standards Board in relation to competition and economics matters. He is listed in Who’s Who Legal Competition 2020 for competition economics.

Economic Insight Limited Tel: +44 207 100 3746 125 Old Broad Street Email: [email protected] London EC2N 1AR URL: www.economic-insight.com United Kingdom

Economic Insight is an award-winning economics consultancy that provides an unrivalled level of client service. We offer economics advice and evidence that properly reflects the specifics of the markets at hand, helps to answer the relevant legal questions and is presented clearly. We avoid textbook models that do not reflect reality and analysis that is only understood by other experts. We work in a practical way, sensitive to the balance between accuracy, time and cost. Although our evidence is always independent, we develop it in a collaborative and open way, involving clients, legal counsel and other experts. We are proud to be recognised by our peers and clients in several industry publications and rankings. www.economic-insight.com

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Recovering Cartel Damages in England – A Claimant’s Guide Kate Pollock

Stewarts Leah Keen

12 Introduction The volume of cartel litigation in Europe has increased markedly in recent years. Businesses impacted in Europe are under- Cartels and other horizontal competition law infringements going a cultural change and are increasingly willing to recover reduce competitive pressures between cartelists, lessening incen- losses caused by cartelists. The sight of other corporate victims tives to reduce prices, offer better services, innovate through achieving recoveries naturally encourages further claims. research and development, or differentiate from competitors by This section focuses on some key features of cartel litigation other means. that distinguish it from mainstream commercial litigation: (1) the These behaviours harm the direct and indirect customers of existence of cartel investigations; (2) the importance of economic cartelists. Businesses and individuals that have suffered this type evidence; and (3) the possibility of collective proceedings. of harm (e.g., by being overcharged) are entitled to recover their losses. Indeed, in many scenarios, they are entitled to recover losses suffered both in England and internationally, in the English Cartel investigations courts.1 Where the relevant jurisdictional criteria are met, the ability to recover all losses in a single forum is highly attractive In cartel litigation, claimants usually rely on the investigative for claimants as it avoids the need to file multiple proceedings in work of competition authorities at national or European Union a variety of jurisdictions. (“EU”) level to uncover anticompetitive conduct that has been Cartel claims can be high value, often running to tens of concealed. The UK’s competition regulator is the Competition millions of pounds or higher. This is in part because collusive and Markets Authority (“CMA”), whose infringement decisions behaviour can last for many years before detection, and so the are binding on the courts. Generally, where the decision of a volume of commerce affected can be very significant. Cartels of competition authority binds a national court, legal responsibility this nature almost invariably entail cross-border behaviour, and for the competition law infringement is already established. claimants frequently have a choice of where to file proceedings. This means that liability for a competition law infringement England has proven to be an attractive jurisdiction for a variety of can be relied on by claimants in what are known as “follow-on” reasons, including both favourable procedural law (such as broad claims. Without the work of competition authorities, businesses disclosure options, which can be particularly important where the may be unaware of the harm that has been caused to them by underlying behaviour is hidden) and practical issues such as the a cartel because the conduct is usually hidden. Prior public relative speed with which the courts move towards trial.2 enforcement, therefore, usually provides significant advantages This chapter addresses some of the key issues that a business to claimants launching corresponding private damages claims in will weigh in deciding whether to seek recovery of losses it has respect of the same or similar conduct. suffered due to the operation of a cartel or cartel-like behaviour. Where there is no prior decision of a competition authority on While some comparisons are drawn with other jurisdictions, the which claimants can rely, cartel litigation will be in the form of focus is on recovery in England, which is often a claimant’s juris- a “stand-alone” claim in which the claimant bears the burden of diction of choice. Brexit will inevitably bring some uncertain- proving liability for the competition infringement. ties, but as is explored in section 5 below, the favourable features At the time of writing, many cartel litigation claims in the of litigating cartel damages claims in England will remain. English courts are follow-on claims, which rely on the binding The structure of this chapter is as follows: section 2 summarises nature of European Commission (“Commission”) infringe- some specific features of cartel litigation and how they differ from ment decisions. This trend is set to evolve in light of Brexit general commercial litigation; section 3 briefly comments on the because claims relating to Commission decisions adopted scope of losses that are recoverable; section 4 addresses practi- after the end of the UK’s EU exit “transition period” will no calities to be considered at an early stage of a claim; section 5 longer automatically be follow-on claims and will instead be covers recent developments and looks to the future; and section 6 brought as standalone claims (see further at section 5 below). concludes and comments on the key dynamics of cartel litigation. Nonetheless, the English courts will remain highly persuaded by the Commission’s findings of fact, bearing in mind its extensive 22 Specific Features of Cartel Litigation investigatory powers and experience in these matters. Further, many cartelists would be unable to credibly deny their cartel Parties affected by competition law breaches are entitled to behaviour in damages actions, particularly as cartelists frequently recover their losses, subject to domestic rules on causation and admit liability to the Commission in order to avail themselves 3 remoteness. All affected parties have standing, including indi- of the regulatory settlement process which can reduce the fines 4 rect purchasers. imposed. The position in the U.S. is informative in this context.

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Findings of liability by the Department of Justice (“DoJ”) are 42 Practicalities not formally binding on the Federal courts when adjudicating on damages claims. However, defendants that admit liability to Once a business suspects that it has been significantly impacted the DoJ do not routinely dispute liability in resulting damages by a cartel,14 it will usually at least investigate the options for claims.5 recovery. The sections below consider timing and limitation, the practical steps for investigating the harm that may have been caused, the approach to selecting jurisdiction, and disclosure. Importance of economic evidence

Investigating a victim’s losses and achieving a good value Timing and limitation recovery requires a solid understanding of economic concepts and theories. The relevant economic theories are complex, Assessing limitation in cross-border cartel claims is highly but the key parameters are: (1) the value of relevant commerce; complex. In fact, different national limitation rules can apply to (2) the overcharge (which is broadly the amount by which the different aspects of the same claim. For example, purchases by a cartel caused prices to be higher than they would have been in claimant group’s French operating company might be governed the absence of the cartel);6 and (3) “pass-on”, which refers to by French limitation law, whereas English limitation law may the extent to which the overcharge may have been absorbed apply to other purchases within the same claim. upstream of the claimant (if the claimant is an indirect purchaser Many national rules provide that accrual of the limitation from the cartel) and/or whether the claimant has passed on the period is delayed where, as is the case with secret cartels, the overcharge to its downstream customers.7 Analysing pass-on wrongdoing was concealed. However, the precise point at which can be particularly complex. limitation will begin to accrue can be unclear, particularly when The English courts tend to take a detailed approach to economic it is triggered by the claimant having sufficient knowledge of a evidence. An expert report that relies upon case-specific, under- concealed cartel.15 lying data and minimises reliance on generic proxies will be more Accordingly, it is important to review the likely limitation persuasive to a judge and will exert increased settlement pressure. timelines for the claim at an early stage. While it may not be Much of the relevant data will be in the hands of the cartelists and possible to deduce precise limitation milestones, a scoping exer- only available through disclosure. Disclosure is, therefore, a key cise will at least inform the claimant of the general timeline tool in building a persuasive and effective expert report. to which they should work. It is possible to attempt to agree standstill agreements with potential defendants while any settlement discussions take place. However, this approach comes Collective proceedings with some risks, including prompting an “Italian Torpedo”, whereby the defendant knows it is likely to be issued with a A relatively new procedure is available to cartel victims, pursuant claim in England and files proceedings pre-emptively in a defen- to which individuals and businesses can bring collective proceed- dant-friendly jurisdiction. ings before the UK’s specialist Competition Appeal Tribunal Aside from the limitation risk, there can be advantages in (“CAT”).8 Collective proceedings are brought by a certified moving promptly when asserting a claim. Each case must be representative of a defined class of claimants, on either an opt-in assessed on its merits, but assertive and prompt action will help or an opt-out basis. The procedure is primarily intended to make signal to defendants that the claimant is committed to making recovery of competition damages more accessible to consumers, a recovery and will not be bought out by a low-value settlement. whose claim may not be viable on an individual basis. In recent years, collective proceedings have also been launched on behalf of businesses, including over truck purchases, foreign exchange Investigating a claim trades and maritime car shipping. Most collective proceedings have slowed in their initial stages pending the outcome of the A key early step in any investigation is to perform an analysis Supreme Court hearing in the case of Mastercard Incorporated and of losses suffered. The early analysis need not be in depth, and others (Appellants) v Walter Hugh Merricks CBE (Respondent), which typically can be completed without any need to search for under- is a consumer claim relating to the payment of interchange fees.9 lying purchase records (even where available). However, it is The Supreme Court judgment is anticipated to provide guidance important to have a broad picture of the potential recovery, as on what is needed for a collective proceedings action to be certi- this informs internal decision-making on matters such as staffing fied before it can proceed through to trial.10 Once the Supreme and allocating resources to the project. Also, if early settlement Court gives guidance, it is expected that collective proceedings offers are received,16 it is not possible to assess whether they under the new regime will proceed at a swifter pace.11 represent good value absent some form of claim valuation. Commercial relationships may discourage businesses from 32 Losses Recoverable in Cartel Litigation asserting claims against their key suppliers. These concerns are often manageable; for example, because follow-on claims do not Damages are awarded on a compensatory basis, i.e. damages equiv- often allege unproven egregious conduct as they rely on regu- 12 alent to the losses that flowed from the infringement. Interest latory infringement decisions and/or admissions of liability. also has an important role in cartel damages claims because there There is no accusation of wrongdoing as this is already proven. is usually a long delay between the time of the wrongdoing and If liability is already established, it can depersonalise the claim any award of compensation. In fact, the interest can sometimes and assist in relationship issues with suppliers. be greater than the damages net of interest. In certain European If a cartel victim decides to seek recovery, it is necessary to jurisdictions such as England and the Netherlands, claimants perform further investigative steps. These can be approached can recover their actual interest losses; for example, lost return proportionally, but purchase and sale channels should be on investments, rather than merely simple interest. Claimants scoped, and contracts with cartelists (if any) should be identi- in England can recover compound interest subject to leading fied and considered. evidence on how they borrow/invest.13

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Jurisdictions claimants passed on to their customers (including materials regarding pricing models). Materials that go to pricing can be highly confidential. Accordingly, the court will often order a Claimants can frequently recover all their international losses in “confidentiality ring”, whereby sensitive documents will only be a single claim and may have a choice of where to file proceedings. available to external legal advisors and experts, and will not be Compared with some jurisdictions, it can be relatively straight- available to employees of the parties to the dispute. Significantly forward to file proceedings in England. The key document is restricting dissemination of these materials goes some way to the Particulars of Claim. This document must be accurate, but protecting their confidentiality. it does not need to set out the full details of the wrongdoing. At trial, the English courts expect parties to lead the best Also, it need not even specify the exact sum sought from the evidence available. While claimants cannot avoid the proper defendant(s); this can come later in proceedings. Germany, by search and collation of evidence, the courts are, to a degree, contrast, requires more upfront investment, as claimants must sympathetic to claimants that face evidential difficulties, partic- present a reasoned analysis of their economic arguments at an ularly where the difficulties were caused by the defendants (i.e., early stage. concealing the wrongdoing delays the claimant in asserting a The EU rules on jurisdiction are set out in the Recast Brussels recovery).25 Regulation (“ ”).17 The general rule is that a defendant can RBR Helpful documentation can sometimes be obtained other be sued in the jurisdiction where it is domiciled. Both during and than through inter partes disclosure. U.S. claims are frequently after the UK’s EU exit transition period (see section 5 below), brought in advance of European claims, and information from the RBR continues to apply to proceedings if they are issued their filings and economic reports can be very helpful. before the end of the transition period.18 As things stand, cartel Either where the same cartel is the subject of litigation in damages claims outside of the scope of the RBR are subject to foreign courts or where foreign courts have jurisdiction over a English common law rules. Under both sets of rules, England potential defendant, there can be means to obtain materials with has developed a long-arm view of its jurisdiction.19 Usually, a the support of the foreign court. An example of the latter is the UK defendant that is arguably liable for the cartel conduct can device in Section 1782 of Title 28 of the United States Code,26 be used to anchor a claim against other, foreign, defendants, which gives the U.S. district court the power to order a person to which can be joined to the proceedings if they are part of the provide evidence for use in a foreign proceeding or international same cartel. Damage suffered within the jurisdiction can also tribunal. This applies to legal proceedings which have already be used to secure jurisdiction under both regimes. been initiated and also those “in reasonable contemplation”.

Evidence and disclosure 52 Impact of Recent Developments on Cartel Litigation Cartels are, by their nature, concealed, and so claimants are This section explores recent developments in cartel damages initially disadvantaged by marked information asymmetry. claims in England. The individual wrongdoers often know that their conduct is improper and so may hide their behaviour even from their colleagues. Owing to the concealment, cartel claims are often Brexit asserted many years after the underlying wrongdoing, which can cause data (both claimant and defendant data) to further The UK is currently in the “transition period” of its exit from the atrophy. EU during which EU law continues to apply, and both compe- Broad disclosure in England significantly assists in over- tition law and jurisdiction rules remain largely unchanged. The coming the informational asymmetry.20 Where the court orders 21 transition period runs until 11pm (UK time) on 31 December standard disclosure, the parties must disclose all documents 2020. that are either helpful or unhelpful to their case or the case of 22 The field of cartel litigation may see an increased urgency another party to the dispute. Privileged documents and those to issue claims before the end of the transition period in order submitted to a regulator as part of any leniency process are to preserve a claimant’s right to bring a claim relying on the exempt. The parties must make a reasonable search for such 27 23 relevant EU law provisions. This may materialise where the documents. Commission has already adopted an infringement decision, and The modern approach of the English courts is to take disclo- a claimant wishes to pursue a follow-on claim in England. Or, sure in stages, requiring the parties to disclose pre-identified a claimant may opt to issue a protective standalone claim where and collated documents in parallel with searching for docu- 24 there is evidence of infringing behaviour, but a Commission ments that have not yet been identified. This may include infringement decision is yet to be adopted. claimants obtaining early access to the documents collated by At the time of writing, the legal framework for cartel damages and submitted to a competition regulator that has investigated claims post-transition period is undecided. There are two the wrongdoing. The staged approach to disclosure keeps the possible scenarios: (1) if the UK/EU have finalised and formally litigation moving forwards and delivers documents to the claim- concluded the terms of their future relationship, this new arrange- ants even as the defendants are required to search for further ment will apply; or (2) if there is no agreement on the future rela- materials relevant to the claim. Documents held by a competi- tionship, a “no-deal” scenario applies. In the second scenario, tion regulator go to the nature of the wrongdoing, such as anti- some new domestic rules will come into force.28 A key change competitive communications between cartelists. Defendants will be that the current statutory basis for most cartel damages are, therefore, sensitive about disclosing these materials. claims, Article 101 TFEU, will no longer be part of UK law. Disclosure is not a one-way process; claimants are required Claims issued in the English courts and governed by English law to provide the defendants with relevant internal materials. The will instead rely on a breach of Chapter I of the Competition Act areas of most interest to the defendants are those indicating the 1998 (the territorial scope of which is more limited than Article claimants’ purchases of cartelised products, and internal docu- 101 TFEU29). Nonetheless, claims issued in England may still mentation indicating how much, if any, of the overcharge the include elements that are governed by foreign law (e.g. EU law

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as it is applied in Germany and France), and such claims could, the situation via means which remain unlawful, such as price- therefore, be brought under Article 101 TFEU (subject to the fixing. Additionally, permitting competitors to communicate relevant jurisdictional criteria being met). Another key change legitimately in the context of their COVID-19 response could will be that claims relating to Commission decisions adopted afford them the opportunity to stray into illegitimate coordi- after the end of the transition period will be brought as stand- nation, leading to a negative impact on their customers (such as alone rather than follow-on claims (Commission decisions will agreeing to charge artificially inflated prices). Their customers, no longer be binding on the English courts.)30 However, it is who may already be facing financial challenges in light of the not clear whether the burden on a claimant will become signifi- COVID-19 crisis, will be alive to anticompetitive harm caused cantly higher in practice. Even in a follow-on claim relying on to them by their suppliers, and may see no choice but to recover a Commission infringement decision, a claimant has to estab- any resulting losses via litigation. lish that the cartel has caused it to suffer loss. Furthermore, the The English courts and the CAT adapted quickly to the English courts may still consider a finding of infringement in a COVID-19 crisis, encouraging hearings to go ahead remotely Commission decision to be highly persuasive prima facie evidence where possible rather than be postponed.32 Competition litiga- of cartel conduct. tion matters often involve multiple parties due to the numbers Regardless of the scenario after the transition period, there of claimants and defendant cartelists litigating the same cartel. is no doubt that the UK will remain one of the leading juris- They can, therefore, be logistically challenging even under dictions for cartel damages claims. There are features of liti- normal circumstances. Nonetheless, the courts enabled parties gation in the UK that are seen as favourable towards claimants to proceed smoothly with interim hearings, Case Management and will be unaffected by EU membership (or lack thereof ). For Conferences, appearances before the Supreme Court, and so example, the English rules on disclosure are relatively generous on. Stewarts acted for the winning party in the first English and are attractive to claimants in cartel litigation, where asym- Commercial Court trial to run virtually. All participants (judge, metry of information between the claimants and cartelists is counsel and witnesses) participated in the trial by video confer- common. There is also a high level of expertise within the judi- ence from England, Belgium, Kazakhstan and the United States. ciary, which includes a specialist tribunal (the CAT) as well as Notwithstanding the English courts’ willingness to work judges in the commercial courts with extensive amounts of cartel on a remote basis, claimants involved in cartel litigation were damages claims experience. Finally, the relative speed at which faced with the challenges of pursuing their claims amid wide- litigation progresses compared to other European jurisdictions spread business disruption due to the COVID-19 crisis. Cartels and a mature competition bar will also be enduring features of often span multiple jurisdictions, and claimants typically have English cartel litigation post-Brexit. to coordinate disclosure, for example, across their international offices. However, the timing and scope of different governments’ responses to COVID-19 and the varying restrictions on Cartel litigation in a pandemic businesses created a challenge for those having to comply with disclosure and other directions in ongoing cartel litigation. The Like many other practice areas, a key development in 2020 Civil Procedure Rules 1998 were, however, updated with a new, has been the impact of COVID-19, the full effects of which temporary practice direction allowing parties to agree extensions could materialise well into the future. In terms of immediate of time for complying with time limits during the COVID-19 effects: (1) competition law in England has seen some temporary crisis. While claims have proceeded as normally as possible (e.g. changes implemented to mitigate the COVID-19 crisis; (2) the with virtual hearings taking place), parties have been able to take English courts have faced down the challenges of remote litiga- advantage of the new rules, where appropriate.33 tion; and (3) cartel victims have continued to pursue their claims in tandem with addressing widespread business disruption. 62 Dynamics of Cartel Litigation and To address concerns that competition law enforcement might Conclusion impede some necessary cooperation between businesses in light of COVID-19, for example, maintaining the supply of essen- Given that cartels can operate undetected for many years,34 the tial products, the UK Government temporarily relaxed some volumes of commerce affected can be substantial. Individual elements of competition law. Supermarkets were permitted to businesses can unknowingly suffer significant losses, which they coordinate their response to the COVID-19 crisis, including then seek to recover later down the line. having permission to share certain data. The CMA also Regulatory investigations into cartelists, the binding nature of confirmed that it would not take competition law enforcement infringement decisions, and the fact that infringers frequently action against businesses cooperating to the extent necessary to admit liability, give claimants a huge advantage and help mini- protect consumers. mise the risks of any litigation. That said, the features of cartel Outside of these limited relaxations, however, businesses litigation require a specialist skillset. were not relieved of their obligations to comply with competi- An infringement decision by a regulator encourages multiple tion law generally. The CMA was, therefore, keen to stress that claims. Accordingly, defendants frequently engage in robust it would not tolerate any exploitation of the COVID-19 crisis defence tactics, as they are conscious that perceived or actual as a cover for anticompetitive behaviour such as coordinating lack of vigour in defending a claim will further encourage claims unnecessarily on long-term pricing strategies.31 Businesses were from other customers of the same cartel.35 also warned that the CMA’s commitment not to take enforce- The key for claimants and their advisors is, therefore, to avoid ment action against certain instances of business cooperation giving defendants means to delay (or even defeat) a claim. A could not preclude private competition litigation claims. clean follow-on claim where jurisdiction is uncontroversial and The short- and medium-term economic impact of the where there is no realistic limitation defence is extremely diffi- COVID-19 crisis could lead to more anticompetitive conduct cult to defend. However, given that defendants need to avoid than would otherwise have been seen, resulting in cartel encouraging other claims, it can be logical for them to run argu- damages claims in the future. In particular, where industries ments even with low prospects of success if that works to delay are at risk of failing because of a collapse in demand due to proceedings. An experienced cartel litigator will be conscious COVID-19, those businesses may be tempted to try to mitigate of these traps and structure a streamlined claim.

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Endnotes & Others v Shell Chemicals UK Ltd & Others [2009] EWHC 2609 (Comm); Cooper Tire & Rubber Company & Others v 1. References to England/the English courts includes England Dow Deutschland Inc. & Others [2010] EWCA Civ 864; KME and Wales. This chapter also refers to the United Kingdom Yorkshire Ltd & Others v Toshiba Carrier UK Ltd & Others (“UK”) in contexts where it is appropriate. [2012] EWCA Civ 1190; Vattenfall AB and Others v Prysmian 2. The threat of trial is a key lever to force defendants to engage SpA [2018] EWHC 1694 (Ch D); and Media-Saturn Holding in settlement at realistic figures. Accordingly, relative speed GmbH and others v Toshiba Information Systems (UK) Limited of procedure can be a key attraction for claimants. and others [2019] EWHC 1095 (Ch). 3. C-453/99 Courage v Crehan [2001] ECR I-6297. 20. Other significant features that make England attractive 4. C-295/04 Vincenzo Manfredi v Lloyd Adriatico Assicurazion are the relative speed of proceedings towards trial and SpA: “Any individual can claim compensation for the the broad availability of specialist expertise (barristers, harm suffered where there is a causal relationship between economists, specialist judges, etc.). Counterintuitively, that harm and an agreement or practice prohibited under the English cost-shifting rule (which is uncapped) is also Article [101] TFEU.” (Emphasis added.) advantageous to claimants. The normal rule is that the 5. Although they may dispute the scope of the DoJ finding. loser will pay the majority of the winner’s costs. Each 6. In a study prepared for the Commission “Quantifying case turns on its merits, but where liability is estab- antitrust damages – Towards non-binding guidance for lished, the cost-shifting rule can pressure defendants and courts”, Oxera reported that the mean overcharge of inter- increase recoveries for claimants. “After the event” insur- national cartels is 26%. ance is also broadly available for claimants who wish to 7. Where the claimant passed some of the overcharge to its further reduce the risk of “losing” on costs. A further customers, it may have made fewer sales owing to increased and important feature is that the English courts are gener- prices; resulting lost profits are also recoverable. ally comfortable with awarding very high damages where 8. Introduced by the Consumer Rights Act 2015 (“CRA”). supported by evidence. 9. Case ID: UKSC 2019/0118. 21. The term “documents” is interpreted broadly; it includes 10. The issues to be determined are: (1) what is the legal test paper and electronic documents plus metadata and other for certification of claims as eligible for inclusion in collec- ways of recording data, such as voicemails. tive proceedings?; and (2) what is the correct approach to 22. Civil Procedure Rules, Part 31.6. questions regarding the distribution of an aggregate award 23. Civil Procedure Rules, Part 31.7. at the stage at which a party is applying for a Collective 24. See, for example: the CAT’s ruling on staged disclosure Proceedings Order (“CPO”)? See https://www.supreme- in Ryder Limited & Another v Man SE & Others; Wolseley UK court.uk/cases/uksc-2019-0118.html. Limited & Others v Fiat Chrysler Automobiles N.V. & Others; 11. The remainder of this chapter focuses on individual claims and Dawsongroup Plc & Others V DAF Trucks N.V. & Others which fall outside of the specialist collective proceedings [2020] CAT 3. regime. 25. A demonstration of the pragmatic approach of the English 12. In the UK, there has been one award of exemplary damages court is in National Grid Electricity Transmission Plc v ABB in a competition case: Travel Group Plc (in Liquidation) v Cardiff Ltd & Others (Claim Number: HC-2015-000269, Order City Transport Services Limited [2012] CAT 19. This was an of Mrs Justice Rose sealed on 24 November 2016), where unusual case; claiming exemplary damages will rarely be the court permitted summary information to be disclosed viable. First, a fine/finding of infringement by a regulator rather than the underlying documents where it would have precludes exemplary damages, which are therefore unavail- been disproportionately costly to obtain the latter. able in “follow on” claims. Second, the Damages Directive 26. Assistance to foreign and international tribunals and to (Directive 2014/104/EU) (implemented in the UK in 2017) litigations before such tribunals. specifically prohibits exemplary damages, albeit the prohibi- 27. The key ordinance at European law level is Article 101 tion is not retrospective. of the Treaty on the Functioning of the European Union 13. Sempra Metals Ltd v Commissioners of Inland Revenue [2007] (“TFEU”), which proscribes agreements, decisions and UKHL 34. concerted practices between undertakings that distort 14. There are a number of ways a business may discover it is a competition in the internal market (or which have such victim, including sight of a fining/investigation announce- effect). Such behaviour includes, for example, price- ment by a competition regulator and rumours of price- fixing and agreements not to compete on certain markets/ fixing in the industry. geographies. 15. A claimant would argue that sufficient knowledge was 28. See, in particular, the Competition (Amendment etc.) (EU only accrued at a late stage; for example, when the compe- Exit) (No. 2) Regulations 2019 (2019/1245) and Competition tition regulator released the non-confidential version of its (Amendment etc.) (EU Exit) Regulations 2019 (2019/93). decision. A defendant would argue for an earlier point; 29. Chapter I of the Competition Act 1998 prohibits anticom- for example, on market rumours of a cartel or on early petitive conduct affecting trade and competition within announcement by a regulator (perhaps a foreign regulator) the UK. that it was investigating a cartel. 30. Regulation 1/2003 will be revoked (currently this includes 16. Perhaps on account of the relationship between the an obligation on national courts not to take decisions claimant and a cartelist. which run counter to Commission decisions; this obliga- 17. Regulation (EU) 1215/2012. tion will fall away). 18. Article 67, Agreement on the withdrawal of the United 31. https://www.gov.uk/government/news/covid-19-cma- Kingdom of Great Britain and Northern Ireland from approach-to-essential-business-cooperation. the European Union and the European Atomic Energy 32. See, for example: “Review of court arrangements due to Community (2019/C 384 I/01). COVID-19, message from the Lord Chief Justice”, 23 19. See, for example: Provimi Ltd v Roche Products Ltd & Others March 2020: “We have put in place arrangements to use [2003] EWHC 961 (Comm); Cooper Tire & Rubber Company telephone, video and other technology to continue as

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many hearings as possible remotely. We will make best terms rather than for cash, e.g. improved prices for an agreed possible use of the equipment currently available; HMCTS time period. Theoretically, defendants should be more is working round the clock to update and add to that [...]” willing to settle a claim prior to proceedings being issued, (https://www.judiciary.uk/announcements/review-of- because filing proceedings brings a degree of publicity and court-arrangements-due-to-covid-19-message-from-the- so settling prior to proceedings should draw less attention lord-chief-justice/). than post proceedings being issued. The general rule is 33. See https://www.justice.gov.uk/courts/procedure-rules/ that early settlement requires claimants to take a substantial civil/pdf/update/civil-proc-rules-118-update.pdf. discount on the value of their claim. This rule is accentuated 34. The Trucks Cartel operated for 14 years, from 1997 to in cartel litigation as defendants will frequently demand a 2011. steeper discount in an individual settlement to outweigh the 35. This is not to say that defendants will be unwilling to settle risks of encouraging other claimants. Finally, once defend- claims early in appropriate circumstances. Factors that ants consider themselves to be at significantly less risk of defendants will weigh up include: (a) the identity of the facing new claims, perhaps because of the passage of time, claimant and whether they are a key long-term customer; and they will be more willing to agree resolution with the parties (b) whether the claimant is willing to settle on commercial that issued claims.

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Kate Pollock is described by The Legal 500 as “tenacious”, “confident” and a “first rate litigator”. Kate specialises in competition litigation and in particular cartel damages claims, including acting for 12 major retailers in multi-billion pound claims against Mastercard and Visa. Kate has significant experience of complex and high-value commercial disputes, both in the UK and overseas, most recently acting for major corporates based in France, Sweden and Slovenia. Her clients span the retail, manufacturing, aviation and energy sectors. Her representative cases include acting for a global wholesaler of IT products and services in a multi-million pound claim arising from the worldwide Liquid Crystal Displays Cartel, and for a major power company in a multi-million pound claim relating to the High-Voltage Power Cables Cartel. Kate trained at Travers Smith in London. She joined Wragge & Co in 1999, moving to Walker Morris in 2006. Kate joined Stewarts in 2011, and was made head of Competition Litigation in 2019.

Stewarts Tel: +44 20 7936 8086 5 New Street Square Email: [email protected] London EC4A 3BF URL: www.stewartslaw.com United Kingdom

Leah Keen specialises in complex competition litigation and has broad experience, having acted on many of the high-profile, multi-party damages claims arising from infringements of competition law. Leah’s clients are predominantly high-market-value companies from diverse industry sectors. Leah’s experience includes the multi-billion pound litigation against Mastercard and Visa, as well as acting on follow-on and stand-alone damages claims arising from investigations into high-voltage power cables, trucks, refrigeration compressors, copper fittings, air cargo and animal feed phosphates. Leah has acted for claimants and defendants in high-value proceedings in the High Court, the Court of Appeal, the Supreme Court and the Competition Appeal Tribunal. Leah’s expertise includes advising on follow-on and standalone damages claims, interventions in Competition Appeal Tribunal proceedings and cartel investigations by the CMA. Leah studied European Politics to Master’s degree-level before working in the public sector in Brussels. Leah later completed a law degree and postgraduate diploma in EU Competition Law before qualifying as a solicitor in 2013.

Stewarts Tel: +44 20 7936 8051 5 New Street Square Email: [email protected] London EC4A 3BF URL: www.stewartslaw.com United Kingdom

Stewarts is a law firm like no other. Specialising in high-value and complex Our lawyers have unrivalled experience in putting together innovative costs disputes, our track record of success for our clients has helped us become arrangements, enabling our clients to manage risk and litigate from a posi- the UK’s leading litigation-only law firm. tion of financial strength. Clients choose Stewarts for our legal excellence, our specialist expertise www.stewartslaw.com and our pioneering approach to complex litigation. Our focus is always on success: achieving the best results for our clients around the world. Stewarts is the UK’s largest litigation-only law firm with more than 370 staff, including over 60 partners with offices in London and Leeds. Each of our departments has an international reputation for excellence acting for corporate and individual clients. To enable our clients to take a global approach to litigation, we have strategic partnerships in place with law firms around the world.

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Preslmayr Rechtsanwälte OG Mag. Dieter Hauck

12 General being applied by third parties acting independently, and that those circumstances and specific aspects could not be ignored by the members of the cartel. It is up to the referring court to 1.1 Please identify the scope of claims that may be determine whether those conditions were met. brought in your jurisdiction for breach of competition Upon a related request for a preliminary ruling sent to the law. ECJ in May 2018 (OGH 17.5.2018, 9 OB 44/17m), the ECJ ruled (12.12.2019 C-435/18) that “Article 101 TFEU must be interpreted Enforcement by private competition litigation in Austria is not as meaning that persons who are not active as suppliers or consumers on the restricted to damage claims. Private bodies have standing to market affected by a cartel, but who have granted subsidies in the form of file for cease and desist (Abstellung) orders or for decisions of promotional loans to purchasers of the products offered on that market, may finding (Feststellung) before the Cartel Court (Kartellgericht). Such demand that undertakings which participated in the cartel be ordered to actions for cease and desist or finding are attractive where no make good the damage suffered by the persons concerned because the amount decisions for a fine by a competition authority is or is yet avail- of the subsidies was higher than it would have been in the absence of the able. The Cartel Court has never had jurisdiction to hear claims cartel, so that they could not use the difference for other more profitable for damages – this jurisdiction rests with the general civil courts. purposes”. Thus a general basis of claim was confirmed for a An infringement of competition law may also infringe Sec public entity who provided subsidies without being a supplier or 1 of the Unfair Competition Act (Gesetz gegen den unlauteren customer on the relevant market. Wettbewerb). The Unfair Competition Act also provides a basis No decisions on umbrella claims have been handed down so for cease and desist (Unterlassung) orders. In such cases, recovery far by Austrian Courts. (Beseitigung) and/or damages (Schadenersatz) may be awarded by Certain infringements of competition law can qualify as crim- the commercial courts (Handelsgerichte), hearing cases under the inal offences. The Criminal Act (Strafgesetzbuch) explicitly pena- Unfair Competition Act. Under the Cartel Act as well as under lises bid rigging in Sec 168b. Cartel behaviour may also consti- the Unfair Competition Act, final decisions can be published. tute fraud; however, in such cases the prosecution would need The civil courts hear cases for finding, cease and desist, to prove the damage caused and intended. Anyone harmed by recovery and damage actions, as well as actions to have a contract such offences (Privatbeteiligter) can join the criminal proceedings avoided. However, while there are several follow-on cases seeking compensation. pending after the Austrian Elevators cartel case and an Austrian Finally, breaches of competition law may cause labour law liti- Banking case, there are, to date, only very few final decisions gation, e.g. where an employee having engaged in anti-competitive on private cartel law enforcement before the civil courts. These behaviour challenges his termination. relatively small cases, relating to a driving school cartel, were not reviewed by the Supreme Court (Oberster Gerichtshof – OGH). The European Court of Justice (ECJ) rendered a prelim- 1.2 What is the legal basis for bringing an action for breach of competition law? inary ruling judgment on the question of damages claimed by customers of third parties (so-called “umbrella claims”). Although the Austrian Supreme Court had ruled that Austrian Actions could be based on the Cartel Act, the Unfair Competition law provides no basis to assert such claims, the ECJ found that Act and/or general civil law in conjunction with competition “Article 101 TFEU must be interpreted as meaning that it precludes the law. However, some actions are only available to certain plain- interpretation and application of domestic legislation enacted by a Member tiffs – see the answer to question 1.5. State which categorically excludes, for legal reasons, any civil liability of The EU Damages Directive was transposed into national law undertakings belonging to a cartel for loss resulting from the fact that an in 2017. undertaking not party to the cartel, having regard to the practices of the cartel, set its prices higher than would otherwise have been expected under 1.3 Is the legal basis for competition law claims competitive conditions” (ECJ 5.6.2014, C-557/12). Consequently, a derived from international, national or regional law? victim of umbrella pricing, i.e. an indirect customer, may claim compensation for the loss caused by the members of a cartel, The legal basis for private damage actions is national law (see even if it had no contractual links with any of them, where it is the answers to questions 1.1 and 1.2). Following the case law established that the cartel at issue was, under the circumstances by the ECJ on private enforcement (ECJ 20.9.2001, C-453/99 of the case and, in particular, considering the specific aspects of Courage/Crehan and ECJ 13.7.2006, C-295 and 298/04 Manfredi ), the relevant market, liable to have the effect of umbrella pricing Articles 101 and 102 TFEU are directly applicable but do not

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contain explicit rules on damages. However, it is long-standing claims depending on their contents; e.g., plaintiffs could argue that case law that the possibility for anybody to claim damages defendants had infringed (pre-)contractual information or noti- greatly enhances the effectiveness of competition rules. In the fication obligations by not disclosing (allegedly) cartel-inflated absence of EU rules governing the matter, it is for the domestic prices. Further, an agreement may be void because of a breach legal system of each Member State to establish the detailed rules of competition law. The indirectly harmed (e.g. the customer of governing the exercise of the right to claim compensation for someone who purchased from a cartelist) have a valid claim under the harm resulting from an agreement or practice prohibited certain circumstances (see also the answer to question 5.2). under Article 101 TFEU, including those on the application of Both individuals and companies having a civil law claim can the concept of “causal relationship”, provided that the principles also seek compensation before the criminal courts, provided of equivalence and effectiveness are observed (ECJ 13.7.2006, criminal proceedings were initiated. Such criminal proceedings, C-295 and 298/04; ECJ 5.6.2014, C-557/12). due to the stricter legal requirements and the level of proof, are not always initiated, and damages will only be adjudicated in very clear-cut cases. Often the criminal courts shun difficult proce- 1.4 Are there specialist courts in your jurisdiction to dures in evidence and refer damage cases to the civil courts. which competition law cases are assigned? For collective claims, no special rules have been enacted so far. Consequently, possibilities for collective claims are limited. The Cartel Court is a specialised division of the Vienna Court Under certain conditions, proceedings initiated individually can of Appeals (Oberlandesgericht Wien) and has exclusive jurisdic- be joined by the trial court. It is also possible to sue several tion to hear actions under the Cartel Act. Its decisions can be defendants together, even if only one of them is domiciled in appealed to the Austrian Supreme Court sitting as the Cartel Austria. Claimants may assign their claims to one entity which Court of Appeals (Kartellobergericht). then asserts the assigned claims in its own name. As persons Civil courts hear actions under the Unfair Competition Act seeking damages must act in assigning their claims, such a and under general civil law for damages. Except for Vienna, “group action” could be considered to be based on an “opt-in” where special commercial courts exist both at district and basis. Such assignment does not necessarily result in the values regional level, the ordinary civil courts sit as commercial courts of the individual claims being added up to establish jurisdic- in such cases. See also the answer to question 1.6. tion. Consequently, the district (generally hearing claims of up to EUR 15,000), rather than the regional court, may have juris- 1.5 Who has standing to bring an action for breach of diction to hear such a “group action”. competition law and what are the available mechanisms for multiple claimants? For instance, is there a 1.6 What jurisdictional factors will determine whether a possibility of collective claims, class actions, actions court is entitled to take on a competition law claim? by representative bodies or any other form of public interest litigation? If collective claims or class actions are permitted, are these permitted on an “opt-in” or “opt- The Cartel Court has exclusive jurisdiction to hear applications out” basis? pursuant to the Cartel Act, and the commercial courts to hear claims based on the Unfair Competition Act. All other (civil) Any undertaking or association of undertakings with a legal or matters are heard by the general civil courts. A district court economic interest may file an action before the Cartel Court. will hear claims with a value of up to EUR 15,000, except for This criterion of interest is not applied strictly. However, an some special matters. The regional courts have jurisdictions for application for finding requires a special interest. A 2013 higher amounts. Claims against an entrepreneur (Unternehmen) amendment introduced an explicit provision into the Cartel Act, registered in the commercial register (Firmenbuch) and relating to establishing that seeking compensation for damages creates a a commercial agreement (unternehmensbezogenes Geschäft) will be sufficient legal interest for an action for declaratory relief. heard by the commercial courts. Private individuals (in the sense of non-entrepreneurs) do not have The location of the court having jurisdiction (örtliche standing before the Cartel Court. However, applications may be Zuständigkeit ) is determined by the Act on Civil Jurisdiction brought by the Austrian Chamber of Commerce (Wirtschaftskammer (Jurisdiktionsnorm). Normally, the domicile or commercial seat Österreich), the Chamber of Employees (Bundeskammer für Arbeiter und of the defendant will be the decisive factor for the location of Angestellte) and the Presidents’ Committee of the Austrian Agricultural the court. will only enforce private damage claims Chambers (Präsidentenkonferenz der Landwirtschaftskammern Österreichs). Criminal courts connected with criminal proceedings against the civil defen- Further, the Federal Competition Agency (Bundeswettbewerbsbehörde), dant; i.e., only the criminal court trying the respective defen- the Federal Antitrust Prosecutor (Bundeskartellanwalt) and the dant has jurisdiction. Normally, the criminal court will only sector-specific regulators have standing before the Cartel Court. give judgment if the claims are obviously well founded and/or The above-mentioned representative bodies or competitors may uncontested; otherwise, the criminal court will refer the matter (alternatively or additionally to an application before the Cartel to the civil courts. Court) file a cease and desist and/or recovery action under the Unfair Competition Act with the commercial courts. Damages can also be claimed by customers (OGH 24.2.1998, 4 Ob 53/98t) 1.7 Does your jurisdiction have a reputation for in the Civil Courts. attracting claimants or, on the contrary, defendant Both the Austrian and the EU prohibition of cartels and abuse of applications to seize jurisdiction, and if so, why? market dominance provisions are generally considered as protective laws (Schutzgesetze) according to the Austrian General Civil Code The Austrian Supreme Court has explicitly ruled that Austrian (Allgemeines Bürgerliches Gesetzbuch). Moreover, literature mostly civil courts have jurisdiction to hear private damage claims in agrees that competition law does not only protect free competition cases where at least one of the cartelists resides or has its corpo- (and thereby competitors), but also customers. Therefore, compet- rate seat in Austria. Consequently, actions may be filed with itors as well as customers may bring a damage claim in civil or commer- Austrian courts even if there is a link to various other countries. cial courts if they suffered harm. Possibly, contracts also support In a case relating to a banking cartel, the Austrian Supreme

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Court confirmed that all market participants (including the indi- order will be issued if there (still) is an actual infringement of rectly damaged) have standing to bring private damage claims. competition law at the point of time of the decision. In one When the EU Damages Directive was implemented into case, the Cartel Court of Appeals held that where the infringe- Austrian law in 2017, several provisions improving the proce- ment has already ended but there are still consequences from the dural position of plaintiffs were introduced – see below for more infringement, an order may still be issued (OGH 19.1.2009, 16 details. Ok 13/08); the case was referred to the first instance and then settled. If the infringement has ended, the Cartel Court still may render a decision of finding (that there was an infringe- 1.8 Is the judicial process adversarial or inquisitorial? ment), subject to the applicant establishing a special interest in such finding. The Cartel Act explicitly also allows for a deci- Before the Cartel Court, judicial proceedings are inquisito- sion of finding in preparation of actions for damages. However, rial, following a special procedural law also applicable to other the Cartel Court has no jurisdiction to hear the damage claims. matters where the public state takes care of certain matters A cease and desist order pursuant to the Unfair Competition pertaining to its subjects. However, the practical burden rests Act requires that the infringement occurred in the conduct on the applicant – a private or public agency – to submit the of business (im geschäftlichen Verkehr), a criterion normally met facts necessary for establishing an infringement. in competition cases. Moreover, the effect on competition by Criminal proceedings are basically inquisitorial, and the the infringement must be appreciable. Finally, it must be likely criminal courts and public prosecution services focus on that the infringement will occur or will be repeated. After an whether the defendant is guilty of a criminal offence. However, infringement has occurred, its repetition will be assumed. It criminal courts will only rule on damage claims if those are falls to the defendant to prove that such risk can be excluded obviously clearly founded and/or uncontested. A private party, or is extremely unlikely to materialise. When an infringement having joined criminal proceedings claiming damages, may also has occurred, and an unlawful situation still exists, the court present further evidence to be heard and question witnesses. may, upon request, also issue a recovering order. The defendant Otherwise, the persons harmed will be referred to civil litigation. is then obliged to remedy the unlawful situation to the extent Proceedings before the commercial and general civil within his abilities. courts are adversarial. However, the court has considerable Damages for infringing the Unfair Competition Act may be discretion to act ex officio and has massive influence over the awarded under the general requirements. However, the relevance procedure in evidence. of the Unfair Competition Act for private antitrust enforcement has been limited by the Supreme Court ruling that an antitrust law 22 Interim Remedies infringement only infringes Sec 1 of the Unfair Competition Act where the infringement cannot be justified by any plausible inter- 2.1 Are interim remedies available in competition law pretation of the law (vertretbare Rechtsauffassung) (OGH 14.7.2009, 4 cases? Ob 60/09s Anwaltssoftware; 4 Ob 101/09w Preselection). Sec 37c para 1 of the Cartel Act confirms the earlier state of Yes – see the answer to question 2.2. the general civil law that anyone who has infringed competition law is obliged to reimburse the damages caused. Further, the same provision contains a rebuttable assumption that a 2.2 What interim remedies are available and under cartel among competitors, i.e. a horizontal infringement, causes what conditions will a court grant them? (some) damage. However, the causation and the amount of such damage still needs to be proven by the plaintiff. Both the Cartel Act and the Unfair Competition Act provide Where a plaintiff (also) relies on a contract, the provisions for interim injunctions (einstweilige Verfügungen). The Cartel Court thereof and their construction may affect the claim. may grant interim relief where the requirements for issuing a The general requirements for an award of damages in compe- cease and desist order are attested to a certain degree (bescheinigt), tition cases are: which means a lower standard of proof than for an actual cease (i) the defendant has infringed national or EU competition and desist order (see also under question 4.1). The commer- law; and cial courts can also impose interim measures to safeguard a later (ii) such infringement has (adequately) caused (measurable) cease and desist order. harm to the defendant; said harm must be within the While under the Cartel Act and the Unfair Competition Act protective scope of the infringed competition provision it is not necessary to show that without the interim injunction (Rechtswidrigkeitszusammenhang); and the defendant must the effectiveness of the principal application, if finally granted, have acted negligently or with intention (fault). would be put at (significant) risk, interim relief under general Adequate causation and protective scope: under Austrian civil law is subject to such requirement. law, the infringement in question not only has to be a conditio sine The criminal courts cannot grant interim relief to a party qua non for the harm, but the behaviour of the defendant also seeking compensation in criminal proceedings. needs to be, by its general nature, capable of causing the harm; i.e. the harm has not occurred only because of an extraordinary 32 Final Remedies and unforeseeable chain of events. The protective scope concept means that the rule infringed has as its objective the protection from such harm as has occurred. The textbook example is the 3.1 Please identify the final remedies which may be available and describe in each case the tests which a court case of an underground cable being damaged during construc- will apply in deciding whether to grant such a remedy. tion works. While the company owning the cable is clearly protected by the rules on property, its customers (e.g. being supplied with electricity or communications) are arguably not The provides for cease and desist orders and deci- Cartel Act within the protective scope of these rules (protecting the prop- sions of finding upon application by enterprises. Only certain erty of the utility company), even if they suffer damages because official parties may move for fine decisions. A cease and desist of, e.g., the interruption of supply. However, if the claims are

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based on Article 101 TFEU, this must not limit rights available of the global group turnover (similar to rules under EC cartel under this provision (see the answer to question 1.1 above and law) for breach of national or European competition rules, and the ECJ cases referred to there). the Court has done so several times in the past. Damages are Where a prior final decision by a competition authority assessed by the civil or commercial courts based on the harm is available, which is the normal case in follow-on actions, the suffered by the plaintiff (see, however, question 3.2 above). courts deciding on damages are bound to such decision to the Whether or not fines have been imposed on the defendant by extent it states the infringement and its unlawfulness. the Cartel Court generally has no impact on the amount of damages, except that it was argued that the fine imposed indi- 3.2 If damages are an available remedy, on what bases cates actual damages suffered. can a court determine the amount of the award? Are In Austria, there is no special redress scheme (apart from exemplary damages available? Are there any examples private damage claims) available for persons harmed by a of damages being awarded by the courts in competition competition infringement. cases which are in the public domain? If so, please identify any notable examples and provide details of the 42 Evidence amounts awarded.

4.1 What is the standard of proof? Under Austrian law, as in most European countries, exemplary (punitive) damages are not available, but only actual harm (posi- tiver Schaden), loss of profit (entgangener Gewinn) and interest can be Generally, for damages to be awarded, the court, based on the claimed. Actual harm has occurred if existing property or rights evidence presented, must be fully convinced that the asserted are affected. Loss of profit encompasses harm to future oppor- facts are true. The courts are free in their evaluation of the tunities. While previously a claim for loss of profit was subject evidence ( freie Beweiswürdigung) and, generally, may consider any to the defendant having acted with gross negligence or inten- evidence that is brought to their attention. tionally, under the new law on cartel damages the compensation The Supreme Court has lowered the standard of proof for generally includes loss of profit. Further, the plaintiff is entitled damages claimed under the Unfair Competition Act where the to interest from the day on which the damage occurred. This plaintiff must only establish that (some) harm has occurred with is consistent with ECJ case law, as the Manfredi judgment ruled a high probability (OGH 15.9.2005, 4 Ob 74/05v), and the defen- that, in any case involving a breach of Article 101 TFEU, loss of dant may prove the opposite, otherwise the amount of damage profit must be compensated. may be estimated by the Court. The case dealt with an illegal Where it is established that a party is entitled to damages, rebate scheme and the damages claimed by a customer who was but the exact amount is impossible or unreasonably difficult to discriminatorily not granted such rebate. establish, the court is entitled by law to assess the amount in its Where a plaintiff for objective reasons has considerable diffi- discretion (nach freier Überzeugung). In this context, the (rebut- culties in proving something, courts may accept prima facie table) presumption that a cartel between competitors causes evidence. For example, in predatory pricing cases, it was held harm (Sec 37c para 2 Cartel Act), has a special effect: unless sufficient for the applicant to establish sales by the defendant defendant cartelists can prove the opposite, it is established that to be below costs by presenting data of comparable undertak- damage has occurred, and the exact amount thereof should be ings (OGH 9.10.2000, 16 Ok 6/00; 16.12.2002, 16 Ok 11/02; ascertained by estimation. If some claims raised within the 29.5.2018, 4 Ob 232/17x). same action are insignificant or where single claims do not On the rules for an estimation by the court, see the answer exceed EUR 1,000, the court may even assess both: (i) whether to question 3.2 above. On the related question of the burden of damages should be granted at all; and (ii) the amount that proof, see question 4.2 below. should be awarded. Further, upon request by a trial court, the Cartel Court, the Federal Antitrust Prosecutor and the Federal 4.2 Who bears the evidential burden of proof? Competition Authority may support the civil court in determining the amount of the damage. To date, there are only a few final decisions dealing with In principle, plaintiffs must submit conclusively and prove all private cartel law damage claims. To date, no decision in which facts supporting the claim. Normally in a follow-on action, damages were awarded is publicly available; only one has been where the existence of the cartel and its illegality are established decided, i.e. the Grazer Driving School case, where damages were by the decision of a competition authority, this is the causation awarded. However, the decision is not publicly available, as only of damage and the amount thereof. For competition claims, judgments by the Supreme Court are published (the final deci- conclusive submissions are sufficient, to the extent they are sion in the Driving School case came from the Appeal Court of based on the reasonably available evidence. Graz). The reason why this case was not finally decided by the Where a damage claim is based on the infringement of a Supreme Court was the relatively small amounts claimed. protective rule or an agreement, the defendant must, if this is There are cases pending which in the future may see the award established, prove the lack of fault. Moreover, according to of damages. However, settlements may occur before these cases court practice, the plaintiff only needs to prove the infringement reach the final stages with the courts. and that harm has occurred; with respect to causality, a rebuttable prima facie proof will be assumed (OGH 16.9.1999, 6 Ob 147/99g). Also, in this case, the plaintiff must submit and prove 3.3 Are fines imposed by competition authorities and/ the occurrence of damages and their amount (OGH 15.5.2012, or any redress scheme already offered to those harmed by the infringement taken into account by the court when 3 Ob 1/12m). calculating the award? If a defendant raises the defence that the plaintiff has passed on any price surcharge resulting from the infringement of competition law, the defendant bears the burden of submission and proof Upon motion by the Federal Cartel Agency or the Federal Cartel in that respect. Prosecutor, the Cartel Court may impose fines of up to 10%

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4.3 Do evidential presumptions play an important proceedings – after having balanced the mutual interests – order role in damages claims, including any presumptions the opposing party or even a third party to disclose specific pieces of loss in cartel cases that have been applied in your of evidence. The evidence plaintiffs seek will likely concern the jurisdiction? effects of a competition law infringement, whereas defendants will likely request the disclosure of documents proving passing The Austrian Code of Civil Procedure recognises the possibility on of overcharges. In case of confidential information, the court for the courts to estimate damages – see the answer to question must order effective measures for the protection of such confi- 3.2 above. dential information (see also the answer to question 4.8). For Since the 2017 amendment, Austrian law has contained a confidential information, the defendant of the application can rebuttable presumption that a cartel (among competitors) causes demand that the evidence is only disclosed vis-à-vis the court, harm. In combination, rules allowing the judge to estimate the which then decides on the disclosure to the other party or takes amount of damages by discretion strengthened the plaintiffs’ the information into account when rendering its decision. positions. Further provisions support this effect, such as the Also, the disclosure of evidence contained in the files of binding effect of final decisions by European or national compe- competition authorities can be requested by parties. Upon tition authorities: these final decisions establishing a violation of such motion, the court must also consider the effectiveness of antitrust law are binding (Bindungswirkung) on the Austrian civil the public enforcement when judging the proportionality of courts. Defendant cartelists can no longer challenge the exis- the request. Documents which were prepared specifically for tence and illegality of a cartel once it has been finally established the proceedings conducted by the competition authority, which by a competition authority. the competition authority has created and sent to the parties Where a damage claim is based on the infringement of a during its proceedings and settlement submissions which have protective rule or an agreement, the plaintiff only needs to prove been withdrawn, are sometimes called “grey list documents”. the infringement and that harm has occurred; with respect to The disclosure of such grey list documents must not be ordered causality, rebuttable prima facie proof will be assumed (OGH before the proceedings before the competition authority have 16.9.1999, 6 Ob 147/99g). been closed. Even stricter restrictions apply to leniency and (non-withdrawn) settlement submissions in cartel cases (i.e. proceedings 4.4 Are there limitations on the forms of evidence concerning cartel behaviour between competitors, not including which may be put forward by either side? Is expert vertical agreements). The disclosure of these so-called “ evidence accepted by the courts? black- list documents” must not be ordered at any time, unless such documents or information are available independently from the Austrian law generally does not restrict the forms of admissible competition procedure. evidence. Only very rarely is evidence inadmissible by its very Further, under general procedural rules, the parties to a trial nature or the way it was obtained. may ask each other questions in court with a view to establishing Expert evidence is accepted and widely used. While opinions the facts of a case and the relevant documents. by expert witnesses instructed by one of the parties may be useful for the parties, especially for the preparation of the action or the defence, and may be presented as documents into evidence, they 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? carry relatively little weight with the court. For the judgment, normally the courts heavily rely on special sworn-in expert witnesses they have appointed themselves. Such experts will Summoned witnesses are obliged by law to appear before the work closely with and in support of the judge. The importance court. If they do not appear, they may be fined by the court and of their activities in collecting, analysing and interpreting data must bear any costs that their non-appearance may cause. As and the written opinions they eventually will deliver cannot be this may include lawyers’ fees, the costs could be substantial. overestimated and shall receive the utmost attention. Further, though rather unusual, the court could impose compulsory attendance on a witness. Finally, witnesses not appearing before the court may be liable for damages to the parties. 4.5 What are the rules on disclosure? What, if any, Witnesses may, however, refuse testimony to avoid criminal documents can be obtained: (i) before proceedings have begun; (ii) during proceedings from the other prosecution or a direct financial disadvantage for themselves party; and (iii) from third parties (including competition or close family, or if they are bound by professional secrecy authorities)? (lawyers, medical doctors, priests, etc.) or would otherwise disclose business secrets. Any witness may be interrogated by either party. In practice, Until the 2017 amendment, Austrian law did not contain the judge starts the interrogation and either party may ask (addi- discovery rules in the strict sense, which changed as required tional) questions. All parties could ask all questions relevant to by the EU Damages Directive. Under general civil procedure the case, though the judge has a wide discretion as to topics and law, upon motion by a party the court can, during proceed- decisions on objections to questions. ings, order the other party to produce certain documents. For this objective, the requesting party needs to specify the documents in detail. The law sets out grounds on which the produc- 4.7 Does an infringement decision by a national or tion of a document can or cannot be refused. However, even international competition authority, or an authority from if a refusal is unjustified, the court cannot enforce production another country, have probative value as to liability orders, but the refusal will be considered in the court’s judg- and enable claimants to pursue follow-on claims for damages in the courts? ment. Consequently, these rules on document production have carried little practical importance so far. Under the 2017 amendment to the Austrian competition Yes. National courts must not issue decisions concerning agree- law, upon reasoned motion by a party, the court can, during ments or concerted practices within the meaning of Articles 101

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or 102 TFEU, which would contradict a European Community 4.9 Is there provision for the national competition Commission decision on the same agreements or concerted authority in your jurisdiction (and/or the European practices. Commission, in EU Member States) to express its The binding effect (Bindungswirkung) of final decisions by views or analysis in relation to the case? If so, how European or national competition authorities has been explic- common is it for the competition authority (or European itly reiterated by the 2017 amendment. The binding effect Commission) to do so? encompasses the verdict and those facts stated and necessarily supporting such verdict, but not each part of the reasoning. In proceedings before the Cartel Court, the Austrian Federal Competition Agency and the Federal Cartel Prosecutor both have standing. As they normally initiate such proceedings, it 4.8 How would courts deal with issues of commercial confidentiality that may arise in competition is necessary for them to participate in such proceedings. On proceedings? the other hand, neither the Federal Competition Agency nor the Federal Cartel Prosecutor have standing before civil courts, pursuant to national law. However, the civil court can request Generally, Austrian procedural law does not have express rules assistance from the Cartel Court, the Federal Competition on the protection of business secrets amongst (a multitude of) Agency and the Federal Cartel Prosecutor when determining the parties to specific proceedings. However, both under the Cartel amount of the damage. However, this has rarely occurred so far. Act and the Unfair Competition Act, the public may, upon Under European law, the European Commission and national request, be excluded from oral hearings if this is necessary for competition authorities can, on their own initiative, submit the protection of business secrets or confidential information. written statements (amicus curiae briefs) to Member State courts, if A joinder of proceedings initiated by the Federal Competition this is required for a coherent application of Articles 101 or 102 Agency or the Federal Cartel Prosecutor to proceedings insti- TFEU. In Austria, the respective national competition authority gated by another party must not take place absent the consent is the Federal Competition Agency. So far, we are not aware of the parties because of the investigative powers vested in the of any case where the European Commission or the Federal public entities. The relevant provision of the Cartel Act provides Competition Agency have exercised this right. that, in principle, third persons may only access the respective court files with the consent of the parties to the proceedings concerned. The ECJ (C-536/11 Donau Chemie) ruled that this 52 Justification / Defences is incompatible with EU law. The Austrian Supreme Court (28.11.2014, 16Ok10/14b and 16 Ok 9/14f) has further held 5.1 Is a defence of justification/public interest that access to a file must also not be generally denied in cases available? not containing “a foreign element”. The Austrian Supreme Court further stated that the criteria for being granted access There is no defence of justification by public interest available. to a file must not impose an excessive burden on those claiming There is a general exemption from the cartel prohibition damages. Finally, it was clarified that the Cartel Court’s file (Article 101 para 3 TFEU and Sec 2 of the Cartel Act) stating that must be forwarded to the criminal prosecutor (Staatsanwalt) cartels which contribute to improving the production or distri- upon request (OGH 22.6.2010, 16 Ok 3/10). bution of goods or to promoting technical or economic prog- The disclosure of evidence as established by the 2017 amend- ress, while allowing consumers a fair share of the resulting bene- ment implementing the EC Damages Directive may also include fits and which do not a) impose on the undertakings concerned evidence containing confidential information. However, the restrictions which are not indispensable to the attainment of court, prior to ordering disclosure, must hear the affected these objectives, or b) afford such undertakings the possibility parties and balance the legitimate interests of all parties and of eliminating competition in respect of a substantial part of third parties concerned. The court shall order appropriate and the products in question, shall be exempt. This contains some effective protection measures, such as the presentation of a “public” elements and therefore should be mentioned here. non-confidential excerpt, the exclusion of the public from the Furthermore, to prove the existence of such circumstances may hearings or the imposition of a limit on the group of people that be quite complex and the undertaking invoking the exemption can acquire knowledge of the evidence. Obviously, the parties bears the risk of error. and their counsel cannot be excluded. Moreover, the parties’ rights (to be heard) must not be unduly restricted. Finally, the 5.2 Is the “passing on defence” available and do court can order an expert witness to prepare a summary not indirect purchasers have legal standing to sue? containing any confidential information. In criminal proceedings, the public can also be excluded from hearings where this is necessary for confidentiality reasons. While The 2017 amendment to the Cartel Act introduced an explicit access to files for third parties is limited (they need to have a provision governing passing on situations, stating that the reasoned legal interest [begründetes rechtliches Interesse]), parties seeking passing on defence is admissible. The burden of proof for passing compensation in criminal proceedings have access to files and a on rests on the defendant. However, this seems to be not much right to be present at the hearings, which can be restricted only in different to the law pre-amendment as rooted in general princi- exceptional cases (to avoid obstruction of the investigation). ples of damage law. While the case law on passing on in Austria Decisions by the Cartel Court, including the full names of the is not far developed, German courts, while generally accepting parties, are published on a special website. The Cartel Court the defence, recently discussed concepts to restrict this defence. shall give the parties ample opportunity to specify those parts Further, the 2017 amendment confirmed that indirect of the decision which they would like to exclude from the publi- purchasers have standing if they can establish that damages were cation; subsequently, the judge must decide on the version to be passed on to them. For this, the indirect purchaser can invoke published. Following the 2017 amendment, the final decision a rebuttable presumption that damages have been passed on. rejecting or dismissing an application and decisions on requests The presumption requires that the indirectly harmed customer for an interim injunction must also be published. establishes an infringement, a cartel mark-up on the level of the

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direct purchaser, and that he obtained goods or services subject an objective limitation period, according to which the claim for to the cartel behaviour. compensation becomes time-barred 10 years after the occur- Both for the passing on defence and for the argument of rence of the damage. Neither of these limitation periods starts standing of the indirect customer, the possibilities of orders by unless the infringement was terminated. This new law applies the court for the presentation of evidence by the opposing party to older claims which were not time-barred by December 26, are available, subject to a balance of interest. 2016, unless old rules effective on that date are more beneficial for the harmed party. Under certain circumstances, the limitation of the claim for 5.3 Are defendants able to join other cartel participants to the claim as co-defendants? If so, on what basis may compensation is suspended (e.g. for the duration of the proceed- they be joined? ings before, or investigations by competition authorities and for settlement negotiations). The suspension ends one year after the decision of the competition authority became final or one In private civil law proceedings, as opposed to public fine year after the proceedings were terminated otherwise. In case proceedings, third parties with a legal interest in the outcome of settlement negotiations, after their abortion, an action must can support the position of the original party by accessory be filed or continued within a reasonable time. intervention (Nebenintervention). A defendant can notify other cartel participants, arguing that they have such legal interest to join (Streitverkündung). Whether or not they join is the notified 6.2 Broadly speaking, how long does a typical breach parties’ decision. However, once notified, a party can no longer of competition law claim take to bring to trial and final (e.g. in procedures on recourse claims) argue as a defence that judgment? Is it possible to expedite proceedings? the case was not handled properly by the notifying party. As stated explicitly in the law after the 2017 amendment, in The duration of proceedings varies considerably and could take passing on situations, the defendant can notify either the indirect several years. Durations of proceedings with the Cartel Court purchaser or its direct customers (depending on who is suing) (or another European or national competition authority) for with a request to join the proceedings. fines, cease and desist or findings on the one hand, and with civil courts for damages on the other hand, need to be regarded 62 Timing separately. With the Cartel Court and criminal courts, one level of appeal must be considered; with the civil courts, two appeals 6.1 Is there a limitation period for bringing a claim for are possible if the case goes up to the Supreme Court. breach of competition law, and if so how long is it and Except waiving/skipping appeals, there are limited possibil- when does it start to run? ities to speed up proceedings. Obviously, the better the preparation for bringing an action, the sooner the appointment of a court expert (for causation and amount of damages) and a judg- With respect to the claims possible, it is necessary to distinguish ment can be expected. Much depends on the quality of the between claims for cease and desist or for findings to be factual argument and evidence that can be presented by the heard by the Cartel Court or the civil courts on the one hand, plaintiff. and claims for damages to be heard by the civil courts only on the other hand. The Cartel Act does not establish limitation periods for 72 Settlement applications for cease and desist orders or decisions of findings. However, cease and desist orders can only be issued if 7.1 Do parties require the permission of the court the infringement is still ongoing. For decisions of finding, the to discontinue breach of competition law claims (for required special interest will be more difficult to argue the more example, if a settlement is reached)? time has passed since the infringement was terminated. Under the Unfair Competition Act, the limitation period Parties do not require a court permission to discontinue proceed- for cease and desist orders is six months from the time when ings for damages in civil courts. The situation is different with the (potential) plaintiff has learned about the infringement proceedings before the Cartel Court. While parties can termi- and the identity of the (potential) defendant. Moreover, cease nate proceedings, the Federal Competition Agency and/or the and desist claims are limited to three years after the end of the Federal Cartel Prosecutor can, within a period of 14 days as of infringement. However, this is not the case where an illegal situ- service of the declaration that applications by private parties ation continues to the present. If this is the case, desist and/or (e.g. for cease and desist or for findings) are revoked, continue recovery claims may be still brought. proceedings against the defendant in their own name as Official Under general civil law, the limitation period for damage Parties. claims is three years from knowledge of the harm and the iden- Moreover, in appeal proceedings before the Cartel Court of tity of the (potential) defendant. Under certain circumstances Appeals, the application initiating the proceedings can only (where also a criminal offence is committed by a natural person), be revoked with the consent of the defendant and the Federal it could be argued that a 30-year period is relevant. Further, if Competition Agency, as well as the Federal Cartel Prosecutor. undue enrichment can be argued and proven, a 30-year period could also be argued. 7.2 If collective claims, class actions and/or Again, the 2017 amendment brought significant changes representative actions are permitted, is collective relating to the statute of limitation. The Cartel Act now explic- settlement/settlement by the representative body on itly stipulates that damage claims based on an infringement behalf of the claimants also permitted, and if so on what of competition law become time-barred after five years from basis? the point of time at which the harmed person became aware (or should have reasonably become aware) of the infringer, the As described in the answer to question 1.5, there are no collec- damage and that the behaviour which caused the damage consti- tive claims in the narrow sense in Austria. If a “group action” tuted a competition law infringement. This is supplemented by

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based on assigned claims is settled, which is possible, the settle- 102 Leniency ment is binding on all assigned claims. If several plaintiffs have brought a joint action, upon settlement quite complex issues could arise. 10.1 Is leniency offered by a national competition authority in your jurisdiction? If so, is (a) a successful, and (b) an unsuccessful applicant for leniency given 82 Costs immunity from civil claims?

8.1 Can the claimant/defendant recover its legal costs Leniency is available under Austrian law. Leniency applications from the unsuccessful party? must be filed with the Federal Competition Agency and may result in full immunity from fines for the first applicant and/or In proceedings pursuant to the Cartel Act, there is only a reim- a reduction of fines for any others. However, no general immu- bursement of costs if the application or defence was wanton nity from civil claims is granted. Since the 2017 amendment, the (mutwillig), which is rarely awarded. law grants a small benefit to the successful leniency applicant in Under general civil law, the unsuccessful party must reim- that he is liable for damages only vis-à-vis his own direct or indi- burse the winning party for (quite substantial) court fees, rect customers, unless harmed plaintiffs cannot receive payment lawyers’ fees, and expenses (e.g. for court-appointed experts). from other defendants. If success is only partial, the costs will be awarded pro rata. The amount of recoverable costs is determined by law in a system 10.2 Is (a) a successful, and (b) an unsuccessful depending on the amount in dispute and the various activities applicant for leniency permitted to withhold evidence (e.g. action, statement of defence, other briefs, hearings by the disclosed by it when obtaining leniency in any hour). subsequent court proceedings? A party joining criminal proceedings is entitled to have its costs reimbursed if it succeeds in receiving compensation. In Austria, leniency is exclusively administered by the Federal Competition Agency; there is no leniency in court proceedings. 8.2 Are lawyers permitted to act on a contingency fee However, the Cartel Court has wide discretion in determining basis? fines and may well (negatively) consider when evidence is withheld. The leniency applicant has no general right of refusal, and Lawyers under Austrian law are not permitted to act on a pure just a few categories of documents are protected against disclo- contingency fee basis, i.e. the fee is a part of the recovered sure. For more details, see the answer to question 4.5. amount in case of success. Other fee arrangements like hourly rates, even with a success bonus, are possible. 112 Anticipated Reforms

8.3 Is third party funding of competition law claims 11.1 For EU Member States, highlight the anticipated permitted? If so, has this option been used in many impact of the EU Directive on Antitrust Damages Actions cases to date? at the national level and any amendments to national procedure that are likely to be required. Funding by third-party litigation financing is permitted. While we are not aware of antitrust cases where this has been used, in The amendment to Austrian competition law implementation other areas of law such third-party litigation financing occurs of the EU Damages Directive entered into force on May 1, frequently. 2017, which led to a further strengthening of private enforcement. The Cartel Act now contains a rebuttable presumption 92 Appeal that cartel infringements cause harm. Under certain circumstances, small- or medium-sized undertakings and the leniency applicant receiving full immunity from 9.1 Can decisions of the court be appealed? fines are privileged in that they will be held liable only vis-à-vis their direct and indirect purchasers and providers. Decisions by the Cartel Court can be appealed to the Cartel Quite new to Austrian civil procedure was the introduction Court of Appeals, which is a special senate of the Supreme Court. of disclosure provisions. Even third parties can be ordered to However, the Cartel Court of Appeals does, beside the review of disclose evidence, subject to a balance of interests. Furthermore, questions of law, review the facts established by the trial court evidence as contained in the files of courts and authorities may be only to a very limited extent, though this was improved by the subject to disclosure. For such evidence, the balance of interest 2017 amendment. A decision may now also be appealed to the also must consider the effectiveness of public enforcement. Cartel Court of Appeals claiming that, according to the case Documents which include, among others, information which was files, there are substantial doubts about the correctness of the prepared specifically for these proceedings may only be disclosed facts supporting the Cartel Court’s decision. after the competition authority has terminated the proceedings. Decisions by the civil district, regional or commercial courts Leniency statements and settlement submissions must not be can be appealed on two levels; the final appeal is heard by the disclosed at any time. Supreme Court. Generally, however, the Supreme Court will In the past, experience has shown that plaintiffs may have only hear questions of law in cases showing fundamentally new trouble conclusively stating the facts to support their claim. This questions. is mitigated under the new law, as “the action has to be at least substan- Decisions by the criminal courts can be appealed as well. tiated to the extent that it contains those facts and evidence which are reasonably available to the plaintiff and which sufficiently support the plausibility of a claim for compensation” (see also the answer to question 4.2 above).

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11.2 What approach has been taken for the ■ the restriction of the liability of immunity recipients; and implementation of the EU Directive on Antitrust ■ the provision expressly governing passing on. Damages Actions in your jurisdiction? How has the The above are only applicable to damages which occurred Directive been applied by the courts in your jurisdiction? after December 26, 2016. The new rules on disclosure apply to all proceedings in which The Damages Directive has been implemented very closely the brief initiating the proceedings is (or has been) submitted following the Directive’s wording. Application of the new rules after December 26, 2016. by courts may be seen in newer cases when they evolve. Concerning limitation, the new limitation provision of the Cartel Act applies to claims which have not been time-barred on December 26, 2016. However, in case the infringements 11.3 Please identify, with reference to transitional happened prior to and were not time-barred by that date, the provisions in national implementing legislation, whether the key aspects of the Directive (including old rules (e.g. limitation period of three years, or suspension of limitation reforms) will apply in your jurisdiction only ‎to only six months after a final decision or other termination of the infringement decisions post-dating the effective date of proceedings before competition authorities instead of one year) implementation; or, if some other arrangement applies, apply in case they are more beneficial for the damaged party (see please describe it. also the answer to question 6.1).

Sec 37a to 37m of the Cartel Act implement the EU Damages 11.4 Are there any other proposed reforms in your Directive. Sections 37a to 37g are applicable to damages claims jurisdiction relating to competition litigation? concerning harm which occurred after December 26, 2016 only. Therefore, the following aspects of the Directive, inter alia, apply: There are no other proposed reforms relating to competition ■ the rebuttable presumption that cartel infringements litigation. caused harm; ■ the exception concerning small- or medium-sized enterprises and the respective counter-exception;

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Mag. Dieter Hauck earned his Master of Laws from the University of Vienna in 1989. After completing a postgraduate course in International Studies at the University of Vienna in 1990, he began practising as a lawyer and has been a partner in the firm since May 1995. A member of the Studienvereinigung Kartellrecht e.V. (Cartel Law Academic Society), he specialises in EU, public procurement, merger and cartel law and follow-on cartel damage procedures. In all these matters, sound legal and tactical advice – in and out of court – is for Dieter Hauck as essential as a solution-oriented direct approach, effective case management and quick reactions to challenging situations.

Preslmayr Rechtsanwälte OG Tel: +43 1 533 16 95 Universitätsring 12 Email: [email protected] 1010 Vienna URL: www.preslmayr.at Austria

Preslmayr Rechtsanwälte are experts in business law. Our clients, both from Austria and around the world, are primarily large- and medium-sized businesses in manufacturing, banking, trade, information technology, advertising, tourism, and telecommunications. We also advise investors. Many of our clients have depended on us to solve their complex legal prob- lems for many years. We regard this as a sign of our clients’ trust and satisfaction. Close cooperation with our clients is an essential element of our mutual success. In advising our clients, we consider not only legal aspects but, above all, commercial objectives as well. We act for our clients as legal guides and problem-solvers with a knack for business, who work together with experts from other disciplines whenever necessary. This synergy of legal expertise, business sense and service-oriented management will also ensure the excellence of our services in the future. www.preslmayr.at

Competition Litigation 2021 © Published and reproduced with kind permission by Global Legal Group Ltd, London 44 Chapter 6 Belgium Belgium

Thierry Bontinck

Pierre Goffinet

DALDEWOLF Laure Bersou

12 General 1.3 Is the legal basis for competition law claims derived from international, national or regional law?

1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition The legal basis for competition law claims is derived from both law. national law and EU law.

Under Belgian competition law, breach of competition actions 1.4 Are there specialist courts in your jurisdiction to can be brought before both the Belgian Competition Authority which competition law cases are assigned? (“BCA”) and the judicial courts. The ABC has jurisdiction to open an investigation for breach Except for cases falling under the competence of the BCA and of competition rules (Articles IV.1 and IV.2 of the Belgian appeals against the BCA’s decisions, actions in competition law Economic Law Code – “ELC” – transposing Articles 101 and matters are introduced before the court of first instance or the 102 of the Treaty on the Functioning of the European Union entreprise court (depending on the identity of the parties and – “TFEU”). the application of international private law rules) of the regis- Before the judicial courts, actions may be brought by individ- tered seat of the defendant. There is no specialised court in uals and companies on the basis of contractual responsibility Belgium for adjudicating competition law matters. (Articles 1146 et seq. of the Civil Code (“BCC”)) and/or extra Regarding class actions, they should be introduced before the contractual responsibility (Articles 1382 et seq. BCC). Courts of Brussels (Article XVII.35 ELC). Interim measures, including injunctions, are also available Appeals against ABC decisions are lodged before the Belgian before the BCA and the judicial courts. Market Court, which is part of the Brussels Court of Appeal and Moreover, the Belgian class action procedure (Articles specialised in regulatory matters. XVII.35 et seq. ELC) allows a representative to file a legal claim on behalf of a group of consumers, including in cases of breach of competition rules (EU regulations and Belgian law). 1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms On 6 June 2017, the Belgian legislator adopted the Act on actions for multiple claimants? For instance, is there a for damages for infringements of competition law (published in possibility of collective claims, class actions, actions the Belgian Official Gazette (Moniteur Belge/Belgisch Staatsblad ) on by representative bodies or any other form of public 12 June 2017, p. 63,596; hereinafter the “Belgian Competition interest litigation? If collective claims or class actions Law Damages Act”). The Act transposed Directive 2014/104 are permitted, are these permitted on an “opt-in” or “opt- into the Belgian legal order with the insertion of a third Title in out” basis? Book XVII ELC (Articles XVII.71 et seq.). Before the BCA, actions can be brought: (i) on the BCA’s own 1.2 What is the legal basis for bringing an action for initiative; (ii) on the basis of a complaint by any individual or breach of competition law? company demonstrating a direct and actual interest; or (iii) at the request of the Minister of Economic Affaires or the Minister of the Middle Classes, Self-Employed, SMEs, Agriculture and The primary legal basis is Book IV ELC (antitrust practices, Social Integration. merger control). Actions for damages of competition rules are Before the judicial courts, any person or legal entity justi- governed by the third Title of Book XVII ELC. fying a sufficient interest has standing to bring a claim based on Class actions can be brought in competition law matters contractual and/or extra-contractual liability. (Articles XVII.35 et seq. ELC). In the Belgian legal framework, class actions are permitted on an “opt-in” or “opt-out” basis. For Belgian residents, the judge

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has the choice between an opt-in system and an opt-out system. contains provisions that go beyond the Directive (for example, a For non-residents, only the opt-in system is available. wider definition of cartels including horizontal but also vertical Furthermore, according to Article 8 of Regulation n° 1215/2012 agreements and concerted practices concluded between compet- of 12 December 2012 on jurisdiction and the recognition and itors or between non-competitors). enforcement of judgments in civil and commercial matters On 15 May 2018, a draft bill setting up the “Brussels (“Regulation Brussels Ibis”) and the AKZO case (CJEU, 21 May International Business Court” (“BIBC”) was submitted to the 2015, Cartel Damages Claims/AKZO C-352/13, EU:C:2015:335), Belgian Parliament. The BIBC will be an English-speaking cartel participants may be jointly sued in the courts of a Member court with jurisdiction over international commercial disputes State where one of them is domiciled. between companies. The Court will be highly specialised On 30 March 2018, the possibility for class actions was and composed of non-professional judges. The new Court is extended to SMEs. expected to deal with cases more efficiently than the common The notion of SME means companies employing less than courts. The creation of the BIBC seeks to participate in making 250 employees, whose annual turnover does not exceed EUR 50 Brussels an attractive place for settling international disputes. million and whose annual balance sheet does not exceed EUR The Belgian Parliament has not yet adopted the draft bill. 43 million. The representation mechanism will be endorsed by: (i) a 1.8 Is the judicial process adversarial or inquisitorial? professional association defending the interests of SMEs which has legal personality and which is a member of the High Council of Independents and SMEs (Conseil Supérieur des Indépendants et des Before the BCA, the pre-trial phase is inquisitorial while the trial PME/Hoge Raad voor de Zelfstandigen en de KMO); (ii) an associa- phase is adversarial. tion with legal personality, approved by the Minister of Middle Before the judicial courts, the procedure is adversarial and Classes, whose purpose is directly connected to the collec- public. tive harm suffered by the group and which does not pursue an economic aim on a long-term basis; and (iii) a representative 22 Interim Remedies entity approved by a Member State of the EU or the EEA. 2.1 Are interim remedies available in competition law cases? 1.6 What jurisdictional factors will determine whether a court is entitled to take on a competition law claim? In Belgian law, interim remedies before the BCA are available In accordance with Article 7 of the Brussels Ibis Regulation, under Article IV.71 ELC. Interim remedies are also available in participants in an infringement may be sued before the courts of competition law cases before judicial courts. the place where the harmful event occurred or may occur. On 29 July 2019, the CJEU decided that a domestic court of 2.2 What interim remedies are available and under an EU Member State is competent to rule on a follow-on class what conditions will a court grant them? action even in the absence of contractual relations between the claimant and the cartel participant. According to the CJEU, “the Upon a party’s request, the BCA is empowered to adopt interim place where the harmful event occurred” within the meaning measures in cases where there is an imminent risk of serious and of Article 7(2) of the Brussels Ibis Regulation covers the place irreparable prejudice for other parties or the public interest. where the market prices were distorted and in which the victim According to Article IV.72 ELC, the hearing is scheduled claims to have suffered that damage, even where the action is within two weeks and one month following the submission of directed against a participant in the cartel at issue with whom the claim with a possible extension of one two-week term. The that victim had not established contractual relations (C-451/18, College of the BCA shall have one month as from the hearing to DAF Truck, EU:C:2019:635). adopt a decision, which is subject to appeal before the Belgian The Brussels Courts have exclusive jurisdiction for class Market Court. actions (Article XVII.35 ELC). Upon request and in case of duly justified urgency, judicial In line with Article 23 of the Brussels Ibis Regulation and courts can also impose interim measures, specifically within the the Apple case (CJEU, 24 October 2018, Apple, C-595/17, legal framework of interlocutory proceedings (référé/korte geding). EU:C:2018:854), parties may also have agreed on a jurisdiction clause giving competence in competition law matters. 32 Final Remedies

Belgium should be seen as a favourable and attractive jurisdic- The BCA can: (i) order interim measures as well as the termi- tion to bring a competition law claim, because of: (i) the possi- nation of the anticompetitive practice; (ii) negotiate settlements; bility to bring a class action; and (ii) the adoption of the Belgian and (iii) impose fines of up to 10% of global turnover and a Competition Law Damages Act. penalty of up to 5% of the average daily turnover (in cases where As will be explained below, Belgian law allows, among other an interlocutory or final decision is not respected). things: (i) production of evidence in French, Dutch and English Before the judicial courts, in both class actions and indi- before the BCA; (ii) compensation for moral damages even in vidual claims, the damages will cover the entirety of the damage class actions; and (iii) limited legal costs. incurred (including moral damage) so as to restore the victims to Regarding private enforcement, the Belgian Competition Law the situation in which they would have been in the absence of the Damages Act introduces Directive 2014/104 into Belgian law. It cartel (including compensation for actual loss (price overcharge)

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and for loss of profit, plus the payment of interest). The compen- 4.2 Who bears the evidential burden of proof? sation will take the form of a financial indemnity covering the entire period of the damages and, a priori, without taking into In principle, the burden of proof lies with the litigant who alleges account the fines possibly imposed by the EU Commission or the a fact. However, according to the Judicial Code, litigants have BCA. On the other hand, a commitment to compensate cartel the obligation to collaborate in the administration of evidence. victims can be taken into account by the BCA while setting the Under some conditions, the judge can order any litigant to amount of the fine in the context of a settlement procedure. produce the evidence at its disposal, specifically when there are serious reasons to suspect that a litigant or a third party has a 3.2 If damages are an available remedy, on what bases document that supports a relevant fact. In practice, judges tend can a court determine the amount of the award? Are to balance the relevance of the evidence, the legality of a refusal exemplary damages available? Are there any examples and the opportunity to deliver an “order to produce evidence”. of damages being awarded by the courts in competition Given the asymmetrical position of the parties in competition cases which are in the public domain? If so, please identify any notable examples and provide details of the law litigation, in most cases, relevant evidence that can estab- amounts awarded. lish damages is in the hands of the opposing party or a third party. The Belgian Competition Law Damages Act facilitates the burden of proof for the claimant; for example, by easing the Under Belgian law, damages can be granted by judicial courts, condition under which the judge can: (i) under certain circum- excluding exemplary damages. stances, give access to the BCA’s file (Articles XVII.78 et seq. In principle, the damages will cover the entire incurred preju- ELC); and/or (ii) order the opposing party or a third party to dice which has to be demonstrated by the claimant (this notably produce documents that are in its hands (Articles XVII.74 et seq. requires a test of the different theories of harm under competi- ELC), with the exception of settlement proposals and leniency tion law (e.g., to calculate the effective prices in case of pricing applications (and any related element). abuses) and to assess the different models designed to estimate damages). The damages could only be compensated by means of a financial indemnity. 4.3 Do evidential presumptions play an important If necessary, an expert can be appointed to give a report on role in damages claims, including any presumptions the extent of the financial prejudice (costs shall be borne by the of loss in cartel cases that have been applied in your jurisdiction? parties). Moreover, the Belgian Competition Law Damages Act enables the judge to ask the BCA for assistance in the quantifi- According to the Belgian Competition Law Damages Act, an cation of the damages (Article IV.88 ELC). infringement of competition law established by a final decision of the BCA or the Belgian Market Court is deemed to be irrefutably established for the purpose of an action of damages brought 3.3 Are fines imposed by competition authorities and/ before a national court. or any redress scheme already offered to those harmed by the infringement taken into account by the court when Furthermore, the Belgian Competition Law Damages Act calculating the award? creates a rebuttable presumption that a cartel causes harm.

Fines imposed by competition authorities are not taken into 4.4 Are there limitations on the forms of evidence account by the judicial courts. The plaintiff can seek integral which may be put forward by either side? Is expert compensation of the damage incurred. See, however, above the evidence accepted by the courts? possibility for the BCA to take into account a commitment to compensate cartel victims while setting fines in the context of a There is no limitation regarding the forms of evidence that liti- settlement procedure. gants can use before judicial courts. However, a litigant can invoke the confidentiality of commercial information to refuse to provide 42 Evidence other parties with some evidence (see question 4.5 for the condition under which a judge can order the production of evidence covered by confidentiality). In addition, as mentioned above, 4.1 What is the standard of proof? declarations made in a leniency procedure and/or in a settlement procedure are strictly confidential and cannot be disclosed. Under Belgian law, the standard of proof is subject to general Under the Judicial Code, the judge may appoint experts to rules applicable to judicial proceedings. Each litigant should reach conclusions or to give technical advice. The judge may demonstrate the factual elements he invokes in his briefs, and appoint experts chosen by the parties or choose another expert the judge must be convinced. with a reasoned decision. The Judicial Code provides precise According to the Belgian Judicial Code (Articles 870 et seq.), conditions under which experts can be revoked, the perfor- these elements can be established in many ways: set out in a mance of the expertise, and the interaction between experts and document; through expertise ordered by a judge; corroborating the litigants, etc. It also provides that the judge has no obliga- presumptions; and testimony, etc. tion to follow the final report written by the experts. However, the Belgian Competition Law Damages Act provides: (i) that a cartel infringement is refutably presumed to cause damage; and (ii) that a final decision of the BCA or the Belgian 4.5 What are the rules on disclosure? What, if any, Market Court is an irrefutable presumption of a competition law documents can be obtained: (i) before proceedings have begun; (ii) during proceedings from the other infringement. party; and (iii) from third parties (including competition authorities)?

According to Article 879 of the Judicial Code, the judge should

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balance the obligations of litigants to collaborate in admin- the confidentiality of commercial information is frequently istering evidence and the protection of confidentiality. As raised where a litigant asks for the production of a document. mentioned above, the judge has the power to order a party to The judge has the power to order the production of a docu- produce a document under specific circumstances, namely: (i) ment under specific legal conditions. However, even if the legal the written evidence has to contain the proof of a relevant fact conditions are met, the judge retains a margin of appreciation, for the final decision (in order to avoid a so-called “fishing expe- and analyses on a case-by-case basis whether the document dition”); (ii) the written proof as regards a document; (iii) there has to be produced. The judge has to balance the relevance are serious reasons to suspect that a litigant or a third party, of the evidence, the legality and legitimacy of a refusal based including competition authorities, has the document; and (iv) on commercial confidentiality and the opportunity to deliver the document has to be in the hands of a litigant or a third party. an “order to produce evidence”. Any person involved in the In line with Article 871bis of the Judicial Court, any partici- proceedings should not disclose business secrets learned during pant in the judicial proceedings (such as a company, the lawyers the proceedings (Article 871bis of the Judicial Code). and an expert) cannot disclose business secrets known in the Under the Belgian Competition Law Damages Act, judges are course of the proceedings. required to take appropriate measures to ensure the protection Furthermore, the Belgian Competition Law Damages Act of confidential information (such as the possibility of redacting specifies the circumstances and the conditions under which a sensitive passages in documents, restricting the persons allowed private party could access the evidence from another party, a to see the evidence, or instructing experts to produce summaries third party or the BCA. According to Article XVII.75 ELC, the of the information in a non-confidential form). judge takes any measure to protect the confidentiality of elements disclosed in courts. The judge keeps a margin of appreciation 4.9 Is there provision for the national competition and should determine on a case-by-case basis whether the docu- authority in your jurisdiction (and/or the European ment has to be produced. However, the Belgian Competition Commission, in EU Member States) to express its Law Damages Act excludes the production of any settlement views or analysis in relation to the case? If so, how proposals and/or leniency applications (and any related element) common is it for the competition authority (or European (Articles XVII.74 et seq. ELC). Commission) to do so?

4.6 Can witnesses be forced to appear? To what extent, According to Article IV.88 ELC, the BCA might, ex officio or at if any, is cross-examination of witnesses possible? the request of a court, give its observations on a pending case (amicus curiae). However, in practice, the BCA rarely appears in courts as According to Articles 924–936 of the Judicial Code, any person amicus curiae. above the age of 15 could be called as a witness in civil proceedings. However, the witness could refuse to testify in case of a legitimate reason (i.e. force majeure, professional privilege). In 52 Justification/Defences case of refusal to testify without a legitimate reason, the witness could be fined by the court. In practice, witnesses are rarely 5.1 Is a defence of justification/public interest called before the courts. available? Article 942 of the Judicial Code allows cross-examination of witnesses (which is not similar to cross-examination in Anglo- Article IV.5 ELC allows the Belgian Government to adopt a Saxon countries). More concretely, witnesses are only interro- royal decree setting out the practices exempted from the applica- gated by the judge on the basis of the questions listed by the tion of Articles IV.1 and IV.2 ELC. Such a decree has not been litigants. The latter are forbidden to interrupt a witness or to proposed so far. However, all the EU block exemption regula- directly ask a question. tions are applicable to national competition law infringements which would not affect trade between Member States (Article 4.7 Does an infringement decision by a national or IV.3 ELC). international competition authority, or an authority from another country, have probative value as to liability 5.2 Is the “passing-on defence” available and do and enable claimants to pursue follow-on claims for indirect purchasers have legal standing to sue? damages in the courts?

The Belgian Competition Law Damages Act introduces the The Belgian Competition Law Damages Act provides that an “passing-on defence” (Articles XVII.83 et seq. ELC) in Belgian infringement of competition law found by a final decision of law. the BCA or the Belgian Market Court is deemed to be irrefutably established for the purpose of an action of damages brought before a national court. 5.3 Are defendants able to join other cartel participants Conversely, a final decision of a competition authority or the to the claim as co-defendants? If so, on what basis may appeal authority of an EU Member State shall only be consid- they be joined? ered as prima facie evidence of the infringement (Article XVII.82 ELC). Articles 30, 566 and 856 of the Judicial Code regulate questions of related actions and the possibility to join cases. 4.8 How would courts deal with issues of commercial confidentiality that may arise in competition proceedings?

As mentioned above (see question 4.5), the discussion regarding

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62 Timing 7.2 If collective claims, class actions and/or representative actions are permitted, is collective settlement/settlement by the representative body on 6.1 Is there a limitation period for bringing a claim for behalf of the claimants also permitted, and if so on what breach of competition law, and if so how long is it and basis? when does it start to run? Individual consumers are represented by a “group representa- Before the BCA, actions are time-barred after five years for tive”, previously identified: (i) as a consumer organisation with infringement of competition law and three years for infringe- legal personality which is also represented in the Conseil de la ment of procedural obligations (Article IV.91 ELC). Consommation/Raad voor Verbruik or is recognised by the Minister Before the judicial courts, the Belgian Competition Law of Economic Affairs; or (ii) as an association which has had Damages Act provides that the general rules on time limitation legal personality for over three years, which has a corporate apply (Articles 2262 et seq. BCC). The limitation period is 10 purpose directly related to collective damages, which does not years for contractual liability and five years for extra-contractual pursue an economic purpose in a sustainable manner, and which liability. Regarding extra-contractual liability, an extra and abso- is recognised by the Minister. The Minister has discretionary lute time limit of 20 years applies. The 20-year time limit applies powers in this regard. as from the day following the day when the event giving rise to In 2016, the Belgian Constitutional Court annulled the the action took place. former Article XVII.39 ELC as it did not allow entities from In addition, the Belgian Competition Law Damages Act other Member States to bring a representative action before the provides that the limitation period starts the day after the day Belgian courts (Decision n°41/2016 of 17 March 2016, published where the infringement ended and the applicant has known or in the Belgian Official Gazette (Moniteur belge/Belgisch Staatsblad ) should reasonably have known: (i) the behaviour and the fact on 2 June 2016, p. 33,969). Consequently, any qualified entity that this behaviour constitutes an infringement of antitrust from other Member States where the interests protected by rules; (ii) the fact that this act caused him harm; and (iii) the that qualified entity are affected by the infringement may bring identity of the offender. For continuous or repeated infringe- an action before a Belgian court (new Article XVII.39 ELC, ments, the offence ceased the day that the last infringement entered into force on 4 May 2017). ceased (Article XVII.90 ELC). The limitation period shall be (i) interrupted by any act by 82 Costs a competition authority (BCA, EU Commission or competition authority of an EU Member State) aimed at investigating or prosecuting an antitrust infringement to which the action for 8.1 Can the claimant/defendant recover its legal costs damages relates. The interruption ends on the day following the from the unsuccessful party? day on which the decision to establish an antitrust infringement became final or the proceedings were terminated in another The awarding of legal costs in civil and commercial actions is manner, or (ii) suspended by consensual dispute resolution intended to compensate the successful party for part of its legal mechanisms, except arbitration (the suspension is limited to a costs. maximum of a two-year period when the legal proceedings were Legal costs include: (i) the fees and charges to be paid to the instituted before the initiation of a consensual dispute resolu- court; (ii) the bailiff’s fees; (iii) the possible experts’ fees; and (iv) tion mechanism). the procedural indemnity (supposed to cover the lawyers’ fees, or at least a part of them). Procedural indemnity is set by the court on the basis of 6.2 Broadly speaking, how long does a typical breach Article 1022 of the Belgian Judicial Code and the Royal Decree of competition law claim take to bring to trial and final of 26 October 2007 in proportion to the value of the case; this judgment? Is it possible to expedite proceedings? varies between €180 and €36,000.

Depending on how complex the case is, the average length of proceedings can be estimated as follows: 8.2 Are lawyers permitted to act on a contingency fee ■ Before the BCA, 2.5 years for infringement of competition basis? law (average period, BCA annual report 2019). ■ Before the Belgian Market Court, four months to one year. Lawyers are free to determine the amount of their fees and their ■ Before the civil and entreprise courts, one to two years. method of calculation in compliance with the Bar’s rules. Part ■ Before the courts of appeal, three to seven years. of the fee could be determined on a contingency basis, although the client’s prior approval is needed. 72 Settlement 8.3 Is third party funding of competition law claims 7.1 Do parties require the permission of the court permitted? If so, has this option been used in many to discontinue breach of competition law claims (for cases to date? example, if a settlement is reached)? Belgian law does not prohibit third-party funding, including In class actions proceedings, a settlement has to be submitted legal expenses insurance. Specifically, in class actions, the group to the court for validation (homologation/goedkeuring). However, representative covers the charges and fees of the proceedings. in actions for damages, the parties are free to end by negoti- ating a settlement. Before the BCA, the authority is free to continue prosecuting a case (and deciding on it) despite the withdrawal of a complaint.

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92 Appeal 11.2 What approach has been taken for the implementation of the EU Directive on Antitrust Damages Actions in your jurisdiction? How has the 9.1 Can decisions of the court be appealed? Directive been applied by the courts in your jurisdiction?

Decisions of the BCA can be appealed before the Belgian In Belgium, the Damages Directive has been transposed by the Market Court within 30 days as from their notification (Article Belgian Competition Law Damages Act (see question 1.1). IV.90 ELC). The Belgian Competition Damages Act applies to every The decisions of the court of first instance and entreprise infringement of competition law, irrespective of whether it court can be appealed before the Court of Appeal within 30 constitutes a violation of Belgian or EU antitrust rules. The Act days. applies in conjunction with the provisions of liability contained Furthermore, the decisions of the courts of appeal can be in the BCC (Article XVII, 7, §2, ELC). challenged before the Belgian Supreme Court (Cour de cassation/ The main features of the Act are as follows: Hof van cassatie). ■ The Act provides full compensation for the victims of a cartel (as the general rule in Belgian law). 102 Leniency ■ The Act creates a rebuttable presumption that an antitrust infringement causes harm. The Act also creates a 10.1 Is leniency offered by a national competition non-rebuttable presumption that a decision from the BCA authority in your jurisdiction? If so, is (a) a successful, or the Belgian Market Court proves the existence of an and (b) an unsuccessful applicant for leniency given antitrust infringement. immunity from civil claims? ■ The Act facilitates the collection of evidence. Under the Act, courts are entitled to request a party or a third party, In line with Article 54 ELC, companies and individuals may such as the BCA, to produce any evidence, excluding leni- apply for a leniency programme. On 6 May 2020, the BCA ency applications and settlement proposals. adopted new Leniency Guidelines (which entered into force ■ The Act provides specific rules regarding the starting on 22 May 2020) (hereinafter “LG 2020”). The leniency point, interruption and suspension of time limitations. programme is limited to cartel cases (which might, however, ■ As mentioned above, the Act introduces in Belgian law include hub-and-spoke cases), with express exclusion of other the concept of the “passing-on” defence, i.e. the right to types of agreements or abuses of dominance. mitigate the company’s liability by demonstrating that all Pursuant to paragraph 10 of the LG 2020, the exemption or some overcharges have been passed on to the victims’ solely applies to sanctions imposed by the BCA under Book IV customers. ELC. ■ Under the Act, the infringers are jointly and severally liable However, according to Directive 2014/104, the Belgian for the harm caused by the violation of the antitrust rules. Competition Law Damages Act limits the liability of a company Accordingly, each of them is obliged to fully compensate which has been granted immunity from fines (100% fine reduc- the harm caused by the antitrust violation, and the victim tion) under a leniency programme to an amount not exceeding has the right to request from each infringer compensation the amount of the harm it caused to its own direct or indirect until he has been fully compensated. However, SMEs and purchasers or providers. immunity recipients (100% fine reduction) are solely liable vis-à-vis their own customers and suppliers. But they remain 10.2 Is (a) a successful, and (b) an unsuccessful liable towards other injured parties where full compensa- applicant for leniency permitted to withhold evidence tion could not be obtained from the other participants in disclosed by it when obtaining leniency in any the antitrust infringement. subsequent court proceedings? To date, the Belgian jurisdictions have not yet rendered any decision on the application of the EU Directive (and the Belgian A leniency applicant (whether successful or unsuccessful) is not Competition Damages Act) in cartel cases. required to produce any confidential documents in subsequent court proceedings, except under the specific conditions set out 11.3 Please identify, with reference to transitional pursuant to Articles XVII.74–XVII.76 ELC. provisions in national implementing legislation, Furthermore, pursuant to paragraph 81 of the LG 2020, the whether the key aspects of the Directive (including BCA is not allowed to release any document related to a leniency limitation reforms) will apply in your jurisdiction only ‎to and/or immunity application to the judicial courts in the course infringement decisions post-dating the effective date of of a procedure of private enforcement, except after the end of implementation; or, if some other arrangement applies, please describe it. the proceedings before the BCA and under the specific conditions set out pursuant to Articles XVII.74–XVII.80 ELC. The Belgian Competition Law Damages Act entered into force 112 Anticipated Reforms on 22 June 2017. Its substantive provisions apply as from that date (Article 22 of the Damages Directive). Procedural provisions contained in the Act apply to actions 11.1 For EU Member States, highlight the anticipated impact of the EU Directive on Antitrust Damages Actions introduced in courts after 26 December 2014 (i.e. the date of entry at the national level and any amendments to national into force of the Damages Directive) (Article 45 of the Belgian procedure that are likely to be required. Competition Damages Act). Under Belgian law, time limitations are considered to be of procedural nature. Accordingly, provisions on time limitations apply to actions introduced after The Belgian Competition law Damages Act seeks to facilitate 26 December 2014. judicial proceedings in competition law matters (see question 11.2 below).

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11.4 Are there any other proposed reforms in your dependence will be found where a company is in a position of jurisdiction relating to competition litigation? submission vis-à-vis its partner which does not hold a dominant position. Economic dependence is characterised by the absence of a reasonably equivalent alternative available within a reason- Book IV ELC was amended by an Act of 24 May 2019, which able time, under reasonable conditions and at reasonable cost, entered into force on 3 June 2019. enabling a company to impose benefits or conditions which On 31 July 2020, the prohibition of abuse of economic depen- could not be obtained under normal market circumstances. The dence was introduced into the ELC. It provides a new compe- prohibition of abuse of economic dependence entered into force tition law infringement in business-to-business relationships, on 22 August 2020. i.e. the abuse of economic dependence. An abuse of economic

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Thierry Bontinck has been a member of the Brussels Bar since 1996 and the Bar of Paris since 2012, and is a former member of the Council of the Order of French-speaking section of the Brussels Bar (2007–2010). He teaches ethics to young lawyers at the Brussels Bar. In 2013, he was appointed as Lecturer of European Law at the Paris Bar School. Thierry Bontinck leads the EU, Regulatory & Competition Law team with Pierre Goffinet. He handles cases in competition law (Belgian and European proceedings, audits, compliance), private enforcement, commercial distribution (contractual methods, disputes, establishing networks and structuring distribution schemes within Europe) and EU public law. His practice also covers procedural aspects of private enforcement and he has particular expertise in the application of competition law for regulated professions. He has published articles on European law, commercial distribution and competition law, and is a frequent speaker at seminars on these topics. He is also a member of the Editorial Committee of the Journal des Tribunaux.

DALDEWOLF Tel: +32 2 627 10 10 Av. Louise, 81 Email: [email protected] 1050 Brussels URL: www.daldewolf.com Belgium

Pierre Goffinet has been a member of the Brussels Bar since 2004, and graduated from the Catholic University of Louvain. He also holds a B.S. and M.A. in economics from the Catholic University of Louvain. He is a former Competition Prosecutor of the Belgian Competition Council. Within this institution, he was especially in charge of referral requests of mergers to the European Commission for the Belgian Competition Authority. Pierre Goffinet is also a former researcher in applied macroeconomics at the Catholic University of Louvain. Pierre Goffinet leads our EU, Regulatory & Competition Law team with Thierry Bontinck. He has significant experience in a broad range of sectors, including energy, telecom, retail, FMCG, gambling, insurance, health, rail and maritime transport. His practice also covers economic aspects of private enforcement. He has published many articles on Belgian and European competition law.

DALDEWOLF Tel: +32 2 627 10 10 Av. Louise, 81 Email: [email protected] 1050 Brussels URL: www.daldewolf.com Belgium

Laure Bersou has been a member of the Brussels Bar since 2016. Laure obtained a LL.M. in EU law, magna cum laude, from the Institute for European Studies (Université Libre de Bruxelles – Brussels) in 2008 and a LL.M. in European Legal Studies, cum laude, from the College of Europe (Bruges) in 2009. Laure is a member of the EU, Regulatory & Competition Law team. She advises clients on a number of EU law issues, with a particular focus on competition law matters. Laure has experience in advising clients on restrictive agreement, abuses of dominance and State aid cases before the national and the EU authorities. Laure specialises in EU and competition law litigations in regulated sectors, including energy, telecom and financial services. Laure has also developed special skills relating to private enforcement cases.

DALDEWOLF Tel: +32 2 627 10 10 Av. Louise, 81 Email: [email protected] 1050 Brussels URL: www.daldewolf.com Belgium

Based in Brussels, DALDEWOLF is composed of 40 lawyers whose expertise is widely recognised in their respective fields. Working closely with our clients, we are organised in expert teams, set up in order to meet our clients’ needs in their business. Our EU, Regulatory & Competition Law team handles competition law cases in both Belgian and EU law. We assist clients facing investigations, audit and compliance programmes. Our lawyers also handle single market issues (free movement of goods and services, freedom of establishment, etc.), EU and international civil service law and EU public procurement. Our lawyers advise Belgian and foreign companies on issues of distribution (choice of commercial contracts, contractual methods and dispute resolution) and market practices (unfair competition, sales methods, advertising, etc.). www.daldewolf.com

Competition Litigation 2021 © Published and reproduced with kind permission by Global Legal Group Ltd, London 52 Chapter 7 Brazil Brazil

Leonardo Rocha e Silva

Pinheiro Neto Advogados Alessandro P. Giacaglia

The Public Civil Action Act (Federal Law No. 7,347/1986) 12 General governs class actions in Brazil, including those involving anticompetitive matters. 1.1 Please identify the scope of claims that may be The Brazilian Industrial Property Act (Federal Law No. brought in your jurisdiction for breach of competition 9,279/1996) reads that a competitor may seek redress of losses law. caused by another competitor for unfair competition acts.

Civil lawsuits are available for all types of anticompetitive 1.3 Is the legal basis for competition law claims practices. The Brazilian Competition Act (Federal Law No. derived from international, national or regional law? 12,529/2011) is the primary competition law in Brazil. It prohibits unreasonable restraint of trade that produces or The Brazilian Constitution gives federal and state courts juris- can produce the effects of lessening competition, creating a diction to hear anticompetitive matters. State courts will hear monopoly, controlling a relevant market, or increasing profits. most cases, while federal courts have jurisdiction only over cases This Act lists 19 examples of punishable anticompetitive prac- involving harm to the federal government or a federal state- tices, including price-fixing, tying, predatory pricing, refusal to owned company. deal, group boycotts, and sale discrimination. The Brazilian Competition Act authorises plaintiffs to seek damages, injunctive reliefs, or both. This Act contains a specific provision 1.4 Are there specialist courts in your jurisdiction to on the recovery of damages. Plaintiffs may invoke civil or which competition law cases are assigned? consumer protection under federal law with the Competition Act. Defendants are subject to administrative and criminal Following the National Council of the Federal Justice recom- penalties in addition to civil liabilities. mendation, federal courts in the Southeast region and the Also, Brazilian law authorises civil lawsuits for unfair compe- Federal District have started organising these specialised courts. tition acts. The Brazilian Industrial Property Act (Federal Law Federal courts in the States of Rio de Janeiro and Espírito Santo No. 9,279/1996) lists 14 illegal practices, including gaining a have already launched specialist courts, as well as State Court of competitive advantage by publishing false information about São Paulo. Further developments in this area are yet to be seen. a competitor, and obtaining a competitor’s confidential information illegally. This Act requires that the defendant causes actual harm to the plaintiff and that they are competitors. The 1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms plaintiff in those specific cases does not need to show a negative for multiple claimants? For instance, is there a actual or potential impact on competition. possibility of collective claims, class actions, actions by representative bodies or any other form of public 1.2 What is the legal basis for bringing an action for interest litigation? If collective claims or class actions breach of competition law? are permitted, are these permitted on an “opt-in” or “opt- out” basis?

Plaintiffs usually ground lawsuits under the Brazilian Anyone directly or indirectly injured by anticompetitive conduct Competition Act (Federal Law No. 12,529/2011) combined with has the standing to sue. Generally, a plaintiff must show actual the Civil Code (Federal Law No. 10,406/2002), which estab- injury. lishes that plaintiffs can recover damages for any illegal activity. Multiple plaintiffs and defendants are possible in the same The Consumer Protection Code (Federal Law No. 8,078/1990) civil lawsuit. The judge may order the joinder of parties or claims applies if the anticompetitive practice involves a consumer. even if the parties have filed separate complaints. Plaintiffs Individuals who are final users of products or services and must have made similar claims, the case must deal with the same companies that are a final user of products or services and are in anticompetitive conduct, and the parties be subject to the same a weakened position with the vendor are considered consumers. jurisdiction. The Code contains specific procedural and substantive rules Plaintiffs can seek recovery of damages through class actions that govern lawsuits involving consumers. For instance, it with multiple plaintiffs or defendants involved in a common provides double damages awards and shifts the burden of proof question of fact. A plaintiff in class actions must identify the to the vendor. harmed parties and can add new ones as the suit develops. It

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also must be one of the plaintiffs that the Public Civil Action Act 2.2 What interim remedies are available and under lists to have the standing to bring a class action. The list includes what conditions will a court grant them? the Public Prosecutor’s Office, the Public Attorney’s Office, federal, state and local governments, state-owned companies or Courts have broad discretion to determine interim remedies. foundations, and specific associations. The Brazilian Antitrust Usually, a judge’s injunctive order summons the party to cease Authority (“CADE”)’s Attorney’s Office plans to participate in the anticompetitive conduct. For instance, the judge orders future class actions actively, although it is not listed in the Public the defendant to stop market allocation and start offering the Civil Action Act. product in specific markets. The injured parties usually do not have the standing to file The plaintiff must show that: (i) irreparable harm looms a class action. However, they can join the case as assistants to unless the judge grants the order; (ii) the remedy is needed to the plaintiff. Injured plaintiffs in a separate lawsuit regarding preserve the plaintiff’s rights; and (iii) the effects of such injunc- the same matter can ask for a stay in proceedings until the class tion are reversible. The courts may issue an injunctive order action judge issues a final decision. before or after hearing the defendant. Usually, courts render it after hearing the adverse party. Courts are more likely to grant 1.6 What jurisdictional factors will determine whether a interim measures if the plaintiff convinces the judge that it is court is entitled to take on a competition law claim? expected to be successful on the merits of the case and shows that the anticompetitive conduct is ongoing and causing harm to The place where the plaintiff is domiciled and where the anti- the plaintiff. Courts will likely deny preliminary injunctions if competitive conduct took place determines the court’s jurisdic- the injury is merely monetary damage, and the defendant is not tion. The courts will hear the case if the defendant is domiciled dissipating its assets to avoid payment. in Brazil, the act took place in Brazil, or the defendant must perform the relief in Brazil. 32 Final Remedies State or federal courts will hear the case if they have subject-matter jurisdiction. State courts have general subject- 3.1 Please identify the final remedies which may be matter jurisdiction to hear civil antitrust claims. The Federal available and describe in each case the tests which Constitution gives federal courts exclusive jurisdiction over a court will apply in deciding whether to grant such a cases in which the Federal Government, a federal agency, or a remedy. federal state-owned company is a plaintiff, defendant, or inter- venes on the matter (article 109, paragraph 1). Courts can order the cessation of illegal conduct and the payment of damages if the plaintiff succeeds in the lawsuit. The 1.7 Does your jurisdiction have a reputation for defendant may be sentenced to pay compensatory damages, attracting claimants or, on the contrary, defendant including expectation damages and, in more specific cases, applications to seize jurisdiction, and if so, why? consequential damages. Expectation damages usually encom- pass the sum of the plaintiff’s financial losses. Judges can also Although possible for decades, damages lawsuits are still award compensation for moral damage. The law does not have a uncommon in Brazil. In the last decade, however, complaints strict rule on how to calculate moral damages. However, judges have gained traction with some help from CADE. CADE is usually consider the gravity of the offence along with the plain- taking many actions to foster civil litigation, although its focus is tiff and defendants’ financial status. to enforce the Competition Act in the administrative sphere by When the litigants’ commercial relationship qualifies as a imposing administrative penalties. CADE is shaping its opin- consumer relationship under the Consumer Protection Code, ions to be better suited as evidence in damages suits. It has the defendant may be sentenced to double damages (i.e., twice forwarded some of its decisions to potential plaintiffs, including the amount unduly paid in excess) plus indexation and interest. possibly affected consumers and prosecutors, alerting them of the possibility of a civil lawsuit. It is also actively engaged in 3.2 If damages are an available remedy, on what bases changing the current legislation, making it easier for civil litiga- can a court determine the amount of the award? Are tion of that nature. exemplary damages available? Are there any examples of damages being awarded by the courts in competition cases which are in the public domain? If so, please 1.8 Is the judicial process adversarial or inquisitorial? identify any notable examples and provide details of the amounts awarded. The judicial process is adversarial, in which attorneys must represent the parties, and a federal or state judge hears the case. The plaintiff must present a substantiated computation of Before trial, in class actions, the Public Prosecutor’s Office damages. The award is calculated based on the overprice paid can initiate a mostly inquisitorial pre-trial class action proce- by the plaintiff summed up with other monetary and moral dure to gather evidence. After concluding this investigation, damages caused. In consumer cases, the court may apply double the prosecutor must litigate the case in an adversarial judicial damages to the plaintiff’s losses. The calculation of damages process before the courts. may be discussed after the plaintiff wins the litigation on the merits, which will follow a specific procedure governed by the 22 Interim Remedies Civil Procedure Code. The court may order the defendants to provide their financial records for calculation of overpricing if such information is neces- 2.1 Are interim remedies available in competition law cases? sary to calculate the plaintiff’s losses. However, the judge might deny access to it on confidentiality grounds. Nonetheless, because the damages usually take into consideration confidential financial The law authorises interim remedies. information, the damages awarded are protected under seal.

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3.3 Are fines imposed by competition authorities and/ The parties may submit reports prepared by expert witnesses or any redress scheme already offered to those harmed or hear them as witnesses, and judges may hire an expert to by the infringement taken into account by the court when serve the court. Expert witnesses can use any extrinsic evidence calculating the award? for their opinion. The other litigant or the judge may order the expert witnesses to submit the evidence they relied upon to Damages awarded by courts in civil claims do not prevent crim- render the opinion. inal courts from imposing fines in addition to other criminal penalties, and they do not prevent CADE from imposing 4.5 What are the rules on disclosure? What, if any, administrative sanctions against the plaintiff. It is still not clear documents can be obtained: (i) before proceedings as of yet whether fines imposed by CADE will be taken into have begun; (ii) during proceedings from the other account by judges hearing damages claims. party; and (iii) from third parties (including competition authorities)? 42 Evidence The Civil Procedure Code authorises any evidence, provided 4.1 What is the standard of proof? that the party legally and morally obtained it. Hearings, documents, expert opinions, and copies of other public proceedings are examples of evidence usually admitted in private antitrust Civil law does not establish a specific standard of proof. The litigation. law requires the judge to issue a sound judgment based on the Courts admit documents produced in CADE investiga- evidence the parties submitted. Nonetheless, judges usually tions. The Superior Court of Justice (“STJ”) has authorised a decide based on the preponderance of evidence standard, which party to access a full copy of the confidential leniency agree- would be higher than the balance of probabilities and lower than ment executed with CADE. According to the STJ, CADE must beyond any reasonable doubt standards. provide a copy of the leniency agreement to the parties in civil antitrust litigation after CADE’s Tribunal (the decision-making 4.2 Who bears the evidential burden of proof? body of the antitrust authority) issues its final decision.

The plaintiff initially bears the burden of proof. In addition 4.6 Can witnesses be forced to appear? To what extent, to stating the matters of fact, the plaintiff must substantiate its if any, is cross-examination of witnesses possible? claims and indicate how it will obtain additional evidence. Once the plaintiff has proven a fact, the burden of proof switches to Witnesses can be forced to appear by court order. Cross- the defendant, who should convince the judge otherwise by examination of witnesses is possible. providing sufficient counterevidence. A different burden of proof applies to consumer relations under the Consumer Protection Code. Plaintiffs may only state 4.7 Does an infringement decision by a national or the facts that support their reasonable claim, while defendants international competition authority, or an authority from another country, have probative value as to liability carry the burden of proving that those asserted facts are incor- and enable claimants to pursue follow-on claims for rect, false, or unrelated to the complaint. damages in the courts?

4.3 Do evidential presumptions play an important role Brazilian courts typically consider foreign decisions, despite the in damages claims, including any presumptions of loss in non-binding nature of such alien documents. cartel cases that have been applied in your jurisdiction?

4.8 How would courts deal with issues of commercial Only criminal convictions are binding on civil courts in terms confidentiality that may arise in competition of fault, fact, and existence of damage. On the one hand, the proceedings? parties in civil litigation have almost no room to challenge the conclusions issued in criminal cases. While presumptions may apply to the existence of damage, the plaintiff must show in the The STJ has ruled that the judge receiving a copy of a leni- civil litigation the actual loss caused by the defendant. On the ency agreement could redact its competition-sensitive excerpts. other hand, criminal case dismissals are not conclusive for civil Otherwise, the document should be available to the parties in its cases because a criminal procedure has a higher standard of entirety. However, if the procedure contains confidential infor- proof than civil proceedings. mation, the civil lawsuit should be kept sealed. Decisions issued by other civil courts on the same matter and decisions issued by CADE in the administrative sphere are 4.9 Is there provision for the national competition persuasive but not conclusive. authority in your jurisdiction (and/or the European Commission, in EU Member States) to express its views or analysis in relation to the case? If so, how 4.4 Are there limitations on the forms of evidence common is it for the competition authority (or European which may be put forward by either side? Is expert Commission) to do so? evidence accepted by the courts? The court must notify CADE of any civil litigation involving the Courts accept any actual, documentary, and testimonial evidence Brazilian Competition Act. Represented by CADE’s Attorney if it was legally obtained and did not harm general moral stand- General, CADE can participate in the case as an assistant to the ards. The Civil Procedure Code does not limit the elements plaintiff or the defendant. admissible into evidence in civil litigation. For instance, the law does not prohibit hearsay or character evidence.

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52 Justification/Defences these changes would have a marginal impact on the length of time that the procedure would usually take.

5.1 Is a defence of justification/public interest available? 72 Settlement

7.1 Do parties require the permission of the court Generally, there is no defence of public interest available. The to discontinue breach of competition law claims (for law is enforced against any party that infringes the Brazilian example, if a settlement is reached)? Competition Act. However, for companies that are active in highly regulated markets, a common defence is that they comply with regulation allegedly conflicting with the Competition Act. The parties must get the settlement approved by the judge so that the lawsuit can be formally shelved. In certain particular cases, the parties can settle without the consent of the judge. In 5.2 Is the “passing on defence” available and do those situations, the parties must require the court to close the indirect purchasers have legal standing to sue? lawsuit.

The passing on defence is available, and indirect purchasers may 7.2 If collective claims, class actions and/or have legal standing on showing the damage caused and causa- representative actions are permitted, is collective tion. The São Paulo State Court of Appeals decided in at least settlement/settlement by the representative body on three cases that the client did not have the standing to sue cartel behalf of the claimants also permitted, and if so on what participants that were punished by CADE because they were not basis? the final consumers of the product. According to the Court, if not proven otherwise, the final users bear the entire costs of a Grounded on the Brazilian Constitution and federal law, the cartel practice. Public Prosecutor’s Office can agree on collective settlements in class actions. However, injured parties may decide not to join 5.3 Are defendants able to join other cartel participants the settlement (opt out). to the claim as co-defendants? If so, on what basis may they be joined? 82 Costs

Defendants may join their own directors and officers as well as 8.1 Can the claimant/defendant recover its legal costs companies of their own economic group as jointly liable for the from the unsuccessful party? anticompetitive practice. The court may order the joinder of other cartel participants as defendants if the judge believes that they The unsuccessful party has to reimburse the prevailing party also caused damage to the plaintiff. These new co-defendants are for the court costs, including filing fees, expert fees, and other jointly and severally liable for the damage caused to the plaintiff. expenses, and also has to pay the counterparty’s attorney fees. Under the Civil Procedure Code, court-defined attorneys’ fees 62 Timing range from 10% to 20% of the lawsuit’s value. Those fees have no connection to the contractual attorneys’ fees – i.e., the ones 6.1 Is there a limitation period for bringing a claim for negotiated between the parties and their lawyers. breach of competition law, and if so how long is it and As an exception, the court may dismiss entities and individ- when does it start to run? uals from paying court costs and fees with evidence that they lack financial resources. Plaintiffs have three years to file the damages lawsuits. As a general rule, the limitation period starts running when the event 8.2 Are lawyers permitted to act on a contingency fee triggering the liability occurs. Some contend that the limita- basis? tion period should begin to run only when the affected party is aware of the infringement. This issue is extremely contro- Yes. In Brazil, it is relatively common for lawyers to work on a versial and is being disputed before the Brazilian courts. Bills contingency fee basis. at the Brazilian Congress are trying to establish the issuing of CADE’s final decision on the violation as the moment when the limitation period starts to run for the affected parties to file a 8.3 Is third party funding of competition law claims damages lawsuit. permitted? If so, has this option been used in many cases to date?

6.2 Broadly speaking, how long does a typical breach of competition law claim take to bring to trial and final Under Brazilian law, third parties are not expressly prohibited judgment? Is it possible to expedite proceedings? from funding litigation. Third-party funding is not typical but seems to be growing in Brazil. It can take more than 15 years for a final and conclusive judgment on a typical breach of Brazilian Competition Act claim to 92 Appeal be issued. Expedited proceedings are not available, but stakeholders, such as CADE, are discussing bills that would accel- 9.1 Can decisions of the court be appealed? erate the proceedings. Under the Civil Procedure Code, the parties to a dispute can Yes. Parties can appeal against interlocutory and final decisions. agree on specific deadlines for responses and appeals. However, The Civil Procedure Code provides for filing various appeals,

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not only to the trial judge and the court of appeals, but also to 11.2 What approach has been taken for the the higher courts. The STJ reviews federal law issues, while implementation of the EU Directive on Antitrust the Federal Supreme Court (“STF”) examines violations of the Damages Actions in your jurisdiction? How has the Federal Constitution. Only the court of appeals can review de Directive been applied by the courts in your jurisdiction? novo the facts and evidence made available to the first instance court judge. The STJ and STFs’ reviews are limited to legal This is not applicable in Brazil. issues; i.e., they are not allowed to review facts or evidence discussed in the lower courts. 11.3 Please identify, with reference to transitional provisions in national implementing legislation, 102 Leniency whether the key aspects of the Directive (including limitation reforms) will apply in your jurisdiction only to 10.1 Is leniency offered by a national competition infringement decisions post-dating the effective date of authority in your jurisdiction? If so, is (a) a successful, implementation; or, if some other arrangement applies, and (b) an unsuccessful applicant for leniency given please describe it. immunity from civil claims? This is not applicable in Brazil. CADE has offered leniency agreements since 2000. CADE’s programme is considered very successful, and over 100 leniency 11.4 Are there any other proposed reforms in your agreements have already been executed. Neither successful nor jurisdiction relating to competition litigation? unsuccessful applicants are given immunity from civil claims. The House of Representatives is currently reviewing a bill (Bill 10.2 Is (a) a successful, and (b) an unsuccessful No. 11,275/2018) that aims to foster private litigation in Brazil applicant for leniency permitted to withhold evidence while protecting the Brazilian Leniency Programme. The disclosed by it when obtaining leniency in any Federal Senate has already approved this Bill. The House of subsequent court proceedings? Representatives has suggested no amendments to the Bill and should schedule it for voting. It contains the following signifi- The STJ has ordered CADE to share a confidential leniency cant changes to the Brazilian Competition Act: agreement with the courts in civil litigation. Although there ■ it makes it clear that double damages will be imposed on is no decision by superior courts on the obligation to share violators charged with cartel behaviour; with courts an unsuccessful leniency agreement, the Brazilian ■ it increases the Lenients and Settlement Agreement Competition Act establishes that CADE will keep the proposal Signatories protection by assuring they will not pay double of a leniency agreement by unsuccessful applicants confidential. damages to the harmed parties; ■ it establishes that the Lenients and Settlement Agreement 112 Anticipated Reforms Signatories should not be jointly and severally liable with the other defendants; 11.1 For EU Member States, highlight the anticipated ■ it sets forth that the defendant has the burden of proof if it impact of the EU Directive on Antitrust Damages Actions decides to use a pass-on defence; at the national level and any amendments to national ■ it extends the statute of limitations period for five years procedure that are likely to be required. after CADE publishes its decision; ■ it introduces an additional obligation for a company or This is not applicable in Brazil. individual willing to enter into a Settlement Agreement with CADE: the Signatory must submit to arbitration all disputes concerning damages claims if the plaintiffs require it; and ■ it aims at expediting the judicial proceedings by giving full faith and credit to CADE’s decisions.

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Leonardo Rocha e Silva has been a partner at Pinheiro Neto Advogados since 2006. He has more than 25 years’ experience of guiding his clients through merger control issues and investigations, including cartels, vertical restraints and abuse of dominance. His practice areas include antitrust, civil and commercial litigation. Leonardo previously worked in Switzerland and in the UK, and holds an LL.M. in International Economic Law from the University of Warwick.

Pinheiro Neto Advogados Tel: +55 61 3312 94 88 SAFS, Quadra 2, Bloco B Email: [email protected] Edifício Via Office – 3° andar URL: www.pinheironeto.com.br Brasília-DF, 70070-600 Brazil

Alessandro P. Giacaglia has been an associate in the Litigation Group of Pinheiro Neto Advogados’ São Paulo office since 2012. He has experience in antitrust and anticorruption cases, both in the administrative and judicial spheres in Brazil and the United States. Alessandro has an LL.M. degree from the University of Chicago Law School, a Postgraduate degree in fraud risk management and compliance, an LL.M. degree in corporate law, and a Bachelor’s degree in Law.

Pinheiro Neto Advogados Tel: +55 11 3247 60 22 Rua Hungria 1100 Email: [email protected] São Paulo URL: www.pinheironeto.com.br SP, 01455-906 Brazil

Pinheiro Neto Advogados’ Competition Law Practice Group is part of the firm’s highly regarded Litigation Department. The experienced team has in-depth knowledge of the judicial proceedings underway in the various Brazilian courts. It has particular expertise in appellate litigation before the country’s superior courts in Brasília. Pinheiro Neto has equity partners and complete teams of associates with expertise in competition law not only in São Paulo but also in Brasília, where the antitrust authority is headquartered. The team has recently been very active in helping clients in the review and implementation of internal investigations and compliance training programmes. The team members have published various articles in the field and have been recognised constantly by Who’s Who, Chambers and Partners, Best Lawyers, LACCA Approved, and other institutions as leading practitioners in Brazil. www.pinheironeto.com.br

Competition Litigation 2021 © Published and reproduced with kind permission by Global Legal Group Ltd, London 58 Chapter 8 Denmark Denmark

Michael Honoré

Asbjørn Godsk Fallesen

Honoré & Fallesen Law Firm Advokatfirmaet Sune Troels Poulsen Sune Troels Poulsen

of Competition Law, can be made by any person/company who 12 General has suffered damage due to a breach of competition law. In November 2016, the Maritime and Commercial High 1.1 Please identify the scope of claims that may be Court established that a claim for damages for breach of compe- brought in your jurisdiction for breach of competition law. tition law does not preclude a parallel claim for damages for breach of the Danish Marketing Practices Act, even when the The following types of civil claims are possible: claims relate to the same legal matter. 1. an action for reversal or remittal of a decision by the Danish Competition Appeals Tribunal; 1.3 Is the legal basis for competition law claims 2. an action for declaration (this may, for instance, be brought derived from international, national or regional law? by either party in a refusal-to-supply conflict); 3. an action for injunction before the ordinary courts or the The legal basis for competition law claims is, apart from claims enforcement court (this may, for instance, be brought by for damages pursuant to the Act on Actions for Damages for customers and/or competitors in cases concerning discrim- Infringements of Competition Law, derived from national law inatory pricing or by competitors in cases concerning pred- principles. atory pricing); and It is possible to bring a claim before the courts based on 4. a claim for damages suffered as a consequence of breach of national competition law and/or EU competition law. competition law (this may, for instance, be brought by the customers of cartel participants). Claim types 2–4 above may be brought directly before the courts 1.4 Are there specialist courts in your jurisdiction to even if neither the Danish Competition and Consumer Authority which competition law cases are assigned? nor the Danish Competition Council has made a decision. In addition to the civil claims mentioned above, the Public As a rule, all actions must be brought before the relevant Prosecutor for Serious Economic and International Crime may city court. However, in cases where the provisions of the bring criminal actions for breach of competition law. Competition Act are of material importance, the case may be brought before the Maritime and Commercial High Court in 1.2 What is the legal basis for bringing an action for Copenhagen instead of the relevant city court. Furthermore, breach of competition law? if an action is brought before a city court and the provisions of the Danish Competition Act are of material importance for deciding the case, the city court must refer the action to the With respect to claim type 1 stated under question 1.1 above, a Maritime and Commercial High Court if requested by a party. decision by the Danish Competition Appeals Tribunal can be brought before the courts within eight weeks after receiving the decision of the Tribunal; see section 20(3) of the Danish 1.5 Who has standing to bring an action for breach of Competition Act. competition law and what are the available mechanisms With respect to claim types 2–3, the Danish Competition Act for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions does not provide any explicit legal basis for bringing an action by representative bodies or any other form of public for breach of competition law. The legal basis for bringing such interest litigation? If collective claims or class actions claims is derived from general principles of Danish law. are permitted, are these permitted on an “opt-in” or “opt- Claim type 4 is regulated by the Act on Actions for Damages out” basis? for Infringements of Competition Law, which implements the Damages Directive (2014/104/EU). A claim for damages, Actions for breach of competition law can be brought by any pursuant to the Act on Actions for Damages for Infringements affected market participant. A claim for damages can be made

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by any person/company who has suffered a loss due to a breach been committed within the jurisdiction, or even that it has had of competition law. effect within the jurisdiction. Under the Danish Administration of Justice Act, collective claims (similar claims from different parties raised against 1.7 Does your jurisdiction have a reputation for the same party, or similar claims raised by one or more parties attracting claimants or, on the contrary, defendant against several parties) are allowed if the following conditions applications to seize jurisdiction, and if so, why? are satisfied: a. the Danish courts have jurisdiction to hear all the claims; Denmark does not have a reputation for attracting claimants. b. the relevant court has jurisdiction to hear at least one of In recent years, there have been a number of defendant applica- the claims; tions to seize jurisdiction in Denmark, mainly due to discovery c. all claims are subject to the same rules of procedure; and rules being more favourable to defendants in Denmark than in d. neither party objects, or the claims should be treated as many other countries, and due to the fact that Danish courts one case due to the connection between them. are generally quite conservative when awarding damages to It is also possible to bring class actions. A class action may be claimants. initiated provided that: a. the claims are similar; b. the Danish courts have jurisdiction to hear all the claims; 1.8 Is the judicial process adversarial or inquisitorial? c. the relevant court has jurisdiction to hear at least one of the claims; The judicial process in Denmark for civil claims is adversarial. d. a class action is considered the best way to handle the claims by the court; 22 Interim Remedies e. the members of the group in question can be identified and informed about the case in a practical manner; and f. it is possible to appoint a group representative. 2.1 Are interim remedies available in competition law A class action is conducted by a group representative on cases? behalf of the group. The Danish Consumer Ombudsman may act as a group repre- Interim remedies are available. The provisions of the sentative. This option is restated in the Act on Actions for Administration of Justice Act on prohibitory injunctions apply Damages for Infringements of Competition Law. to competition law cases. The class action comprises all claimants registered as members of the relevant group, unless the court decides that 2.2 What interim remedies are available and under the class action comprises all claimants who have not opted out. what conditions will a court grant them?

1.6 What jurisdictional factors will determine whether a In accordance with the Administration of Justice Act, the court is entitled to take on a competition law claim? enforcement court may grant a prohibitory injunction ordering a person or a legal entity to refrain from certain acts which According to the Danish Administration of Justice Act, an conflict with the claimant’s rights. appeal against a decision by the Danish Competition Appeals In connection with a prohibitory injunction, the defendant Tribunal may be brought before the city court at the place where may be ordered to undertake specific acts to ensure compli- the party bringing the action lives or has its registered office. ance with the injunction. The enforcement court may also However, most of these cases will probably be brought before ensure compliance with the prohibitory injunction; for instance, or referred to the Maritime and Commercial High Court in by seizing objects used in connection with a breach of the Copenhagen instead of the relevant city court; see question 1.4 injunction. above. The enforcement court will grant a prohibitory injunction if For other types of actions, the Danish Administration of the court considers it likely that each of the following condi- Justice Act provides that a court will be entitled to take on a tions are satisfied: competition law claim if: a. at the relevant preliminary stage of the proceedings, the a. the defendant lives or has its registered office within the acts in question do seem likely to be in conflict with the jurisdiction; claimant’s rights; b. the claim relates to business conducted by the defendant b. the defendant will carry out the acts in question; and within the jurisdiction; c. it is not possible to wait for normal court proceedings. c. the claim relates to real estate located in the jurisdiction; The enforcement court may refuse to grant a prohibitory d. the claim relates to a contractual obligation which has injunction if the damage suffered by the defendant as a conse- been or must be performed within the jurisdiction (does quence of a prohibitory injunction is disproportionate to the not apply to payment obligations); claimant’s interests. e. the claim relates to a breach of competition law committed The enforcement court will not grant a prohibitory injunction within the jurisdiction; or if it finds that the general rules on damages and criminal liability f. the parties have agreed to submit their dispute to the rele- of Danish law or any security provided by the defendant offer vant city court. adequate protection to the claimant. Therefore, the fact that the breach of competition law has If the enforcement court grants a prohibitory injunction, it been committed within its jurisdiction will entitle a court to take may demand that the claimant provides security for any damage on a competition law claim. However, if one of the other situ- that the defendant may suffer as a consequence of the prohibi- ations a.–d. or f. applies, it is not imperative that the breach has tory injunction.

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32 Final Remedies and Commercial High Court of December 2011 formed the basis of the claim. Also in this case, the crux of the case was the calculation and documentation of the loss incurred by Breeders 3.1 Please identify the final remedies which may be of Denmark. Breeders of Denmark had claimed an amount of available and describe in each case the tests which DKK 5.3 million/EUR 0.70 million, but was awarded an amount a court will apply in deciding whether to grant such a remedy. of DKK 3.4 million/EUR 0.46 million.

A decision by the Danish Competition Appeals Tribunal may be 3.3 Are fines imposed by competition authorities and/ (1) affirmed, (2) reversed, or (3) remitted by the courts. or any redress scheme already offered to those harmed by the infringement taken into account by the court when The courts may also: calculating the award? a. declare that an agreement should be interpreted in a certain way; b. declare an agreement or any part thereof void; Fines are not taken into account by the court when calculating c. declare that certain acts or omissions by a person or a legal the award. The issue as to whether a redress scheme will be entity are in breach of competition law; taken into account has not been decided. It is assumed that d. impose an injunction prohibiting a person or legal entity insofar as a claimant has been compensated through a redress from carrying out certain acts; and/or scheme, this must be taken into account by the court when e. award damages. calculating the award, as a claimant could otherwise obtain an No particular tests apply in relation to remedies a.–d. A court undue economic advantage. will award damages only if the following conditions are satisfied: a. the defendant’s liability is established; 42 Evidence b. the loss and amount of loss are proved; c. a cause-and-effect relationship between the causes for 4.1 What is the standard of proof? liability and the economic loss is established; and d. the loss was a reasonably foreseeable consequence of the The courts have a margin of appreciation when assessing evidence, act or omission resulting in liability. and there are no specific rules on the standard of proof. Please refer to question 4.2 below. 3.2 If damages are an available remedy, on what bases can a court determine the amount of the award? Are exemplary damages available? Are there any examples 4.2 Who bears the evidential burden of proof? of damages being awarded by the courts in competition cases which are in the public domain? If so, please The claimant generally bears the evidential burden of proof identify any notable examples and provide details of the of an alleged breach of competition law and, in the case of amounts awarded. an action for damages, the existence and amount of the loss. However, the Act on Actions for Damages for Infringements Damages will at the outset only be awarded if the claimant is of Competition Law sets out a presumption that cartel infringe- able to prove the existence of an economic loss and the amount ments cause harm. The infringer has the right to rebut this of the loss. The underlying principle is that the compensation presumption. should put the claimant in the situation he would have been in if If a breach of competition law has been established by an the harmful event had not occurred. administrative decision which has not been appealed, or by However, the courts have a margin of appreciation when a final ruling of a court of law, this will serve as proof of the assessing evidence, and where the claimant has given a plausible breach. explanation of how the breach of competition law has affected Pursuant to the Act on Actions for Damages for Infringements the claimant, the courts may award damages based on an esti- of Competition Law, a final Danish competition law decision mate, even if it is very difficult to prove a specific loss with establishing an infringement of competition law is deemed to certainty. constitute irrefutable evidence of the infringement in ques- Exemplary damages are not available. The level of damages is tion when bringing an action for damages. In other words, the generally quite low in Denmark. finding of an infringement cannot be challenged in substance On several occasions, Danish courts have heard and rendered during the follow-on damages claim lawsuit. Further, a final judgment in competition law-based damages claim cases. decision in another Member State establishing an infringement In a reported case of January 2015, the Maritime and of competition law creates a presumption that an infringement Commercial High Court considered a claim by Danish pesticides of competition law has indeed taken place. producer Cheminova against Akzo Nobel for the latter’s involve- As a general rule, the defendant bears the evidential burden of ment in the Monochloroacetic Acid cartel. The Commission’s proof of the existence of justifications/defences for the conduct 2005 cartel decision formed the basis of the claim. The crux of in question. For instance, the defendant will have to prove that the case was the calculation and the documentation of the loss the conduct is covered by a block exemption if the defendant incurred by Cheminova. Cheminova had claimed an amount of makes such claim. Similarly, if the defendant claims that the DKK 47 million/EUR 6 million, but was awarded an amount of behaviour in question was objectively justified or justified by DKK 10 million/EUR 1.5 million. efficiency gains, it is for the defendant to prove that the condi- In a case of January 2017, the Maritime and Commercial High tions for such a defence are satisfied. Court considered a claim by Breeders of Denmark (an export A defendant can claim that the claimant has passed on the loss company offering DanAvl Breeding Pigs and consultancy to pig to its customers (“passing-on defence”). Pursuant to the Act on producers) against the Danish Agriculture & Food Council/Pig Actions for Damages for Infringements of Competition Law, the Research Centre due to the latter’s anticompetitive behaviour and defendant bears the burden of proof in relation to passing on. abuse of its dominant position. A court order from the Maritime As regards an indirect purchaser claiming compensation from an

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infringer, the indirect purchaser has an alleviated burden of proof by the court in the event the files in question are produced as in relation to showing that an overcharge has in fact been passed evidence. on by the direct purchaser to the indirect purchaser claiming a As regards other documents from the files of the Danish loss. In this regard, the court will take into consideration whether Competition and Consumer Authority, the court may not order it is common commercial practice to pass on price increases to the disclosure of the following categories of evidence until the indirect purchasers. competition authority has closed its proceedings: Generally, the courts exercise some discretion when deciding a. information that was prepared by a natural or legal person who bears the burden of proof and what it takes to discharge the specifically for the proceedings of a competition authority; burden of proof. b. information that the competition authority has drawn up and sent to the parties in the course of its proceedings; and c. settlement submissions that have been withdrawn. 4.3 Do evidential presumptions play an important role in damages claims, including any presumptions If the competition authority has not closed its proceedings, of loss in cartel cases that have been applied in your documents obtained through an access to file request which jurisdiction? fall within the above-mentioned categories will be rejected as evidence by the court. In a judgment from June 2017, the Maritime and Commercial As mentioned in question 4.1 above, the Danish courts have a High Court found that the requirement to identify documents margin of appreciation which also applies in competition law cases. for which disclosure of evidence is requested in the Act on However, in the Act on Actions for Damages for Infringements of Actions for Damages for Infringements of Competition Law Competition Law, there is an evidential presumption of economic must be interpreted more broadly in competition law damages loss in cartel cases. Please also refer to question 4.2 above. cases than what is otherwise the interpretative position under the Danish Administration of Justice Act. 4.4 Are there limitations on the forms of evidence Refusal by either party to comply with a court order in this which may be put forward by either side? Is expert respect will be taken into account when the court considers the evidence accepted by the courts? evidence. If the refusal is made by a third party, the court may impose a fine or take the third party into custody, etc. to secure Any evidence of importance to the case may be produced by compliance with the order. the parties. Neither a party to the case nor a third party may be ordered The general rule with respect to expert evidence is that it must to produce evidence disclosing information about issues that be obtained in a process controlled by the court. In this process, the party/third party in question would not be obliged to give each party may affect the choice of the expert and the questions oral testimony about (confidential information, information that to be answered by the expert. Expert evidence obtained unilat- could expose the party or his family to criminal sanctions or erally by one party is not per se excluded as evidence, but the serious loss, etc.). courts may not give such evidence the same weight as if it had been obtained through a process controlled by the court. 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? 4.5 What are the rules on disclosure? What, if any, documents can be obtained: (i) before proceedings Anyone who is not explicitly excluded (ministers of religion, have begun; (ii) during proceedings from the other medical doctors and lawyers) is obliged to appear as a witness party; and (iii) from third parties (including competition authorities)? and may, if necessary, be forced to appear. Cross-examination of witnesses is possible. The general rule is that each party must produce the evidence which it deems necessary, and that the court only considers the 4.7 Does an infringement decision by a national or evidence produced by the parties. international competition authority, or an authority from another country, have probative value as to liability In competition law matters, it is not possible to obtain disclo- and enable claimants to pursue follow-on claims for sure of documents from the other party or third parties through damages in the courts? the courts before the proceedings begin. It is, however, possible to seek access to the files of public authorities. In relation to the files of the Danish Competition A final decision by the Danish competition authority estab- and Consumer Authority, only a person considered a party to the lishing an infringement of competition law is deemed to be irref- case in question is entitled to access the file. At the outset, only utable evidence of the infringement in question when bringing the natural or legal person who has obtained the evidence from an action for damages before a Danish court. the competition authorities through an access to file request may Also, Danish courts are obliged not to make any decision produce it in a subsequent action for damages. contrary to a decision taken or to be taken by the European During proceedings, each party may request that the court Commission. order the other party, or any third party, to produce any evidence However, Danish courts are not bound by decisions by other in its possession, subject to this evidence being identified and national competition authorities; but as mentioned in question the request being proportional. These requirements will often 4.2 above, a decision authority of another Member State creates prove to be an obstacle in obtaining evidence from the other a presumption that an infringement of competition law has party. occurred when bringing an action for damages before a Danish However, leniency statements or settlement submissions are, court. as a starting point, not disclosable. Moreover, leniency state- A decision by the Danish Competition and Consumer ments or settlement submissions obtained solely through an Authority which has not been appealed is considered to be access to file request to a competition authority will be rejected binding, at least on the party to whom the decision is addressed.

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4.8 How would courts deal with issues of commercial ■ The agreement does not impose restrictions that are confidentiality that may arise in competition unnecessary to achieve these efficiencies on the parties. proceedings? ■ The agreement does not allow the parties to exclude competition in relation to a substantial amount of the As a consequence of the adversarial principle, all parties must goods or services in question. have access to all documents. However, a party may produce In relation to claims concerning abuse of dominant position, documents as evidence in a non-confidential version where it is also possible to justify the behaviour in question by demon- confidential information without importance to the case has strating that it is objectively necessary. been deleted. The public is entitled to attend court hearings, but upon the 5.2 Is the “passing on defence” available and do request of one of the parties, the court may decide to deny access indirect purchasers have legal standing to sue? to the public (closing of doors) if this is necessary to protect confidential information. Conditions for this are relatively strict. The “passing on defence” is available. Please refer to question 4.2 above. 4.9 Is there provision for the national competition As regards lawsuits by indirect purchasers, pursuant to the authority in your jurisdiction (and/or the European Act on Actions for Damages for Infringements of Competition Commission, in EU Member States) to express its Law, any natural or legal person who has suffered a loss caused views or analysis in relation to the case? If so, how by an infringement of competition law is able to claim and to common is it for the competition authority (or European obtain full compensation for that loss. Accordingly, both direct Commission) to do so? and indirect purchasers may claim damages and have a legal standing to sue. The Act on Actions for Damages for Infringements of Competition Law provides an explicit legal basis for: 5.3 Are defendants able to join other cartel participants ■ the court to give a competition authority the opportu- to the claim as co-defendants? If so, on what basis may nity to comment on disclosure requests for the submission they be joined? of evidence. Further, a competition authority may, on its own initiative, submit observations to the court about the proportionality of the disclosure requests for the submis- A cartel participant could intervene in an ongoing lawsuit in sion of evidence; support of a participant to the same cartel. Such intervention ■ allowing a competition authority, upon request from a would be subject to applicable standards of legal interest and court, to provide its observations when the court must standing and require acceptance by the court. A cartel partici- assess whether a piece of evidence is obtained solely pant could also launch a declaratory claim against the claimant through access to the file and must be rejected by the court (in relation to a matter against another participant to the same for the reasons mentioned in question 4.5 above; and cartel) and subsequently ask for the cases to be joined. A cartel ■ allowing the Danish Competition and Consumer Authority participant who has been sued for damages by a claimant may upon the request of the court to assist the court with also raise a contribution claim against another cartel partic- respect to the determination of the quantum of damages. ipant and request that this claim is joined with the damages It remains to be seen how often these provisions will be used. proceedings. If the Danish Competition and Consumer Authority or the European Commission, unrelated to a specific lawsuit, has 62 Timing published a decision or an analysis which is of relevance to the lawsuit, such decision or analysis may be invoked by a party. 6.1 Is there a limitation period for bringing a claim for In principle, the Danish Competition and Consumer Authority breach of competition law, and if so how long is it and or the European Commission may possibly intervene in support when does it start to run? of a party in a lawsuit and may thereby indirectly express its views and analysis; however, this option has not been used. The general rules on inactivity and time-barring as modified by the Danish Competition Act and the Act on Actions for 52 Justification/Defences Damages for Infringements of Competition Law apply. In relation to actions for damages for infringements of 5.1 Is a defence of justification/public interest competition law, a five-year limitation period applies. The limi- available? tation period is counted from the date the infringement ceases and the claimant has, or could have, reasonably been expected to have known: According to the Danish Competition Act, the Act does not 1. the infringer’s behaviour and the fact that it constitutes an apply to restrictions on competition which are a direct or neces- infringement of competition law; sary consequence of public regulation. 2. that the infringement of the competition rules has caused Also, the Act provides that the prohibition against harm to the claimant; and anti-competitive agreements does not apply to an agreement if 3. the identity of the infringer. the following four conditions are satisfied: The five-year limitation period will be suspended if a compe- ■ The agreement contributes to strengthening the effi- tition authority initiates an investigation or proceedings in ciency of production or distribution of the relevant respect of an infringement of competition law to which the goods or services or furthers technological or economic action for damages relates, or while a consensual dispute resolu- development. tion process is pending. ■ The agreement ensures that a reasonable share of the bene- The absolute limitation period is 10 years from the time the fits hereof are passed on to consumers. infringement ceased.

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A decision by the Danish Competition and Consumer 82 Costs Authority or the Danish Competition Council will stand if it has not been appealed to the Competition Appeals Tribunal within four weeks. 8.1 Can the claimant/defendant recover its legal costs Decisions by the Competition Appeals Tribunal will stand if from the unsuccessful party? the decision has not been brought before the courts within eight weeks. Unless special circumstances apply, the court will award an amount to cover legal costs to the successful party. In practice, however, this amount rarely covers more than a limited portion 6.2 Broadly speaking, how long does a typical breach of the actual costs. of competition law claim take to bring to trial and final judgment? Is it possible to expedite proceedings? 8.2 Are lawyers permitted to act on a contingency fee Given the typical complexity of a competition law case, it is basis? likely to take at least 18 to 36 months from the date when an action is filed with a court of first instance (the city court or the Lawyers are generally obliged to take into consideration the Maritime and Commercial High Court in Copenhagen) before a outcome reached as one of several factors when calculating their judgment is rendered. fees. “No cure – no pay” agreements are legal, but it is not If the decision is appealed, it may take another 18 to 36 months permitted for attorneys to set their fees as a certain share of the before a final judgment is delivered. damages awarded (“pactum de quota litis”). Criminal proceedings tend to be somewhat faster than civil proceedings once they have been initiated, but preparation time 8.3 Is third party funding of competition law claims for such proceedings is generally quite long and may last several permitted? If so, has this option been used in many years. cases to date? Generally, civil proceedings may be expedited by making the writ of summons as complete as possible so that the need for further pleadings will be limited as much as possible. Third-party funding of competition law claims is permitted. Proceedings commenced on the basis of a final decision by the There is no obligation for the funded party or the entity competition authorities establishing a breach of competition law providing the funding to disclose any such funding arrange- are, in principle, easier to expedite as the breach has already been ments to the court, and consequently, it is not transparent to established. However, it remains to be seen if such proceedings what extent this option is used. It is well known that industry will actually pass through the court system more quickly than organisations and interest groups occasionally provide funding proceedings commenced without any prior decision from the to their members in lawsuits which are of general interest to competition authorities. their members. The Maritime and Commercial High Court in Copenhagen offers a fast-track procedure in which the date for the final 92 Appeal hearing and deadlines for submitting pleadings are fixed at an early stage in order to expedite proceedings. The fast-track 9.1 Can decisions of the court be appealed? procedure presupposes that each party only needs to submit two pleadings and that the final hearing of the case may be held in A judgment by a city court or by the Maritime and Commercial only one day. High Court in Copenhagen may be appealed to the High Court within four weeks of the judgment. A judgment by the Maritime 72 Settlement and Commercial High Court may, in certain cases, be appealed directly to the Supreme Court as the court of second instance. 7.1 Do parties require the permission of the court First instance judgments by the High Court may be appealed to discontinue breach of competition law claims (for to the Supreme Court within four weeks of the judgment. The example, if a settlement is reached)? High Court’s judgment in an appeals case may be appealed to the Supreme Court as the third instance only if permission is No, the parties do not need permission from the court to discon- granted to that effect by the Danish Appeals Permission Board tinue proceedings. (Procesbevillingsnævnet).

7.2 If collective claims, class actions and/or 102 Leniency representative actions are permitted, is collective settlement/settlement by the representative body on 10.1 Is leniency offered by a national competition behalf of the claimants also permitted, and if so on what authority in your jurisdiction? If so, is (a) a successful, basis? and (b) an unsuccessful applicant for leniency given immunity from civil claims? A collective settlement by the representative body is permitted, but must be accepted by the court to be valid. According to the Yes, a leniency programme applies to cartel activities. There is Danish Administration of Justice Act, the court must accept the no immunity from civil claims, irrespective of whether leniency settlement unless it discriminates between the claimants repre- has been successfully applied for or not. However, pursuant sented by the representative body or is prima facie unreasonable. to the Act on Actions for Damages for Infringements of Competition Law, a successful leniency applicant has, to some extent, an advantage in terms of not being jointly liable, in full, with other cartel participants.

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10.2 Is (a) a successful, and (b) an unsuccessful 11.2 What approach has been taken for the applicant for leniency permitted to withhold evidence implementation of the EU Directive on Antitrust disclosed by it when obtaining leniency in any Damages Actions in your jurisdiction? How has the subsequent court proceedings? Directive been applied by the courts in your jurisdiction?

An applicant for leniency – whether successful in obtaining The EU Directive on Antitrust Damages Actions has been leniency or not – may be ordered by the court to submit docu- implemented into Danish law in the form of a separate piece of ments in its possession as evidence, unless the applicant in ques- legislation (the Act on Actions for Damages for Infringements tion would be exempt from the duty to appear as a witness with of Competition Law). respect to the facts contained in the documents (for instance, There are judgments available in the public domain in which because of a duty of confidentiality, or because the disclosure the Danish courts have applied the national law implementing of the documents would expose the applicant or parties closely the Directive. related to the applicant to criminal sanctions or loss). Sanctions may be imposed if the documents are not submitted. 11.3 Please identify, with reference to transitional However, if the applicant in question is a party to the provisions in national implementing legislation, proceedings, the court cannot force the leniency applicant to whether the key aspects of the Directive (including disclose the relevant documents or impose sanctions on the leni- limitation reforms) will apply in your jurisdiction only to ency applicant for not disclosing the documents, but if the leni- infringement decisions post-dating the effective date of ency applicant refuses to comply with a court order to disclose implementation; or, if some other arrangement applies, certain documents, the court may decide to take this refusal into please describe it. account when considering the evidence and may hold it against the leniency applicant. The Act on Actions for Damages for Infringements of Competition Law entered into force on 27 December 2016. 112 Anticipated Reforms The Act applies to claims for damages brought before the courts after 27 December 2016. 11.1 For EU Member States, highlight the anticipated The substantial provisions of the Act, including rules on impact of the EU Directive on Antitrust Damages Actions period of limitation, do not apply to claims for damages as a at the national level and any amendments to national result of infringements of competition law committed prior to procedure that are likely to be required. 27 December 2016. The previously applicable rules will apply to such infringements. The Act on Actions for Damages for Infringements of Infringements commenced prior to 27 December 2016 and Competition Law of 2016 resulted in several material changes. which continue after this date will constitute continued viola- Some of the most central changes were: tions and will be processed according to the new rules in their ■ that any natural or legal person – including both direct entirety. and indirect purchasers that have suffered a loss due to The procedural provisions of the Act also apply to actions for an infringement of competition law – is entitled to full damages brought before a court after 25 December 2014, corre- compensation for the loss suffered; sponding to the date the Directive entered into force. ■ the presumption that cartel infringements cause losses; and 11.4 Are there any other proposed reforms in your ■ the burden of proof is eased for indirect purchasers. jurisdiction relating to competition litigation?

No, there are not.

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Michael Honoré is specialised in competition law, state aid law and general EU law. Michael also advises on general contract law. Michael is an experienced litigator and regularly represents clients in cases before the Danish courts and the European Court of Justice. Michael is authorised to appear before the Danish high courts. Michael worked as a lawyer at Bech-Bruun from 2005 to 2019, and from 2012 as a partner in its department for EU and competition law. Before this, Michael worked as a référendaire at the Court of the European Union in Luxembourg (2002–2005) and as a junior associate with the law firms of Liedekerke and Ashurst in Brussels (2001–2002). Michael has given advice within many sectors and industries, but has, over the years, worked particularly extensively within the areas of food and agriculture, infrastructure (transport, energy, IT and telecommunications, payment services) and R&D&I (research, development and innovation).

Honoré & Fallesen Law Firm Tel: +45 42 45 48 54 Hørkær 14c Email: [email protected] 2730 Herlev URL: www.honorefallesen.dk Denmark

Asbjørn Godsk Fallesen is highly specialised in the competition rules of Denmark and the EU. Asbjørn has extensive experience with all aspects of these rules and with a number of connected areas of law, such as the rules on damages and criminal justice. Asbjørn has particularly extensive experience with the competition law rules for dominant undertakings, where his work has been highly focused on court cases concerning the most complex legal and economic issues in the area for a number of years. Asbjørn has experience working with several of the most recognised law firms within EU and competition law in Denmark, and from the legal service of Ørsted (formerly DONG Energy), one of Denmark’s largest and most regulated companies. Throughout his whole career, Asbjørn has worked with the most high-value, large-scale and legally complex cases within his areas of specialisation, including, e.g., the biggest competition law damages case in Danish history.

Honoré & Fallesen Law Firm Tel: +45 42 45 51 60 Hørkær 14c Email: [email protected] 2730 Herlev URL: www.honorefallesen.dk Denmark

Sune Troels Poulsen is specialised in competition law, state aid law and public procurement law. Sune has considerable experience in analysing more complex cases and he regularly represents clients in negotiations and before complaints boards. Sune has a Ph.D. degree from the University of Aarhus. Sune worked as an associate professor at the universities of Aarhus and Copenhagen between 1995 to 2014, where he lectured and did research within the fields of competition law, state aid law, public procurement law and general EU Law. He is the author and co-author of several books and articles within these fields of law. From 2015–2017, he was a partner at Andersen Partners, and from 2017–2018 he was an associate partner at Mazanti-Andersen Korsø Jensen. In recent years, Sune has worked extensively with all kinds of competition law aspects of franchising and distribution, the competition law rules for dominant undertakings and within the business areas of medicine distribution, poultry production, bread production, furniture distribution, car distribution, and airports, etc.

Advokatfirmaet Sune Troels Poulsen Tel: +45 40 92 13 83 Hørkær 14c Email: [email protected] 2730 Herlev URL: www.sunetroelspoulsen.dk Denmark

Honoré & Fallesen Law Firm is Denmark’s first specialised law firm within the fields of state aid law, competition law, EU procedural law and general EU law. The firm’s two partners, Michael Honoré and Asbjørn Godsk Fallesen, are among Denmark’s leading experts and have a combined total of almost 30 years of experience within these fields. The firm offers advice to both private, semi-public and public companies as well as to authorities (e.g. municipalities). www.honorefallesen.dk

Sune Troels Poulsen Law Firm is a specialised law firm within the fields of competition law, state aid law and public procurement law. Sune Troels Poulsen has carried out research within these fields at the universities of Aarhus and Copenhagen, on which his advice to clients and litigation is based. He offers advice to both public and private clients. www.sunetroelspoulsen.dk

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James Levy

Max Strasberg

Ashurst LLP Helen Chamberlain

12 General The Chapter II Prohibition provides that conduct on the part of one or more undertakings that amounts to an abuse of a dominant position in a market is prohibited if it may affect trade 1.1 Please identify the scope of claims that may be within the UK (or a substantial part of it). brought in your jurisdiction for breach of competition Pursuant to Regulation 1/2003 (the “Modernisation law. Regulation”), and prior to the end of the Transition Period, the English courts and competition authorities have jurisdiction to Following a referendum on its membership of the European apply Articles 101 and 102 of the Treaty on the Functioning of Union (“EU”) in June 2016, the UK withdrew from the EU on the European Union (“TFEU”) directly. 31 January 2020 (“Brexit”). Brexit is governed by the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Scope of claims for breach of competition law Ireland from the European Union and the European Atomic Energ y A breach of either the Prohibitions or Articles 101 or 102 of the Community (the “Withdrawal Agreement”). The Withdrawal TFEU gives rise to a generic cause of action known as a “breach of Agreement was signed by both the UK and the EU on 24 statutory duty”. Post-Transition Period, the UK Competition and January 2020. The Withdrawal Agreement is enshrined in UK Markets Authority (“CMA”) and any regulators empowered to do law by the European Union (Withdrawal Agreement) Act 2020 so will be entitled to investigate only infringements of UK compe- (the “Brexit Act”). tition law. Only breaches of the Prohibitions under the 1998 Act At the time of writing, the UK is in a pre-agreed transition will give rise to a breach of statutory duty in the English courts. period following its withdrawal from the EU. The transition Under sections 47A and 47B of the 1998 Act, claimants have period will end on 31 December 2020 (the “Transition Period”). rights of action that are specific to competition law infringements. During the Transition Period the relationship between EU and These were expanded after October 2015 when Schedule 8 of the UK competition law, including in relation to competition litiga- Consumer Rights Act 2015 (the “2015 Act”) came into force. tion, has not changed. However, the status of UK competition In particular, claimants can seek “follow-on” damages if the law post-Transition Period is uncertain. In principle, the emer- CMA or other competition authorities have determined that gency legislation made by the UK Government in preparation there has been an infringement (which amounts to a breach of for a “no deal” Brexit scenario will enter into force at the end of statutory duty). In these circumstances, the claimants do not the Transition Period (the Competition (Amendment etc.) (EU need to prove the defendant’s liability. Alternatively, claimants Exit) Regulations 2019 (SI 2019/93) (the “Competition SI”). may pursue “stand-alone” claims (i.e. where there has been no prior infringement decision from a competition regulator and Competition law regime liability must be established at trial in the usual way). There is The principal statute that governs the scope of claims for also a collective actions regime. a breach of competition law in England and Wales is the Competition Act 1998 (“1998 Act”). The 1998 Act contains two The impact of Brexit prohibitions on anti-competitive activity, known respectively as The relationship between EU and UK competition law during the Chapter I Prohibition (section 2 of the 1998 Act) and the the Transition Period has not changed. The Brexit Act provides Chapter II Prohibition (section 18 of the 1998 Act) (together, that all EU-derived domestic legislation and “direct EU legisla- the “Prohibitions”). tion” that was operative immediately before Brexit forms part of The Chapter I Prohibition prohibits agreements between English domestic law after Brexit. This means that, for example, undertakings, decisions by associations of undertakings and/or the Modernisation Regulation is part of English law (and there- concerted practices that: fore remains in full force) following Brexit. As such, for the (a) may affect trade in the UK (or a substantial part of it); or time being, English national courts and competition authori- (b) have as their object or effect the prevention, restriction or ties retain their jurisdiction to apply Articles 101 and 102 of the distortion of competition within the UK. TFEU directly.

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The UK Government published the Competition SI in January 1.3 Is the legal basis for competition law claims 2019. This will govern UK competition law post-Transition derived from international, national or regional law? Period unless it is amended following UK–EU negotiations. The Competition SI effectively revokes the Modernisation The legal basis for competition law claims in England and Wales Regulation (and several other EU Regulations dealing with is derived from: specific areas of competition law). This means that the English (i) statute: the main statute governing competition law is the courts will not be bound by Articles 101 or 102 of the TFEU 1998 Act; after 31 December 2020. The CMA will no longer have juris- (ii) common law: the body of case law derived from deci- diction to apply Articles 101 and 102 of the TFEU, although the sions of the English courts and the Competition Appeal equivalent provisions will continue to apply under the 1998 Act. Tribunal (the “CAT”); and English courts will retain a right to “have regard” to EU law (iii) (subject to the domestic status of EU law post-Brexit) EU developments when considering cases to which such develop- law: section 60 of the 1998 Act expressly requires that ments are relevant, but will not be bound by the European Court questions arising in relation to competition law are dealt of Justice (“ECJ”) precedent established on or after the end of with by national competition authorities and the courts in the Transition Period, nor will they be able to refer a matter to a manner that is consistent with the treatment of corre- the ECJ under the preliminary reference procedure. sponding questions arising under EU competition law. Further, the Competition SI will amend sections 47A and 58A The Competition SI replaces section 60 with a new section of the 1998 Act, such that decisions of the European Commission 60A. Section 60A obliges the UK competition regulators and relating to infringements of EU competition occurring after courts to ensure that there is no inconsistency with pre-Brexit the end of the Transition Period will no longer be binding on competition case law when interpreting English competition English courts in “follow-on” damages claims. The Competition law, but empowers the UK competition regulators and courts to SI includes associated transitional provisions, which preserve a depart from it under certain specified circumstances. party’s right to make (or continue) any claim (or defence to a claim) before the UK courts that relates to an infringement of EU competition law that occurred before the end of the Transition 1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned? Period. In practice, therefore, there may be breaches of statutory duty in respect of infringements of Articles 101 or 102 tried before the UK courts for some time to come. The CAT is a specialist competition tribunal set up pursuant to the 1998 Act. The CAT operates as a judicial body and consists of a President and Chairmen (senior lawyers, often High Court 1.2 What is the legal basis for bringing an action for judges), and Ordinary Members (experienced professionals breach of competition law? in a diverse range of fields including business, economics and accountancy). For the purpose of hearing and determining The legal basis for bringing an action is section 47A and section cases before it, the CAT sits as a panel consisting of a Chairman 47B of the 1998 Act (see further the response to question 1.5). and two other members. Section 2(1) of the European Communities Act 1972 (“ECA Since 2015, the CAT has become the main venue for all 1972”) provides the statutory basis for the rights and obligations competition cases in England and Wales. In particular, it has provided under Articles 101 and 102 of the TFEU to be directly the jurisdiction to determine: enforceable and effective in the English legal system. The (a) “follow-on” claims; ECA 1972 was repealed by the Brexit Act. The Modernisation (b) “stand-alone” claims; Regulation gave English courts and competition authorities (c) “collective proceedings”; jurisdiction to apply Articles 101 and 102 of the TFEU. In prac- (d) appeals against competition law infringement decisions tice, this led to claimants pleading breaches of both the 1998 issued by the CMA or sector regulators; and Act and the TFEU. As noted above, this will begin to change (e) the judicial review of other decisions taken by the CMA, after the Transition Period when the Modernisation Regulation such as decisions relating to merger control or market ceases to apply and UK courts cease to apply Articles 101 investigations. and 102 of the TFEU to infringements taking place after the It remains open to claimants to bring a competition damages Transition Period. claim in the High Court under the “Competition List” of the A breach of competition law may also give rise to one or Business and Property Courts of England and Wales. High Court more additional causes of action under English law – section judges have the power under Part 30 of the English Civil Procedure 47A(1) of the 1998 Act is broadly framed and expressly covers Rules (“CPR”) to transfer competition claims to the CAT. not only “any claim for damages” but also “any claim for a sum of money”. The Court of Appeal has confirmed that in addition 1.5 Who has standing to bring an action for breach of to the action for breach of statutory duty, a claimant may bring competition law and what are the available mechanisms a claim for the tort of conspiracy, provided that all the ingredi- for multiple claimants? For instance, is there a ents of the cause of action can be established by infringement possibility of collective claims, class actions, actions findings in the European Commission’s decision (see W.H. by representative bodies or any other form of public Newson Holding Ltd and others-v-IMI Plc and others interest litigation? If collective claims or class actions [2013] EWHC Civ 1377 (relating to the Copper Tubes Cartel)). are permitted, are these permitted on an “opt-in” or “opt- out” basis? This can be difficult to prove in practice (see Emerald Supplies Ltd and Others-v-British Airways Plc [2014] EWHC 3513 (Ch) and [2014] EWHC 3514 (Ch) and Media-Saturn Any legal person with capacity who has suffered or is likely to Holding GmbH-v-Toshiba Information Systems UK Ltd suffer loss or damage as a result of a breach of English (or EU) [2019] EWHC 1095 (Ch)). competition law is entitled to bring a claim for damages or an injunction, either in the High Court or before the CAT (CPR EU Competition Law Practice Direction).

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Claims by multiple claimants in the High Court brought before the CAT under the new regime, of which one has Under the CPR, any number of claimants (or defendants) can be been dismissed and eight are due to be considered. joined as parties to a single claim (Parts 19.1–19.5 of the CPR). The second CPO application ever brought concerned a GBP The requirement is that the claims can conveniently be disposed 14 billion follow-on opt-out collective damages claim against of in the same proceedings. Mastercard, arising from the European Commission’s decision A claim involving a large group of claimants that have in 2014 relating to interchange fees (Walter Hugh Merricks incurred similar damage as a result of an infringement (e.g. the CBE-v-Mastercard Incorporated & Ors [2017] CAT 16). purchase of cartelised products) is perhaps most likely to lend The claim was brought in September 2016 by Mr Merricks as itself to a joint claim. However, the claimants will still need to class representative, on behalf of the 46.2 million consumers demonstrate that their claims can conveniently be disposed of who purchased goods and/or services from businesses selling in in a single damages action, and that the group comprises only the UK that accepted Mastercard cards (irrespective of whether claimants who are actually capable of having suffered damage the consumers actually used a Mastercard for the purchase), (see Bao Xiang International Garment Centre and Ors-v- between May 1992 and June 2008. In July 2017, the CAT rejected British Airways plc and Ors [2015] EWHC 3071 (Ch)). the application for certification on two main grounds: first, the Representative actions lack of a sufficiently reliable methodology to calculate aggre- It is possible to bring a representative action on behalf of parties gate loss; and second, the lack of a sufficiently reliable method- who have “the same interest” in a claim under Part 19.6(1) of ology to calculate individual losses, so as to enable distribution the CPR. However, following a decision in Emerald Supplies of the damages “pot”. The CAT initially refused Mr Merricks Ltd-v-British Airways Plc [2009] EWHC 741 (Ch), this permission to appeal its certification decision, on the basis that procedure is not generally considered appropriate to facilitate there was no statutory provision for appeal against such deci- class actions in a competition law context. sions. However, in October 2018, the Court of Appeal ([2018] ) held that the CAT’s decision in an applica- Group Litigation Orders (“GLOs”) EWCA Civ 2527 A GLO may be ordered if a number of claims have “common or tion for certification of a collective damages action constituted a decision as to the award of aggregate damages, and therefore related issues of fact or law” (Parts 19.10 and 19.11 of the CPR). This there was a right to appeal to the Court of Appeal. is an opt-in mechanism. All claimants wishing to join the group Subsequently, in April 2019, the Court of Appeal handed litigation must apply to be entered onto the group register by a down its appeal judgment ([2019] EWCA Civ 674), which date specified by the court. Judgment on one or more of the set aside the CAT’s order refusing certification. In doing so, GLO issues then binds all of the claimants on the group register. the Court of Appeal rejected the CAT’s original arguments A GLO will not be permitted if the court considers it more and generally emphasised that a certification hearing does not appropriate that the claims are consolidated or brought by way require a “mini-trial”, which risks an unnecessarily vigorous of a representative action. Whilst 109 GLOs have been granted examination of a prospective action. The application was since they were introduced in May 2000, only one has been remitted back to the CAT for a re-hearing in light of the Court issued in a competition case (Prentice-v-Daimler Chrysler, a of Appeal’s judgment, but Mastercard appealed to the Supreme case that ultimately settled). Court. The appeal was heard in May 2020 and judgment is awaited at the time of writing. Claims by multiple claimants in the CAT If the Supreme Court upholds the recent ruling of the Court Directions of the CAT of Appeal in Merricks-v-Mastercard, it will represent a signif- Under section 47A of the 1998 Act, any person who has suffered icant development for future CPO applicants. Applicants will loss or damage as a result of an infringement of competition law now clearly have a right to appeal to the Court of Appeal on may bring a claim for damages before the CAT in respect of that questions of law in relation to the CAT’s certification decision. loss or damage. The Supreme Court’s ruling is eagerly awaited both by prac- The CAT has discretion to order that multiple claims be titioners and the CAT itself, as hearings in several other later managed and/or determined together (e.g. where a number of CPO applications have been stayed pending the judgment. claims arising from the same infringement are brought against the same defendants). Collective actions 1.6 What jurisdictional factors will determine whether a court is entitled to take on a competition law claim? Collective “follow-on” damages actions for breach of competition law may be brought in the CAT under section 47B of the 1998 Act. The scope of the collective actions regime was significantly The Recast Brussels Regulation expanded in October 2015, such that collective actions under Until the end of the Transition Period, the jurisdiction of a section 47B of the 1998 Act are available to both businesses and court to hear a claim against EU-domiciled defendants and/ consumers, in “stand-alone” as well as “follow-on” cases, and, or relating to harm suffered within the EU is likely to be most significantly, on an “opt-out” as well as an “opt-in” basis. governed by Regulation (EU) No 1215/2012 (the “Recast Claimants wishing to issue collective proceedings must first Brussels Regulation”). This question is always a matter for apply to the CAT for a collective proceedings order (“CPO”) so careful consideration on a case-by-case basis but, in summary, that the collective claim can formally commence. Various condi- a defendant may be sued in the English courts if it is domi- tions must be met before a CPO will be made. In particular, the ciled in England and Wales, if the anti-competitive behaviour is CAT must (i) authorise the proposed class representative to act alleged to have occurred in England and Wales, or if the relevant as such, and (ii) certify the relevant claims as suitable for inclu- damage itself occurred, or will occur, in England and Wales. sion in collective proceedings. The CAT’s procedural rules were A claimant that is the victim of a pan-EU cartel involving cartelists domiciled in various jurisdictions can currently rely revised in 2015 (the “CAT Rules 2015”) to grant it a consider- on Article 8 of the Recast Brussels Regulation to “anchor” its able degree of discretion in authorising class representatives to claim in England and Wales if one of the cartelists is domiciled act and certifying claims. there, and the claims against each of the cartelists are so closely The CAT’s approach to certification of collective proceedings connected that it is expedient to determine them together to has been the subject of a lengthy and ongoing assessment in the avoid the risk of irreconcilable judgments. English courts. To date, nine applications for a CPO have been

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The Recast Brussels Regulation will cease to apply in the UK The question was considered more recently by the High Court following the end of the Transition Period. At that point, the in Vattenfall-v-Prysmian and NKT [2018] EWHC 1694 (Ch). Recast Brussels Regulation will be converted into English law The Court found that an arguable case that the anchor defendant as retained EU law, which can then be amended by legislation. knowingly implemented the cartel was sufficient to ground juris- The Recast Brussels Regulation will continue to apply to: diction in England and Wales. As to what is capable of constituting (1) proceedings commenced before the end of the Transition knowing implementation, the Court referred to the Provimi, Period; (2) judgments obtained in proceedings commenced Cooper Tire and Toshiba Carrier cases, and concluded that before the end of the Transition Period; and (3) where the parties selling the cartelised product is capable of constituting knowing reach a settlement before the end of the Transition Period that implementation of the cartel, as was indirect involvement in the one party wishes to enforce subsequently in the UK. Aside from business surrounding the supply of the cartelised product. this, there is currently no mechanism for the reciprocal applica- The Provimi test was revisited by the High Court in Media- tion of Recast Brussels Recognition (or equivalent) principles as Saturn Holding GmbH and others-v-Toshiba Information between the UK and the EU in respect of proceedings issued Systems (UK) Limited and others [2019] EWHC 1095 (Ch). after the Transition Period. This was a claim brought following the European Commission’s On 8 April 2020, the UK deposited an application to accede 2012 TV and Monitor Tubes Cartel decision, to which both to the Lugano Convention. If the UK accedes to the Lugano of the subsidiaries’ parent companies were addressees. The Convention at the end of the Transition Period, this will, in High Court found that it was arguable that the subsidiaries did principle, largely permit the continuation of the Recast Brussels have knowledge of the infringement. In this case, the parent Regulation regime as between the UK and the EU. addressees of the infringement decision were also the shadow/ However, if the UK does not accede to the Lugano de facto directors of the subsidiaries. Convention, then the question of jurisdiction and enforcement The possibility of anchoring claims in the CAT is less clear. of judgments of EU Member State courts will be governed In Emerson Electric Co & Ors-v-Mersen UK Portslade Ltd by common law principles. Whilst the English courts would [2012] EWCA Civ 1559, the Court of Appeal upheld the CAT’s be highly likely to apply any exclusive jurisdiction clause in ruling that there must be an addressee of the infringement deci- contracts involving EU-based parties, questions of jurisdiction sion to give the CAT jurisdiction to hear a “follow-on” claim and enforcement of judgments could be more complex. This under section 47A of the 1998 Act. could have practical implications in jurisdictional disputes in The CAT considered the Provimi judgment at some length in competition claims. Sainsbury’s Supermarkets Ltd-v-Mastercard Incorporated If the defendant is domiciled outside the EU, different rules and Ors [2016] CAT 11. The CAT looked for a compromise deriving from English common law already apply. These between the EU concept of a parent company forming part of provide that a defendant can be sued in England if it is served the same economic undertaking exercising “decisive influence” with the claim form in England. This is possible in circum- over the infringing subsidiary, and knowing implementation. The stances where the defendant has a place of business in England, CAT suggested that liability could be attributed between compa- or if it is present in the jurisdiction for another purpose (even nies in the same undertaking only if they had in some way partic- briefly) and is served with a claim form during that time. A ipated in the breach or otherwise exercised a decisive influence defendant may also be sued in England if the damage occurred, over a company that did. or resulted from an act committed, within the jurisdiction. The CAT and the courts may in future have regard to the ECJ’s However, even if these factors are satisfied, the English courts preliminary ruling in Case C-724/17 – Vantaan kaupunki-v- have discretion as to whether or not to accept jurisdiction. Skanska Industrial Solutions Oy and Others in which the ECJ held that liability for participation of now-dissolved subsidiaries could be attributed to their parent companies. The ECJ found that Anchoring a claim to a subsidiary in England and Wales The law in respect of this important issue is not settled. cartel damages should be attributed in the same way as Commission In the High Court, it is possible to anchor a claim via an England fines so as not to allow an undertaking to avoid penalties through a and Wales-based subsidiary of an addressee of a European company restructuring. This may make it easier to sue any subsid- Commission infringement decision, but the question will relate iary that is part of an undertaking that participated in a cartel, as an to what, if any, level of knowledge can constitute knowing anchor defendant in its court of domicile. implementation of the cartel in respect of anchor defendants. In Provimi-v-Aventis [2003] EWHC 961, the High Court 1.7 Does your jurisdiction have a reputation for permitted a claim to be brought against subsidiaries that were attracting claimants or, on the contrary, defendant not addressees of the infringement decision, even though they applications to seize jurisdiction, and if so, why? did not know about the cartel to which their parent companies were party, on the basis that the subsidiaries had implemented England and Wales has become a relatively popular jurisdiction the cartel agreed by the parent companies. However, in Cooper for bringing private antitrust actions. It is considered to be a Tire and Rubber Company Europe Ltd & Ors-v-Dow favourable jurisdiction for potential claimants. Primarily, the Deutschland Inc & Ors [2010] EWCA Civ 864 and Toshiba reasons for this are that: Carrier UK & Ors-v-KME Yorkshire & Ors [2012] EWCA (a) the English courts have a reputation for dealing with Civ 1190, the Court of Appeal cast doubt on the Provimi deci- complex cases efficiently and effectively; sion, suggesting that at least knowledge of the cartel by the (b) the English courts have a flexible and, in some respects, anchor subsidiary needs to be proven. generous approach to establishing jurisdiction; In Toshiba Carrier, the claimants pursued both a “follow-on” (c) the relevant procedural rules provide scope for an exten- claim and “stand-alone” claim against the relevant England sive disclosure regime (see question 4.5 below); & Wales-based subsidiary that was being sued as the “anchor (d) the development of UK opt-out/opt-in class actions may defendant”. The Court of Appeal concluded that, due to the lead to an increase in high-value private enforcement of inclusion of such “stand-alone” claim, the proceedings should competition law in the medium to long term, as claimants not be struck out on jurisdictional grounds, and the Supreme become more confident about the way in which this new Court upheld this on appeal. regime is applied in practice;

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(e) whilst the costs of litigating in England and Wales can be Applications will normally be made with notice being given to high, the “costs-shifting” rules (whereby the loser gener- the respondent. However, the court may accept an application for ally pays a significant proportion of the winner’s costs) an interim injunction that is made without notice if putting the make England and Wales a preferred jurisdiction for respondent on notice could undermine the status quo. If an injunc- claimants from a costs perspective; and tion is awarded without notice, the applicant will be required to (f) a mature litigation funding market may add to the appeal notify the respondent of the injunction and provide the respondent of the jurisdiction for claimants. with an opportunity to contest the injunction in court.

1.8 Is the judicial process adversarial or inquisitorial? The CAT The CAT has powers to grant interim relief in the context of damages actions, and claims for an injunction under section 47A The procedure before the Courts and the CAT is adversarial. of the 1998 Act are set out in Rules 66–70 of the CAT Rules 2015. 22 Interim Remedies When deciding whether to grant an injunction, the CAT is required to apply the same principles as would be applied by 2.1 Are interim remedies available in competition law the High Court, i.e. the guidelines developed by the courts cases? in American Cyanamid-v-Ethicon Ltd [1975] AC 396 (explained above). Yes. At the time of writing, at least four applications have been The Courts have a wide jurisdiction to order many types of made to the CAT for interim injunctions pursuant to its new interim remedy under Part 25 of the CPR, including injunctions. powers, but as far as the authors are aware, no interim injunctions The CAT also has powers to grant interim relief in two have actually been awarded by the CAT. different contexts, namely: (a) requests for interim relief pending determination by 32 Final Remedies the CAT of an appeal against a regulator’s decision (for example, suspension of the effect of a CMA infringement 3.1 Please identify the final remedies which may be decision); and available and describe in each case the tests which (b) requests for interim relief in damages claims and claims a court will apply in deciding whether to grant such a for an injunction under section 47A of the 1998 Act. remedy.

The final remedies available are: (a) damages; (b) injunctions; (c) 2.2 What interim remedies are available and under what conditions will a court grant them? declaratory relief; and (d) alternative remedies. (a) Damages A remedy in damages is available to a party that can establish The High Court that on the balance of probabilities: (i) it has suffered loss as The most relevant remedy available for the purposes of this a result of a breach of competition law by the defendant; (ii) chapter is likely to be interim payments and interim injunctions. the defendant’s conduct caused the losses claimed; and (iii) An interim injunction may be “prohibitory”, i.e. to prevent the damage was not too remote. Damages awards can be the defendant from commencing or continuing unlawful behav- granted by both the CAT and the High Court. iour, or “mandatory”, i.e. to require the defendant to take certain (b) Injunctions steps. As a general rule, mandatory orders are rare whereas Final injunctions may be granted by either the High Court, prohibitory orders are not uncommon. or (following the reforms introduced by the 2015 Act) the When deciding whether to grant an application for an interim CAT. injunction, the courts will generally follow the guidelines set At the time of writing, the CAT has not yet exercised its out in American Cyanamid-v-Ethicon Ltd [1975] AC 396, powers to grant final injunctions by way of remedy in a focusing on two key questions: claim made under section 47A of the 1998 Act. The (1) Is there a serious issue to be tried? cases in which such applications have been made settled This is often also expressed as requiring the applicant to (Shahid Latif and Mohammed Abdul Waheed-v-Tesco show a “good arguable case”. Stores Limited; Socrates Training Limited-v-The Law (2) If so, what is the balance of convenience? Society of England and Wales [2017] CAT 10). This is a practical test. First, the court will ask whether (c) Declaratory relief damages would be an adequate remedy for the appli- A claimant may seek a declaration that a particular agree- cant if they were to succeed at trial. If damages would ment, or certain conduct on the part of the defendant, is or be an adequate remedy, no injunction will be granted and would constitute a breach of competition law. Declaratory the dispute will proceed to trial as usual. If it would not relief may be sought in conjunction with other remedies. be an adequate remedy, the court will consider whether Declaratory relief is not a remedy available from the a cross-undertaking in damages from the applicant (a CAT. This was confirmed by the CAT in its judgment pre-requisite in almost all cases) would provide adequate in Wolseley UK Limited and Others-v-Fiat Chrysler protection for the respondent if the court were to grant Automobiles N.V. and Others [2019] CAT 12. interim relief that subsequently proves to have been (d) Alternative remedies wrongly granted (i.e. if the applicant is ultimately unsuc- In the case of 2 Travel Group PLC (in liquidation)-v-Car- cessful at trial). Finally, the court will consider the matter diff City Transport Services Limited [2012] CAT 19, the in the round on the basis of a “balance of convenience”. CAT was willing to award exemplary damages in excep- That is, would more harm be done by granting the interim tional circumstances. However, by virtue of the Damages injunction than by refusing it?

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Directive, this possibility no longer exists for proceed- Exemplary damages ings brought on or after 9 March 2017 and relating to an Prior to the implementation of the Damages Directive, the infringement or harm that occurred on or after that date. possibility of awarding exemplary damages was, in prin- Other alternative equitable remedies such as restora- ciple, open to both the English courts and the CAT, although tion, account of profits and exemplary damages are not in practice such damages were only available in very excep- normally available for breach of competition law (see, tional circumstances (see 2 Travel Group PLC (in liquida- for example, Devenish Nutrition Ltd & Ors-v-Sanofi- tion)-v-Cardiff City Transport Services Limited [2012] CAT Aventis SA (France) & Ors [2007] EWHC 2394 (Ch), 19). In line with its general approach that overcompensation [2008] EWCA Civ 1086). should be avoided, the Damages Directive expressly prohibits the award of exemplary damages in competition damages 3.2 If damages are an available remedy, on what bases actions. This is reflected in English law in paragraph 36 of can a court determine the amount of the award? Are Schedule 8A of the 1998 Act (inserted by the Claims in respect exemplary damages available? Are there any examples of Loss or Damage arising from Competition Infringements of damages being awarded by the courts in competition (Competition Act 1998 and Other Enactments (Amendment)) cases which are in the public domain? If so, please Regulations 2017 (the “Damages Directive Implementing identify any notable examples and provide details of the Regulations”)). However, this provision only applies to amounts awarded. proceedings commenced on or after 9 March 2017 and relating to an infringement or harm that occurred on or after that date. A claimant who suffers loss as a result of an infringement of In practice, as competition infringements (cartels in particular) English (or EU) competition law can bring a claim for damages. can be long running, it will probably not apply to many claims Both the High Court and the CAT can hear such claims, and the for some time to come. general principles applied to determine the amount of the award In cases to which the new rule does not apply due to these and the types of damages available are similar in both forums. transitional provisions, it does remain open to the High Court and/or the CAT to award exemplary damages, although it is Compensatory damages noted that the Court of Appeal’s judgment in BritNed renders Damages are generally awarded on a compensatory basis, i.e. to a non-compensatory award of cartel damages (e.g. exemplary enable a claimant to recover, insofar as money can, the losses damages, restitution and/or an account of profit) unlikely in suffered as a result of the defendant’s breach of competition law. practice. The CAT is prohibited from awarding exemplary In October 2018, the High Court handed down the first judg- damages in collective actions in any event (see section 47C(1) ment and award of damages in a cartel follow-on damages case of the 1998 Act). in the English courts. BritNed was a follow-on claim to the European Commission’s 2014 infringement decision in the Power Cables Cartel. 3.3 Are fines imposed by competition authorities and/ or any redress scheme already offered to those harmed The claimant had claimed over EUR 180 million in damages. by the infringement taken into account by the court when It was awarded EUR 13 million in compensatory damages by the calculating the award? High Court. This was subsequently reduced to EUR 11.7 million. The High Court rejected the claimant’s claim for lost profits. On 31 October 2019, the Court of Appeal judgment unani- Neither the courts nor the CAT have considered the question of mously ordered that BritNed must repay EUR 4.94 million of whether a redress scheme can allow a reduction in the value of the damages paid by ABB. The Court of Appeal judgment is damages awarded. significant insofar as it sets out in detail the requisite approach The Damages Directive Implementing Regulations provide to the assessment of “cartel” damages. In particular: that where a settlement is reached in a claim against multiple (i) only compensatory damages are available in the English defendants, the amount of the claimant’s remaining claim is courts; there is nothing in the EU jurisprudence that reduced by the settling defendant’s share of the loss or damage suggests that damages in a follow-on case should be other caused to that claimant. This share is calculated by reference than compensatory; to the settling defendant’s relative responsibility for the harm (ii) the use of the “broad axe” principle (which allows the court caused (e.g. the settling defendant’s share of the claimant’s total to rely on estimates) to assess damages is not contrary to purchases that were affected by the cartel and within the claim), the principle of full compensation; and rather than by reference to the amount paid by the settling (iii) in assessing and quantifying the overcharge, the court defendant under the settlement agreement. must examine in detail all the specific facts – it is not suffi- Since 2015, the CMA has had discretion to approve voluntary cient to look at the general effects of the cartel. redress schemes offered by infringing businesses, either during The Court of Appeal’s judgment in BritNed, whilst fact-sen- the course of an investigation or following an infringement deci- sitive, is notable as it sets out clear guidance that the principles sion. For businesses, offering such a scheme could lead to a that apply to the assessment of follow-on damages are the same potential reduction of up to 10 per cent in any fine imposed by as for the other types of civil damages claims. the CMA in respect of the infringement. However, this relates to The Supreme Court ruling in Sainsbury’s ([2020] UKSC a reduction in the regulatory fine, not a reduction in the calcula- 24) confirms that the assessment of pass-on forms part of the tion of any subsequent damages award by the courts or the CAT. assessment of compensatory damages. The determination of the quantum of damage in competi- 42 Evidence tion claims is often a challenging issue, and will almost always involve the submission of expert economic evidence. When 4.1 What is the standard of proof? considering the level of its damages award, the court/CAT will consider whether the damages (or part of them) could be seen as The applicable standard for civil claims is the “balance of too remote from the breach. probabilities”.

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In the context of an appeal against an infringement deci- As this new regime begins to be applied over the coming sion taken by the Office of Fair Trading (the predecessor to the years, it will also remain to be seen how judges will grapple with CMA), the CAT held that the applicable standard of proof has to these rather complex rules where “mixed” claims are brought reflect the fact that competition prohibitions are quasi-criminal. involving both direct and indirect purchasers. Article 15 of the In Napp Pharmaceutical Holdings Ltd and Subsidiaries-v- Damages Directive states that national courts should be capable Director General of Fair Trading [2002] CAT 1, it was held of taking “due account” of claims at different levels of the that the competition authority was required to satisfy the CAT supply chain in assessing whether the burden of proof is satis- that the infringement was proven on the basis of “strong and fied. The Damages Directive Implementing Regulations are no compelling evidence”. more specific. This is likely to give rise to difficult questions for litigants which will need to be resolved by the court/the CAT in due course. 4.2 Who bears the evidential burden of proof?

“Stand-alone” cases 4.3 Do evidential presumptions play an important role in damages claims, including any presumptions In “stand-alone” cases, the burden of proof as to the existence of loss in cartel cases that have been applied in your of the infringement is split. It is for the claimant to show that jurisdiction? the agreement in question prima facie infringes the Chapter I Prohibition/Article 101(1), but it then falls to the defendant to show that the agreement is not prohibited because it meets the The traditional position under English law is that there is no conditions for exemption under section 9 of the 1998 Act/Article presumption of loss and the quantum of damages needs to be 101(3). If the existence of the infringement is established, the proven applying principles of causation and loss. However, in burden of proof is on the claimant to prove that it suffered loss proceedings that are commenced on or after 9 March 2017, where as a result. the relevant infringement and harm also occurred on or after that date, the Damages Directive Implementing Regulations “Follow-on” cases have amended the 1998 Act to include a rebuttable presump- In “follow-on” cases, the claimants bear the burden of proving tion that cartel infringements cause harm, thereby shifting the the loss suffered as a result of the infringement. Under the burden to the defendant to demonstrate that the claimant did Damages Directive, there is a presumption of harm that shifts not in fact suffer harm. the burden of proof onto the defendant to demonstrate that the claimant did not in fact suffer harm. 4.4 Are there limitations on the forms of evidence The weight that will be placed on the decision of the compe- which may be put forward by either side? Is expert tition authority was discussed in the High Court’s judgment in evidence accepted by the courts? BritNed. Despite the claimant relying on a lengthy, comprehensive full infringement decision of the European Commission There are few limitations on the forms of lawful evidence that (as opposed to a settlement decision, which is usually much can be put forward by either side. The evidence relied upon shorter and sparse on details of the infringement), the judge was by the parties to proceedings under the 1998 Act is adduced reluctant to place substantial weight on the infringement deci- largely by way of documentary evidence, plus the testimony sion and emphasised that only the operative part of the decision, of witnesses of fact recorded in written statements, and expert and those recitals that are core to the operative part, are binding witnesses if permitted by the court. Both the factual and expert on the Court. The other recitals were found not to be binding witnesses are then subject to cross-examination at trial. Hearsay if the Court is presented with factual evidence to the contrary. may also be advanced as evidence, although less weight will be Where the passing on defence is invoked, the burden of proof given to such evidence by the court. becomes a complex issue. The Damages Directive Implementing Regulations insert express provisions dealing with the burden of The High Court proof in this context into the 1998 Act: In the English courts, contemporaneous documentary evidence (a) in a claim made by a direct purchaser, where the defendant commonly forms the backbone of the evidence at trial. The argues that the loss has been passed on by way of a defence rules governing the disclosure of documentary evidence are in to the claim, the burden of proving pass-on lies with the Part 31 of the CPR. The term “document” is construed widely defendant, although there is an evidential burden on the and includes all notes, records, tapes, other electronic media or claimant to provide disclosure as to how they dealt with the anything on which evidence or information is recorded in an recovery of their costs in their business (see Sainsbury’s intelligible manner. ([2020] UKSC 24)); and Expert evidence is admissible if it is ordered by the Court. (b) in a claim made by an indirect purchaser, alleging that the It should be provided by a suitably qualified and independent overcharge (or part of it) was passed on to them, the burden expert. of proof lies with the claimant, but they benefit from a The Court will control the scope of evidence by inviting the rebuttable presumption that the overcharge was passed parties to identify the issues that divide them and on which on provided that they can show that: (i) the defendant evidence is required. The extent of the economic analysis typi- infringed competition law; (ii) the infringement led to an cally required in competition cases means that the presence of overcharge for the direct purchaser; and (iii) the claimant economists as expert witnesses is commonplace. purchased goods or services that were the subject of the infringement (or goods or services derived from them). The CAT As with other substantive provisions of the Damages Directive The approach of the CAT is similar to that of the High Court. Implementing Regulations, these provisions will only apply to The CAT has the power to decide whether to admit or proceedings brought on or after 9 March 2017 where the rele- exclude evidence having particular regard to what is just and vant infringement and harm also occurred on or after this date. proportionate.

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4.5 What are the rules on disclosure? What, if any, these rules and directions ensure that a consistent approach is documents can be obtained: (i) before proceedings taken in proceedings before the CAT and the High Court. have begun; (ii) during proceedings from the other Disclosure in competition proceedings before the CAT is not party; and (iii) from third parties (including competition automatic: an order or direction of the CAT is required. The authorities)? only exception to this is that a party may request disclosure of any document referred to in the pleadings, witness statements, affida- Disclosure in competition proceedings before the High vits or in an expert report. However, in general, the CAT will take Court a similar approach to that followed in the High Court, with disclo- Until recently, disclosure in competition law proceedings before sure reports and (where appropriate) an electronic documents the High Court was governed by the same rules of the CPR that questionnaire taking the same form as required by CPR Practice apply in other types of cases. In 2019, a pilot scheme focused Direction 31B. Like the High Court, the CAT has powers to order upon the proportionate disclosure of documents relating to disclosure from third parties and will order such disclosure to the issues arising in the case commenced for most new claims issued extent it considers necessary for the just, expeditious and econom- in the Business and Property Courts of England and Wales. The ical conduct of the case. It will also take a similar approach to legal pilot scheme does not apply to competition claims, but is likely professional privilege as the High Court. to influence the way in which disclosure in competition claims (i) Documents that can be obtained before proceedings have is now approached. begun By way of general overview, since 1999 parties could expect An application for disclosure of documents prior to the to provide material disclosure of documents found following a start of proceedings is permitted under certain circum- reasonable search that supported their case, supported the other stances in the High Court – see Part 31.16 of the CPR on side’s case or was adverse to its own case. This approach is pre-action disclosure. known as “standard disclosure”. Whilst “standard disclosure” Similarly, under Rule 62 of the CAT Rules 2015, parties remains a possibility in competition claims, courts are increas- have the ability to make an application to the CAT for ingly likely to explore alternative methods aimed at delivering pre-action disclosure. The CAT may make such an order a more cost-effective and/or proportionate outcome. This in specific circumstances. Pre-action disclosure, if ordered, may typically be done by requiring the parties to focus upon a will likely be limited only to specific documents or a very targeted, “issues-based” approach. limited category of documents. The High Court’s Practice Direction 31C concerns disclosure (ii) Documents that can be obtained during proceedings from and the use of evidence in competition claims. It entered into the other party force at the same time as the Damages Directive Implementing The High Court may require parties to disclose documents Regulations and restricts the scope of disclosable evidence to at any stage of the proceedings. Disclosure is a continuing that which is proportionate. In particular, claimants in follow-on obligation on parties to litigation. If a party to the proceed- damages claims seeking disclosure of the administrative file of ings discovers or creates relevant documents relating to the the European Commission or the CMA are now required to dispute during the proceedings, it may need to notify the make a formal application to the High Court. That applica- other parties and/or give supplemental disclosure. tion must identify categories of evidence within the administra- Similarly, the CAT will order disclosure during the course tive file of which disclosure is sought and contain a statement of of proceedings if it thinks it is necessary or relevant to the reasonably available facts and evidence sufficient to support the proceedings. claim for damages (see question 11.2). (iii) Documents that can be obtained from other parties In proceedings commenced on or after 9 March 2017 (irre- (including competition authorities) spective of when the relevant infringement and harm occurred), Both the High Court and the CAT have powers to order Part 6 of new Schedule 8A of the 1998 Act (reflecting Articles disclosure by third parties under Part 31.17 of the CPR 5–8 of the Damages Directive) provides that: and Rules 19(2)(d), 22(1)(b) and 56(1)(b) of the CAT Rules (i) the disclosure of settlement submissions that have not been 2015, respectively. withdrawn and cartel leniency statements is prohibited; Such orders for third-party disclosure may also be addressed (ii) the disclosure of a competition authority’s investigation to competition authorities. However, for all proceedings materials may not be disclosed before the relevant investi- commenced on or after 9 March 2017, irrespective of when gation is closed; and the relevant infringement and harm occurred, the Damages (iii) documents or information in a competition authority’s file Directive Implementing Regulations provide that such may not be ordered to be disclosed unless the court is satis- disclosure may only be ordered where the information or fied that no one else is reasonably able to provide the docu- documents in question cannot reasonably be obtained from ments or information. another party to the proceedings or another third party. Where documents are protected by legal professional priv- In addition, investigation materials may only be ordered to ilege, they may also be withheld from inspection and are not be disclosed once the competition authority has closed the required to be produced as evidence, unless a party takes the relevant file, and so-called “black-list” documents, namely unusual step of waiving privilege in its communications. Unlike leniency corporate statements and settlement submissions under EU law, the English law of privilege can extend to that have not been withdrawn, benefit from an absolute communications with “in-house” lawyers who are employed by prohibition on disclosure. the business that they advise. 4.6 Can witnesses be forced to appear? To what extent, Disclosure in competition proceedings before the CAT if any, is cross-examination of witnesses possible? The rules on disclosure in proceedings before the CAT are set out in Rules 60–65 of the CAT Rules 2015, as supplemented In the English courts, if a witness is reluctant, or unwilling, to by the CAT Practice Direction which was issued alongside the attend trial, attendance can be compelled by issuing and serving Damages Directive Implementing Regulations. In practice,

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a witness summons (Parts 34.2–34.7 of the CPR) if the witness issues arise. However, judges in both fora tend to discourage is within the jurisdiction. Failure to appear can lead to fines and the use of private hearings on confidentiality grounds in favour imprisonment. Factual and expert witnesses can expect to be of open justice. subject to cross-examination by the other side’s advocate. The CAT has similar powers, and cross-examination of 4.9 Is there provision for the national competition witnesses is ordered to any extent or in any manner it deems authority in your jurisdiction (and/or the European appropriate (Rules 21(7) and 55(6) of the CAT Rules 2015). Commission, in EU Member States) to express its views or analysis in relation to the case? If so, how common is it for the competition authority (or European 4.7 Does an infringement decision by a national or Commission) to do so? international competition authority, or an authority from another country, have probative value as to liability and enable claimants to pursue follow-on claims for Paragraph 3 of the EU Competition Law Practice Direction damages in the courts? under the CPR provides that the CMA is to be notified of competition claims before the High Court. Infringement decisions of the CMA and of the European In respect of proceedings before the CAT, Rules 33(7) and Commission (if decided before the end of the Transition Period) 76(6) of the CAT Rules 2015 provide (respectively) that the are treated as binding proof of liability in “follow-on” actions CMA is to be provided with a copy of the claim form in indi- before either the High Court or the CAT. vidual and collective opt-out damages proceedings. The CMA is In relation to CMA infringement decisions, sections 58 and also to be provided with copies of subsequent pleadings served. 58A of the 1998 Act (as amended by the 2015 Act) specifically More generally, Rule 16 of the CAT Rules 2015 provides that, as provide that both findings of fact made by the CMA in the a general rule, “any person with sufficient interest in the outcome” may course of an investigation and CMA findings of infringement apply to the CAT for permission to intervene. Rule 50 of the are binding in both the High Court and the CAT in relation to CAT Rules 2015 further expressly provides that, in relation to civil proceedings (including collective proceedings) for infringe- damages claims, the CMA may submit written observations to ment of the Prohibitions or Articles 101 and 102, provided that the CAT on the application of the Prohibitions or Articles 101 the relevant period for appeal has expired or any appeal has run and/or 102 and, with the CAT’s permission, may also submit its course. oral observations. Decisions of a foreign regulator or court are generally treated Article 15 of the Modernisation Regulation provides for the as admissible evidence, but will not be binding on the issue of possibility that national competition authorities and/or the liability. The Competition SI provides that, after the end of the European Commission may assist national courts as amicus curiae Transition Period, English courts will no longer be required to (“friend of the court”) on issues relating to Articles 101 or 102 treat a decision of a Member State national competition authority of the TFEU. or indeed the European Commission (subject to transitional The European Commission has made amicus curiae observa- provisions) as prima facie evidence of a competition infringement, tions before the English courts in National Grid Electricity for the purposes of a follow-on claim for damages. However, Transmission Plc-v-ABB & Ors [2012] EWCH 869, Deutsche decisions of national competition authorities reached before the Bahn AG and others-v-Morgan Advanced Materials plc end of the Transition Period retain the statutory status of prima [2014] UKSC 24 and Sainsbury’s-v-Mastercard; Asda-v- facie evidence (even if they are only made final after the end of Mastercard; Sainsbury’s-v-Visa [2018] EWCA 1536 (Civ). the Transition Period). Article 6(11) of the Damages Directive entitles the European Commission and/or the CMA to provide (non-binding) observations to a national court setting out its/their views on the 4.8 How would courts deal with issues of commercial proportionality of an application for disclosure of the adminis- confidentiality that may arise in competition proceedings? trative file. In July 2018, the European Commission submitted written observations to the High Court in respect of applications for the Trucks Cartel administrative file. Business secrets or confidential documents are not protected from production in the disclosure process to the other side 52 Justification/Defences per se. However, the CPR and the CAT Rules 2015 specifically restrict the use of disclosed documents to the purpose of the proceedings alone. Disclosed documents are confidential to 5.1 Is a defence of justification/public interest those proceedings (unless and until they are referred to in court, available? whereupon they can become the subject of public records). In addition, “confidentiality ring” arrangements are common- There are no justification or public interest defences available in place in both the High Court and the CAT. This may mean that “follow-on” actions. parties themselves are not privy to their adversary’s documents In Chapter I Prohibition and Article 101 TFEU cases, there and it is only their lawyers and expert witnesses who can review is a defence to the prohibition set out in section 9 of the 1998 the full extent of the other side’s disclosure. Act and Article 101(3), respectively. The burden of proof in The use of confidentiality rings is intended to be limited. relation to Article 101(3) is upon the defendant seeking to rely The High Court recently confirmed that the protection of upon it. These are not public interest defences as such, but the sensitive information by a confidentiality ring is exceptional, exemption they provide is available where the defendant shows must be limited to the narrowest extent possible and requires that the prima facie restriction of competition is outweighed by careful scrutiny by the court to ensure that there is no resulting the pro-competitive effects of the agreement in question. A unfairness (Infederation Limited-v-Google LLC and others defence of objective justification is also available under Chapter [2020] EWHC 657 (Ch)). II and Article 102. In both the CAT and the High Court, hearings can be held in private – in whole or in part – where commercial confidentiality

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5.2 Is the “passing on defence” available and do whereas the pass-on “defence” is limited to identifiable indirect purchasers have legal standing to sue? increases in prices charged by the claimants that are demon- strably causally connected to the overcharge. The Court of Appeal’s ruling was upheld on appeal to the The “pass-on” defence is available and it is a significant feature Supreme Court in June 2020, on all but one of the appeal grounds of private competition actions. Until recently, the “pass-on” ( ). In this regard, the Supreme Court held, as defence had not been considered in any detail by the English [2020] UKSC 24 had the CAT, that pass-on is an element in the quantification courts. of damages that is required by the compensatory principle. It The July 2016 judgment of the CAT in Sainsbury’s is required to prevent duplicative recovery through claims in Supermarkets Ltd-v-Mastercard Incorporated and Ors respect of the same overcharge by direct and indirect purchasers [2016] CAT 11 provided the first detailed guidance on the in the same supply chain. It held that the Court of Appeal had admissibility of the “passing on” defence in competition erred in requiring a greater “degree of precision” in the quan- damages claims brought in England and Wales. Sainsbury’s tification of pass-on from Visa and Mastercard than from the claimed damages for breach of Chapter I of the 1998 Act and/ claimants pursuing damage and ruled that in assessing the value or Article 101 of the TFEU arising from the level at which the of the pass-on, it was appropriate to adopt a “broad axe” (i.e. UK multilateral interchange fees were set for Mastercard cards. general estimation rather than precise calculation) approach. By way of summary, the CAT held that: The Supreme Court ruling in is likely to be (i) “passing on” is in fact not a defence at all, but merely an Mastercard scrutinised closely both by claimants and defendants for guid- element of the calculation of the appropriate measure of ance on their respective approaches to the appropriate quanti- damages. This reflects the need to ensure that the claimant fication of pass-on. Future claimants may also have regard to is sufficiently compensated but not over-compensated; the European Commission’s recent non-binding Guidelines for (ii) the “defence” may only cover identifiable increases in national courts on how to estimate the share of overcharge which was passed prices charged to customers and not other responses (e.g. on to the indirect purchaser. cost savings, reduced expenditure, etc.); (iii) there must be a demonstrable causal link between the overcharge and those identifiable price increases; and 5.3 Are defendants able to join other cartel participants (iv) the defendant must show, on the balance of probabili- to the claim as co-defendants? If so, on what basis may ties, that another class of claimant exists, downstream of they be joined? the claimant in the proceedings, to whom the overcharge has been passed on. The burden of proof was on the For claims commenced in the English High Court, Parts 19 and defendant. 20 of the CPR provide mechanisms for defendants to be able to In the circumstances of this particular case, the CAT add and substitute parties or claim contributions and/or indem- concluded that whilst Sainsbury’s was likely to have passed nities from other parties. on a substantial amount of the overcharge, Mastercard failed For claims commenced in the CAT, joining additional parties to prove exactly what proportion was passed on in the form of to a claim is governed by Rule 38 of the CAT Rules. This identifiable increases in prices, and failed to trace price increases provides that the CAT may grant permission to add a party to through to particular product lines. As a result, the damages proceedings if: (i) it is desirable to add or substitute the new awarded to Sainsbury’s were not reduced to reflect any element party so that the CAT can resolve the matters in dispute; or (ii) of passing on. there is an issue involving the new party and an existing party This approach attracted criticism, particularly as the CAT that is connected to the matters in dispute and it is desirable to nonetheless subsequently estimated the amount of pass-on at 50 add the new party to resolve that issue. Permission to add a per cent in the context of determining the interest payable on party may be sought either by the existing party or the entity that the damages awarded to Sainsbury’s. In a similar subsequent wishes to become a party. Rule 38 also gives the CAT the power damages action brought against Mastercard in the High Court to remove or substitute a party. by another group of retailers, the High Court took a different As a general principle, where other cartel participants are approach with the result that the multi-lateral interchange fees joined to a claim as co-defendants, they will be deemed jointly charged by Mastercard were not found to be anti-competi- and severally liable for any damages awarded. tive, and therefore no damages were payable (Asda & Ors-v- Mastercard Inc. & Ors [2017] EWHC 93 (Comm)). 62 Timing Appeals in these two cases were heard jointly (together with the appeal in Sainsbury’s-v-Visa) by the Court of 6.1 Is there a limitation period for bringing a claim for Appeal in 2018 (see ; Sainsbury’s-v-Mastercard Asda-v- breach of competition law, and if so how long is it and Mastercard; Sainsbury’s-v-Visa [2018] EWCA 1536 (Civ)). when does it start to run? On 4 July 2018, the Court of Appeal handed down a judgment endorsing the CAT’s approach to pass-on and confirming that the multi-lateral interchange fee charged by Mastercard was The limitation rules that apply to competition damages claims anti-competitive. The Court of Appeal did not accept the brought in England and Wales are complex, mainly due to contention that the CAT’s rejection of the pass-on “defence” successive legislative reforms accompanied by long-lasting tran- was inconsistent with its decision to reduce the interest sitional provisions. The details cannot be traversed fully in this awarded to Sainsbury’s by 50 per cent on the basis of pass- chapter, but the key points are summarised as follows. on. The Court reasoned that the CAT had made economic For claims in the High Court, a six-year basic limitation assumptions around pass-on when assessing interest, which period applies in all cases. If proceedings are brought after 9 was distinct from the legal concept of pass-on. In particular, March 2017 in respect of losses suffered on or after that date, the Court emphasised that the economic notion of pass-on is then time does not start to run until the later of (i) the day on broader (e.g. it includes cost savings and reduced expenditure which the relevant infringement of competition law ceases, and to balance increased spending resulting from an overcharge), (ii) the claimant’s “day of knowledge”.

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The “day of knowledge” is defined as the day on which the results in sufficient relevant facts being in the public domain claimant first knows, or could reasonably be expected to know, prior to the publication of the infringement decision, such that of the infringer’s behaviour, that the behaviour constitutes an potential claimants are able to plead a prima facie claim in damages. infringement of competition law, that the claimant has suffered The question was more recently addressed in the judgments of loss or damage arising from that infringement, and the identity the CAT and the Court of Appeal on limitation in DSG, Dixons. of the infringer. The CAT held that the claimant had adequately alleged that it did The limitation period is suspended during any investigation by not discover essential facts regarding the domestic interchange a competition authority (and for one year after the conclusion of fee rates before the statutory deadline because Mastercard the investigation) and pending any appeals against the relevant concealed its unlawful conduct. On appeal, the Court of Appeal infringement decision. In all other cases, time begins to run from found that a trial would be necessary to determine if the conceal- when the wrongful act caused damage to the claimant, unless ment exception applies (i.e. whether Dixons could with reason- the claimant can establish that the wrongful act was deliberately able diligence have discovered their claims in respect of both concealed. intra-EEA and domestic transactions), because those issues For claims in the CAT: could not be fairly decided without disclosure and evidence. (i) if the cause of action arose prior to 1 October 2015, an (old) two-year limitation period provided for in Rule Foreign limitation periods 31(1)–(3) of the CAT Rules 2003 will apply (irrespective The alignment of the limitation rules in CAT proceedings with of when proceedings are commenced, with the time-bar those that apply in High Court proceedings extends to the appli- in Rule 31(4) of the CAT Rules 2003 also applicable where cation of foreign limitation periods to claims that are governed proceedings are commenced before 1 October 2015); by foreign law. It is well established that the High Court will (ii) if the cause of action arose after 1 October 2015, and apply the relevant foreign limitation period to a claim governed proceedings were commenced prior to 9 March 2017, the by foreign law. In Deutsche Bahn and Ors-v-Mastercard six-year limitation period provided for in the 2015 Act will Incorporated and Peugeot Citroën Automobiles UK Ltd apply, but the new rules contained in Schedule 8A of the and Ors-v-Pilkington Group Limited and Ors [2016] CAT 1998 Act regarding when the limitation period starts and 14, the CAT confirmed that it would do the same notwith- when it is suspended will not; and standing the fact that the causes of action pleaded in those cases (iii) if the cause of action arose on or after 9 March 2017 and arose prior to the entry into force of the 2015 Act, which aligned proceedings were also commenced on or after this date, the CAT limitation rules with those of the High Court. both the six-year limitation period provided for in the 2015 Act and the new regime contained in Schedule 8A of the 6.2 Broadly speaking, how long does a typical breach 1998 Act will apply. of competition law claim take to bring to trial and final judgment? Is it possible to expedite proceedings? Deliberate concealment allowing extension of the limitation period The High Court Section 32(1)(b) of the Limitation Act 1980 provides that, where a Generally, first instance High Court proceedings can be claimant is successful in demonstrating that there has been delib- expected to take around two years to complete, from issuing erate concealment of the facts relevant to its right of action, the a claim form to attending trial. Much will depend on: (i) the six-year limitation period is deemed to start running from the number of witnesses; (ii) the volume of disclosure; (iii) the legal date on which the claimant knew, or could with reasonable dili- and economic complexities in the case; and (iv) the need for gence have discovered, that the cause of action for their claim had expert evidence. In BritNed, the first cartel follow-on damages arisen. This is often at issue in relation to cases involving cartels. case to reach judgment, took over three-and-a-half years to In October 2014, the question of limitation in the context of reach judgment in the High Court from the date that proceed- a stand-alone competition damages claim was first tested in the ings were commenced. High Court in a strike out application brought by the defend- There are procedures available to fast track small claims, ants in Arcadia Group Brands Ltd and others-v-Visa Inc claims concerning a limited range of issues or issues without and others [2014] EWHC 3561 (Comm). The High Court contested fact. Summary judgment procedures are also avail- held that, in order to rely on section 32(1)(b) of the Limitation able. None of these procedures is likely to be appropriate for a Act 1980, the claimant had to demonstrate that the facts that large competition claim, which will generally involve complex had been concealed must be those that were essential for the facts, law and economic expert evidence. It is nonetheless and claimant to prove in order to establish a prima facie case (the in any event possible to obtain an order to expedite proceedings. “statement of claim” test). Section 32(1)(b) could not there- This can significantly reduce the lead-time to trial. In Purple fore apply to any new facts that would merely make the claim- Parking Limited and Meteor Parking Limited-v-Heathrow ant’s case stronger. The claim was struck out. The strike out Airport Limited [2011] EWHC 987 (Ch), a case in relation to was unanimously upheld by the Court of Appeal in August 2015 an abuse of dominant position, the judge ordered that the case be ([2015] EWCA Civ 883). This case highlighted the importance dealt with on an expedited basis. The High Court handed down of bringing a competition claim as soon as claimants have suffi- a judgment 10 months after the proceedings had commenced. cient information to plead a prima facie case. This case is cited as an example of a relatively small company This approach is supported by a recent High Court ruling obtaining rapid redress against anti-competitive behaviour from (see Granville Technology Group Limited (In Liquidation), the High Court. VMT Limited (In Liquidation) and OT Computers Limited (In Liquidation)-v-Infineon Technologies AG and Micron The CAT Europe Limited [2020] EWHC 415 (Comm)) which suggests It is more difficult to make general comments about the length of that time can begin to run prior to the date of an infringement time taken to reach final judgment for competition law claims in decision in the context of a well-publicised investigation that the CAT, given its more limited track record. However, a reasonable estimate would be two to three years from commencement to trial. More complex cases may take considerably longer.

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Since 2015, there has been a “fast-track” route in the CAT been (or could be) made. The procedural rules governing such which is intended to be used for simpler cases and/or short appli- settlements of proceedings are in Rules 94–97 of the CAT Rules cations for injunctive relief. The factors relevant to determining 2015. whether a particular case is suitable for the fast-track route are Where a CPO has been made in relation to “opt-out” collec- set out at Rule 58 of the CAT Rules 2015. These factors include: tive proceedings, the CAT may make a collective settlement (i) whether the time estimate for the final hearing is three days order (binding all persons covered by the order based in the UK or less; (ii) the complexity and novelty of the issues involved; (iii) who do not “opt out” of the settlement, as well as those not the scale and nature of the documentary evidence involved; and based in the UK if they “opt in”) if it is satisfied that its terms are (iv) the number of witnesses involved. The CAT has noted that just and reasonable. The representative body and the defend- cases involving damages for harm caused by a cartel (particu- ant(s) must apply to the CAT for approval of any proposed larly a cartel of long duration) are unlikely to be appropriate for collective settlement, providing both details of the claims to be the fast-track procedure. Nevertheless, the fast-track procedure settled and the proposed terms of the settlement. appears to be proving reasonably popular, with at least six allo- Where, however, a CPO has been made in relation to “opt-in” cation applications having been made to date. collective proceedings, the representative body may not settle the Like the High Court, the CAT has the power to award proceedings prior to the expiry of the time specified in the CPO summary judgments in damages actions (Rule 43 of the CAT (as the time by which a class member may, without the permis- Rules 2015), but to date it has not done so. sion of the CAT, opt in to the proceedings) without the prior permission of the CAT (see Rule 95 of the CAT Rules 2015). 72 Settlement Collective settlement is also possible in circumstances where a CPO has not been made, such that parallel claims that were 7.1 Do parties require the permission of the court not initiated as collective proceedings, but which would have to discontinue breach of competition law claims (for satisfied the certification requirements for collective proceed- example, if a settlement is reached)? ings, can be settled collectively (Rule 96 of the CAT Rules 2015). Before the CAT can approve such a settlement, it must make In the High Court, it is open to the claimant to discontinue a collective settlement order allowing a nominated collective proceedings at any stage, upon filing a notice of discontinuance settlement representative for the claimants to act in respect of to the court and upon serving a copy on every other party to the the proposed collective settlement. As above, before it approves proceedings (Part 38 of the CPR). In the ordinary course, where the collective settlement, the CAT must be satisfied that the a party discontinues its action prior to judgment, it is liable to terms of the collective settlement order are just and reason- pay the reasonable costs incurred by the other parties up to that able. Once approved, the collective settlement is binding on point. A claimant does not generally require the permission all persons falling within the class of persons described in the of the court to discontinue all, or only a part, of the proceed- collective settlement order (save those who have “opted out” of ings it has issued. Permission is required, however, if the court the settlement if based in the UK and those who did not “opt in” has previously granted an interim injunction, the claimant is in if based outside the UK). receipt of an interim payment in relation to the claim, or where As noted above, the Damages Directive Implementing there is more than one claimant. Regulations provide that when a defendant settles, the quantum Once proceedings have been issued, it is necessary to notify of any settling claimant(s)’ claim must be reduced by the amount the Court if a settlement has been reached. Note that if a claim of loss attributable to that defendant rather than the amount has been discontinued, a claimant that makes another claim of the settlement agreement (so that a settling defendant is against the same defendant will require the permission of no worse off than a non-settling one). They also provide that the Court if: (i) the claimant discontinued the claim after the settling defendants will be exempted from liability to pay contri- defendant had filed a defence; and (ii) the “new” claim arises out butions to non-settling co-infringers. However, we note again of facts that are the same or very similar to those in the discon- that in practice, these rules (particularly the exemption from tinued claim (see Part 38.7 of the CPR). contribution proceedings) may not apply for some time. Under Rule 44 of the CAT Rules 2015, a claimant may withdraw a claim for damages before the CAT only with the consent 82 Costs of the defendant, or with the permission of the CAT President (or, if the case has already proceeded to a hearing, the Tribunal). Note that a claim may be resubmitted in the CAT after it has 8.1 Can the claimant/defendant recover its legal costs been withdrawn (Case 1263/5/7/16 – Labinvesta Limited-v- from the unsuccessful party? Dako Denmark A/S and Others). Under Rule 13 of the CAT Rules 2015, an appellant may only The CPR rule in the High Court is that the unsuccessful party withdraw an appeal against a competition authority’s decision to the proceedings will be ordered to pay the reasonable costs of with the permission of the Tribunal (or the CAT President if the the successful party. The jurisdiction to award costs lies solely Tribunal has not yet been constituted). with the court, and judges are free to exercise their discretion. For hearings of less than one day, costs awards are commonly 7.2 If collective claims, class actions and/or ordered summarily, upon application. A typical final costs representative actions are permitted, is collective order, however, will not state the proportion of costs to be settlement/settlement by the representative body on awarded, but merely the fact that costs have been awarded to the behalf of the claimants also permitted, and if so on what successful party either in whole or as to part only (e.g. by issue) basis? of the proceedings. The parties then face a potentially lengthy negotiation over the costs to be paid, or a detailed assessment Both opt-in and opt-out collective claims are permitted before process conducted by a costs judge. the CAT. The 2015 Act introduced sections 49A and 49B into In the CAT, the award of costs is within the Tribunal’s discre- the 1998 Act which give the CAT the power to review and tion pursuant to Rule 104(2) of the CAT Rules 2015. The Court approve any proposed collective settlement where a CPO has of Appeal has confirmed that the CAT has a wide discretion

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in considering the question of costs and that it is not bound to Damages-based agreements follow the approach in the CPR that costs should follow the Under LASPO 2012, DBAs are now available in respect of event (Quarmby Construction-v-OFT [2012] EWCA Civ general civil litigation (except criminal or family proceedings) 1552). In awarding costs, the CAT may consider the parties’ where conditional fee agreements (see below) are or had been conduct, success in parts of their case (even if a party does not permitted. Under a DBA, the lawyer acting will not charge their succeed in recovering the full amount claimed), proportionality client for conducting the case but has a stake in its outcome, and reasonableness. The CAT may also take into account any known as the contingency amount. In general, for commer- admissible offers to settle that have been made by parties (see cial litigation, including competition claims, the contingency Rule 104(4) of the CAT Rules 2015). amount (i.e. the percentage of the client’s damages award that If the CAT makes an order for costs to be paid by a party, the lawyer is entitled to receive in the event of success) is capped the actual amount paid in respect of costs is usually negoti- at 50 per cent of the sums recovered. The Damages-Based ated between the parties. If a figure cannot be agreed, costs Agreements Regulations 2013 prohibit the use of concurrent will be subjected to an assessment. In the context of appeals hybrid DBAs, whereby a DBA is combined with another form against competition authority decisions, it is notable that the of funding agreement such as the payment of hourly rates. In its CAT has decided not to award costs against the unsuccessful post-implementation review, the UK Government did, however, party in a number of cases so as not to discourage appeals as a permit the use of “sequential” hybrid DBAs, where each stage matter of policy. In that context, it is worth noting the Court of the proceedings comprises a different type of retainer, which of Appeal’s ruling in British Telecommunications Plc-v- may include a DBA at a particular stage. Office of Communications [2018] EWCA Civ 2542. Ofcom DBAs are not permitted in “opt-out” collective proceed- appealed against the CAT’s costs ruling, which had required ings relating to competition law claims. Accordingly, the new Ofcom to pay 50 per cent of the recoverable costs incurred by section 47C of the 1998 Act provides that DBAs are unen- BT in bringing a successful appeal against a market review by forceable where they relate to “opt-out” collective proceedings. Ofcom. The Court of Appeal ruled that Ofcom should not be DBAs remain relatively uncommon. subject to adverse costs orders in situations where it was acting in its regulatory capacity in a claim before the CAT. Provided its Conditional fee agreements actions were reasonable and in the public interest, this should be Under conditional fee agreements (“CFAs”), the client pays the case even where Ofcom was unsuccessful, as it had been in different amounts for the legal services depending on the this case. The costs issue was remitted back to the CAT and BT outcome of the case. In other words, the lawyer’s fee is condi- subsequently withdrew its costs application. tional upon the outcome of the litigation. CFAs are permitted The CAT sought to limit the impact of BT-v-Ofcom in for contentious work (including competition litigation), subject its costs ruling in Flynn Pharma Ltd and Pfizer Inc-v- to specific terms and conditions. Competition and Markets Authority [2019] CAT 9. The In large-scale commercial litigation, a CFA will typically appellants had appealed against a decision by the CMA finding involve the payment by the client of a discounted hourly rate to an abuse of dominance on their part. The CAT found that the the lawyer, which is then subject to an uplift in the event of a Court of Appeal’s reasoning, as applied in the context of the successful outcome. There is a limit on the uplift that the lawyer regulatory decision that was appealed in BT-v-Ofcom, did not can charge in the event of success (referred to as a success fee), apply to competition infringement decisions such as the present which is currently set at 100 per cent of the prevailing standard case since the CMA as a competition authority was not merely hourly rate the lawyer would ordinarily charge. performing its regulatory function; it had, in fact, discretion CFAs can be used for High Court litigation and arbitration to bring an infringement case and extensive powers to impose and can be used by claimants and defendants. Both solicitors financial penalties. and barristers are able to accept instructions on a conditional However, on appeal of the judgment in May 2020 ([2020] fee basis. EWCA Civ 617), the Court of Appeal concluded that the Rule 113 of the CAT Rules 2015 provides that, subject to the starting point is, as set out in BT-v-Ofcom, that no order for prohibition on the use of DBAs in collective proceedings, the costs should be made against a regulator who has brought or rules on funding arrangements made under Part II of the Courts defended proceedings in the CAT acting purely in its regula- and Legal Service Act 1990 apply to proceedings before the tory capacity. The appeal ruling provides some additional CAT. These rules specify: (i) the criteria that must be fulfilled certainty for the CMA, placing the CMA’s capacity as competi- in order for a CFA to be enforceable; and (ii) the proceedings tion authority on the same footing as other regulatory bodies for that cannot be the subject of an enforceable CFA. the purposes of costs. Under LASPO 2012, CFA success fees are not recoverable from the other side. Any CFA success fee in respect of a CFA entered into after 1 April 2013 must now usually be paid by the 8.2 Are lawyers permitted to act on a contingency fee basis? CFA-funded party rather than by the losing party.

English law has a traditional objection to contingency fee-based 8.3 Is third party funding of competition law claims arrangements. In 2012, Lord Justice Jackson published a detailed permitted? If so, has this option been used in many cases to date? review of the costs of litigation (the “Jackson Report”). The use of damages-based agreements (“DBAs”) (i.e. where the lawyers’ fees correlate to the damages awarded to their client) As a matter of public policy, third-party funding of litigation was the subject of considerable scrutiny in the Jackson Report. in England has historically been strongly discouraged. Policy A number of the recommendations contained in the Jackson has changed in recent years as funding is seen as a means of Report were accepted by the UK Government and incorporated increasing access to justice. The English courts are now more into the Legal Aid, Sentencing and Punishment of Offenders permissive of third-party funding, which is generally permitted Act 2012 (“LASPO 2012”), which came into force in April 2013. provided that the funding agreement between the funder and

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the litigant does not give the funder the right to control the of proceedings commenced on or after 9 March 2017 where the action or give it an interest in the action itself (as opposed to a relevant infringement and harm also occurred on or after that share of the proceeds). date. Under these regulations, immunity recipients will generally There has been a significant growth in the litigation-funding only be liable for the harm caused to their own direct and indirect industry in the UK, largely centred in London. There are indi- purchasers, rather than being jointly and severally liable for the cations that third-party funding of competition damages claims entire harm caused by the relevant infringement (subject to an is taking place, particularly in “follow-on” damages cases. For exception where the remaining co-infringers are unable to fully example, both the UKTC and RHA prospective “opt-out” collec- compensate the other victims of the infringement). As such, tive actions in relation to the Trucks Cartel are known to be funded they will also generally be protected from contribution claims claims (by Calunius Capital and Therium Capital, respectively). from other co-infringers. However, the protection only extends Some concerns remain over the lack of transparency in the to immunity recipients (i.e. 100 per cent leniency), not also to third-party funding market and the unregulated nature of the those who benefit from a lesser degree of leniency. In prac- funding market. In response, a group of well-known litigation tice, immunity recipients are nonetheless likely to have to wait funders established a voluntary code of conduct published by a number of years to determine the full extent of their liability. the Association of Litigation Funders (“ALF”).

10.2 Is (a) a successful, and (b) an unsuccessful 92 Appeal applicant for leniency permitted to withhold evidence disclosed by it when obtaining leniency in any 9.1 Can decisions of the court be appealed? subsequent court proceedings?

Appeal from the High Court In the case of National Grid Electricity Transmission Appeals can be made by a party from the High Court to the Plc-v-ABB & Ors [2012] EWCH 869, the High Court ruled Court of Appeal on a point of law. Appeals are not available as in favour of disclosing limited extracts from leniency docu- of right. Matters of fact established in the High Court can rarely, ments, having carried out the “balancing exercise” between if ever, be overturned on appeal. The test applied to matters competing interests advocated by the ECJ in Case C-360/09 of appeal is whether the Court considers that the appeal would – Pfleiderer AG-v-Bundeskartellamt and Case C-536/11 have a real prospect of success or there is some other compelling – Bundeswettbewerbsbehörde-v-Donau Chemie AG and reason for the appeal to be heard. Permission to appeal must be others. Precise details of what was considered to be disclosable obtained either from the High Court or the Court of Appeal. It are unfortunately not in the public domain, and the case settled is possible to appeal further to the Supreme Court (again, only in June 2014. on a point of law), but only with the permission of the Supreme Following implementation of the Damages Directive into Court itself. English law, cartel leniency statements now benefit from absolute protection from disclosure in proceedings commenced on Appeal from the CAT or after 9 March 2017, irrespective of when the relevant infringe- Appeals from the CAT to the Court of Appeal are permitted ment and harm occurred. under section 49 of the 1998 Act. Such appeals can concern However, it is important to note that this protection does not either: (i) the CAT’s judgment in respect of a point of law; or (ii) extend to pre-existing evidence referred to in an application for the CAT’s judgment in respect of damages awards under section leniency, or other documents relating to the application other 47A or section 47B of the 1998 Act. than the actual corporate leniency statement itself (although literal quotations from the leniency statement in other documents 102 Leniency will be protected). Notably, the CAT has broad discretion when determining whether a document is a cartel leniency statement 10.1 Is leniency offered by a national competition for the purposes of Schedule 8A of the 1998 Act, as is reflected in authority in your jurisdiction? If so, is (a) a successful, the CAT’s 2017 Practice Direction relating to disclosure. and (b) an unsuccessful applicant for leniency given When deciding whether to order disclosure of such documents, immunity from civil claims? the English courts will likely continue to weigh up competing interests when assessing the proportionality of disclosure. It is The CMA is prepared to offer lenient treatment to businesses worth noting in this regard that the need to safeguard the effec- that come forward with information about a cartel in which they tiveness of public enforcement of competition law is expressly are involved. Under the UK leniency programme, successful included in the list of matters to be taken into account as part of leniency applicants may be able to avoid a penalty for infringe- the proportionality assessment when disclosure is sought of any ment of competition law altogether (i.e. immunity), or alter- other documents on a competition authority’s file. natively obtain a reduction in the amount of any fine imposed by the CMA. Leniency granted by the CMA does not provide 112 Anticipated Reforms immunity from any penalty that may be imposed on the business by other competition authorities outside the UK. 11.1 For EU Member States, highlight the anticipated Any grant of immunity or leniency in respect of fines imposed impact of the EU Directive on Antitrust Damages Actions by the CMA does not extend to protection from civil claims for at the national level and any amendments to national damages brought by victims of the infringement. Indeed, a leni- procedure that are likely to be required. ency applicant can find itself the main initial target for damages claims, given that it will be required to admit liability for the The implementation of the Damages Directive into English infringement as a condition of being granted immunity/leniency. law has already had an impact on antitrust damages actions in That said, some limitations on the liability of immunity England and Wales (e.g. in respect of disclosure), but perhaps recipients have been introduced by the Damages Directive less so than in some other Member States, as the pre-existing Implementing Regulations, which will only apply in the context English private enforcement regime already met (or included

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provisions very close to) many of the requirements of the application of the Implementing Regulations (see further the Damages Directive. For example, the principle of joint and response to question 11.3 below). several liability was already applied by the English courts, As set out in the response to question 4.3 above, the presump- disclosure rules were already relatively wide, and decisions of tion that cartels cause harm is a substantive provision, which the national competition authority were already binding on the has been implemented into English law in paragraph 13 of CAT and national courts in “follow-on” actions. Schedule 8A of the 1998 Act. In BritNed, the High Court made However, the implementation of the Damages Directive comments to suggest that the presumption that cartels cause (through the Damages Directive Implementing Regulations) harm, as implemented by the Damages Directive Implementing has resulted in some important amendments to national proce- Regulations, may not, when applied, cause a particularly signifi- dure in England and Wales. In particular: cant shift in the approach to cartel damages in the English court ■ The disclosure requirements of the Damages Directive system, given the courts’ already well-developed approach to have altered some aspects of the existing English disclo- quantification of damages. sure rules (for example, in respect of absolute protection The application of the other provisions in the Damages for corporate leniency statements and settlement submis- Directive, both procedural and substantive, remains to be seen. sions, and the restrictions on disclosure of a competition authority’s file and “investigative materials”). 11.3 Please identify, with reference to transitional ■ The award of exemplary damages (previously available as a provisions in national implementing legislation, remedy in exceptional circumstances) is prohibited. whether the key aspects of the Directive (including ■ Limitation periods applicable to antitrust damages actions limitation reforms) will apply in your jurisdiction only to brought in England and Wales have been adjusted to infringement decisions post-dating the effective date of reflect the requirements of the Damages Directive relating implementation; or, if some other arrangement applies, to when time starts to run and the circumstances in which please describe it. the limitation period is suspended. The temporal application of the new Schedule 8A of the 1998 Act 11.2 What approach has been taken for the inserted by the Damages Directive Implementing Regulations is implementation of the EU Directive on Antitrust specified in paragraphs 42–44 of that Schedule: Damages Actions in your jurisdiction? How has the (a) provisions that implement substantive provisions of the Directive been applied by the courts in your jurisdiction? Damages Directive will only apply where proceedings are commenced on or after 9 March 2017 and the relevant Despite the UK’s decision to leave the EU, the Damages infringement and harm also occurred on or after this date; Directive has been implemented into English law by the Damages and Directive Implementing Regulations. The Competition SI (b) other provisions that implement purely procedural provi- retains the substantive and procedural provisions implemented sions of the Damages Directive will apply to all proceed- by the Damages Directive Implementing Regulations. ings commenced on or after 9 March 2017. The English courts have already applied the procedural provi- This reflects the requirements of Article 22 of the Damages sions of the Damages Directive. In June 2018, a number of Directive, which provides that national measures adopted in claimants in follow-on proceedings in the Trucks Cartel applied order to comply with the substantive provisions of the Directive to the High Court for disclosure of the Commission’s case file. must not apply retroactively. Unlike the Directive itself, and The claimants sought disclosure of the same version of the case many other Member States’ national implementing legislation, file that had been disclosed to the claimant in another case in the Damages Directive Implementing Regulations also go on December 2017, to which the provisions implementing the to expressly specify which provisions are to be deemed substan- Damages Directive had not been applicable. tive for this purpose. These include: (i) limitation periods; (ii) In their application, the claimants were obliged to satisfy the passing on; (iii) the rebuttable presumption of harm; (iv) the Court that the applications complied with Practice Direction restrictions on liability of immunity recipients and small- and 31C of the CPR, namely that their application: (i) contained a medium-sized enterprises; (v) the prohibition on exemplary statement of the reasonably available facts and evidence suffi- damages; and (vi) contribution and consensual settlement. The cient to support the plausibility of the claim for damages; (ii) only provisions that are deemed to be “procedural” for these included a description of the evidence sought that is as precise purposes are those relating to disclosure and use of evidence. and narrow as possible on the basis of that statement; and (iii) was proportionate (with specific regard to the criteria in Article 11.4 Are there any other proposed reforms in your 5(3) of the Damages Directive). jurisdiction relating to competition litigation? The applications were heavily contested by two of the defendant groups. Further, the Commission provided written No other reforms to competition litigation in England and Wales submissions. The High Court ruled in favour of the appli- have been proposed in any detail at the time of writing. The big cants, finding that the applications were compliant with the question remains the impact of Brexit and the post-Transition Damages Directive. A disclosure order was made in July 2018, Period on competition litigation in the medium to long term. requiring DAF to disclose a substantial part of the European It is unclear whether Brexit will ultimately result in fewer Commission’s case file in the Trucks Cartel. In August 2018, claims relating to EU-wide/global cartels being brought the Court of Appeal refused DAF permission to appeal this before the English courts. Key issues will include the arrange- order. This was the first decision in the English courts to apply ments in relation to jurisdiction and enforceability of judg- the procedural rules implementing the Damages Directive that ments, and the extent to which English courts continue to govern access to the competition authority’s case file. have regard to EU case law after the end of the Transition English courts have not yet applied the substantive provi- Period. If the Competition SI in its current form comes into sions of the Damages Directive, due to the narrow temporal force, European Commission infringement decisions relating to

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conduct occurring after the end of the Transition Period will practice, it is generally expected that English competition law no longer be binding proof of liability in the English courts, will continue to mirror EU competition law for some time to the English courts will not be required to treat infringement come, although a degree of divergence between the two regimes decisions of a Member State national competition authority as may well develop over time. prima facie evidence of an infringement, and will be permitted to depart from pre-Brexit EU competition law where appropriate. Acknowledgment However, because of the lengthy limitation periods applicable, follow-on claims in relation to Commission decisions reached With thanks to Yoana Georgieva of Ashurst LLP for her contri- prior to the end of the Transition Period would likely remain bution to this chapter. applicable in the English courts and the CAT for some time. In

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James Levy is a partner in the Dispute Resolution team in Ashurst’s London office. James is an experienced litigator and has acted on a broad range of complex commercial cases. He has particular experience in conducting “heavy” litigation in an efficient and innovative manner, including leading one of the first commercial litigation teams in the UK to successfully use predictive coding in a large-scale disclosure exercise. James holds a Post-Graduate Diploma in EU competition law from King’s College London and has considerable experience in contentious competition matters before the High Court and the CAT, including, most recently, UK litigation arising from the Trucks Cartel.

Ashurst LLP Tel: +44 20 7638 1111 London Fruit and Wool Exchange Email: [email protected] 1 Duval Square URL: www.ashurst.com London E1 6PW United Kingdom

Max Strasberg is a senior associate in the Dispute Resolution team in Ashurst’s London office. Max specialises in competition litigation, with an emphasis on cartel damages actions both on the claimant and defendant side. Max has experience of High Court, Competition Appeal Tribunal and Court of Appeal litigation. Max advises clients on a wide range of contentious competition matters (including investigations by competition authorities, follow-on damages actions, public procurement disputes involving judicial review) and general commercial disputes. He has specific and in-depth knowledge of the automotive industry. Max’s experience includes litigation arising from the Polyurethane Foam, Auto-Parts, Power Cables and Trucks Cartels.

Ashurst LLP Tel: +44 20 7638 1111 London Fruit and Wool Exchange Email: [email protected] 1 Duval Square URL: www.ashurst.com London E1 6PW United Kingdom

Helen Chamberlain is a solicitor in the Competition Team in Ashurst’s London office. Helen advises clients on non-contentious and contentious competition matters. Her contentious competition experience includes UK litigation arising from the Trucks Cartel.

Ashurst LLP Tel: +44 20 7638 1111 London Fruit and Wool Exchange Email: [email protected] 1 Duval Square URL: www.ashurst.com London E1 6PW United Kingdom

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Finland Finland

Ilkka Leppihalme

Dittmar & Indrenius Toni Kalliokoski

or in Articles 101 and 102 of the TFEU is liable to compen- 12 General sate the damage caused by such violation. Therefore, anyone who has suffered harm caused by a competition infringe- 1.1 Please identify the scope of claims that may be ment is entitled to claim damages on the basis of the Act. The brought in your jurisdiction for breach of competition Competition Damages Act is the national implementation of law. the EU Competition Damages Directive, and is applicable to harm caused after December 2016. In addition to such statutory The Finnish private enforcement case law is quite well devel- claims, antitrust damages claims for breach of contract have been oped, and a number of final judgments on the merits are avail- successful in court. able. The number and size of the cases have increased tremen- Competition law claims that are not damages actions would dously over the past decade. Competition law issues are still normally require a contractual relationship between the claimant primarily dealt with by the Finnish Competition and Consumer and the defendant. Authority, but private enforcement has emerged as a complement to public enforcement, and it is now common for Finnish fining 1.3 Is the legal basis for competition law claims decisions to be followed by private damages litigation. The derived from international, national or regional law? cases have mainly concerned Finnish infringements. It is quite common that cases are settled either before trial or during trial. Please see the answer to question 1.2 above. Private damages claims can, in principle, be based on any type of anticompetitive conduct by business undertakings (including price fixing and other types of concerted behaviour between 1.4 Are there specialist courts in your jurisdiction to competitors, abuse of a dominant market position, retail price which competition law cases are assigned? maintenance and certain other vertical restrictions) prohibited by the national competition law or by the Treaty on the Functioning Private competition law claims are heard by district courts in the of the European Union (“TFEU”). However, certain sectoral first instance with appeals to the courts of appeal and, subject to activities are specifically excluded from the scope of application a leave to appeal, the Supreme Court. of national competition law, such as agreements relating to the For public enforcement, a national specialist court, the Market primary production of agricultural products exempted in accord- Court, has exclusive competence over competition matters. A ance with Article 42 of the TFEU or arrangements concerning case in the Market Court is typically commenced by a proposal the labour market. In practice, damages claims have been for an infringement fine by the Finnish Competition and brought for both price-fixing and abuse of dominance. Consumer Authority or by an appeal against the Authority’s deci- Besides damages claims, competition law issues can be raised sion. The decision of the Market Court can be appealed against as a part of commercial disputes. One of the parties to an agree- in the Supreme Administrative Court. The Market Court does ment may argue that a specific restrictive clause or arrangement, not have jurisdiction for competition damages claims. e.g., a non-compete or exclusivity clause, is null and void because it breaches national or EU competition rules, and a court must decide whether that clause or arrangement is enforceable. 1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms An infringement of competition legislation does not consti- for multiple claimants? For instance, is there a tute a criminal offence under Finnish law. possibility of collective claims, class actions, actions by representative bodies or any other form of public 1.2 What is the legal basis for bringing an action for interest litigation? If collective claims or class actions breach of competition law? are permitted, are these permitted on an “opt-in” or “opt- out” basis?

The legal basis for bringing a damages action can be the Anyone who has suffered harm caused by a competition law Competition Damages Act, a breach of contract or, for legacy infringement has the right to claim damages on the basis of the cases, Section 20 of the Competition Act. Section 20 of the Competition Damages Act. This also applies to business under- Competition Act is applicable to harm caused between November takings further down the distribution chain if there is a causal 2011 and December 2016. According to Section 20, an under- connection between the infringement and the damage they have taking or an association of undertakings that deliberately or negli- suffered. gently violates the prohibitions included in the Competition Act

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It may be possible for the Consumer Ombudsman to bring 22 Interim Remedies an opt-in class action for damages on behalf of consumers. However, any claimants can authorise, for instance, a joint representative to bring an action on their behalf resulting in a 2.1 Are interim remedies available in competition law type of opt-in claim by bundling numerous claims. cases? In the Timber Cartel damages litigation, two claimant groups of 600 and 1,000 forest owners were formed by consolidating The interim remedies provided for in the Code of Judicial the claims into groups that used one law firm. Procedure applied in civil proceedings are also available in competition law cases.

1.6 What jurisdictional factors will determine whether a court is entitled to take on a competition law claim? 2.2 What interim remedies are available and under what conditions will a court grant them? The Competition Act generally applies to conduct that restricts competition in the Finnish markets. A Finnish court has juris- A district court may, pursuant to the Code of Judicial Procedure: diction if the defendant is domiciled in Finland. However, a (1) prohibit the deed or action of the opposing party, under Finnish court could also hear a case against a foreign entity domi- threat of a fine; ciled in the EU if the infringement or damage has occurred in (2) order the opposing party to do something, under threat of Finland. The court will decide on a case-by-case basis whether a fine; the case has a sufficient link to Finland. (3) empower the applicant to do something or to have some- As a main rule, proceedings shall be instituted before the thing done; court of the place of domicile of the defendant. According (4) order that property of the opposing party be placed under to the Code of Judicial Procedure, claims brought at the same the administration and care of a trustee; or time against several defendants must be dealt with in the same (5) order other measures necessary to secure the right of the proceeding if the claims are based on the same grounds for applicant to be undertaken. action. Such claims can be brought in any district court which Granting the above interim remedies requires the applicant to has jurisdiction to deal with claims against one of the defend- establish that it has a probable right against the opposing party ants. Once a damages claim has been brought in one district and that there is a danger that the opposing party by action or court having jurisdiction, a claim based on the same matter omission or in some other manner hinders or undermines the cannot be tried in another jurisdiction (lis pendens rule). realisation of the right of the applicant, or essentially decreases Competition law claims may also go before an arbitral its value or significance. When deciding on the interim remedy tribunal. Pursuant to the Finnish Arbitration Act, any dispute referred to above, the court shall ensure that the opposing in a civil matter which can be settled by agreement between the party does not suffer undue inconvenience in comparison to parties may be resolved in arbitration. Parties to an agreement the benefit to be secured. The court may also order attachment may also agree that disputes arising from the agreement shall of real or movable property of the opposing party if the appli- be finally decided by one or more arbitrators, unless otherwise cant can establish a probability that it holds a receivable (e.g., a provided in statutory law. competition law damages claim) that may be rendered payable The District Court of Helsinki has found itself competent to by a decision that can be enforced, and if there is a danger that hear a damages claim despite the presence of arbitration clauses the opposing party may hide, destroy or convey his property in the supply agreements of cartelised products. Thus, it seems or take other action endangering the payment of the receivable. that claimants can choose whether to pursue their claims in court or in arbitration. 32 Final Remedies

1.7 Does your jurisdiction have a reputation for 3.1 Please identify the final remedies which may be attracting claimants or, on the contrary, defendant available and describe in each case the tests which applications to seize jurisdiction, and if so, why? a court will apply in deciding whether to grant such a remedy. Finnish private enforcement mainly concerns domestic cases. Relative to its size, Finland has a high level of private enforce- The most important final remedy in a private competition law ment. So far, there is one significant instance where a damages claim is damages. The compensation for damages based on a claim was initiated in a Finnish court regarding a non-domestic breach of competition law covers compensation for the actual cartel. It was brought by the Cartel Damage Claims company loss; i.e., overcharges, lost profits, expenses, and other direct against the Finnish member of the European Hydrogen Peroxide or indirect economic damage resulting from the competition Cartel. The case was settled for EUR 18.5 million. restriction. Late payment interest can be claimed as of 30 days from the date on which a demand for payment was first presented. 1.8 Is the judicial process adversarial or inquisitorial? Antitrust damages cases typically take several years to conclude, so the amount of accrued interest can be substantial. Interest can The Finnish judicial process can be characterised as an adver- also be claimed for the time between the occurrence of the harm sarial process with case management by judges. In Finnish and the demand for payment, but the interest rate is very low. court proceedings the judge conducts the trial, but the parties It is also possible to obtain a declaratory judgment confirming, bear the responsibility of presenting the evidence that they wish for instance, that part of an agreement is in breach of competi- to be considered by the court. tion law and therefore null and void. Further, the interim remedies referred to in question 2.2 may be confirmed as part of the final decision.

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3.2 If damages are an available remedy, on what bases 4.2 Who bears the evidential burden of proof? can a court determine the amount of the award? Are exemplary damages available? Are there any examples of damages being awarded by the courts in competition The claimant has the burden of proving that the defendant cases which are in the public domain? If so, please has breached competition rules. The claimant can rely on an identify any notable examples and provide details of the infringement decision of the competition authorities which amounts awarded. establishes that an infringement has occurred. The claimant must then prove that it has suffered an actual loss caused by the Only actual loss and damages foreseeable at the time the damage defendant’s competition law infringement. The difficulty of the is caused can be compensated. Punitive or exemplary damages defendant’s burden of disproving the claimant’s allegations will cannot be awarded under Finnish law. then depend on the strength of the claimant’s evidence. For As a general principle, the amount of damages should corre- cartel cases, please see question 4.3 below. spond to the actual loss suffered. The claimant has the burden of proof regarding the amount of the actual loss and the 4.3 Do evidential presumptions play an important causal connection between the defendant’s behaviour and the role in damages claims, including any presumptions loss. At the same time, the damages awarded should not be of loss in cartel cases that have been applied in your over-compensatory, allowing the claimant to benefit from the jurisdiction? breach of competition law. Damages may be adjusted if full compensation is considered unreasonably onerous, taking into The Competition Damages Act includes a rebuttable presump- consideration the nature and extent of the damage, the circum- tion of harm for cartel cases. There are no other statutory stances of the parties involved and other relevant issues. evidential presumptions of loss. If the claimant can prove that it suffered harm but cannot prove the exact amount, Finnish courts are entitled to award 4.4 Are there limitations on the forms of evidence damages based on an estimate of the harm. In all cases where which may be put forward by either side? Is expert damages have been awarded so far, the court has estimated the evidence accepted by the courts? amount on the basis of the available evidence. So far, damages have been awarded in a number of cases. In 2013, the District Court of Helsinki awarded damages to 39 There are no restrictions concerning the form of evidence as municipalities that had been overcharged by an asphalt cartel. such in Finnish legislation but certain rules exist for specific The principal amount was EUR 37.4 million. Interest and costs types of evidence. For instance, written witness testimonies are orders increased the total to approximately EUR 66 million. not accepted in district courts but they can be used in arbitral In 2016, the awards were considerably reduced by the Helsinki proceedings. Written and oral expert evidence is accepted, and Court of Appeal, and in 2019 further reduced by the Supreme experts will often provide both written and oral statements. In Court. practice, courts never appoint their own experts, so parties must In 2017, the Helsinki Court of Appeal awarded EUR 90,000 appoint the experts. The courts have free discretion to consider for abuse of dominance in the telecoms sector. the weight of the expert evidence provided. In 2019, the District Court of Helsinki awarded a total of EUR 8 million plus interest and legal costs to two claimants in 4.5 What are the rules on disclosure? What, if any, a predatory pricing case in the dairy sector. A number of other documents can be obtained: (i) before proceedings claimants had already settled. have begun; (ii) during proceedings from the other party; and (iii) from third parties (including competition authorities)? 3.3 Are fines imposed by competition authorities and/ or any redress scheme already offered to those harmed by the infringement taken into account by the court when The Finnish legal system does not recognise discovery as under- calculating the award? stood and applied in the common law system. In Finnish court proceedings, each party presents and discloses the evidence that it is going to refer to in the proceedings. According to the Code Courts have considerable discretion to determine the amount of of Judicial Procedure, a court may, upon a request of a party damages. There are no specific provisions regarding the treat- to the proceedings, order any party or third party to disclose ment of fines or redress schemes in the calculation of damages. sufficiently specific documents in its possession, should the In the competition damages judgments so far, courts have ruled court consider the documents to be relevant as evidence. The that fines already imposed are not taken into account when calcu- Code of Judicial Procedure also includes rules on documents lating the award of damages. Any redress already paid should and information that do not have to be disclosed, such as busi- reduce the amount of compensable damage correspondingly. ness secrets. The EU Competition Damages Directive has been implemented by referring to these existing rules on document 42 Evidence disclosure. Most importantly, the existing rules do not contain provisions concerning the disclosure of categories of evidence, 4.1 What is the standard of proof? which is required by the Directive, so this is left to the discretion of the courts. In civil cases, such as competition damages cases, a circum- The Finnish Act on the Openness of Government Activities stance may be taken as grounds for the judgment only on the (“Openness Act”) empowers anyone to request copies of public condition that a party has presented credible evidence regarding documents from public authorities. According to the Act on it. In practice, there are no specific provisions on the standard the Publicity of Administrative Court Proceedings, the princi- of proof in Finnish legislation concerning damages. The court ples of the Openness Act also apply in the Market Court and can freely evaluate the weight and relevance of the evidence on the Supreme Administrative Court regarding trial documents. a case-by-case basis. This means that documents on the Finnish Competition and

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Consumer Authority’s case file, and trial documents from public also empowers both the Finnish Competition and Consumer enforcement proceedings, are as a default available. The main Authority and the European Commission to submit their obser- exceptions are corporate statements contained in leniency appli- vations regarding the application of Articles 101 and 102 of the cations as well as business secrets and similar documents where TFEU to a national court. We are not aware of any cases where a public or private interest prevents making them public. Article 15 would have been applied in Finland. The above provisions relate to the existence of a competition law infringement. They are thus more important in stand-alone 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? damages claims where the claimant has to prove the infringement without a previous infringement decision. In addition, the new Competition Damages Act enables a court to request a state- Pursuant to the Code of Judicial Procedure, a witness can be ment from the Finnish Competition and Consumer Authority called under threat of a fine. If a witness is absent without a valid concerning the amount of harm. excuse or leaves without permission, the fine shall be enforced In addition, officials from the Finnish Competition and and the court may order that the witness be immediately brought Consumer Authority have appeared as witnesses in damages cases. to the court, unless the hearing of the case is adjourned. The party who has called the witness conducts the direct exami- 52 Justification/Defences nation. Thereafter, the witness is cross-examined by the opposing party. Leading questions are allowed in cross-examination for the purpose of ascertaining the congruence between the testimony 5.1 Is a defence of justification/public interest and the true state of affairs. available?

Using a defence of justification/public interest is not restricted 4.7 Does an infringement decision by a national or international competition authority, or an authority from in the Finnish legislation. However, it is difficult to assess the another country, have probative value as to liability practical relevance of such defences due to lack of case law. It and enable claimants to pursue follow-on claims for is unlikely that this type of argument would exclude liability damages in the courts? for damages in clear infringement cases. The defendant could, however, attempt to justify an adjustment to the amount of Infringement decisions by the European Commission are always damages. binding. Under the Competition Damages Act, applicable to harm caused after December 2016, infringement decisions by the 5.2 Is the “passing on defence” available and do Finnish Competition and Consumer Authority are also binding. indirect purchasers have legal standing to sue? Decisions by authorities from other countries can be submitted as evidence, their evidentiary value to be evaluated by the court. The Competition Damages Act explicitly allows the passing-on Before 2016, there were no statutory provisions on this matter, defence and provides indirect purchasers the standing to sue. and case law is contradictory. While there is no case law on it, it seems clear that the passing-on defence has been available already before the Competition 4.8 How would courts deal with issues of commercial Damages Act because a claimant should only be able to recover confidentiality that may arise in competition actual losses. Indirect purchasers have likewise had legal proceedings? standing to sue already before the Competition Damages Act.

As a general principle, court proceedings in Finland are public. 5.3 Are defendants able to join other cartel participants Proceedings can be conducted without public access only in very to the claim as co-defendants? If so, on what basis may limited circumstances. Therefore, any documents submitted to they be joined? the court are also generally public. However, at the request of a party the court can, at its discretion, declare documents or parts Defendants may not join other cartel participants as defendants of documents containing business secrets as confidential if their in the original claim. However, defendants may bring a contri- publication would cause financial harm to a party. bution claim against them. The court will then decide whether to join the contribution claim with the original claim so that 4.9 Is there provision for the national competition liability can be established and apportioned for all the defend- authority in your jurisdiction (and/or the European ants as part of the same proceedings. Commission, in EU Member States) to express its views or analysis in relation to the case? If so, how 62 Timing common is it for the competition authority (or European Commission) to do so? 6.1 Is there a limitation period for bringing a claim for breach of competition law, and if so how long is it and The Competition Act empowers general courts to request a state- when does it start to run? ment from the Finnish Competition and Consumer Authority regarding the case. This possibility has been used a few times. These statements tend to be quite generic because the Authority According to the Competition Damages Act, there are two has not actually investigated the case. A request for a statement concurrent limitation periods. Both can only be interrupted has also led to the opening of a full investigation, rendering the by filing a claim. The first limitation period is five years. It initial statement moot. begins to run when the claimant knew or ought to have known On the basis of Article 15 of the Regulation (EC) 1/2003, about the breach of competition law, the harm and the liable national courts may ask the Commission for its opinion on the person. This limitation period is suspended if a competition application of Articles 101 and 102 of the TFEU. Article 15 authority begins an investigation concerning the infringement.

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The suspension ends one year after the decision in the compe- 7.2 If collective claims, class actions and/or tition authority’s investigation matter has become final. The representative actions are permitted, is collective second limitation period is 10 years from the date when the settlement/settlement by the representative body on infringement happened, or a continuous infringement ended. behalf of the claimants also permitted, and if so on what As long as either limitation period is running, the claim cannot basis? become time-barred. These rules apply only to harm caused after December 2016. It may be possible for the Consumer Ombudsman to bring For harm caused before December 2016, unless a claim a class action for damages on behalf of consumers. The is filed, the right to claim damages expires 10 years from the Consumer Ombudsman is also permitted to settle on behalf of date on which the infringement was committed or a contin- the class. Also, if several entities have transferred their claims uous infringement ceased. If the damages claim is based on a to one claims vehicle (such as Cartel Damage Claims), that entity prohibition decision of the Finnish Competition and Consumer is permitted to settle alone. If a number of parties are merely Authority or its proposal on the imposition of an infringe- represented by the same attorney, a separate consent for settlement fine, the limitation period expires one year after the deci- ment is required from all the clients. sion has become final. These rules entered into force with the Competition Act in November 2011 and apply only to infringe- 82 Costs ments committed under that Act and before the entry into force of the Competition Damages Act in December 2016. 8.1 Can the claimant/defendant recover its legal costs Infringements committed before November 2011 are subject to from the unsuccessful party? the previous competition legislation where the limitation period was five years from the time the claimant became aware of the damage. The unsuccessful party will, as a main rule, be ordered to compensate the prevailing party’s reasonable legal fees and costs incurred by necessary measures. The court is entitled to use free 6.2 Broadly speaking, how long does a typical breach discretion when awarding the legal costs. The courts may also of competition law claim take to bring to trial and final order partial compensation or make a decision that each party judgment? Is it possible to expedite proceedings? shall bear its own costs; the latter especially when the matter has been so unclear that both parties have had good reason to So far, follow-on claims are more common. In such cases the conduct the proceedings. time taken by the infringement proceedings has to be taken If some claims are decided in favour of one party and some in into account. An investigation by the Finnish Competition favour of the other party, the parties often bear their own costs. and Consumer Authority may take two to three years. The Authority cannot impose sanctions but may propose that the Market Court impose administrative fines. A case may be 8.2 Are lawyers permitted to act on a contingency fee basis? pending in the Market Court for another two to three years. The decisions of the Market Court can be appealed to the Supreme Administrative Court, where proceedings may take a Lawyers, in general, are not prohibited from acting on a couple of years. contingency fee basis. However, members of the Finnish Bar Although the district court handling an action for damages is Association are allowed contingency fee structures only on not obliged to stay the damages claim until a final decision has specific grounds. The most common fee structure in Finland is been issued in the administrative proceedings, it will in most based on hourly rates. cases be inclined to do so to avoid a contradictory judgment. The length of the proceedings in a district court depends 8.3 Is third party funding of competition law claims on the circumstances of the matter and the workload of the permitted? If so, has this option been used in many court. Competition law damages cases often involve complex cases to date? multi-party litigation, and have taken two to four years at the district court level. In practice, it is rarely possible to expedite Third-party funding is not prohibited or restricted by law. proceedings. However, we are not aware of any instances of use. The closest to third-party funding so far is a case where two victims of a 72 Settlement cartel sold their receivables to a third party that then began proceedings against the cartel members. 7.1 Do parties require the permission of the court to discontinue breach of competition law claims (for 92 Appeal example, if a settlement is reached)?

9.1 Can decisions of the court be appealed? No permission is needed to discontinue claims. Parties are allowed to withdraw their claims to stop the proceedings. Permission of the court is also not required for a settlement. Decisions of a district court can be appealed in a court of appeal Adjournment of the proceedings is usually granted by the court and, should leave to appeal be granted, from the court of appeal if negotiations for settlement are pending between the parties. to the Supreme Court. The threshold for granting leave to After settlement is reached, the parties confirm to the court that appeal is quite high. they no longer have any claims against each other.

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102 Leniency 11.2 What approach has been taken for the implementation of the EU Directive on Antitrust Damages Actions in your jurisdiction? How has the 10.1 Is leniency offered by a national competition Directive been applied by the courts in your jurisdiction? authority in your jurisdiction? If so, is (a) a successful, and (b) an unsuccessful applicant for leniency given immunity from civil claims? The Directive was transposed into the Competition Damages Act, which entered into force on 26 December 2016. Because of the restrictions on the temporal application of the Directive, Leniency rules were introduced to the Finnish Competition Act the Directive has not yet been applied by the courts, and is not in 2004. Leniency applicants are not given immunity from civil expected to be applied for some time. claims.

11.3 Please identify, with reference to transitional 10.2 Is (a) a successful, and (b) an unsuccessful provisions in national implementing legislation, applicant for leniency permitted to withhold evidence whether the key aspects of the Directive (including disclosed by it when obtaining leniency in any limitation reforms) will apply in your jurisdiction only to subsequent court proceedings? infringement decisions post-dating the effective date of implementation; or, if some other arrangement applies, The Competition Damages Act requires that the corporate please describe it. statements included in leniency applications shall not be permissible evidence, unless the leniency applicant itself discloses its Matters that were pending when the Competition Damages Act own corporate statement. entered into force will be decided based on the previous legislation. To the extent that the infringement happened before the 112 Anticipated Reforms entry into force of the Competition Damages Act, only certain parts of the new Act are applicable. The attempt is to only apply 11.1 For EU Member States, highlight the anticipated the procedural but not substantive parts of the new legislation impact of the EU Directive on Antitrust Damages Actions to the infringements that happened before the Act entered into at the national level and any amendments to national force. procedure that are likely to be required.

11.4 Are there any other proposed reforms in your Due to contradictory judgments in different antitrust damages jurisdiction relating to competition litigation? cases, it is difficult to say whether the Directive will introduce major changes to the current law. The expected changes relate Not at the time of writing (23 July 2020). at least to limitation periods, presumption of harm in cartel cases, disclosure of evidence, and the application of joint and several liability.

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Ilkka Leppihalme, Partner, heads Dittmar & Indrenius’ Competition & Public Procurement practice. His work covers the full spectrum of EU and Finnish competition law: merger control; cartel investigations; horizontal and vertical agreements; abuses of dominance; litigation/damages cases; compliance programmes and training; public procurement; and state aid, across a wide range of industries. Ilkka has been involved in various landmark competition cases, including the largest competition cases in Finland. He is regularly involved in assessing potential competition law issues in a transactional context and possesses significant experience in both domestic and multi- jurisdictional merger control procedures. He has also represented clients in numerous precedent-setting competition law-related damages cases. Ilkka has also acted as Counsel and as an expert on Finnish law in some of the most notable international antitrust damages cases. Ilkka is one of the five members of the Competition Law Expert Group of the Finnish Bar Association. He is a regular chairman and speaker at competition law conferences and seminars. He is listed as a leading competition law expert in all major international ranking publications.

Dittmar & Indrenius Tel: +358 9 681 700 Pohjoisesplanadi 25 A Email: [email protected] FI-00100 Helsinki URL: www.dittmar.fi Finland

Toni Kalliokoski is a Counsel in Dittmar & Indrenius’ Competition & Public Procurement and Dispute Resolution practices. He specialises in antitrust damages and has experience from both the claimant and defendant side in the first major cartel damages cases in Finland, including the precedent-setting Asphalt Cartel damages litigation. He has acted as an expert concerning Finnish law aspects in antitrust damages litigation abroad. Toni participated in the Expert Committee appointed to draft Finland’s new Competition Damages Act, based on the EU Directive on damages actions for infringements of competition law. He regularly lectures and publishes academic articles concerning antitrust damages. His publications include the first Finnish book on antitrust damages. He is also preparing a Ph.D. on antitrust damages at the University of Helsinki.

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Dittmar & Indrenius provides insightful and comprehensive advice to demanding corporate clients. We focus on creating exceptional added value. Our ambition is to be the best law firm partner for our clients. ■ “…‘carries the hallmark of quality’.” (Chambers Global.) ■ “This firm has a strong background with many large Finnish companies, working on numerous ground-breaking cases.” (Chambers Europe.) ■ “…‘without doubt the best firm I’ve worked with in Finland’ say clients.” (The Legal 500 EMEA.) www.dittmar.fi

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Alexandre Glatz

Osborne Clarke SELAS Thibaut Marcerou

certain practices in the transport sector (article L.420-2-2), 12 General abusively low prices (article L.420-5) and restrictive practices (articles L.442-1 et seq.). 1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition law. 1.3 Is the legal basis for competition law claims derived from international, national or regional law?

Breaching competition law (mainly articles L.420-1 and L.420-2 French law complies with EU law in respect of competition law of the French Commercial Code, i.e. the equivalent of articles rules. 101§1 and 102 TFEU) can result in claims brought before the However, certain particularities do exist (see question 1.1 and French Competition Authority (“FCA”) as well as before special question 1.2). Civil and Commercial courts (“State courts”). Both French and EU law provisions can be invoked. Injunctive relief is also available before both the FCA and State 1.4 Are there specialist courts in your jurisdiction to courts. which competition law cases are assigned? Moreover, private enforcement claims such as follow-on or stand-alone claims have been traditionally available either under At first instance, competition law litigation is subject to the general liability on torts (article 1240 of the French Civil Code) or jurisdiction of specialised commercial and civil courts (article sometimes contractual liability (article 1103 et seq. of the French L.420-7 of the French Commercial Code), depending on rules Civil Code) principles. (See, for example, Cass. Com, April 26, governing territorial jurisdiction for the claim. 2017, No. 15-28.197 on a stand-alone claim on the basis of article Appeals are lodged with the Court of Appeal in Paris. 1382 of the French Civil Code on the former provision for torts; The Cour de cassation (highest civil and commercial court) and now article 1240.) the Conseil d’Etat (highest administrative court) have jurisdiction Furthermore, collective proceedings (class actions or actions as the ultimate judges, excluding factual questions. de groupe) provisions were set forth by Law No. 2014-344 dated March 17, 2014 on Consumption (“Loi Hamon”). Finally, more recently, a specific competition follow-on legal framework has 1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms been implemented through the transposition by France of the for multiple claimants? For instance, is there a Antitrust Damages Directive 2014/104/EU by Order No. 2017- possibility of collective claims, class actions, actions 303 dated March 9, 2017. by representative bodies or any other form of public interest litigation? If collective claims or class actions are permitted, are these permitted on an “opt-in” or “opt- 1.2 What is the legal basis for bringing an action for out” basis? breach of competition law?

An action in court for breach of competition law can be brought Anticompetitive behaviours are set forth under article L.420-1 before the FCA or State courts by any person having a legal et seq. of the French Commercial Code. More particularly, anti- interest. Follow-on or stand-alone claims based on general tort competitive practices fall under article L.420-1 of the French principles or contractual liabilities are possible. The implemen- Commercial Code (the equivalent of article 101§1 TFEU), abuse tation by France of the Antitrust Damages Directive 2014/104/ of dominant position under article L.420-2§1 of the French EU by Order No. 2017-303 dated March 9, 2017 has facilitated Commercial Code (the equivalent of article 102 TFEU) and follow-on claims. abuse of economic dependency under article L.420-2§2 of the Collective claims (class actions or actions de groupe) have been French Commercial Code. available since the entering into force of Loi Hamon, but only EU law provisions (articles 101 and 102 TFEU) are also appli- for a limited number of authorised consumer associations. cable before French special courts and the FCA. Follow-on actions are available to said associations, provided Specific provisions of the French Commercial Code might the competition law-related decision concerned is final. also be applicable, in particular those related to pricing (articles The French class action legal framework is an “opt-in” system, L.410-1 et seq.), merger control (articles L.430-1 et seq.), exclu- as the victims represented by the consumer association have to sive rights in French overseas communities (article L.420-2-1), come forward in order to join the class.

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1.6 What jurisdictional factors will determine whether a 22 Interim Remedies court is entitled to take on a competition law claim?

2.1 Are interim remedies available in competition law The FCA is the authority to which usual competition law-related cases? claims are referred to when applying article L.420-1 of the French Commercial Code (or article 101§1 TFEU) relating to anticom- Interim remedies are available in France both before the FCA petitive agreements and article L.420-2 of the French Commercial (see, for example, Decision No. 20-MC-01 of April 9, 2020 (French Code (or article 102 TFEU) relating to abuse of market dominance. press organisation v. Google) and State courts (see, for example, Paris State courts are also competent either to annul/grant damages Court of Appeal, December 7, 2016 (Pétanque Longue), case No. of any breach of article L.420-1 and/or article L.420-2 or for 16/15228). the application of other competition law-related provisions, in Moreover, the Directive to improve national competition particular by application of article L.442-1 et seq. of the French authorities’ powers efficiency (ECN+ Directive), which will Commercial Code, even in fast-track proceedings (référé ) (see be implemented in France in the following months, should also question 1.2). empower the FCA to impose on its own initiative interim reme- The main factor to consider when issuing a writ before a State dies in cases of urgency and risk of serious and irreparable court is the specialisation of the court, as only certain courts damage to competition. are competent to handle competition law-related disputes (see question 1.4). These are mandatory public order rules and non-specialised courts do not hesitate to decline jurisdiction. 2.2 What interim remedies are available and under what conditions will a court grant them?

1.7 Does your jurisdiction have a reputation for attracting claimants or, on the contrary, defendant Before the FCA, claimants may claim for interim remedies applications to seize jurisdiction, and if so, why? (mesures conservatoires) provided subject to simultaneously lodging a claim on the merits (saisine au fond ) (article L.464-1 of the The FCA is one of the most respected competition authorities in French Commercial Code). Moreover, several conditions are to the European Union. It is usually considered to be independent, be fulfilled: professional and efficient. Claimants often appreciate its incli- ■ proof that the facts presented in the claim might be a nation to grant interim measures (mesures conservatoires). breach of competition law (article L.420-1 and/or article From a defendant perspective, the FCA is also generally L.420-2 of the French Commercial Code); considered as professional. In recent years, valuable efforts have ■ the competition law breach shall lead to serious and imme- been made in order to better protect defendants’ rights. diate consequences; and Private enforcement is much more frequent in France nowa- ■ there shall be an urgent need to justify interim measures days. The implementation by France of the Antitrust Damages in the context of irreversible or hardly reversible conse- Directive 2014/104/EU by Order No. 2017-303 dated March 9, quences to the economy, a specific sector, to a plaintiff, or 2017 has contributed to this change, although the main factor consumer interests. for the increase of antitrust damage claims is a change in the Before State courts, according to articles 834 et seq. of the attitude of undertakings which no longer hesitate to launch such French Code of Civil Procedure (civil courts) or articles 872 et claims and the fact that French courts are now responsive to seq. of the French Code of Civil Procedure (commercial courts), such claims. judicial courts may grant interim measures (mesures conservatoires ou One can already observe a real change in the attitude of provisoires) in fast-track proceedings (référé ) without ruling on the certain judges in this respect. As an example, Paris wants to be merits ( fond ). Should the case fail to raise serious grounds for an attractive jurisdiction for international claims and a section challenging (absence de contestations sérieuses), the court may grant of the Paris Commercial Court is able not only to consider as an interim measure an amount of money (provision) or specific documents drafted in the English language, but also to rule on performance, even in the event of a positive obligation (obliga- cases with proceedings fully held in the English language. The tion de faire). Government in place as of May 2017 is favouring this kind of If there is ground for challenging (contestation sérieuse), protec- initiative. tive measures may be awarded in order to avoid an imminent damage (dommage imminent) or to prevent an obviously illicit trouble (trouble manifestement illicite). 1.8 Is the judicial process adversarial or inquisitorial? 32 Final Remedies The French legal system is quite reluctant to perform an inquisitorial process. Before State courts, civil and commercial litiga- 3.1 Please identify the final remedies which may be tions are generally based on evidence provided by the parties, available and describe in each case the tests which but the judge plays an active part. He is able, in particular, to a court will apply in deciding whether to grant such a order investigation measures (mesures d’instruction) that may have remedy. similar effects as disclosure proceedings. The FCA possesses investigative powers and uses extensive A competition law breach (articles L.420-1 and L.420-2 of the means of investigation or expertise to prove the existence of French Commercial Code, or articles 101 and 102 TFEU) can anticompetitive practices. However, once evidence has been result in financial penalties being enforced by the FCA of up to gathered, the procedure becomes adversarial again. 10% of the parties’ group annual turnover. A competition law breach can also result in the annulment of the clause or the agreement either by the FCA or by the State courts.

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The FCA or State courts can also order to put an end to the In two cases, a claimant was even awarded compensation unlawful practice. before the Paris Court of Appeal in a follow-on litigation, Follow-on remedy claims resulting from an anticompetitive whereas the defendant undertook commitments before the agreement, behaviour or practice are also available before the FCA (Paris Court of Appeal, December 20, 2017, SARL DKT State courts under the general principles of liability on torts or International v. SA Eco-Emballages et Valorplast No. 15/07583 and the contractual liability regime, it being said that the claimant Paris Court of Appeal, September 12, 2018, Betclic v. PMU, No. shall prove a fault, a damage and a causal link between the fault 18/04914). and damage (see, notably, question 1.1). Publicity of the decisions can also be ordered by the FCA or 42 Evidence the State courts. 4.1 What is the standard of proof? 3.2 If damages are an available remedy, on what bases can a court determine the amount of the award? Are For commercial matters (the main area of competition law-related exemplary damages available? Are there any examples of damages being awarded by the courts in competition litigation), evidence is freely submitted by the parties. cases which are in the public domain? If so, please identify any notable examples and provide details of the 4.2 Who bears the evidential burden of proof? amounts awarded.

As a principle, the burden of proof rests on the party that alleges Class actions (actions de groupe) were introduced in the French a fact. legal system in 2014 and are limited to the initiative of some authorised consumer associations in the framework of an “opt- in” system, quite far away from the impressive damage awarding 4.3 Do evidential presumptions play an important the US “opt-out” class action type of legal regime (see also ques- role in damages claims, including any presumptions tion 1.5). of loss in cartel cases that have been applied in your jurisdiction? Most of the antitrust cases resulting in the awarding of significant damages are based on general principles of liability on torts (articles 1240 et seq. of the French Civil Code). Evidential presumptions related to a competition law breach Before French courts, exemplary or punitive damages are not (under article L.420-1 and/or article L.420-2 of the French awarded. However, damages compensate the entire prejudice Commercial Code and/or article 101 and/or article 102 TFEU) suffered by the victim. This includes awarding interest. played an important role in the following cases: Compensation usually covers the overcharge suffered and (i) Order No. 2017-303 dated March 9, 2017, governing damages the loss of opportunity calculated on the basis of the adverse actions for infringements of competition law, implementing effect of time. Non-financial damages (for example) can also Directive 2014/104/EU on antitrust damage claims, created be granted. Many cases actually result in arbitration court or several presumptions as regards follow-on claims in general out-of-court settlements. (see question 11.2). There are notable, publicly available examples of damages (ii) More specifically, competition infringements related to being awarded by the State courts in competition law cases, such follow-on actions initiated in the context of class actions as the Outremer Telecom case where Orange SA (formerly France (actions de groupe), as implemented in the French legal system Telecom) and its subsidiary Orange Caraïbes were sanctioned by (articles L.623-1 et seq. of the French Consumer Code), can the FCA for abuse of dominant position, and a competitor of result in liability for the professional who committed the Outremer Telecom was awarded several million euro in compen- breach only in the case of a final decision of an EU compe- sation (Paris Commercial Court, March 16, 2015, SAS Outremer tition authority, which also constitutes a non-rebuttable Telecom c/ SA Orange Caraïbe et SA Orange; Paris Court of Appeal, presumption of the breach by the professional (articles May 10, 2017, case No. 15/05918). Although State courts do not L.623-24 et seq. of the French Consumer Code). easily award significant damages to victims of anticompetitive conduct, they have recently demonstrated a real willingness to 4.4 Are there limitations on the forms of evidence change this. As an example, a major damage claim was filed by which may be put forward by either side? Is expert SFR Numericable with the Paris Commercial Court in June 2015 evidence accepted by the courts? against Orange, seeking €2.4 billion following the €350 million fine imposed by the FCA on Orange (Decision No. 15-D-20 Regarding commercial matters (the main area of competition dated December 17, 2015) for having abusively hindered the law-related litigation), evidence is not limited from a formal development of competition since the early 2000s. perspective. In civil matters, written evidence shall generally be given for any agreement exceeding €1,500. 3.3 Are fines imposed by competition authorities and/ Expert evidence is often required or ordered by courts, but or any redress scheme already offered to those harmed remains in any event the best evidence to justify the damages by the infringement taken into account by the court when claimed. calculating the award?

4.5 What are the rules on disclosure? What, if any, State courts do not take into account fines or the redress scheme documents can be obtained: (i) before proceedings imposed by the FCA when calculating damages to be awarded. have begun; (ii) during proceedings from the other Fines imposed by the FCA take into account the “damage to party; and (iii) from third parties (including competition the economy” (dommage à l’économie), which is different from that authorities)? suffered by the victims of anticompetitive conduct. There is no disclosure proceeding under French law.

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However, based on article 145 of the French Code of Civil evidence, the judge has to make sure that the request of evidence Procedure, judicial courts may order any legally admissible inves- by the victims is proportionate. Based on article L.483-8 of the tigation measure (mesures d’instruction légalement admissibles) prior to French Commercial Code, the judge can order the communication a claim on the merits if there is a legitimate ground (motif légitime) of documents from the file of the FCA, but only if the proceedings to obtain proof of facts on which the solution of a lawsuit may are closed by a decision of the FCA and if the evidence requested depend. These measures can be granted by fast-track proceed- does not come from a leniency or a settlement procedure. ings (référé ) which are contradictory, but also based on ex parte non-contradictory requests (requête). 4.9 Is there provision for the national competition French courts can also order investigation measures (mesures authority in your jurisdiction (and/or the European d’instruction) during the course of a lawsuit (articles 143 et seq. Commission, in EU Member States) to express its of the French Code of Civil Procedure) or even request a third views or analysis in relation to the case? If so, how party, including the FCA or the French Directorate General common is it for the competition authority (or European for Competition Consumer Affairs and Repression of Fraud Commission) to do so? (“DGCCRF”), to submit evidence (articles 138 et seq. of the French Code of Civil Procedure and L.483-1 of the French The FCA can be requested by French courts according to article Commercial Code). L.462-3 of the French Commercial Code to opine on the anticompetitive practices set forth by articles L.420-1 (for anticom- 4.6 Can witnesses be forced to appear? To what extent, petitive practices), L.420-2 (for abuse of a dominant position and if any, is cross-examination of witnesses possible? abuse of economic dependency), L.420-2-1 (exclusivities in the French overseas territories), L.420-2-2 (practices in the transport sector) and L.420-5 (abusively low prices) of the French Under French civil procedure, a witness can be compelled to Commercial Code, as well as articles 101 and 102 TFEU. This appear before courts, subject to a fine in case of refusal. provision is not commonly used by French courts, but there is a Cross-examination of witnesses is not allowed under French tendency to use this mechanism more often (for an example, see civil procedure, but questions submitted to the judge by the opinion 14-A-18 on the Bottin Cartographes v. Google case by which parties can be asked by the judge to the witness. the Paris Court of Appeal requested the FCA to assist in the assessment of an abuse of a dominant position). 4.7 Does an infringement decision by a national or It should also be noted that, according to article 15 of the international competition authority, or an authority from Council Regulation No. 1/2003, French courts may also request another country, have probative value as to liability the Commission to opine on questions concerning the applica- and enable claimants to pursue follow-on claims for tion of EU competition law. The FCA, acting on its own initia- damages in the courts? tive, may submit written observations to French courts relating to the application of article 101 or 102 TFEU. Courts may also Pursuant to the uniform application of EU competition law request guidance from the FCA regarding the assessment of principles set forth by article 16(1) of the Council Regulation damages (article R.481-1 of the French Commercial Code). No. 1/2003 and article L.481-2 of the French Commercial Code, State courts ruling on agreements, decisions or practices under article 101 or article 102 TFEU that are already subject to a 52 Justification/Defences Commission decision cannot decide to the contrary of the decision adopted by the Commission. 5.1 Is a defence of justification/public interest Article L.481-2 of the French Commercial Code also provides available? that where the existence of an anticompetitive practice and its attri- bution to a person have been established by a decision pronounced According to article L.420-4 of the French Commercial Code, by the FCA or by the Court of Appeal which can no longer be the prohibition of anticompetitive practices set forth by articles subject to an appeal for the party relating to that finding, the anti- L.420-1 and L.420-2 of the French Commercial Code do not competitive practice benefits from a non-rebuttable presumption cover practices: (see question 11.2). Consequently, the judge granting compensa- ■ which result from the application of law or subsequent tion will be bound by this finding for the follow-on claim of the regulations; and victim of the practice. ■ for which the authors can justify that they result in However, a competition law infringement decision by a economic progress, including by creating or maintaining national (non-French) or international competition authority or jobs, and reserve to users a fair share of the benefit that will an authority from another country is not binding on State courts. emerge from the practice, without eliminating competition National (non-French) or international competition authority (altogether). Specific provisions also apply to the agricul- decisions can, however, be used by claimants as evidence of anti- tural sector. competitive conduct (article L.481-2 of the French Commercial Specific justifications also apply for French overseas Code – see question 11.2). territories.

4.8 How would courts deal with issues of commercial 5.2 Is the “passing on defence” available and do confidentiality that may arise in competition indirect purchasers have legal standing to sue? proceedings? Pursuant to article L.481-4 of the French Commercial Code, It is usually assessed on a case-by-case basis. However, now that direct or indirect purchasers from victims of an infringement of Directive 2014/104/EU on antitrust damage claims has been competition law benefit from a presumption that they have not implemented by Order No. 2017-303 dated March 9, 2017, under passed on the overcharge resulting from the breach of competi- French law and in order to avoid excessive communication of tion. Direct or indirect purchasers that allege to have suffered

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an overcharge as a result of the anticompetitive conduct have the merits or on the merits on fixed dates in case of urgency to prove it. However, the indirect purchaser shall be deemed upon authorisation (requête) by the competent court (procedure à to have proven that a passing-on to that indirect purchaser jour fixe). occurred where that indirect purchaser has shown that: (1) the defendant has committed an infringement of competition law; 72 Settlement (2) the infringement of competition law has resulted in an overcharge for the direct purchaser of the defendant; and (3) the 7.1 Do parties require the permission of the court indirect purchaser has purchased the goods or services that to discontinue breach of competition law claims (for were the object of the infringement of competition law, or has example, if a settlement is reached)? purchased goods or services derived from or containing them (article L.481-5 of the French Commercial Code). A party which has lodged a claim before the FCA may withdraw it. The President or the Vice-President of the FCA may then 5.3 Are defendants able to join other cartel participants issue a decision to close the case, without having to give reasons. to the claim as co-defendants? If so, on what basis may However, despite this withdrawal, the FCA may continue the they be joined? investigation (article L.462-8 of the French Commercial Code). Before the State courts, a settlement by the parties usually Before French courts, defendants might join other cartel partic- results in the withdrawal of the claim and sets forth that the ipants to a claim as co-defendants (articles 325 et seq. of the counterparty accepts such withdrawal, which is a condition for French Code of Civil Procedure). the court to effectively withdraw the case (article 394 of the French Code of Civil Procedure). 62 Timing 7.2 If collective claims, class actions and/or representative actions are permitted, is collective 6.1 Is there a limitation period for bringing a claim for settlement/settlement by the representative body on breach of competition law, and if so how long is it and behalf of the claimants also permitted, and if so on what when does it start to run? basis?

As a principle, the limitation period in commercial (article Collective settlements are available under the same conditions as L.110-4 of the French Commercial Code), competition (article bilateral settlements (see question 7.1). 462-7 of the French Commercial Code) and civil (article 2224 of However, the class actions regime as implemented by article the French Civil Code) matters is five years as of the acknowl- L.623-1 et seq. of the French Consumer Code sets forth that, in edgment of the facts on which the claim is based. Pursuant to the case of an agreement resulting from mediation and negoti- article L.482-1 of the French Commercial Code, the five-year ated on behalf of the group, the court having jurisdiction over limitation period runs from the day on which the claimant is the case has to homologate the agreement (article L.623-23 of aware or should have been aware of (1) an anticompetitive prac- the French Consumer Code). tice qualified as such, (2) the fact that such practice causes the claimant damage, and (3) the identity of one of the authors of 82 Costs such anticompetitive practice. In any case, the claim is time-barred with the FCA 10 years 8.1 Can the claimant/defendant recover its legal costs after the breach of competition law has ceased if the FCA has from the unsuccessful party? not ruled on the matter. Moreover, as a result of article L.623-1 of the French Consumer Code, follow-on competition law-related class actions Article 695 et seq. of the French Code of Civil Procedure sets cannot be engaged more than five years after the decision ruling forth a number of situations that result in costs being borne by on the infringement has become final, and from the moment the the dismissed party or another party, if the court so decides. claimant is aware or should have been aware of (1) the conduct in Moreover, according to article 700 of the French Code of question, (2) the fact that it constitutes an anticompetitive prac- Civil Procedure, the judge will estimate the amount due by any tice, (3) the damage he suffers, and (4) the identity of the author party to support the costs of proceedings, despite the fact that of the practice (article L.623-25 of the French Consumer Code). such amount rarely equals the effective legal costs.

8.2 Are lawyers permitted to act on a contingency fee 6.2 Broadly speaking, how long does a typical breach basis? of competition law claim take to bring to trial and final judgment? Is it possible to expedite proceedings? Contingency fees (honoraires de résultat) are not allowed as such. There is no typical timing for the FCA to rule on a case, although However, additional fees that are not solely based on the the FCA is generally efficient and has already made a significant result of the case are allowed and usually regarded as not exces- effort to “clean up” the stock of cases under investigation for sive if limited to 10% of the amount obtained by the claimant. several years. As regards courts of first instance, timing is variable on a case-by-case basis. 8.3 Is third party funding of competition law claims Before the Paris Court of Appeal, proceedings usually take permitted? If so, has this option been used in many between 12 and 18 months. cases to date? Before the Cour de cassation, proceedings usually take between 12 and 24 months. Third-party funding of a competition law claim is becoming Interim measures might, of course, be granted more rapidly, more frequent in France. This offer is indeed already available and relatively fast proceedings (référé ) are available when not on in the market and may develop.

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In this respect, the French Cour de cassation has ruled that the 11.2 What approach has been taken for the right to a claim (droit à agir en justice) can be sold to a third party implementation of the EU Directive on Antitrust (Cour de cassation, First Chamber, January 10, 2006 case No. Damages Actions in your jurisdiction? How has the 03-17.839). Directive been applied by the courts in your jurisdiction?

92 Appeal Some of the provisions set forth by Directive 2014/104/EU already existed in the French legal framework or had been 9.1 Can decisions of the court be appealed? partially anticipated by Loi Hamon on the non-rebuttable presumption of breach by a professional in French follow-on class actions, and Law No. 2012-1270 dated November 20, 2012 As a general principle, State court decisions relating to compe- (Loi Lurel ) on the confidentiality of information provided in the tition law matters can be appealed before the Paris Court of framework of leniency programmes. Some other implementa- Appeal within a month after the servicing of the court. In the tions result from French court case law. context of fast-track proceedings (référé ), the appeal has to be Most of the legislative adaptations come, however, from the lodged within 15 days. implementation under French law of Directive 2014/104/EU by The case can be further referred to the Cour de cassation (highest Order No. 2017-303 dated March 9, 2017, governing damages civil and commercial court) two months after the appeal deci- actions for infringements of competition law. The main impact sion has been served. of Order No. 2017-303 dated March 9, 2017 is on: FCA decisions can be appealed before the Paris Court of ■ The non-rebuttable presumption of a fault resulting from Appeal and then before the Cour de cassation both one month after anticompetitive conduct recognised as such by the FCA. their notification (article L.464-8 of the French Commercial The recognition deriving from a decision of a foreign Code). competition authority has only a probative value (article L.481-2 of the French Commercial Code). 102 Leniency ■ The presumption that direct and indirect purchasers as victims of the anticompetitive conduct did not pass on the 10.1 Is leniency offered by a national competition overcharge resulting from the breach of competition law authority in your jurisdiction? If so, is (a) a successful, (see question 5.2). and (b) an unsuccessful applicant for leniency given ■ The presumption that a cartel caused damages, which does immunity from civil claims? not have to be proved by the claimant (article L.481-7 of the French Commercial Code). Yes, French law offers leniency applications before the FCA. ■ The joint liability of the multiple offenders when there Total or partial immunity can be granted in respect of the exist various anticompetitive conduct authors (article fine applied by the FCA, but this does not prevent the appli- L.481-9 of the French Commercial Code). cant for leniency from facing civil/commercial claim litigations ■ New limitation period terms (article L.482-1 of the French and thus payment of damages to the victims of the competition Commercial Code). law breach. The implementation of the Directive in France has led to an intensification of appeals and/or referrals to the Courts. 10.2 Is (a) a successful, and (b) an unsuccessful Debates arose on the starting point of the five-year limita- applicant for leniency permitted to withhold evidence tion period and its postponement at the end of the anticompet- disclosed by it when obtaining leniency in any itive practices. In the presence of secret practices, it is tradi- subsequent court proceedings? tionally considered that the time limit of prescription begins to run on the day of the decision since it is the latter which reveals Since discovery proceedings are not allowed under French law, practices to victims (Paris Commercial Court, October 1, 2019, the applicant for leniency can, as a principle, withhold evidence No. 2017053369 or Paris Court of Appeal, February 6, 2019, disclosed when applying for leniency before the FCA. No. 17/04101). However, when the victims could only suspect However, the FCA might have to disclose evidence upon the practices, several jurisdictions held that the limitation period court’s request, except in cases of refusal based on legitimate had started to run before the decision was made by competi- grounds as provided in article 11 of the French Code of Civil tion authorities (Fort-de-France Court of Appeal, 24 January Procedure or article L.462-3 of the French Commercial Code, 2017, No. 15/00486), while the Paris Court of Appeal consid- in order to protect the attractiveness of the leniency programme. ered that the limitation period could only run from the day on which the cartel was not only suspected but established in its factual and legal elements (Paris Court of Appeal, July 2, 2015, 112 Anticipated Reforms No. 13/22609). Nevertheless, it is too early to assess the real impact of the Directive on private enforcement decisions. 11.1 For EU Member States, highlight the anticipated impact of the EU Directive on Antitrust Damages Actions at the national level and any amendments to national 11.3 Please identify with reference to transitional procedure that are likely to be required. provisions in national implementing legislation, whether the key aspects of the Directive (including limitation reforms) will apply in your jurisdiction only ‎to Directive 2014/104/EU on antitrust damage claims was imple- infringement decisions post-dating the effective date of mented by Order No. 2017-303 dated March 9, 2017. It has implementation or, if some other arrangement applies, surely eased follow-on claims in France (see question 11.2). please describe.

As a principle, the substantive provisions of Order No. 2017- 303 dated March 9, 2017, implementing the Directive, came into

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force the day after the Order’s publication, i.e. on March 11, not been reached; in that case, the time period already elapsed 2017, and provisions regarding presumptions, rules of evidence is taken into account to calculate the remaining period (article and tort law are applicable to claims derived from events giving 12 of the Order). rise to damages which have happened after the entry into force of Order No. 2017-303. 11.4 Are there any other proposed reforms in your As regards procedural provisions, in accordance with article jurisdiction relating to competition litigation? 22 of the Directive, a transitional provision of Order No. 2017- 303 dated March 9, 2017 makes procedural provisions applicable only to actions for damages of which a national court was seized The implementation of the Directive ECN+, which should take after December 26, 2014. place in the following months, will not trigger major changes Finally, pursuant to Order No. 2017-303 dated March 9, 2017, for the FCA; however, this will now be able to start proceedings provisions extending the limitation period are applicable to ex officio to impose interim measures and structural remedies on cases for which the expiration date of the limitation period has companies sanctioned for anticompetitive practices.

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Alexandre Glatz is a Partner in the Competition and Commercial law department at Osborne Clarke. He combines broad skills in all areas of economic law with specialised expertise in competition law, franchising, selective and exclusive distribution, agency and commercial litigation. Alexandre has been involved in many of the most significant vertical restraints cases in France (notably the “Perfume case”, the “Toys case” and the “Dermo-cosmetics case” concerning the issue of Internet reselling of products which were the object of selective distribution), and he regularly assists clients during dawn raids and cartel litigation or for merger control filings. He is actively involved in numerous commercial litigations and his expertise includes antitrust private enforcement expertise. The Osborne Clarke Paris team lead by Alexandre Glatz is recommended in the 2020/2021 EU Competition & Distribution edition of The Legal 500, and Alexandre is included in the 2021 edition of Best Lawyers in France (Competition/Antitrust law).

Osborne Clarke SELAS Tel: +33 1 84 82 45 76 163 boulevard Malesherbes Email: [email protected] 75017 Paris URL: www.osborneclarke.com France

Thibaut Marcerou is a Senior Associate in the Competition and Commercial law department at Osborne Clarke. He advises French and foreign clients particularly in the areas of competition (merger control, horizontal and vertical anticompetitive practices, abuse of dominant position), distribution (commercial negotiation, T&Cs, contracts and distribution networks, restrictive practices) and consumer issues (sales promotions, T&Cs, unfair business practices). He also deals with commercial disputes and litigation before the French Competition Authority, civil and commercial courts as well as investigations before the French regulators (DGCCRF, DDPP). He has been a member of the AFEC (French Association for Competition Studies) since 2012 and Vice-President of the “Young Committee” of the AFEC since 2016.

Osborne Clarke SELAS Tel: +33 6 48 38 25 59 163 boulevard Malesherbes Email: thibaut.marcerou@osborneclarke 75017 Paris URL: www.osborneclarke.com France

Osborne Clarke provides insightful and effective legal services to meet and distribution, mergers and acquisitions, intellectual property, regulatory clients’ advisory, litigation and transactional needs. We have offices and and public law, information technology, data privacy, publicity, labour law, competition litigation capabilities in all of the major European economies: immigration and professional mobility, real estate transactions and tax. the UK; Germany; France; Netherlands; Italy; Spain; and Belgium. Our The competition team led by Alexandre Glatz has developed in-depth offices in Silicon Valley, San Francisco and New York advise US compa- knowledge on all aspects of antitrust, dawn raids and subsequent litiga- nies targeting Europe, before they leave home. In Asia, our Hong Kong tions, private enforcement and all kinds of commercial litigations. and Shanghai offices advise clients internationally on doing business in www.osborneclarke.com the Asia-Pacific region, with a particular focus on Hong Kong and China. In addition to our office locations, we also have specialist groups focusing on key international markets – India, Middle East, Russia/CIS and Turkey. In Paris, Osborne Clarke is led by a dynamic, growing team, covering a wide range of specialisms of business law. The team has a deep knowledge of the digital economy sector within which a large part of its clientele (French and international) operates. The main areas of expertise for Osborne Clarke Paris, both for advising and litigation, are commercial, antitrust and merger control, franchising

Competition Litigation 2021 © Published and reproduced with kind permission by Global Legal Group Ltd, London 98 Chapter 12 Germany Germany

Prof. Dr. Ulrich Schnelle

Haver & Mailänder Rechtsanwälte Partnerschaft mbB Elisabeth S. Wyrembek

12 General 1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned?

1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition Specific competition law courts exist in Germany. According law. to Section 87 GWB, the ordinary Regional Courts (Landgerichte) have exclusive jurisdiction over civil claims for breach of competition law. The Regional Courts usually have specialised cartel Pursuant to Sections 33 and 33a of the German Act against divisions before which these cases are heard with judges specif- Restraints of Competition (“GWB”), parties that are affected ically trained and experienced in competition law. Moreover, by a breach of German or European competition law can most Bundesländer have assigned exclusive jurisdiction to one or bring claims for abatement and removal as well as claims for more specific Regional Courts and thus concentrated competi- damages against the tortfeasors. Where claimants are unable to tion litigation cases before these courts. determine the precise scope of their damages claims (which is normally the case), it is also possible to bring actions for declaratory relief. Finally, claims can be brought in respect of disclo- 1.5 Who has standing to bring an action for breach of sure of relevant documentation or the provision of information competition law and what are the available mechanisms that the claimant requires in order to substantiate or quantify for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions its claims. by representative bodies or any other form of public interest litigation? If collective claims or class actions 1.2 What is the legal basis for bringing an action for are permitted, are these permitted on an “opt-in” or “opt- out” basis? breach of competition law?

The primary legal basis for claims for abatement and removal is Actions for breach of competition law (e.g., actions for abatement and removal or damages claims) can be brought by any affected Section 33 GWB. The primary legal basis for damages claims is market participant according to Sections 33 and 33a GWB. Sections 33a GWB. Depending on the individual circumstances This is in line with Articles 3 and 12 EU Damages Directive of the case, legal action can also be based on Section 826 of the and generally includes any natural or legal person who has been German Civil Code (“BGB”) if the infringement of competition directly or indirectly affected by a breach of competition law. law was conducted with the intent of harming the claimant, on While class actions are alien to German law, a number a breach of contractual or pre-contractual duties, on a violation of different means of collective redress exist, nonetheless. of the German Act against Unfair Competition, or on the prin- According to Section 33 (4) GWB, for instance, certain regis- ciple of unjust enrichment. tered trade associations and consumer protection organisations are entitled to bring collective claims for abatement and removal 1.3 Is the legal basis for competition law claims where a breach of competition law affects their members. Note: derived from international, national or regional law? Section 33 (4) GWB does not entitle organisations to bring damages actions on behalf of their members. The legal basis for competition claims in Germany is mainly Also, German procedural law allows for a joinder of parties derived from national law, which gave rise to competition law on both the claimant and defendant side (Streitgenossenschaft). claims and their efficient prosecution way before the judg- A joinder of parties requires that the joint parties are entitled ments of the ECJ of 20 September 2001 (C-453/99 – Courage) or obliged for the same factual and legal cause, e.g. various and of 13 July 2006 (C-295/04 – Manfredi ) set the scene at EU customers affected by a cartel arrangement versus various partic- level. Obviously, however, the policy and jurisprudential devel- ipants of a cartel. However, joinder of parties does not necessarily result in a single uniform decision regarding the joined opments at EU level also had a significant impact on German parties. Rather, even though the various claims are litigated in national law and its interpretation by the national courts. With the same proceedings, the joined parties and their respective the implementation of the EU Directive on Antitrust Damages claims remain legally independent. (“EU Damages Directive”), it is now fair to say that the legal basis An increasing trend in German competition law litigation is for competition law claims is now at least in part derived from the collective enforcement of claims by special purpose vehicles international law. which aggregate and take assignment of cartel damage claims (see question 8.3).

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1.6 What jurisdictional factors will determine whether a 22 Interim Remedies court is entitled to take on a competition law claim?

2.1 Are interim remedies available in competition law One relevant factor to determine the competent Regional Court cases? is the domicile or registered seat of the defendant. A German court has jurisdiction over competition law claims brought Yes, interim remedies are available. against one or more defendants domiciled in the relevant court district. Another important jurisdictional factor for competition 2.2 What interim remedies are available and under law claims is the special jurisdiction of tort under Section 32 what conditions will a court grant them? German Code of Civil Procedure (“ZPO”) and Article 7 (2) of regulation (EU) 1215/2015. Under these provisions, jurisdiction Interim remedies are available both as preventive measures as well can lie with the courts at the place where the tortfeasor acted or as interim remedies for abatement and removal. They require where a legally protected interest has been impaired. Therefore, that the claimant can convince the court of the urgency of the in the context of claims relating to a breach of competition law, matter, which, in practice, is only conceivable in respect of claims actions can be brought before those German courts in whose for abatement and removal: interim remedies for performance (in district the anti-competitive conduct was committed or where it particular damages compensation or supply) are only available produced its effects. under very exceptional circumstances, as the claimant would be In addition, all EU-based defendants can be jointly sued for awarded remedies which are not interim, but final. This is usually damages in any EU Member State where one of them is domi- only possible in a final judgment. Therefore, they are only conceiv- ciled according to Article 8 (1) of regulation (EU) 1215/2015. able if the failure to supply is expected to cause the claimant such significant harm that he is no longer able to continue the main 1.7 Does your jurisdiction have a reputation for proceedings. attracting claimants or, on the contrary, defendant applications to seize jurisdiction, and if so, why? 32 Final Remedies

Germany is a claimant-friendly and popular European venue for 3.1 Please identify the final remedies which may be cartel damages claims. This development has its roots in the available and describe in each case the tests which a court early ’90s when the first significant claims for damages were will apply in deciding whether to grant such a remedy. awarded by German courts and was further fostered by the 2005 reform of the GWB, which introduced a set of rules that Final remedies are dependent on the claimant’s request. significantly improved the conditions for private competition Under Section 33 GWB, a claimant can lodge a claim for litigation in Germany. Furthermore, the jurisprudence of the abatement and removal, ask for injunctive relief, or – under German Federal Court of Justice has also significantly contrib- Section 33a – claim damages. As a special subcategory to those, uted to rendering Germany one of the most interesting venues there are also claims for performance. for bringing cartel damages claims, e.g. by establishing legal or The court will award damages to the extent that the claimant factual presumptions in respect of the effects of cartels and the has been affected by a culpable (i.e., at least negligent) compe- existence of cartel damages. The extensive jurisprudence that tition law infringement, which inflicted harm on the claimant. exists in the meantime provides significant legal certainty and Claims for abatement and removal as well as for injunctive allows claimants to pinpoint any of the potential procedural relief are successful if the claimant is affected by a culpable risks and anticipate the likely outcome of their cases. Last but competition infringement which is still ongoing, so that the not least, the comparatively short duration of judicial proceed- restrictions can be removed. ings is appealing to many claimants.

3.2 If damages are an available remedy, on what bases 1.8 Is the judicial process adversarial or inquisitorial? can a court determine the amount of the award? Are exemplary damages available? Are there any examples of damages being awarded by the courts in competition The German judicial process is in essence adversarial. As a cases which are in the public domain? If so, please general rule, the court may consider only the facts and asser- identify any notable examples and provide details of the tions presented (and as the case may be proven) by the parties amounts awarded. and may not look for evidentiary material on its own. For this purpose, Section 138 ZPO stipulates that the parties are to make Damages are an available remedy under German law. However, their declarations as to the facts fully and completely and are German law does not provide for exemplary, punitive or treble obliged to tell the truth. Deliberately making false factual alle- damages or the like. Rather, German law is based on the gations qualifies as a crime. concept of simple but full compensation. The courts are free to The general principle of an adversarial process is somewhat estimate the approximate amount of damages, provided that the limited by the court’s duty of constructively moderating the court disposes of sufficient facts in order to make a reasonable proceedings, i.e. to ensure that the parties (i) make full decla- and resistant estimate. rations regarding all material facts, (ii) designate sources of evidence, and (iii) make the appropriate demands for relief. It is thus usual that a court would provide the parties with certain hints and indications regarding potential gaps in their factual allegations or submissions of evidence.

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3.3 Are fines imposed by competition authorities and/ were higher than they had been without the cartel (“affected by the or any redress scheme already offered to those harmed cartel ”), if the products or services provided by the claimant are by the infringement taken into account by the court when the subject matter of the cartel and fall within the scope of such calculating the award? cartel as far as time and geographic scope are concerned.

Payments to competition authorities, or other payments, or 4.4 Are there limitations on the forms of evidence payment commitments are not taken into account when calcu- which may be put forward by either side? Is expert lating the award. As a general rule, German civil law/tort evidence accepted by the courts? law aims at compensating the claimant by putting him in the situation he would have been in if the harmful event had not There are five different forms of evidence admissible under the occurred. This is also the approach taken in Article 3 (2) EU ZPO, namely documentary evidence, witness testimony, expert Damages Directive. testimony, inspection by the court (not of practical relevance in competition litigation) and party testimony. 42 Evidence Documentary evidence is the most important form of evidence in German litigation. As a general rule, all documents 4.1 What is the standard of proof? are deemed to be authentic until their authenticity is disputed by a party. According to the general standard of proof, the claimant has to Witnesses are heard individually and give evidence during the fully convince the court beyond any reasonable doubt in regard oral hearing in front of the court and the parties. to all requirements of a claim, including the chain of causation. Proof by formal party testimony does exist, but is secondary to However, there are some exceptions to this general rule. First of other forms of evidence and plays only a minor role in German all, one will have to mention the binding effect of decisions by litigation. the European Commission or one of the national competition Upon request of a party, the court may appoint an expert. authorities within the EU. Moreover, according to Section 287 Court-appointed experts provide strictly independent and neutral ZPO, the court is allowed to estimate the amount of damages advice to the court in matters where the judges are lacking exper- if the claimant is able to show that all other requirements for a tise. Prior to the oral hearing, each party can submit the written successful damages claim are met but is unable to specify the expert opinion of its own party-appointed expert. However, amount of harm suffered. these opinions are not considered independent expert testimony, but rather part of the respective party’s statement of facts.

4.2 Who bears the evidential burden of proof? 4.5 What are the rules on disclosure? What, if any, documents can be obtained: (i) before proceedings As a general rule in German Civil Procedure, a party bears the have begun; (ii) during proceedings from the other burden of proof for all facts which are to its benefit, i.e. the party; and (iii) from third parties (including competition claimant bears the burden of proof for all facts that are required authorities)? to successfully claim damages and the defendant bears the full burden of proof for all defences against the substantive claim. The newly introduced Section 33g (1) GWB provides for a However, there may be a shift in the burden of proof in certain substantive claim for access to documents/information. This situations; for instance, when evidential presumptions apply (see claim exists at any time (provided that the claimant can show question 4.3). that he might be entitled to damages caused by the cartel) and also before proceedings have begun. The claimant has to iden- 4.3 Do evidential presumptions play an important tify the required documents as accurately as possible with role in damages claims, including any presumptions reasonable effort. However, if such a request for documents is of loss in cartel cases that have been applied in your refused, the demanding party has no choice but to start separate jurisdiction? proceedings against the refusing (third) party for the disclosure of the relevant documents. Claimants benefit from a number of legal presumptions which Under Section 33g (2) GWB, the defendant is also able to have been developed by the courts over time, such as: (i) the claim access to documents which are necessary to defend against presumption that dealings with the cartelists during the cartel a claim for damages if the proceedings have already begun. period can generally be considered to be affected by the cartel; Importantly, however, the claim pursuant to Section 33g (2) and (ii) the presumption that cartels generally result in higher GWB is only available to defendants once legal proceedings prices (now explicitly regulated in Section 33a (2) GWB). have been initiated against them. However, for cases which are governed by the rules of law Moreover, pursuant to Section 142 ZPO together with applicable prior to the coming into effect of Section 33a (2) Sections 421 et seqq. ZPO, the claimant has a procedural right GWB, the Federal Court of Justice has ruled in its judgment to request the defendant to present documents in his possession of 11 December 2018 (KZR 26/17 – Schienenkartell ) that there during the court proceedings. This right exists in particular if is no prima facie evidence that cartels generally result in an over- the claimant can demonstrate a legal interest in exploring the charge. After this judgment, the lower courts set up a presump- content of certain documents, or if the defendant has referred to tion based on facts to this effect on which the Federal Court of the content of those documents in his own submissions. Justice will still have to decide. In its 28 January 2020 judgment The civil courts can request access to records of the FCO and/ (KZR 24/17 – Schienenkartell II ), the Federal Court of Justice or the public prosecution authorities according to Sections 474 clarified its 11 December 2018 judgment to the effect that there (1) German Code of Criminal Procedure at any time when this is a presumption in fact that the prices of cartelised products is required in the interest of justice.

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4.6 Can witnesses be forced to appear? To what extent, specifically for the proceedings of a competition authority; (b) if any, is cross-examination of witnesses possible? information that the competition authority has drawn up and sent to the parties in the course of its proceedings; and (c) settlement submissions that have been withdrawn). The disclosure If a duly summoned witness does not appear, the court can of leniency statements and settlement submissions is generally impose a coercive fine on that witness. In the event of a witness prohibited by Section 33g (4) GWB. failing to appear in several instances, a court may also impose compulsory attendance. Certain persons are entitled to refuse to testify. This, inter 4.9 Is there provision for the national competition alia, includes persons – such as lawyers, tax advisors and certi- authority in your jurisdiction (and/or the European fied accountants – to whom facts are entrusted by virtue of their Commission, in EU Member States) to express its profession, provided that their testimony would concern facts views or analysis in relation to the case? If so, how common is it for the competition authority (or European to which their professional confidentiality obligation refers. Commission) to do so? Furthermore, a witness may also be entitled to refuse to testify to the extent that the witness would not be able to answer a given question without disclosing trade secrets, or to the extent According to Section 90 (1) GWB, the courts have to inform that his testimony could result in the witness being prosecuted the FCO about any pending competition litigation proceedings for a criminal or administrative offence. and are obliged to submit any written pleadings or other rele- There is no US-style cross-examination of witnesses in German vant documents if requested to do so by the FCO. Section 90 (2) civil proceedings. The questioning of witnesses is primarily GWB allows the FCO to send representatives, who are allowed conducted by the court. However, the parties and their attorneys to appear and plead in court as well as to question witnesses, are allowed to ask the witness questions. experts or the parties. The FCO regularly makes use of this right as amicus curiae. If the damages claim deals with an infringement of Article 4.7 Does an infringement decision by a national or 101 or 102 TFEU, the European Commission is allowed to international competition authority, or an authority from submit written statements and plead in oral hearings according another country, have probative value as to liability and enable claimants to pursue follow-on claims for to Section 90a GWB. This provision, however, has not played damages in the courts? any role in private competition litigation in Germany in the past.

Yes. If damages are claimed for an infringement of a provision 52 Justification/Defences of the GWB or of Article 101 or 102 TFEU according to Section 33b GWB, the court is bound by a finding that an infringement 5.1 Is a defence of justification/public interest has occurred, to the extent such a finding was made in a final available? decision by the German competition authority, the Commission of the European Community, or the competition authority or No. There is no justification/public interest defence available in court of another Member State of the European Community. damages proceedings. However, damages can only be awarded if Therefore, the claimants in follow-on actions do not have to the defendant has culpably infringed competition law. There is no show that there was an infringement of competition law. such infringement if the defendant’s conduct was justified. However, the probative value of such a decision is limited to the finding of anti-competitive behaviour and does not discharge 5.2 Is the “passing-on defence” available and do the claimant from its burden of proof in respect of the causation indirect purchasers have legal standing to sue? and quantification of the damage.

Yes, according to Section 33c GWB, the passing-on defence is 4.8 How would courts deal with issues of commercial available. The defendant bears the burden of proof for showing confidentiality that may arise in competition that the claimant was able to pass through its damages to its proceedings? own customers if the claimant is a direct customer. As this requires detailed knowledge of the claimant’s relationship with Under German law, parties are generally not obliged to disclose its customers, in particular its pricing policy, it is very difficult any information or documents at all. However, as described for the defendant to fulfil this burden of proof. Therefore, under above, Sections 142 ZPO and § 33a GWB (in conjunction Section 33c (5) GWB, the court is allowed to estimate the amount with Section 89b GWB) allow the court to order the parties to of damages which have been passed on if the defendant has produce records or documents, as well as any other material, shown and proven verifiable facts that a passing-on of damages that are in its possession and to which one of the parties has was likely. Nevertheless, an economic expert opinion that focuses made reference. on market structure and market conditions which have made it However, the disclosure of documents can be restricted if the possible to pass on damages will be inevitable in such case. court concludes that disclosure of a certain piece of evidence If the claimant is an indirect purchaser, there is a rebut- would be disproportionate. In its assessment, the court will in table presumption to the benefit of that indirect purchaser that particular have to consider whether the evidence being disclosed damages have been passed on. However, this presumption is contains confidential information, especially concerning any not available for the defendant. third parties, and whether the required information can be Finally, it should be emphasised that the practical relevance obtained from third parties. of the passing-on defence has been and will likely be limited in Moreover, according to Section 33g (5) GWB, certain docu- private competition litigation in Germany. This results in the ments contained in the file of a competition authority may only first place from the extraordinary high standards that defend- be disclosed after the authority has closed its proceedings (i.e.: ants must meet in order to prove the existence and scope of a (a) information that was prepared by a natural or legal person potential passing-on. Secondly, to the extent that the claimant

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can base its claims on the principle of unjust enrichment (which economic issues involved and the regular need for expert will normally be the case in follow-on actions), according to the evidence in relation to damages calculations, cartel damages jurisprudence of the German Federal Court of Justice, the pass- actions will take significantly more time in the first instance, ing-on defence cannot apply as a matter of law. especially where international cartel arrangements with multiple participants are concerned. If the claimant merely seeks a declaratory judgment, first 5.3 Are defendants able to join other cartel participants to the claim as co-defendants? If so, on what basis may instance proceedings will normally be closed within 15–20 they be joined? months. No specific forms of expedited proceedings exist within main litigation proceedings. However, expedition of proceedings is a Defendants can serve a third-party notice to other cartel partic- fundamental principle of German procedural law, and judges are ipants – who are jointly and severally liable for the totality of expected to ensure at every stage of the proceedings that the lawsuit the damages – together with the request to join the dispute as is conducted expeditiously by both the court and the parties. intervener in support of the defendants, according to Section 72 ZPO. Third-party notices serve the purpose of securing contribution claims against the cartel participants not directly 72 Settlement involved in the litigation. Once the third-party notice has been served, the recipient can 7.1 Do parties require the permission of the court decide whether it wishes to join the lawsuit as intervener. In any to discontinue breach of competition law claims (for event, the outcome of the litigation will be binding for the third- example, if a settlement is reached)? party recipient once formal notice has been given. Thus, even if the third party decides not to join the dispute, it has to accept the Prior to an oral hearing, claimants can withdraw their claims factual and legal findings of the court and cannot refute them in at any time without the court’s permission (e.g., following an a subsequent litigation. out-of-court settlement). However, once an oral hearing has As an intervener, the joining third party is not formally a taken place, withdrawal of the action requires the defendant’s party to the dispute. However, the intervener has the right to consent. file its own motions and submissions in the proceedings as long The parties to the dispute may also mutually discontinue the as they are not in opposition to the procedural actions taken by lawsuit by way of court settlement, according to Section 278 (6) the main party. ZPO. Such settlement is made by either submitting to the court a settlement proposal in writing or by accepting a settlement 62 Timing proposal made by the court.

6.1 Is there a limitation period for bringing a claim for 7.2 If collective claims, class actions and/or breach of competition law, and if so how long is it and representative actions are permitted, is collective when does it start to run? settlement/settlement by the representative body on behalf of the claimants also permitted, and if so on what basis? According to Section 33h (1) GWB, the regular knowledge-based limitation period is five years. Under Section 33h (2) GWB, the limitation period begins from the end of the year in which: (1) the Collective settlements are generally possible, but they are limited claim arose; (2) the claimant obtains knowledge of the circum- to the parties of the court proceedings (see question 1.5). Class stances giving rise to the claim, the fact that these circumstances actions or representative actions do not exist under German law constitute an infringement of competition law, and of the iden- so it is also not possible that a representative body would enter tity of the defendant, or would have obtained such knowledge into settlement negotiation or a settlement agreement on behalf if he had not shown gross negligence; and (3) the infringement of other claimants. has ended. Moreover, claims for damages become statute-barred: (1) 82 Costs notwithstanding knowledge or a grossly negligent lack of knowledge, 10 years after they arise and the infringement ended; and 8.1 Can the claimant/defendant recover its legal costs (2) regardless of how they arose and of knowledge or a grossly from the unsuccessful party? negligent lack of knowledge, 30 years from the date on which the act, breach of duty or other event that caused the damage The court allocates the legal costs, i.e. the court fees and occurred, whichever period ends first. expenses, as well as the statutory attorney fees, on a pro rata basis According to Section 33h (6) GWB, the limitation period of in relation to the outcome of the case. As a general rule, the legal a claim for cartel damages is suspended if proceedings are initi- costs must be borne by the unsuccessful party. ated by the FCO, the European Commission or the competition authority of another Member State of the EU. The suspensive effect ceases one year after these proceedings have been closed 8.2 Are lawyers permitted to act on a contingency fee with res iudicata effect. basis?

6.2 Broadly speaking, how long does a typical breach Under statutory German law, contingency fees are allowed of competition law claim take to bring to trial and final in exceptional circumstances only. They are permitted if the judgment? Is it possible to expedite proceedings? claimant would − due to his economic situation − be unable to assume the statutory attorney fees and would thus be prevented from asserting his rights without the possibility of a contingency The average duration of civil litigation proceedings in Germany fee agreement. is between eight and 10 months. However, due to the complex

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8.3 Is third party funding of competition law claims of the competition authority’s proceedings is not protected even permitted? If so, has this option been used in many if it is contained in the authority’s file. cases to date? In addition, prior to the closing of public cartel investigations, evidence is protected from being disclosed if it contains either: Third-party litigation funding is permitted under German law (i) information that has been compiled for the purposes of the and several companies offer these services in the well-established ongoing administrative proceedings; (ii) communication from German funding market. Funders usually assume the finan- the competition authority to the parties of the proceedings; or cial risk associated with a lawsuit in exchange for a share of the (iii) settlement submissions that have been withdrawn. potential proceeds. A more recent trend in German competition law litigation is 112 Anticipated Reforms the appearance of special purpose entities which aggregate and take assignment of cartel damage claims and then litigate them. 11.1 For EU Member States, highlight the anticipated However, this trend could be somewhat slowed down by the impact of the EU Directive on Antitrust Damages Actions cement cartel ruling of the Higher Regional Court of Düsseldorf at the national level and any amendments to national of 18 February 2015. The court found that the claimant vehi- procedure that are likely to be required. cle’s mechanism for assigning and collecting claims was illegal, as the vehicle did not have sufficient funds to pay the defend- The EU Damages Directive will not have a significant impact ants’ costs if the claim failed. In the more recent jurisdiction of on competition litigation in Germany as German law already some of the lower courts, there is a clear tendency not to allow either contains many similar provisions, or the required instru- such collection of claims. There is a certain contradiction to the ments have been adopted by settled case law. The only signifi- case law of the Federal Court of Justice which had allowed such cant changes are the prolongation of the limitation period from special purpose vehicles in cases outside of competition law. three to five years and the now statutory claim for access to information/documentation. 92 Appeal 11.2 What approach has been taken for the 9.1 Can decisions of the court be appealed? implementation of the EU Directive on Antitrust Damages Actions in your jurisdiction? How has the Directive been applied by the courts in your jurisdiction? German procedural law provides for a two-tier appellate system against judgments, namely a first appeal (Berufung) and a second appeal (Revision). While in the framework of the Berufung Germany had already enacted provisions which anticipated the entire case can be reassessed, the Revision is confined to a the provisions of the EU Damages Directive. Nevertheless, review of questions of law. Germany introduced the EU Damages Directive in the GWB only partially by changing the numbering of the articles in the 102 Leniency GWB. Germany was more reluctant on the transition of all rules in order to avoid any retroactive effect of the new rules. In Germany, the relevant date as contemplated in Article 22 EU 10.1 Is leniency offered by a national competition Damages Directive is 26 December 2016. authority in your jurisdiction? If so, is (a) a successful, and (b) an unsuccessful applicant for leniency given Due to the rather formal transitional provisions (see ques- immunity from civil claims? tion 11.3), the substantive law changes have essentially not been applied. However, in particular the extension of the knowledge-based prescription (see question 6.1) from three to five The FCO offers immunity from or a reduction in fines for years has been acknowledged by the courts. It remains to be seen leniency applicants in administrative proceedings. However, whether the rather restrictive approach to apply the Damages regardless of whether the leniency application was successful or Directive prior to its formal coming into effect may change not, the leniency applicant will not be granted immunity from following the ECJ judgments of 14 March 2019, C-724/17 – civil damages claims. Skanska, and in particular of 28 March 2019, C-637/17 – Cogeco, However, according to Sections 33e (1) and (3) GWB, the and the confirmed relevance of the principle of effectiveness of liability of a – jointly and severally – liable immunity recipient is the EU law as particularly expressed in the ECJ judgment of 12 limited to harm suffered by its direct or indirect purchasers or December 2019, C-435/18 – Otis. providers. Other injured parties can only claim compensation from the leniency applicant where full compensation cannot be obtained from the other cartel participants. 11.3 Please identify, with reference to transitional provisions in national implementing legislation, whether the key aspects of the Directive (including 10.2 Is (a) a successful, and (b) an unsuccessful limitation reforms) will apply in your jurisdiction only ‎to applicant for leniency permitted to withhold evidence infringement decisions post-dating the effective date of disclosed by it when obtaining leniency in any implementation; or, if some other arrangement applies, subsequent court proceedings? please describe it.

As no pre-trial discovery exists in Germany, the parties are, in In contrast to prior amendments of the GWB, the 9th amend- general, not obliged to disclose any documents whatsoever. In ment to the GWB contains specific transitional regulations for those cases in which the claimant has a right to demand disclo- cartel damages claims and thus avoids legal uncertainties in sure of certain information/documentation (see question 4.8), this respect. The 9th amendment to the GWB largely follows certain additional restrictions apply in that Section 33g (4) GWB the requirements of Article 22 EU Damages Directive, in that prohibits the disclosure of the leniency application itself, as well substantive law changes only apply to claims that arise after 26 as settlement agreements. Evidence that is available irrespective December 2016, whereas procedural law changes shall apply in

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all cases in which the writ of summons was served before 26 claimants would themselves have to bring an action for payment. December 2016. In respect of limitation, the new rules apply to The government encourages consumer associations to reach all claims which were not already time-barred on 26 December settlements with the defendants which would be binding for 2016, while the beginning/suspension of the limitation periods all claimants registered with the association at the time of the shall follow the former rules. settlement. The German government has proposed a bill of the so-called 10th Reform of the GWB, which is expected to become law over 11.4 Are there any other proposed reforms in your jurisdiction relating to competition litigation? the course of 2020. The major impact is on merger control and abuse of dominant position. For cartel damages, there will be a rebuttable presumption for direct and indirect purchasers The German government reached a political agreement to intro- that any procurement of products or services which fall under duce a general framework for collective redress in terms of model the scope of a cartel, as far as the subject matter, the time and case proceedings (Musterfeststellungsverfahren), which took effect in geographic scope of such cartel are concerned, are affected by November 2018. Under the model case proceedings, associa- the cartel. This clarification is based on the judgment of the tions for consumer protection which have to be registered as Federal Court of Justice of 11 December 2018 (KZR 26/17 – “certified” may bring an action for declaratory relief, in which Schienenkartell ), which had denied the existence of prima facie certain factual and legal issues which are common to a number evidence of the affectedness and was interpreted to question the of potential claims will be decided. They need a group of 50 existence of a presumption in fact to this effect. As explained registered “Opt-In” claimants. The judgment would be binding in question 4.3 above, the Court has clarified its 11 December for all other claimants in a mass damage situation. The back- 2018 decision with its decision of 28 January 2020 (KZR 24/17 ground of this bill is the “Diesel scandal ”, but certain cartels have – Schienenkartell II ). also instigated the lawmakers’ interest. However, any individual

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Prof. Dr. Ulrich Schnelle is a partner in the Stuttgart Office of Haver & Mailänder and head of the practice group for competition, public procurement and state aid law. He specialises in EU and German Competition Law and has extensive experience in defending companies in cartel investigations before the EU Commission and the German Federal Cartel Office. Another focus of his work is within cartel damages actions. He also advises clients on merger control issues and has particular expertise in cases of abuse of dominant position. A further field of activity is advising clients seeking to cooperate with competitors or with suppliers and/or customers in horizontal or vertical contractual relationships. Ulrich Schnelle graduated from the University of Freiburg in 1992, obtained his doctoral degree from the same university in 1992, and was admitted to the Bar in the same year. He is an alumnus of the University of Geneva, the University of Illinois (LL.M.) and the University of Passau, as well as Freiburg.

Haver & Mailänder Rechtsanwälte Partnerschaft mbB Tel: +49 711 227 440 Lenzhalde 83–85 Email: [email protected] 70192 Stuttgart URL: www.haver-mailaender.de Germany

Elisabeth S. Wyrembek is an associate in the Stuttgart Office of Haver & Mailänder. She specialises in EU and German antitrust law and represents companies in national and multinational antitrust litigation at court and in antirust proceedings before the German Federal Cartel Office and the European Commission. She advises companies on all aspects of German and EU merger control, including strategic assistance, ranging from the initial stages of investment decision-making to potential post-clearance complexities. She is experienced in advising companies of all sizes, ranging from internationally operating groups to early-stage start-ups, active in all kinds of industries, particularly focusing on automotive, card payment systems, digital industries and energy. Elisabeth S. Wyrembek graduated from the University of Tübingen in 2011 and was admitted to the Bar in 2013. She is an alumna of Queen Mary University of London (LL.M.) and the University of Tübingen.

Haver & Mailänder Rechtsanwälte Partnerschaft mbB Tel: +49 711 227 440 Lenzhalde 83–85 Email: [email protected] 70192 Stuttgart URL: www.haver-mailaender.de Germany

Haver & Mailänder is a medium-sized group of highly qualified lawyers with economic expertise. Their focus is on the clients and their interests. Advice is personal and individual, target-oriented and success-related. In the field of competition law, Haver & Mailänder is active in defending companies in cartel investigations before the European Commission and the German Federal Cartel Office. Another focus of their work is their practice in cartel damages actions, where Haver & Mailänder represents claimants in various cases. Haver & Mailänder also advises clients on merger control issues and has particular expertise in cases of abuse of dominant position. Another strong field of the firm’s activity is advice to clients seeking to cooperate with competitors or with suppliers and/or customers in horizontal or vertical contractual relationships. All lawyers active with Haver & Mailänder in the field of competition law regularly give presentations and publish articles and blogs on current issues of EU and competition law. www.haver-mailaender.de

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Nick Dealy

Gall Ashima Sood

(ii) services of general economic interest; 12 General (iii) mergers; and (v) conduct of lesser significance. 1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition Merger rule law. (c) The merger rule prohibits direct or indirect mergers that have the effect of substantially reducing competition in The Competition Ordinance (Cap. 619) (the “Ordinance”) is the Hong Kong. This rule is restricted to undertakings that principal competition legislation in Hong Kong. Claims can be hold telecommunications carrier licences or which directly brought in respect of the contravention of any of the following or indirectly control such licensees. provisions contained in the Ordinance: The following general exclusions apply in respect of the merger rule: Conduct rules (i) mergers enhancing overall economic efficiency; (a) The first conduct rule prohibits agreements or concerted (ii) exceptional and compelling reasons of public policy; practices by undertakings or decisions of trade associa- (iii) statutory bodies, unless otherwise specified in a regu- tions if the object or effect of the agreement, concerted lation made by the Chief Executive of Hong Kong; practice or decision is to prevent, restrict or distort compe- and tition in Hong Kong. (iv) persons specified as being exempt in a regulation made The following practices constitute serious anti-competitive by the Chief Executive. conduct under the Ordinance, and are likely to invite more The concept of “undertakings” in each of the above rules severe sanctions: captures all entities irrespective of their legal organisation, as (i) fixing, maintaining, increasing, or controlling the long as they are involved in an economic activity. price for the supply of goods or services; (ii) allocating sales, territories, customers or markets for 1.2 What is the legal basis for bringing an action for the production or supply of goods or services; breach of competition law? (iii) fixing, maintaining, controlling, preventing, limiting or eliminating the production or supply of goods or The Ordinance serves as a comprehensive code for bringing an services; and action for breach of competition law. (iv) bid-rigging practices. The following general exclusions apply in respect of the first conduct rule: 1.3 Is the legal basis for competition law claims (i) agreements enhancing overall economic efficiency; derived from international, national or regional law? (ii) compliance with legal requirements; (iii) services of general economic interest; The legal basis for competition law claims is derived from (iv) mergers; and national Hong Kong law. (v) agreements of lesser significance. (b) The second conduct rule prohibits the abuse of market power by undertakings that have a substantial degree of 1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned? market power, where the object or effect of the abuse is to prevent, restrict or distort competition in Hong Kong. Predatory behaviour towards competitors or limiting The Competition Tribunal is a specialised tribunal constituted production, markets or technical development to the prej- under the Ordinance (the “Tribunal”) with primary jurisdic- udice of consumers is likely to constitute abusive conduct tion to hear and adjudicate competition-related cases. under the Ordinance. The Ordinance bars the jurisdiction of the Court of First The following general exclusions apply in respect of the Instance even in private actions where the cause of action is second conduct rule: solely the contravention or involvement in contravention of (i) compliance with legal requirements; conduct rules.

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1.5 Who has standing to bring an action for breach of 22 Interim Remedies competition law and what are the available mechanisms for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions 2.1 Are interim remedies available in competition law by representative bodies or any other form of public cases? interest litigation? If collective claims or class actions are permitted, are these permitted on an “opt-in” or “opt- Yes, interim remedies are available in case of existing and likely out” basis? violations of the conduct rules and the merger rule.

The Ordinance empowers the Competition Commission (the 2.2 What interim remedies are available and under “Commission”) to bring proceedings before the Tribunal what conditions will a court grant them? where it has reasonable cause to believe that there is a breach of competition rules. There are no stand-alone rights of action. Persons wanting to The Ordinance does not contain a list of specific interim complain of contravention of the competition rules can lodge a measures that the Tribunal can make, nor does it provide for complaint with the Commission or bring a follow-on claim (for any prerequisites other than that the Tribunal must be “satis- any loss or damage suffered) before the Tribunal, either after a fied” that a person is engaged in or proposing to engage in an final determination in respect of the contravention or a formal infringement. admission of the contravention accepted by the Commission. The Tribunal essentially enjoys vast discretion to decide on Hong Kong does not have a class action regime. Whilst it is the types of interim orders to be made, including cease and possible to bring representative actions under the Rules of the desist orders, injunctions, etc. The Tribunal would, however, High Court, they are yet to feature in a competition law context. consider proportionality and effectiveness principles, depending on the types of orders it intends to make and the seriousness of the allegations. 1.6 What jurisdictional factors will determine whether a The Tribunal can make interim orders either on application or court is entitled to take on a competition law claim? on its own motion. In case of the merger rule, the application can only be made by the Commission. The Ordinance has as an effects-based approach conferring An interim order remains in force for a period not exceeding extra-territorial jurisdiction, so long as the effect of the conduct 180 days and is extendable for a maximum period of 180 days. is in Hong Kong. (a) The first conduct rule applies even if: 32 Final Remedies (i) the agreement or decision is made or given effect to outside of Hong Kong; 3.1 Please identify the final remedies which may be (ii) the concerted practice is engaged in outside of Hong available and describe in each case the tests which Kong; a court will apply in deciding whether to grant such a (iii) any party to the agreement or concerted practice is remedy. outside of Hong Kong; or (iv) any undertaking or association of undertakings giving The final remedies available for contravention or involvement effect to a decision is outside of Hong Kong. in the contravention of any competition rule involve the impo- (b) The second conduct rule applies even if: sition of a pecuniary penalty and certain other types of orders (i) the undertaking engaging in the conduct is outside of as detailed below. Hong Kong; or (ii) the conduct is engaged in outside of Hong Kong. (c) The merger rule applies even if: Pecuniary penalty The Tribunal can impose a pecuniary penalty on a person or (i) the arrangements for the creation of the merger take undertaking if it is satisfied of the alleged contravention. In place outside of Hong Kong; determining the amount of the penalty, the Tribunal will take (ii) the merger takes place outside of Hong Kong; or into account factors including, but not limited to: (iii) any party to the arrangements for the creation of the (a) the nature and extent of the conduct that constitutes the merger, or any party involved in the merger, is outside contravention; of Hong Kong. (b) the loss or damage, if any, caused by the conduct; (c) the circumstance in which the conduct took place; 1.7 Does your jurisdiction have a reputation for (d) whether the person has previously been found by the attracting claimants or, on the contrary, defendant Tribunal to have contravened the Ordinance; applications to seize jurisdiction, and if so, why? (e) the size of the contravening undertaking; (f) the degree of market power the undertaking has; Hong Kong has not garnered any such reputation in the rela- (g) the seniority of the managers involved; tively short time that the Ordinance has been in full force. (h) the existence of a compliance culture as evidenced by a compliance programme; (i) co-operation with the competition authority; 1.8 Is the judicial process adversarial or inquisitorial? (j) the person or undertaking’s financial position; and (k) the deterrent effect of any penalty. Like most common law jurisdictions, the judicial process in Policy on recommended pecuniary penalties Hong Kong is adversarial. That said, the Ordinance encour- On 22 June 2020, the Commission published a policy on recom- ages proactive case management by the Tribunal in the conduct mended pecuniary penalties for anti-competitive conduct in of the proceedings. line with the above pecuniary penalty decision. The policy sets out a four-step approach to the formulation of a recommended

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pecuniary penalty for undertakings and associations of under- (n) an order requiring that any person or class of person be takings, with key elements as follows: given access to goods, facilities or services specified in the ■ Step 1: Determining the base amount, considering: the order on the terms specified in the order; value of the sales related to the contravention; the serious- (o) an order requiring that any person or class of person be ness of the conduct; and the duration of the contravention. given the right to use goods, facilities or services specified ■ Step 2: Making adjustments for aggravating and mitigating in the order on the terms specified in the order; factors. (p) an order requiring any person to pay to the Government ■ Step 3: Applying the statutory cap, i.e. 10% of the under- or to any other specified person, as the Tribunal considers taking’s total turnover in Hong Kong for each year of the appropriate, an amount not exceeding the amount of any contravention, up to a maximum of three years. profit gained or loss avoided by that person as a result of ■ Step 4: Applying a reduction as a final adjustment where a the contravention; or business co-operates with the Commission. (q) for the purpose of securing compliance with any other order made under this section, an order requiring any Other orders person who has contravened or been involved in the The Tribunal is empowered to make any of the following orders contravention to do or refrain from doing anything speci- it considers appropriate, including for the purposes of bringing fied in the order. an infringement to an end, restoring effective competition, In considering these other types of orders, the Tribunal may compensating a party’s losses and ensuring that a person does consider proportionality and effectiveness principles, depending not benefit from its infringement: on the types of orders it intends to make and the seriousness of (a) a declaration that a person has contravened a competition the allegations. rule; The Tribunal can also make disqualification orders disqual- (b) an order restraining or prohibiting a person from engaging ifying any person for a maximum period of five years from in any conduct that constitutes the contravention or the being a director, liquidator or receiver or being directly or indi- person’s involvement in the contravention; rectly involved in the promotion, formation or management of (c) an order requiring a person who has contravened a compe- a company. tition rule or been involved in the contravention to do any Such order will be made only if the Tribunal finds the act or thing, including the taking of steps for the purpose company to be in contravention of the competition rule and if of restoring the parties to any transaction to the position in the person’s conduct would make him unfit to be involved in the which they were before the transaction was entered into; management of the company. (d) an order restraining or prohibiting a person from acquiring, With a view to securing enforcement of an order or persuasion disposing of or otherwise dealing with any property spec- of a civil claim, the Tribunal can also issue prohibition orders to ified in the order; prevent a person from leaving Hong Kong. The Tribunal can only (e) an order requiring a person to dispose of such operations, make such an order when satisfied that there is a probable cause to assets or shares of any undertaking specified in the order, believe that the person is about to leave Hong Kong, due to which in the manner specified in the order; the judgment or order is likely to be obstructed or delayed. The (f) an order appointing a person to administer the property of order is valid for one month unless extended or renewed. another person; (g) an order prohibiting a person from making or giving effect 3.2 If damages are an available remedy, on what bases to an agreement; can a court determine the amount of the award? Are (h) an order requiring the parties to an agreement (the making exemplary damages available? Are there any examples or giving effect to which constitutes the contravention of damages being awarded by the courts in competition of the competition rules) to modify or terminate that cases which are in the public domain? If so, please agreement; identify any notable examples and provide details of the (i) an order declaring any agreement (the making or giving amounts awarded. effect to which constitutes the contravention of the competition rules) to be void or voidable to the extent specified in The remedy of damages prescribed under the Ordinance is the order; compensatory in nature, not punitive. In determining the (j) an order prohibiting the withholding from any person of: amount of the award, the Tribunal is guided by the prerequisites (i) any goods or services; or for the grant of damages under the laws of tort, including causa- (ii) any orders for any such goods or services; tion and remoteness. (k) an order requiring a person to pay damages to any We are yet to see a case in Hong Kong where an award of person who has suffered loss or damage as a result of the damages has been made by the Tribunal. contravention; (l) an order prohibiting requiring as a condition of the supply 3.3 Are fines imposed by competition authorities and/ of goods or services to any person: or any redress scheme already offered to those harmed (i) the buying of any goods or services; by the infringement taken into account by the court when (ii) the making of any payment in respect of goods or calculating the award? services other than the goods or services supplied; or (iii) the doing of any other similar thing or the refraining The Ordinance does not contain specific provisions for consid- from doing anything mentioned in subparagraph (i) or ering fines and/or redress schemes when calculating an award. (ii) or any other similar thing; The level of fine or pecuniary penalty will not have any bearing (m) an order prohibiting a person from exercising any right on the amount of damages, which will be determined on the to vote that is exercisable by virtue of the holding of any basis of the loss or damage suffered by the claimant. shares, stock or securities; There are, however, no limits on the factors that the Tribunal may have regard to while imposing pecuniary penalties.

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42 Evidence (ii) During proceedings from the other party: Unlike in the Court of First Instance, automatic general discovery is not available in competition law proceedings. Discovery is 4.1 What is the standard of proof? at the discretion of the Tribunal, and the following factors may be taken into account by the Tribunal in determining The Tribunal clarified in Competition Commission v. Nutanix Hong an application for discovery: Kong Limited & Ors [2019] HKCT 2 that in cases involving deter- (a) the need to secure the furtherance of the purposes of mination of a criminal charge (such as cartel and tender-rigging the Ordinance; arrangements), where pecuniary penalties are sought, the appli- (b) whether the information in the document is cable standard of proof required of the Commission would be confidential; that of beyond reasonable doubt. In all other proceedings, the (c) the balance between the interests of the parties and civil standard of balance of probabilities would be applicable. other persons; and (d) the extent to which the document is necessary for the fair disposal of the proceedings. 4.2 Who bears the evidential burden of proof? (iii) From third parties (including competition authorities): Parties may apply for discovery and production of specific The Commission or the party initiating the action bears the documents from non-parties and the Commission. evidential burden of proving its case. However, the burden It has been recently held that discovery in Tribunal proceed- would shift onto the respondent undertaking seeking to rely on ings should approach the standard applicable to the prosecution a particular exclusion (such as, the economic efficiency defence), in criminal proceedings, i.e. the Commission would be expected to establish their defence on the balance of probabilities. to disclose all relevant material which may undermine its case or advance the respondent’s case. 4.3 Do evidential presumptions play an important In the context of the Commission, the following communica- role in damages claims, including any presumptions tions have been held to be protected from disclosure: of loss in cartel cases that have been applied in your (a) communications between the Commission and parties jurisdiction? who unsuccessfully seek leniency; (b) complaint forms containing the complainant’s details; There is no presumption of loss in damages claims. Claimants (c) reports to and minutes of the Commission concerning the are required to prove both the loss and quantum of damages. results of the investigation and the enforcement steps to be taken; (d) internal communications and notes relating to the execu- 4.4 Are there limitations on the forms of evidence tion of the search warrants showing the methods, proce- which may be put forward by either side? Is expert dures and tactics of the Commission; and evidence accepted by the courts? (e) other internal communications insofar as the Commission is able to justify withholding of the content. In proceedings under the Ordinance, other than proceedings where a pecuniary or financial penalty is sought, the Tribunal is empowered to take into account any relevant evidence or infor- 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? mation, whether or not it would be otherwise admissible in a court of law (including hearsay evidence). In cases involving pecuniary penalties or other stringent orders The Tribunal has all the powers of the Hong Kong Court of First which can have far-reaching consequences for the respondents, Instance with respect to attendance, swearing and examination the Tribunal is bound by the rules of evidence and is expected to of witnesses, and can summon any person to give evidence rele- be careful in admitting and assessing any evidence. vant to the proceedings. The Commission too has the power Expert evidence is admissible before the Tribunal, as long as to call upon any person to answer questions that are reasonably the parties ensure that they serve no more expert evidence than believed to be relevant to the investigation. is necessary. The parties can also expect directions for their Parties are able to cross-examine another party’s witnesses respective experts to communicate with each other and produce before the Tribunal. a joint report specifying matters agreed and matters not agreed and the reasons for any non-agreement. 4.7 Does an infringement decision by a national or international competition authority, or an authority from 4.5 What are the rules on disclosure? What, if any, another country, have probative value as to liability documents can be obtained: (i) before proceedings and enable claimants to pursue follow-on claims for have begun; (ii) during proceedings from the other damages in the courts? party; and (iii) from third parties (including competition authorities)? The Ordinance has provisions for follow-on claims by persons who have suffered loss or damage due to an act adjudged as a (i) Before proceedings have begun: The Commission, as contravention of a conduct rule. However, there is no sugges- an investigation authority, is empowered to obtain any tion of relaxation of the standard of proof, thereby requiring the document or information that is relevant to the investiga- claimant to ultimately prove its case on a balance of probabilities. tion from any person. The Ordinance does not recognise a follow-on action in Private claimants can seek pre-action disclosures from the respect of an infringement decision by an international compe- Courts by demonstrating the relevance and necessity of tition authority or an authority from another country. In such the document in question, and the necessity of discovery cases, a contravention of the Ordinance will first have to be before commencement of the action. established before parties can pursue a follow-on claim.

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4.8 How would courts deal with issues of commercial 5.2 Is the “passing on defence” available and do confidentiality that may arise in competition indirect purchasers have legal standing to sue? proceedings? An application of the passing-on defence is yet to be seen in The Tribunal is particularly attentive to the protection of Hong Kong. confidential commercial or personal information. Parties are The Ordinance does not contain an express limitation on the expected to use their best efforts to agree on whether documents types of person that can sue for damages on account of a contra- or parts of documents are to be given confidential treatment. vention of the conduct rules. Accordingly, indirect purchasers Where appropriate, suitable confidentiality undertakings may would have legal standing to sue provided they have suffered be used to limit any further disclosure by the recipients of the loss or damage as a result of the infringement. information in question. In considering a request for confidential treatment of any 5.3 Are defendants able to join other cartel participants information, the Tribunal may take into account: to the claim as co-defendants? If so, on what basis may (a) the public interest; they be joined? (b) the legitimate business interests of the undertaking; (c) the interests of the natural person; and (d) the interests of justice. Yes, a defendant can join other cartel participants as Confidential treatment is only accorded to information that is co-defendants to the claim by issuing a third-party notice with genuinely required to be protected. In general, confidentiality the leave of the Tribunal. The third party may be joined on the cannot be claimed for the entire or whole sections of a docu- basis that the defendant: ment as it is normally possible to protect confidential informa- (a) seeks to claim contribution or indemnity from the party; tion with limited redactions. (b) seeks to claim any relief or remedy relating to the original The Tribunal may also make orders prohibiting disclosure or subject matter of the action and substantially the same as publication of any material it receives during the proceedings. A some relief or remedy claimed by the plaintiff; or person who fails to comply with an order may be held liable to (c) requires that any question or issue relating to the orig- imprisonment of up to six months and a fine at level 6. inal subject matter of the action should be determined not only as between the plaintiff and the defendant, but also as between either or both of them and the third party. 4.9 Is there provision for the national competition authority in your jurisdiction (and/or the European Commission, in EU Member States) to express its 62 Timing views or analysis in relation to the case? If so, how common is it for the competition authority (or European 6.1 Is there a limitation period for bringing a claim for Commission) to do so? breach of competition law, and if so how long is it and when does it start to run? Where proceedings involving a contravention, or involvement in a contravention, of a conduct rule are brought by a person For contravention of the conduct rules, the limitation period other than the Commission, the Commission is entitled to: is five years; this starts running either after the day on which (a) apply to be a party to those proceedings with the leave of the contravention ceases or the Commission became aware of the Tribunal (so that it can call evidence, cross-examine it, whichever is later. witnesses and seek any relief); and For contravention of the merger rule, the limitation period (b) make representations either on its own application or on is six months; this starts running either after the completion of invitation by the Tribunal. the merger or the Commission became aware of it, whichever is Since the Ordinance came into force, the majority of cases later. The period can be extended by the Tribunal in the case have been initiated by the Commission, and privately initiated of imposition of pecuniary penalties if it considers it reasonable cases have not involved any intervention or participation by the to do so. Commission. For follow-on actions, the limitation period is three years after the earliest date on which the action could have been commenced, following the expiry of the period within which an 52 Justification / Defences appeal can be brought, and if an appeal has been brought, until it has been determined. 5.1 Is a defence of justification/public interest available? 6.2 Broadly speaking, how long does a typical breach of competition law claim take to bring to trial and final There is no specific defence of justification/public interest judgment? Is it possible to expedite proceedings? available under the Ordinance. However, the Ordinance does provide for a specific exclusion ground for enhancing overall Subject to the complexity of the case, the average time taken economic efficiency in the case of the first conduct rule. from the commencement of the proceedings to judgment is In respect of the second conduct rule, the Commission has typically two years. indicated two causes of justification in its guidelines, suggesting There are no specific provisions on expedition of proceed- that parties can justify their actions based on practical reasons ings, except in the cases of urgent interim orders, where applica- (for example, a refusal to sell may be justified by the poor cred- tions for relief can be made by the applicants on an ex parte basis. itworthiness of a customer) or reasons of economic efficiency.

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72 Settlement 102 Leniency

7.1 Do parties require the permission of the court 10.1 Is leniency offered by a national competition to discontinue breach of competition law claims (for authority in your jurisdiction? If so, is (a) a successful, example, if a settlement is reached)? and (b) an unsuccessful applicant for leniency given immunity from civil claims? Permission of the Tribunal is generally not necessary to discontinue a private action. Where, however, the Commission seeks Hong Kong provides a statutory basis for a leniency policy, to discontinue or settle a claim (for example, in exchange for whereby the Commission seeks to induce co-operation in an the defendant’s co-operation in the investigation), the Tribunal’s investigation or proceedings in lieu of immunity from continua- endorsement will be required on the specific orders that are tion or commencement of pecuniary proceedings. sought by way of consent. On 16 April 2020, the Commission revised its leniency policy for undertakings engaged in cartel conduct and introduced a new leniency policy for individuals engaged in cartel conduct, 7.2 If collective claims, class actions and/or with the aim of providing stronger and clearer incentives for representative actions are permitted, is collective settlement/settlement by the representative body on cartel members to stop the cartel conduct and report it to the behalf of the claimants also permitted, and if so on what Commission. basis? Under the revised policy, a distinction has been made depending on whether the leniency application was received prior to or after the opening of the initial assessment or inves- As mentioned above, Hong Kong does not have a class action tigation by the Commission. Leniency is available to the first regime. Whilst representative actions are permissible under cartel member who either discloses its participation (Type 1) or the Rules of the High Court, a settlement in a competition law provides substantial assistance to the Commission (Type 2) and context is yet to be seen. meets all requirements for receiving leniency. The Commission will agree not to commence proceedings (including not bringing 82 Costs proceedings for an order declaring that the leniency applicant has contravened the Ordinance) against the successful Type 1 8.1 Can the claimant/defendant recover its legal costs and Type 2 leniency applicants. Under the old policy, successful from the unsuccessful party? leniency applicants had to admit to their participation in a cartel, exposing them to private follow-on actions for damages. Under Any person who has contravened a competition rule can be the new policy, Type 1 applicants will be completely immune ordered to pay to the Government the costs reasonably incurred to follow-on actions as no admissions will be made. In respect by the Commission in connection with the investigation and the of a Type 2 applicant, if a follow-on private action for damages proceedings for the contravention. is brought, the Commission may issue an infringement notice As for the costs incurred by other parties to the proceed- requiring that such applicant admits a contravention of the ings, costs follow the event; i.e., a successful party is entitled to Ordinance, in order for private action to be brought. recover its costs against the unsuccessful party in accordance Individuals such as employees of a company involved in with the Rules of the High Court. cartel conduct can now seek leniency under this policy. Except where leniency has already been granted to an undertaking, the Commission will agree not to commence any proceedings against 8.2 Are lawyers permitted to act on a contingency fee basis? the first individual who reports the cartel to the Commission and meets all the requirements for receiving leniency.

Contingency fees are prohibited and unlawful in Hong Kong. 10.2 Is (a) a successful, and (b) an unsuccessful applicant for leniency permitted to withhold evidence 8.3 Is third party funding of competition law claims disclosed by it when obtaining leniency in any permitted? If so, has this option been used in many subsequent court proceedings? cases to date? Yes, communications between the Commission and applicants Third-party funding of competition claims is not permitted in seeking leniency (whether successful or unsuccessful) are privi- Hong Kong, as the prohibition against maintenance and cham- leged and can be withheld in subsequent proceedings. perty still applies. Although third-party funding has now been permitted in arbitration, competition claims remain non-arbitrable 112 Anticipated Reforms in Hong Kong.

11.1 For EU Member States, highlight the anticipated 92 Appeal impact of the EU Directive on Antitrust Damages Actions at the national level and any amendments to national 9.1 Can decisions of the court be appealed? procedure that are likely to be required.

Yes, an appeal lies before the Court of Appeal against any deci- This is not applicable. sion of the Tribunal on both points of fact and points of law (except for interlocutory decisions where leave is required).

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11.2 What approach has been taken for the In the first (bid-rigging) case, the Tribunal found the implementation of the EU Directive on Antitrust four respondent information technology (IT) companies, Damages Actions in your jurisdiction? How has the namely, Nutanix Hong Kong Limited, BT Hong Kong Directive been applied by the courts in your jurisdiction? Limited, Innovix Distribution Limited and Tech-21 Systems Limited, liable for contravening the first conduct rule of the This is not applicable. Ordinance by engaging in bid-rigging concerning a tender related to the supply and installation of a new IT system for the Hong Kong Young Women’s Christian Association. 11.3 Please identify, with reference to transitional In the second (market-sharing and price-fixing) case, the provisions in national implementing legislation, Tribunal found the 10 respondent construction compa- whether the key aspects of the Directive (including limitation reforms) will apply in your jurisdiction only to nies liable for contravening the first conduct rule of infringement decisions post-dating the effective date of the Ordinance by engaging in market sharing and price implementation; or, if some other arrangement applies, fixing in relation to the provision of renovation services please describe it. at a public rental housing estate. On 29 April 2020, the Tribunal handed down a judgment on pecuniary penalties This is not applicable. against the respondents, imposing fines totalling HKD 4 million. Seven out of the 10 respondents were made to pay the maximum pecuniary penalty allowable under the 11.4 Are there any other proposed reforms in your Ordinance and all 10 respondents were ordered to pay the jurisdiction relating to competition litigation? Commission’s costs. ■ MoU with the SFC: On 28 April 2020, the Commission Although currently there are no formally proposed reforms in entered into a Memorandum of Understanding with the the pipeline, the Competition Commission has been proactive Securities and Futures Commission (Hong Kong’s securi- in its enforcement efforts and in engaging with stakeholders. In ties and futures markets’ regulator) to enhance co-operation addition to those mentioned above, the following recent devel- and the exchange of information between the two agen- opments are noteworthy: cies. The MoU is aimed at combatting anti-competitive ■ Recent judgments: In 2019, the Tribunal handed down practices in the financial sector and provides for a mecha- judgments in Hong Kong’s first two competition cases nism whereby the Commission and the SFC can notify and involving bid-rigging, market-sharing and price-fixing. consult each other on competition-related issues.

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Nick Dealy joined Gall as a Partner in January 2018 following 18 years at global investment bank UBS, where he had held various roles in London and Hong Kong, including General Counsel for Wealth Management North Asia and Asia Pacific Head of Litigation & Investigations. He has extensive experience in multi-jurisdictional commercial litigation, arbitration and dispute resolution, as well as complex regulatory investigations involving the SFC, HKMA and the ICAC. Nick also advises and acts for clients in respect of employment disputes and internal investigations.

Gall Tel: +852 3405 7688 3/F, Dina House, Ruttonjee Centre Email: [email protected] 11 Duddell Street, Central URL: www.gallhk.com Hong Kong

Ashima Sood joined Gall in September 2014. She has wide-ranging experience in commercial litigation, arbitration and dispute resolution, focusing on issues involving breach of contract, joint venture and shareholders’ disputes, asset tracing and Mareva injunctions, enforcement of judgments, as well as tort and negligence claims.

Gall Tel: +852 3405 7688 3/F, Dina House, Ruttonjee Centre Email: [email protected] 11 Duddell Street, Central URL: www.gallhk.com Hong Kong

Gall is a leading dispute resolution law firm in Hong Kong. We specialise in handling highly complex disputes, many of which involve multi-jurisdictional litigation. Our lawyers have a wealth of experience in a wide variety of litigation, mediation and arbitration. Our core practice areas include commercial litigation, fraud and asset tracing, employment disputes, restructuring and insolvency, obtaining emergency injunctive relief remedies, regulatory and criminal matters, family matters and China-related matters. www.gallhk.com

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Luciano Vasques

DDPV Studio Legale Chiara Sciarra

1.2 What is the legal basis for bringing an action for 12 General breach of competition law?

1.1 Please identify the scope of claims that may be Actions for breach of competition law can be based on Articles brought in your jurisdiction for breach of competition law. 101 and 102 of the TFEU and/or on Articles 2 and 3 of Law 287/90, prohibiting agreements restricting competition and Infringement of the antitrust law provisions in Italy (and, in abuse of dominant position. particular, both the national antitrust law No. 287/90 (“Law Legislative Decree No. 3 of 19 January 2017 (“Lgs. 3/2017”), 287/1990”) and the EU provision pursuant to Articles 101 and which transposed Directive 2014/104/EU (“Damages 102 of the Treaty on the Functioning of the European Union Directive”), provides specific rules concerning antitrust damages (“TFEU”)) could give rise to the enforcement action of the actions. Italian Antitrust Authority (“IAA”), and legitimise a civil action The action proposed before the courts for violation of the by any entity who believes it has suffered damage by an under- antitrust law can be brought by entities who have an interest taking that has violated an antitrust law provision. in the action (Article 100 of the Italian Civil Procedural Code In this case, the subject who has suffered the antitrust offence (“CPC”)), thus any subject who claims to have suffered damage can apply to a Civil Court to obtain recognition of the antitrust caused by an antitrust violation (e.g. a higher price caused by a law violation and the compensation of the damage caused by cartel or damage connected to an exclusive abuse). the latter. A person/entity that does not demonstrate that he/it has a With actions before the national Civil Court concerning an specific interest in the action is not entitled to act for an anti- antitrust provision violation, the plaintiff may claim: trust claim. a) Compensation for damage; such actions can be based on In addition, an association of undertakings or consumer asso- a (definitive) decision of the EU Commission or the IAA ciation could be legitimate in an antitrust civil claim. Consumers (“follow-on actions”), in which case the ascertainment of have standing to sue in an antitrust civil action. However, in the existence of a breach of antitrust law is facilitated by the each claim the plaintiff must demonstrate its specific interest decision of these authorities. In the absence of any previous IAA or EU Commission decision, which ascertained the to act. antitrust law violation, the claimants that allege a breach of The action aimed at ascertaining an antitrust violation can antitrust law before a Civil Court have to provide evidence also be submitted to the court by an entity which has an interest of the antitrust infringement (“stand-alone action”). in the mere positive or negative assessment of the antitrust In both follow-on and stand-alone civil claims, the plaintiffs infringement (e.g., a company that wants the Court to clarify must demonstrate the damage suffered and the causal link that its behaviour does not give rise to an antitrust violation or between the antitrust law violation and the loss suffered. that it has not produced any damage to a certain kind of third b) The mere ascertainment of the antitrust violation (positive party – negative assessment). and negative ascertainment of an antitrust violation). A person who is afraid of suffering damage from an antitrust c) Actions for nullity of a contract or provision which infringes offence is entitled to take action to obtain precautionary meas- antitrust law (e.g., a non-compete clause): any interested ures (asking the Court to forbid certain behaviours) even when party can request Civil Courts, also by way of counterclaim, the damage has not yet materialised. to declare that an agreement restricting competition is null Consumer associations (except for class actions – see question and void, pursuant to Article 101(2) of the TFEU and/or to 1.5) may, in principle, be entitled to act before Civil Courts on Article 2(3) of Law 287/90. the condition that they prove that their associates have suffered The plaintiff, in the same proceeding or in an autonomous damage from the claimed antitrust violation. In the event that one, could ask the Civil Court to urgently obtain precautionary the association does not demonstrate that at least one of its asso- measures aimed at preventing the production of the negative ciates has suffered damage from the alleged antitrust violation, effects which the unlawful antitrust conduct could cause (e.g., the association can only request the ascertainment of the offence requesting the Court to deal on a non-discriminatory basis with but not the quantification of any damage. a monopolist who holds an essential resource). In the context of civil actions, it should be noted that the courts do not apply punitive damages; the Courts are bound to compensate the damages that the plaintiff is able to demonstrate it has suffered.

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1.3 Is the legal basis for competition law claims by the Court at the completion of the class action proceeding after derived from international, national or regional law? the issuance of the decision, when the proceeding is ended. The relevant aspect of the Italian class action is that the judge, after having ascertained the antitrust violation and the causal Civil antitrust actions can concern violations of both national anti- link with the damages claimed by consumers, can only liqui- trust rules aimed at protecting competition (Law 287/90) and the date the specific damages suffered by individual consumers who TFEU rules on competition directly in force in Italy. The national have joined the action; for example, if a cartel caused a 20% price Courts, therefore, can apply the European rules on vertical agree- increase for a given product, the judge will be able to liquidate ments and the de minimis rules as well as the provisions of Article 20% of the value of the purchased product documented (e.g. 101.3 of the TFEU. There are no regional regulations governing with the purchase receipt). Therefore, the judge will not be able competition law, and it should be noted that Article 117 of the to liquidate further damages except for those of which specific Italian Constitution (recently amended by Article 3 Cost. Law 18 evidence has been provided by the plaintiffs. For example, if a October 2001, No. 3) provides that antitrust law can be regulated national cartel among undertakings concerning a given product by national law only and not by regional law provisions. has caused a 20% increase in the price of the product, and the companies involved in the cartel have earned a 20% extra 1.4 Are there specialist courts in your jurisdiction to profit calculated on the sales turnover of the product, the Court which competition law cases are assigned? cannot liquidate the entire “damage to the market”; however, the Court can legitimately liquidate the damages connected to “Specialised Divisions of Enterprises” of Civil Courts have the evidence that specific consumers have submitted to the jurisdiction on antitrust law claims. Since the entry into force Court (20% of the purchase price of the specific product that of Lgs. 3/2017 (3 February 2017), only three of such Specialised the consumer demonstrates he/she has purchased). Divisions are competent for antitrust civil claims, namely the This principle entails a strong disincentive to the use of the ones of Milan, Rome, and Naples (Article 18 of Lgs. 3/2017). class action in Italy, especially with regard to antitrust violation concerning a vast number of low-value consumer products.

1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms 1.6 What jurisdictional factors will determine whether a for multiple claimants? For instance, is there a court is entitled to take on a competition law claim? possibility of collective claims, class actions, actions by representative bodies or any other form of public interest litigation? If collective claims or class actions Pursuant to Article 18 of Lgs. 3/2017, an action for antitrust are permitted, are these permitted on an “opt-in” or “opt- damages can be brought before the Courts of Milan, Rome, and out” basis? Naples only. The Milan Courts have jurisdiction over the judicial districts of Brescia, Milan, Bologna, Genoa, Turin, Trieste, Venice, Mechanisms for multiple claimants are admissible in Italy if the Trento and Bolzano. entities which promote the action have homogeneous interests; The Rome Courts have jurisdiction over the judicial districts of i.e., they claim individual damage connected to the same anti- Ancona, Firenze, L’Aquila, Perugia, Rome, Cagliari and Sassari. trust offence contested in Court (please see question 5.3). The Naples Courts have jurisdiction over the judicial districts The Italian legal system provides for class actions, including of Campobasso, Naples, Salerno, Bari, Lecce, Taranto, Potenza, for breach of competition law, based on an opt-in mechanism. Caltanissetta, Catania, Catanzaro, Messina, Palermo and Reggio The rules concerning class actions have been recently reformed. Calabria. The new provisions laid down in Articles 840 bis to 840 sexies- The claimant could alternatively apply to the Court closest to: decies of the CPC entered into force on 19 April 2020 and will i) the place where the offence occurred; ii) the place where the apply to conduct taking place after that date. company that suffered the antitrust violation is located; and iii) As regards conduct which took place before 19 April 2020, in the event that these criteria do not allow for the identification class actions will continue to be regulated by Article 140 bis of of the competent court (e.g. in the case of several plaintiffs resi- the Italian Consumer Code (Legislative Decree No. 206 of 6 dent in various parts of the national territory or with residences/ September 2005). headquarters outside Italy), the Court where the proceeding A class action claim can be submitted to a Civil Court by a started for the first time. group of consumers or by associations or entities recorded in a According to D. Bonaretti, President of Chamber at the Court public registry managed by the Italian Ministry of Justice. of Appeal of Milan, almost 90% of antitrust claims in Italy are The action is admissible under the condition that the requests lodged before the Court of Milan (refer to the speech given at of individual consumers who promote the action have homoge- the IAA conference held in Florence on 24 May 2019). neous interests. In the event that an antitrust claim (concerning a multina- Once the action is provided, the judge assigns a deadline for tional violation that also has an impact on the Italian territory) the publication of the class action in order to encourage the has been submitted before a non-Italian EU Court, the rules of adhesion of other consumers interested in the proceeding, as Regulation (EU) No. 1215/2012 are applicable. they could claim damages suffered by the alleged antitrust violation, which is to be ascertained in the class action. The costs of publication (as well as legal fees) are borne by 1.7 Does your jurisdiction have a reputation for consumers – or by the association. attracting claimants or, on the contrary, defendant Consumers can join the class action at any phase of the judicial applications to seize jurisdiction, and if so, why? proceeding and, on the basis of the recent provision, which entered into force on 19 April 2020, a consumer who has not participated The costs of antitrust civil trials in Italy are relatively low compared in the class action proceeding has the right to require the resto- to other jurisdictions. Claimants should only pay a modest court ration of the damage caused by the antitrust violation ascertained fee when lodging their suit (a few hundred or thousand euros,

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depending on the claim value), and are rarely required to provide a The prerequisites for obtaining the emergency measure are: i) deposit as a condition for bringing the claim, even where the legal convincing evidence of the antitrust violation – fumus boni iuris basis of the claim does not appear grounded at first. (e.g. an exclusionary abuse of a dominant position ascertained The Courts are highly specialised with a long experience of by an antitrust authority); and ii) evidence that the antitrust antitrust damages litigation, even before the entry into force of violation is causing or it is likely that it will provoke a serious Lgs. 3/2017. and irreparable damage to the entity requesting the measure – Among other disincentivising elements, judgment times in Italy periculum in mora (e.g. an unlawful refusal to deal that will lead are much higher than the average timings of other EU courts. the claimant to fall into bankruptcy or to suffer unrecoverable The national Courts are bound by very stringent rules on the market shares or losses). calculation of damage restoration, making it much more complex The party that requests the measure must demonstrate the to prove the damage or obtain recognition of the entire damage irreparability of the damage that is intended to be avoided with suffered by the market as a consequence of the antitrust violation. the requested precautionary measure, thus that the damage in For an example of the strict approach of the Court to granting any case could not be restored at the conclusion of the ordinary damages, see the Court of Milan, Specialised Division of civil trial. Enterprises “A”, in its judgment Dari Medical v. F. Hoffmann – La For example, the precautionary measure may be granted if the Roche, dated 23 April 2018. alleged antitrust violation not only causes economic harm but Also, Italian class activity also appears to be an inadequate can also jeopardise the survival of the claimant’s undertakings tool to sufficiently compensate all of the damages caused by an (i.e. heavy negative effects that could force the claimant’s under- antitrust violation. taking to definitively reduce investments, workforce, etc.). It should be noted that in some cases, the companies involved in a cartel with European-wide effects, considering the rules laid 32 Final Remedies dawn in Regulation (EU) No. 1215/2012, have submitted a claim to an Italian Court aimed at ascertaining the absence of compen- 3.1 Please identify the final remedies which may be sable damage probably considering the higher average time of the available and describe in each case the tests which Italian civil proceeding than the average time of a civil proceeding a court will apply in deciding whether to grant such a in other EU jurisdiction Courts (“Italian Torpedo”). remedy.

1.8 Is the judicial process adversarial or inquisitorial? The main final remedy in a national private enforcement proceeding is the recognition of the antitrust violation and of The decision process is adversarial. the damage suffered. The judicial proceeding is based on a summons where the The Court may also order to an undertaking that the ascer- plaintiff must submit the evidence of the damage and the causal tained antitrust violation must cease. The Court can also order link between the antitrust violation and the damage for which other specific measures. compensation is requested. The judge is bound by the evidence It is important to note that the Court can only order measures provided by the parties during the procedure (information that have been specifically required by the plaintiff in the intro- documents regularly submitted by the parties and available in ductory act of the judicial proceedings. the trial’s file). These measures are admissible insofar as they are necessary Normally, the information and documents are attached to for the defence of the plaintiffs (e.g. to impede the continua- the parties’ first trial act (plaintiff’s claim and defendant’s first tion of the damage suffered by the plaintiffs and caused by the defence brief) and during the procedural phase, where the Court antitrust infringement ascertained by the Court). For example, authorises the collection of further documents and information the judge cannot issue measures generally aimed at restoring the within the time limits scheduled by the Court (also pursuant to level of competition in the market that are not strictly related to Article 183 of the CPC). the plaintiff’s interests and claims in that specific trial. The Court can therefore, within the limits indicated above, impose not only a negative order (that the unlawful conduct 22 Interim Remedies must cease), but also positive measures. The Civil Courts have the power to declare, both ex officio and 2.1 Are interim remedies available in competition law at the request of any interested party, that an anti-competitive cases? agreement is null and void. A Civil Court could also establish that an agreement between Yes (see question 2.2). undertakings does not constitute an infringement of competition rules. 2.2 What interim remedies are available and under what conditions will a court grant them? 3.2 If damages are an available remedy, on what bases can a court determine the amount of the award? Are exemplary damages available? Are there any examples According to Article 669 bis ff. of the CPC, interim measures of of damages being awarded by the courts in competition any kind can be required by the Court in order to avoid serious cases which are in the public domain? If so, please and irreparable damage to the entity requesting the measure (e.g. identify any notable examples and provide details of the obligation to deal or to supply imposed on a monopolist or to amounts awarded. a holder of an essential facility) or harm that can be caused or aggravated by an actual or highly foreseeable antitrust violation. In the Italian legal system, a subject (company or consumer) who The judge can provisionally order the seizure of products, suffers damage from an antitrust violation can obtain restora- publications of communications in newspapers, as well as any tion for the damage that he/she proves to have suffered to his/ measure that is suitable to prevent or block the negative effect of her patrimony; punitive damages are not provided in Italy. the alleged antitrust violation.

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The restorable damages concern both the emerging damage that allows the Court to evaluate the facts and to ascertain the (e.g. the higher price paid due to a price cartel) and the loss of antitrust violation in a way that could not perfectly comply with profit; for example, the turnover reduction caused by an exclu- what has been ascertained by the Commission and the IAA in sionary abuse, or by a margin squeeze policy, etc. the decision. The Supreme Court (Corte di Cassazione) has simplified the In a judgment set before the new Decree regime was intro- calculation of the consumer damage in a decision concerning duced, the Court of Appeal of Milan cast doubt on whether the a cartel in the motor insurance market by setting the amount IAA’s decisions should have binding force in civil proceedings. of the award as a percentage of the insurance premium paid by The judgment suggested that national Courts could have several consumers (Italian Supreme Court – Corte di Cassazione – judg- genuine reasons to depart from the IAA infringement decision ment No. 11904/2014). assessment (such as the need to consider new events and facts – Court of Appeal of Milan, 2 January 2017, Brennercom). The Court of Rome did not apply Article 7 of Lgs. 3/2017, 3.3 Are fines imposed by competition authorities and/ or any redress scheme already offered to those harmed which only came into effect after the judicial proceedings. by the infringement taken into account by the court when Therefore, it did not consider the IAA’s infringement decision calculating the award? as binding in relation to the nature of the infringement as well as its material and territorial scope (Court of Rome, 24 July 2017, No. 15020, Ministry of Health and Ministry of Finance/Pfizer). The fines imposed by the Commission, by the IAA or by other The IAA and EU Commission’s decisions, as well as other national authorities do not affect in any way the civil proceeding EU antitrust authorities’ decisions, do not bind the Court in and the calculation of the damage; obviously, if the IAA has any way regarding the determination and quantification of the imposed remedies to reduce the negative effects of the anti- compensable damage; however, it happens in practice that the trust offence, these remedies could have an impact on damages Commission and the IAA, in analysing the antitrust violation, that the antitrust violation would produce after the issuance of provide an analysis of the impact of the violation on the market, the IAA’s decision; with the consequence that, if the measures and some criteria for identifying the damage – for example, in imposed are respected and effective, they could have an indirect the motor insurance cartel case, the IAA identified a possible impact on the damages calculation (which obviously includes all percentage of extra profit caused by the collusion that the Court damages produced up to the Civil Court’s decision). took into consideration as a starting point for the calculation of the damage suffered by each consumer (Italian Supreme Court 42 Evidence – Corte di Cassazione – judgment No. 11904/2014). The decisions of other EU antitrust authorities have a 4.1 What is the standard of proof? sounding proof value (but these decisions do not bind the Court with regard to the ascertainment of the antitrust law violation). In antitrust civil proceeding cases concerning an antitrust law In stand-alone cases (therefore in the absence of a prior deci- violation already ascertained by a definitive decision (i.e. a decision by any antitrust authority), the plaintiff must also provide sion that cannot be reviewed or annulled) of the European proof of the antitrust violation, which is particularly difficult as Commission or the IAA (follow-on action), there is full proof of often these violations are proven by documents held by the enti- the existence of the antitrust law violation, pursuant to the provi- ties which actually committed the violation; thus, documents sions of Article 7 of Lgs. 3/2017, which transposed the Damages and information are not easy to find and consult (on the issue of Directive and Article 16 of Regulation (EC) No. 1/2003. evidence discovery, see question 4.5). This means that the plaintiff is not required to demon- The Supreme Court, even before Lgs. 3/2017 had been strate the antitrust law violation (already ascertained by the EU implemented, stated that a direct link could be presumed to Commission or by the IAA in a definitive decision), but only the exist between a cartel and the damages suffered by consumers damage suffered and the causal link between the damage and because downstream contracts between parts of the cartel and the antitrust violation. consumers are usually the means by which a cartel is imple- The Court of Milan (preliminary ruling, 4 October 2018, No. mented. (Supreme Court, 31 October 2016, No. 22031, M.M. & 9759, Cave Marmi Vallestrona/Iveco) ruled on the binding effects Figli S.n.c., A. e S.M./Reale Mutua Assicurazioni.) of Commission settlement decisions, stating that they have the same binding force as infringement decisions. 4.2 Who bears the evidential burden of proof? The decisions of other EU antitrust authorities could provide strong pieces of evidences of the antitrust infringement; however, these decisions do not bind the Court with regard to The plaintiff must provide full evidence of the damage claimed; the ascertainment of the antitrust law violation. in theory, there are no presumptive mechanisms for calculating With reference to the foreclosure for the national judge the damage. Article 2697 of the Italian Civil Code states that to re-evaluate the antitrust violation ascertained in an EU whoever asserts a right in judicial proceedings must prove the Commission and IAA decision, many doubts were raised facts on which such right is based. This provision is also appli- regarding the compliance of this rule with several national cable in antitrust claims. constitutional principles, which impose a total independence of judges from decisions of other non-judicial bodies (the Italian 4.3 Do evidential presumptions play an important role Constitutional Court stated that the IAA is not a Judicial Court in damages claims, including any presumptions of loss in – Decision No. 3 2019). For this reason, it is to be considered cartel cases that have been applied in your jurisdiction? that this foreclosure will not be applied by the Italian courts in an absolute sense, not excluding the power of the Court to eval- Please see question 4.1. uate any new evidence and facts that did not emerge in the EU Italian case law prior to the entry into force of Lgs. 3/2017 Commission or IAA proceedings, and/or the definite decision had already developed a presumption relating to the decisions of the IAA, which were considered as “privileged evidence”: the

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plaintiff could rely on such decisions, but the defendant had the Article 4 of Lgs. 2/2017 regulates the order of disclosure possibility to provide evidence to the contrary. However, Lgs. addressed by the court to a competition authority, which can be 3/2017 went one step further, eliminating the possibility for the issued when neither the parties nor third parties are reasonably defendant to adduce evidence to the contrary. able to provide such evidence, always following the principle of proportionality. In the follow-on civil proceedings, a potential plaintiff has 4.4 Are there limitations on the forms of evidence which may be put forward by either side? Is expert the right to have access to the file of the IAA proceedings if evidence accepted by the courts? it intends (and has a legitimate interest) to act in civil proceedings for damages against the undertaking, which has violated the antitrust law, as ascertained in the IAA’s decision. Thus, There are no particular limitations for evidence; witness evidence normally a plaintiff could already have part of the file of the is possible on specific questions proposed by the party and IAA proceeding, especially if it previously participated in the authorised by the Court (the Court must authorise the witnesses’ IAA’s investigation (e.g. as the complainant). evidence and the questions to be proposed to the witnesses). The disclosure of (i) leniency statements, and (ii) settlement The Court could authorise the technical advice of profes- submissions (addressed to the competition authorities applying sionals (normally, the Court in an antitrust litigation appoints settlement procedures) is always excluded. a technical expert to assist the Court in the analysis of the case). Even before the entry into force of Lgs. 3/2017, the Italian The parties could also appoint technical experts to collabo- Supreme Court had a proactive approach to antitrust private rate with the technical expert appointed by the Court. enforcement, fostering a broad interpretation of the existing The technical expert can ask the Court to require the parties to provisions (Article 210 of the CPC) relating to the gathering provide further documents and information useful for the prepa- of evidence and the burden of proof. Regarding stand-alone ration of the technical report. However, the Court-appointed cases, the Supreme Court held that, in line with the Damages experts cannot relieve the parties of their burden of proof. Directive and even before it was transposed into national law, The report of the technical expert appointed by the Court is Civil Courts must take into due account the information asym- not binding for the Court (the Court could issue a final decision metry among the parties in access to evidence. It also held that that is not (fully) coherent with the conclusions of the technical Civil Courts must guarantee the effectiveness of the right to expert’s report; however, in doing so, the Court has to explain antitrust damages through a less strict interpretation of proce- in the decision the reasons why it has decided not to fully follow dural rules on disclosure and court-appointed experts (Corte di the expert’s report. Cassazione, 4 June 2015, Decision No. 11564, Cargest). The Court of Appeal of Milan (2 January 2017, Brennercom), in the The Court of Milan, also following the Supreme Court Cargest context of a follow-on action, granted damages related to abusive judgment, has remained quite conservative in using discovery price discrimination from a dominant firm. The Court confirmed power requests (see Arslogica Sistemi c. IBM Italia, issued on that technical expert reports play a crucial role in cases involving 13 April 2016 by the Court of Milan, Specialised Division of complex economic assessments, in particular with regard to the Enterprises “A”). In that judgment, the Court did not exercise assessment of a causal link and the calculation of damages. the discovery power requested by the plaintiff, also considering that the claimant had not provided the minimum essential infor- 4.5 What are the rules on disclosure? What, if any, mation needed to at least distinguish the relevant market the documents can be obtained: (i) before proceedings have antitrust violation would have impacted. begun; (ii) during proceedings from the other party; and (iii) from third parties (including competition authorities)? 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? As a general rule, Article 210 of the CPC states that the Court, at the request of one of the parties, may order the other party or a third party to produce in Court a document or other object Once the Court has admitted the evidence and approved the which it considers necessary for the proceeding. questions to be asked, the witness is required to participate and With specific regard to antitrust claims, Articles 3–6 of Lgs. respond under oath with regard to the truth of the facts he/she 3/2017 (implementing Articles 5–8 of the Damages Directive) reports. regulate the disclosure of potential evidence allegedly owned by It is mandatory for the witness to participate, and if he/she the defendant or by a third party and the ability of the Court to does not attend the hearing where he/she is required to testify have access to the file of a competition authority. in the absence of valid reasons, he/she may be fined an amount Article 3 of Lgs. 3/2017 states that, in claims for damages based between €100 to €1,000 (Articles 255 and 257 bis of the CPC) on an infringement of competition law, upon a reasoned request and could be forced to testify through public force. by the plaintiff, the court may order the defendant or third party to disclose relevant evidence which lies in their control, provided 4.7 Does an infringement decision by a national or that, pursuant to the third paragraph of the same provision, the international competition authority, or an authority from order complies with the limit of proportionality. another country, have probative value as to liability Pursuant to Article 6 of Lgs. 3/2017, the Court can impose and enable claimants to pursue follow-on claims for fines (ranging from €15,000 to €150,000) on parties, third parties, damages in the courts? and their legal representatives in the event of non-compliance with the disclosure order. With regard to an IAA decision or decision of the antitrust Notwithstanding the above, many commentators say that there authorities, please see the answer to question 4.1. According is still a risk that the addressee considers it more profitable to pay to Article 16 of Regulation (EC) No. 1/2003, national Courts the fine and refuse to disclose (Siragusa and Comino). Hence, cannot take decisions running counter to a decision i) adopted parties are subject to an additional “procedural” penalty as the by the European Commission, or ii) contemplated by the Court can draw adverse evidential inferences from a party’s refusal Commission in proceedings it has initiated. or failure to comply.

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4.8 How would courts deal with issues of commercial competition and abuse of dominance, Articles 2 and 3 of Law confidentiality that may arise in competition 297/90) to undertakings managing services of general economic proceedings? interest or having the character of legal monopoly if certain strict conditions are met. Article 3(4) of Lgs. 3/2017 (implementing Article 5(4) of the Damages Directive) provides that when a Court disclosure order 5.2 Is the “passing on defence” available and do could concern confidential information, the Court is required indirect purchasers have legal standing to sue? to provide for specific protective measures, including: imposing an obligation of secrecy; identifying the persons authorised to The passing-on defence argument was also admissible before have access to documents; redacting sensitive passages in docu- the implementation of Lgs. 3/2017 (Court of Milan, 27 June ments; holding in camera hearings; and requesting experts to 2016, No. 7970, Swiss/SEA), as it can show that the antitrust make non-confidential summaries of the relevant information. violation did not produce any damage against the plaintiff. The Thus the Court, in the context of the data provided by the downstream customers, which suffered the damage, can act for parties, has to pay attention in the event that the information the restoration of such damage, but in a different specific claim provided by a party contains sensitive commercial information to be submitted to a Civil Court. Thus indirect purchasers have and has to be disclosed to other parties’ attorneys or technical standing to sue. experts. This is a delicate balance that must protect trade and industrial secrets on the one hand, whilst on the other hand allow the 5.3 Are defendants able to join other cartel participants to the claim as co-defendants? If so, on what basis may parties to guarantee the rights of defence. they be joined? A Court cannot prove an accusation supported by documents or information that has not been made available to the party against whom that information is used. In the event of an action for compensation of damages for an The Court in the final decision can apply measures aimed at antitrust violation committed by several companies (e.g. a cartel preserving the disclosure of confidential (privacy) and sensi- or an abuse of collective dominance), the injured party (plaintiff) tive data (e.g. to aggregate sensitive commercial information), can, theoretically, sue only one of the jointly liable undertakings provided that these measures allow a full right of defence of the responsible for the antitrust violation. However, the defendant parties (even in a possible appeal of the Court decision). undertaking, within the term of its first defence brief (comparsa di risposta), may also require the Court to involve one or more undertakings that are jointly liable for the antitrust violation (Article 4.9 Is there provision for the national competition 269 of the CPC). Moreover, the plaintiff can require (within the authority in your jurisdiction (and/or the European first hearing of the trial) the involvement of other undertakings Commission, in EU Member States) to express its not sued at the start of the trial (e.g. when the defendant in its first views or analysis in relation to the case? If so, how common is it for the competition authority (or European defensive brief states that the damage claimed by the plaintiff has Commission) to do so? been totally caused by other undertakings jointly liable for the antitrust violation) (Article 269.2 of the CPC). In principle, the Court may refuse to grant such request; It is possible for the IAA to become an active party to assist the however, it normally grants the request with the participation court in civil proceedings (amicus curiae); however, this instru- of the other undertakings in the proceedings if: i) it is neces- ment has never been applied in Italy. sary to ensure respect for the rights of defence of the defendant Article 15 of Regulation (EC) No. 1/2003 allows national (e.g. when it does not dispose of key information regarding other Courts to ask the Commission to transmit to them informa- undertakings); and/or ii) it avoids carrying out separate proceed- tion in its possession or its opinion on questions concerning the ings for the ascertainment of the same antitrust infringement, application of EU competition rules. which could cause inefficiencies. The IAA may submit comments to Courts in relation to the For a decision concerning the need to involve in the same trial proportionality of disclosure of evidence (Article 4(7) of Lgs. all jointly liable undertakings involved in a cartel ascertained by 3/2017, transposing Article 6(11) of the Damages Directive). an EU Commission decision, see the order issued by the Court of The Courts may seek the assistance of the IAA on the quanti- Milan, Specialised Division of Enterprises “A”, on 18 April 2018, fication of damages (Article 15(3) of Lgs. 3/2017, implementing in case Beltrambini and others v. Iveco, by which Iveco was authorised Article 17(3) of the Damages Directive). to call the other addressees of the European Commission’s decisions in the Trucks case into the proceedings as co-defendants. 52 Justification/Defences The co-infringers are allowed to voluntarily join the proceedings pursuant to Articles 105 and 267 of the CPC. 5.1 Is a defence of justification/public interest The Court can also order the plaintiff to additionally sue available? the other undertakings that allegedly put in place the antitrust infringement, if the Court believes that their presence in the trial is essential to fully decide the case (Article 102 of the CPC). It is not possible to adduce a public interest justification. It should be remembered that a Court decision cannot be The defendant may rely on Article 101(3) of the TFEU to binding for entities that are not parties to the proceedings; invoke an exemption to the prohibition of anti-competitive therefore, for example, if only one of the undertakings which agreements, although only in stand-alone actions, given the participated in a cartel is party to the trial, the Court’s final deci- evidentiary value attributed to the decisions of competition sion will not be binding and cannot be executed against the authorities in follow-on actions (please see question 4.1). other undertakings (which were part of the cartel) which have A specific exceptional provision of the Italian antitrust law not been specifically sued. In this case, the defendant that has (Article 8(2) of Law 287/90) allows an exemption of the Italian been specifically sued and that has been ordered by the Court competition rules (national provision of the agreement against to compensate the plaintiff for the damage of a cartel, can

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autonomously, in a different trial, sue the other undertakings The settlement of disputes between the parties is often (parties of the cartel not specifically sued) to recover from them encouraged by the court itself. Article 185 of the CPC provides the damages (or a part of the damages) it was ordered to restore that the Court, at the first hearing or before the closure of the on behalf of the parties of the cartel not sued. investigation phase, could propose a settlement or conciliation proposal to the parties, where possible, when the dispute “…can 62 Timing be solved easily and quickly”. However, considering the complexity of any antitrust claim, it is unlikely that this provision will be used in antitrust cases. 6.1 Is there a limitation period for bringing a claim for Article 15 of Lgs. 3/2017 provides that, when the parties breach of competition law, and if so how long is it and have opted for a consensual settlement of the dispute, they may when does it start to run? submit an application to the Court to obtain a suspension of the proceedings for up to two years (Court of Milan, Specialised The limitation period is five years from the ascertainment of the Division of Enterprises “A”, order of 10 May 2019, Torchiani/ antitrust violation (Article 8 of Lgs. 3/2017 and Article 2947 of Tecnofoodpack/Iveco). the Italian Civil Code). The limitation period does not start to run before the breach of competition law has ceased and before 7.2 If collective claims, class actions and/or the plaintiff becomes aware (or can reasonably be expected to be representative actions are permitted, is collective aware) of all these elements: i) the behaviour and that this behav- settlement/settlement by the representative body on iour is an infringement of antitrust law; ii) that this infringement behalf of the claimants also permitted, and if so on what determined a damage to the plaintiff; and iii) the identity of the basis? infringer. However, the limitation period is suspended for one year The rules referred to in question 7.1 also apply in the case of when the IAA sets an investigation regarding the antitrust class actions, if the consumer association has also received from infringement on which the action for damages is based. The the consumers the authority to act to settle the case. suspension period begins to run when the IAA decision on the The new regulation on class actions (please see question infringement becomes final or after the investigation is other- 1.5) regulates the binding nature of the settlement agreement wise terminated (Article 8.2 of Decree No. 3/2017). between the participants in the class action. In particular, The Supreme Court of Cassation (Decision No. 5381/2020) Article 840 quaterdecies of the CPC provides that until the case is stated that the one-year suspension of the limitation period rule discussed orally, the Court may submit a settlement or concili- does not apply to antitrust damages claims proposed before 26 ation proposal to the parties: each party can declare its willing- November 2014 (the date of adoption of the Damages Directive). ness to adhere to the proposal. Thus, the Court provided that in these cases, the limitation After the ruling upholding the claims, the joint representa- period starts to run from the beginning of the IAA’s investigative of the members may reach a settlement agreement with the tion proceeding. respondent company, which will be binding on all the claimants The Court of Milan (preliminary ruling) on 4 October 2018, who do not raise objections. in case No. 9759, Cave Marmi Vallestrona/Iveco, took the view that statute of limitation rules have a substantive nature and, conse- 82 Costs quently, are not retroactive. The limitation period can be interrupted by an entity that 8.1 Can the claimant/defendant recover its legal costs allegedly suffers damage from an antitrust infringement by a from the unsuccessful party? registered letter AR, sent to the undertaking(s) that allegedly infringed the antitrust law, in which the violation is contested and compensation for damages is requested. Even if the costs of the judgment paid by the unsuccessful party have been specified to the Court, the Court does not grant the real costs incurred by the victorious party; the Court often 6.2 Broadly speaking, how long does a typical breach calculates the costs on the basis of the professional attorney fees of competition law claim take to bring to trial and final fixed by a national decree (DM 55/2014 as amended by Article judgment? Is it possible to expedite proceedings? 13.6 of Law 2012 No. 247, upgraded by DM No. 37/2018, the “Decree”) and based on the value of the claim. The average duration of a claim is between 18 months and two Normally, the attorney fees fixed by the Decree are signif- to three years for the first instance procedure, two to three years icantly lower than the real costs borne by the parties in the for the second instance appeal, and around two to three years proceedings, especially in complex antitrust cases. for an appeal before the Supreme Court (Corte di Cassazione). Interim procedures could have a duration of six months to 8.2 Are lawyers permitted to act on a contingency fee one year. basis?

72 Settlement Professional law in the past prohibited this kind of agreement with an attorney (patto di quota lite). Now, this agreement is 7.1 Do parties require the permission of the court allowed with the limit that the attorney must, in any case, be to discontinue breach of competition law claims (for adequately remunerated if he/she loses the case, taking into example, if a settlement is reached)? account at least the lowest attorney fee provided by the Decree. If the lowest fee is granted to the attorney, a success fee is The plaintiff can withdraw the judicial proceedings at any time; allowed in case of a successful outcome of the cause. under CPC rules, the judicial proceedings go ahead on the plaintiff’s initiative. In the event of a settlement, the plaintiff is entitled to give up the action at any time during the proceedings.

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8.3 Is third party funding of competition law claims programme in 2007, following the introduction of a new provi- permitted? If so, has this option been used in many sion (Article 15.2 bis) in Law 287/90. In Italy, leniency appli- cases to date? cants are not given protection from civil claims. During the trial, the parties are free to provide or not provide Italian law does not forbid the financing of an antitrust action by documents that support their claims or defences, except for the a third party; however, this is not a widespread practice in Italy. hypothesis in which the judge, following a specific request of Please note that the entity that finances the action must be one of the parties, orders the discovery of specific documents; authorised to provide financial services in Italy or in the EU. in this case, in theory the applicant cannot refuse to provide the In the context of the so-called “Trucks ” case, third-party leniency application if it is required by the Court. funding is being proposed; for instance, by the trade associa- If a defendant does not provide these documents despite the tions of the transport sector, CNA Fita and Confartigianato Court order, the Court could draw evidence to the detriment Trasporti. of those who did not produce the document required (e.g. if the leniency application requested by the Court is not provided 92 Appeal by the defendant, the Court could legitimately argue that the defendant has self-reported the antitrust violation and its full participation in the antitrust infringement). 9.1 Can decisions of the court be appealed? The IAA can refuse to provide the Court with a leniency application in the file of its antitrust proceedings. In civil proceedings, the first instance judgment may be challenged before the Court of Appeal within 30 days from the 112 Anticipated Reforms day the decision was served by one of the parties to the other (“Formal Notification”); otherwise, in the absence of any 11.1 For EU Member States, highlight the anticipated Formal Notification, the appeal may be brought within six impact of the EU Directive on Antitrust Damages Actions months from the publication of the judgment. at the national level and any amendments to national Judgments pronounced at the appeal stage or in a single procedure that are likely to be required. instance may be challenged before the Supreme Court within 60 days from the Formal Notification of the judgment. Pursuant to The Damages Directive has resulted in an increase in antitrust Article 327 of the CPC, in the absence of a Formal Notification, damages actions in Italy. appeals to the Supreme Court may be brought within six months As these antitrust cases have been concentrated in the three from the publication of the judgment. The decisions of the specialised Courts of Milan, Rome, and Naples, these Courts Court of Appeal can be challenged before the Supreme Court have been able to achieve an improved track record in antitrust for violation of the law. It should be noted that a decision of cases, increasing their skills in antitrust matters. the Court of Appeal cannot be challenged before the Supreme The rules on the disclosure of evidence, the binding effect Court for a simple lack of reasoning (illogicality) except in the of decisions of the IAA, the provisions governing limitation case of the total absence of reasoning. periods, and the exceptions to the general rule of joint and several liability are noteworthy changes in civil antitrust claim 102 Leniency proceedings in Italy.

10.1 Is leniency offered by a national competition 11.2 What approach has been taken for the authority in your jurisdiction? If so, is (a) a successful, implementation of the EU Directive on Antitrust and (b) an unsuccessful applicant for leniency given Damages Actions in your jurisdiction? How has the immunity from civil claims? Directive been applied by the courts in your jurisdiction?

Leniency is provided in the national system; however, total The provisions of Lgs. 3/2017 are very similar to the ones of general immunity provisions for civil actions in favour of the the Directive it implements, with some minor adaptations leniency applicant are not provided in Italy, since this restric- aimed at ensuring coordination with substantive and procedural tion would actually violate the constitutionally guaranteed right pre-existing provisions of Italian law. of defence. There are no practical differences between the disciplines According to Article 9 of Lgs. 3/2017 (implementing Article before and after the reform. For example, before the reform the 11 of the Damages Directive), an immunity recipient is jointly Courts, with reference to the probative value to be attributed to and severally liable only: a) to its direct or indirect purchasers the IAA’s and EU Commission decisions, stated that decisions or providers; and b) to other injured parties only where full with regard to the evidence of the ascertainment of antitrust compensation cannot be obtained from the other undertakings law violations (in a follow-on action) constitute non-rebuttable that were involved in the same infringement of antitrust law. evidence (prove privilegiate). Moreover, it is expressly stated that, in any event, the amount of contribution of a successful immunity applicant shall not exceed the amount of the harm it caused to its own direct or 11.3 Please identify, with reference to transitional indirect purchasers or providers. provisions in national implementing legislation, whether the key aspects of the Directive (including limitation reforms) will apply in your jurisdiction only ‎to 10.2 Is (a) a successful, and (b) an unsuccessful infringement decisions post-dating the effective date of applicant for leniency permitted to withhold evidence implementation; or, if some other arrangement applies, disclosed by it when obtaining leniency in any please describe it. subsequent court proceedings? With regard to transitional law, Article 19 of Lgs. 3/2017 Leniency is offered by the IAA, which adopted its first leniency provides that some of its provisions, having procedural nature,

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apply only to actions for damages for breach of competition 3/2017, having substantial nature, including those on limitation law brought after the date of entry into force of the Damages periods, do not apply retroactively, pursuant to Article 22(1) of Directive (26 December 2014). Namely, such provisions are the Directive. Articles 3, 4, and 5 of Lgs. 3/2017 (corresponding to Articles 5, 6, and 7 of the Damages Directive), relating to the disclosure 11.4 Are there any other proposed reforms in your of evidence, and Article 15(2) of Lgs. 3/2017 (corresponding jurisdiction relating to competition litigation? to Article 18(2) of the Directive), relating to the possibility of suspending proceedings for up to two years where the parties thereto are involved in consensual dispute resolution. On the No other relevant proposed reforms relating to competition liti- other hand, the provisions of the Damages Directive and of Lgs. gation are foreseen in Italy in the current year.

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Luciano Vasques concentrates on antitrust, consumer protection, energy and other regulatory matters in Italy and in the European Union, and on corporate law (bankruptcy proceedings). As an officer of and counsel to the Italian Antitrust Authority, Mr. Vasques was involved in proceedings in the Italian manufacturing, oil, energy, gas, water distribution, waste disposal (domestic and industrial waste) and public utilities sectors. He advises clients on Italian and EU antitrust matters, such as investigations of the Italian antitrust authority and of the EU Commission concerning alleged agreements against competition, concerted practices, abuses of dominant position, antitrust litigation cases (antitrust private enforcement), as well as complex antitrust issues arising from merger and acquisition transactions (Italian EU and multijurisdictional filings). Mr. Vasques also assists his clients on consumer protection, unfair competition, multilevel marketing business, State aid issues, telecommunications, electricity and gas regulations, and also has consolidated expertise on transactions concerning the creation and sale of renewable power plants. Mr. Vasques has written widely on antitrust, unfair competition and corporate law for leading Italian and international periodicals, and is the author of a book on the application of antitrust principles relating to Italian public utilities.

DDPV Studio Legale Tel: +39 06 3600 1188 Piazzale delle Belle Arti no. 2 Email: [email protected] 00196 Rome URL: www.ddpvlex.com Italy

Chiara Sciarra is a trainee lawyer at DDPV Studio Legale in Rome. She mainly works in the antitrust, consumer protection and privacy sectors, assisting clients and drafting defensive submissions before the civil and administrative courts. She also participates, as a trainee, in compliance procedures before the Italian Antitrust Authority. Ms. Sciarra graduated in 2019 from Luiss Guido Carli University in Rome with a Master’s thesis on “gun-jumping” and EU merger control. She attended the Erasmus Programme at Radboud University in Nijmegen (Netherlands), focusing on copyright law and competition law.

DDPV Studio Legale Tel: +39 06 3600 1188 Piazzale delle Belle Arti no. 2 Email: [email protected] 00196 Rome URL: www.ddpvlex.com Italy

DDPV is a boutique law firm (with offices in Rome and Milan) which assists its clients in connecting with antitrust investigations of the EU Commission and the Italian Antitrust Authority (“IAA”) for alleged violations of Articles 101 and/or 102 of the TFEU (i.e. agreements against competition, abuse of dominant position) or articles 2 and 3 of the Italian Antitrust Law. DDPV’s Antitrust department also assists clients in appeal proceedings against the EU Commission and IAA antitrust decisions before the lower and higher domestic and European courts (TAR, Consiglio di Stato, EU General Court and Court of Justice), as well as in private antitrust enforcement litigation and litigation concerning the abuse of economic dependence. DDPV also has vast experience in the drafting and submission of merger filings before the national antitrust authorities (including multijurisdictional filings) and the EU Commission (CO and RS forms), as well as in antitrust audit-compliance programmes and State aid issues. www.ddpvlex.com

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Nagashima Ohno & Tsunematsu Koki Yanagisawa

12 General to provide its opinion on the application of the Antimonopoly Act and other necessary matters. In order to avoid an abuse of right to injunction, the court may order the plaintiff to furnish 1.1 Please identify the scope of claims that may be an adequate security deposit at the request of the defendant. brought in your jurisdiction for breach of competition law.

In Japan, the scope of private actions that may be brought for 1.3 Is the legal basis for competition law claims derived from international, national or regional law? breach of competition law includes: (i) claims for compensation of damage arising from breach of competition law; and (ii) petitions for injunction to demand suspension or prevention of The legal basis for competition law claims is derived from actions in breach of completion law. Japanese law, in principle. In addition, an addressee of a cease and desist order or an Under Japanese choice-of-law rules, competition law claims administrative surcharge payment order rendered by the Japan can be brought to Japanese courts based on foreign law if the Fair Trade Commission (the “JFTC”) may file a complaint with court determines that the result of the relevant tortious act has the Tokyo District Court to challenge such JFTC order. Prior to occurred in the foreign jurisdiction. However, if facts to which the amendment to the Antimonopoly Act, which became effec- the foreign law should be applied do not constitute a tort under tive as of April 1, 2015 (“2015 Amendment”), complaints to Japanese law, no claim under the foreign law may be made for challenge JFTC orders were examined through administrative damages or any other remedies. Even if facts to which the proceedings presided by the administrative judges appointed and foreign law should be applied constitute a tort under both the authorised by the chairperson and commissioners of the JFTC. foreign law and Japanese law, the victim may make a claim only for damages or any other remedies that may be permitted under Japanese law. For instance, claims for treble damages or puni- 1.2 What is the legal basis for bringing an action for breach of competition law? tive damages will not be accepted by Japanese courts.

(i) Actions for compensation for damage 1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned? Any person who suffered damage by conduct that constitutes a private monopolisation, an unreasonable restraint of trade or an unfair trade practice in violation of the Antimonopoly Act Private actions may be brought in district courts in accordance is entitled to bring an action seeking compensation for damage with the Code of Civil Procedure in principle, while the Tokyo to the court on the grounds of either (i) strict liability under District Court is the court of first instance that has the exclu- Article 25 of the Antimonopoly Act, or (ii) general tort under sive jurisdiction on claims for compensation for damage under Article 709 of the Civil Code. Even indirect purchasers have Article 25 of the Antimonopoly Act. The Tokyo District Court legal standing to file a lawsuit to claim damages arising from a also has the exclusive jurisdiction as the court of first instance cartel in violation of the Antimonopoly Act. over a complaint to challenge a cease and desist order or an A private action to recover unjust enrichment based on Articles administrative surcharge payment order rendered by the JFTC. 703 and 704 of the Civil Code may be available, depending on the An action for injunction under Article 24 of the Antimonopoly circumstances. Act can be filed with a local district court in the place where a high court is located (i.e., Tokyo, Osaka, Nagoya, Hiroshima, (ii) Actions for injunction Fukuoka, Sendai, Sapporo and Takamatsu). Under Article 24 of the Antimonopoly Act, any person whose interests are infringed or are likely to be infringed by violation 1.5 Who has standing to bring an action for breach of of Article 8, Item 5 (i.e., activities by a business association that competition law and what are the available mechanisms cause a member entrepreneur to employ unfair trade practices) or for multiple claimants? For instance, is there a Article 19 (i.e., unfair trade practices by an entrepreneur) is enti- possibility of collective claims, class actions, actions tled to demand suspension or prevention of such infringement by representative bodies or any other form of public interest litigation? If collective claims or class actions from an entrepreneur or a business association if such person are permitted, are these permitted on an “opt-in” or “opt- suffers or is likely to suffer material damages by such conduct. out” basis? In the event that an action for the aforementioned injunction is filed pursuant to Article 24 of the Antimonopoly Act, the court shall send a notice to the JFTC and may request the JFTC Any person who suffered damages due to a defendant’s conduct

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in violation of the Antimonopoly Act (e.g., competitors and between the venue (i.e., Japan) and the key factor(s) involved customers) may file a complaint for compensation for damage. in each case (such as the domicile of the defendant or the place Any person whose interests are infringed or are likely to be where the tort is committed) in order for the case to be covered infringed by violation of Article 8, Item 5 (i.e., activities by a by the jurisdiction of Japanese courts. Furthermore, a Japanese business association that cause a member entrepreneur to employ court can deny its jurisdiction over cases with foreign elements if unfair trade practices) or Article 19 (i.e., unfair trade practices by it considers, taking into account the nature of the case, the defen- an entrepreneur) of the Antimonopoly Act may file a petition for dant’s burden of responding to the complaint and location of the an injunction pursuant to Article 24 of the Antimonopoly Act. evidence, that there are special circumstances which impede fair- Neither collective claims nor class actions are permitted under ness of the parties or fair and prompt hearing procedures. The Japanese law with regard to the violation of the Antimonopoly foregoing circumstances do not allow Japanese courts to attract Act. claimants and defendant applications to seize jurisdiction. Under the Code of Civil Procedure, if rights or obligations, Having said that, there are certain provisions under the which are the subject matter of the lawsuits, are common to two Antimonopoly Act that assist plaintiffs in their civil actions or more persons or are based on the same factual or statutory seeking the recovery of damages or injunction and plaintiffs cause, these persons may sue as co-plaintiffs. The same shall may consider using such assistance. For instance, the JFTC apply where rights or obligations, which are the subject matter provides its opinion regarding the amount of damage to the of the lawsuits, are of the same kind and based on the same court that handles damage claims based on Article 25 of the kind of factual or statutory causes. In addition, each plaintiff Antimonopoly Act, and also provides its opinion with respect or defendant may appoint another plaintiff or defendant as a to the application of the Antimonopoly Act and other necessary representative of each plaintiff/defendant under the “appointed matters if a lawsuit for an injunction has been filed under Article party system” provided by the Code of Civil Procedure. These 24 of the Antimonopoly Act. schemes can be used by multiple claimants in bringing competition law claims before the civil court proceedings. 1.8 Is the judicial process adversarial or inquisitorial? Furthermore, qualified consumer organisations are entitled to file an action for injunction for lawsuits under the Consumer Contract Act and injunctions under Article 10 of the Act against The judicial process is adversarial for civil actions for compensa- Unjustifiable Premiums and Misleading Representations. In tion for damages or injunctive relief. The court judges will hold 2016, a new system was introduced for consumer organisations hearings where both parties attend and submit their factual and qualified by the Japanese government, so that such organisa- legal arguments and evidence supporting the arguments before the tion may file a lawsuit seeking compensation for damage under court. While the facts admitted by the opposing party require no consumer contracts. In such actions, the plaintiffs may assert evidence and shall bind the court and both parties, the facts denied the defendants’ violation of the Antimonopoly Act. by the opposing party must be proved by evidence. The court then holds examination of witnesses where, in general, witnesses are subject to direct examination plus cross-examination in relation 1.6 What jurisdictional factors will determine whether a to the matters raised during direct examination. After concluding court is entitled to take on a competition law claim? the examination of witnesses, the court may instruct both parties to submit a final brief and then closes the hearing procedures, The Code of Civil Procedure provides the basic jurisdictional which then moves to rendition of judgment. rules. For instance, a court having jurisdiction over the location of a defendant’s principal office/domicile has jurisdiction over 22 Interim Remedies claims brought against the defendant. A court having jurisdiction over the place of violation of the Antimonopoly Act also has 2.1 Are interim remedies available in competition law jurisdiction over claims based on such violation. Furthermore, cases? the Antimonopoly Act provides that if an action for injunction under Article 24 thereof is brought in a local district court, the case may be transferred to the Tokyo District Court or one of A claimant may file with a competent district court a petition the other seven major district courts, and that the Tokyo District for preliminary injunction to suspend or prevent conduct that Court has the exclusive jurisdiction on claims for compensation violates or is likely to violate the Antimonopoly Act pursuant to for damage under Article 25 of the Antimonopoly Act. If more the Civil Code and the Civil Preservation Act. than one court has jurisdiction, the claimant may choose the In addition, when an addressee of a cease and desist order court where the claims are heard, in principle. or an administrative surcharge payment order rendered by the JFTC files a complaint to challenge such JFTC order, the addressee may file a petition to suspend the enforcement of 1.7 Does your jurisdiction have a reputation for the JFTC order in accordance with the Administrative Case attracting claimants or, on the contrary, defendant Litigation Act. However, the court tends to reject such petition applications to seize jurisdiction, and if so, why? under the Administrative Case Litigation Act.

We are of the view that Japan does not have a system that attracts claimants or defendant applications to seize jurisdiction over 2.2 What interim remedies are available and under what conditions will a court grant them? civil cases. First, Japanese law does not provide claimants with a favourable judicial system such as class actions, discovery, treble damages or exemplary damages against defendant(s) who As mentioned in question 2.1, preliminary injunction is a violated the Antimonopoly Act. Secondly, while the Code of Civil possible interim remedy for competition law claims. Generally, Procedure regulates the jurisdiction of Japanese courts over cases a petitioner must show that (i) there is a “necessity” for the with foreign elements, it does not tend to provide broad jurisdic- preliminary injunction, and that (ii) there are causes of actions tion, in that the law relatively strictly requires a close relationship for the claims to be protected, based on prima facie evidence.

Furthermore, the court will require that the petitioner furnish decision was sharply criticised in that plaintiffs must bear the a security deposit in advance of the rendition of an order of burden of almost impossible proof pursuant to the decision. preliminary injunction. Article 248 of the Code of Civil Procedure, which came into In order to obtain the court order of suspension of enforce- force in 1998, allows the court to determine a reasonable amount ment of the JFTC order under the Administrative Case Litigation of damage if it is extremely difficult to prove the amount thereof Act, the petitioner is required to demonstrate that there is an from the nature of the damage, and such provision plays an urgent necessity to avoid grave damage to be caused by the important role in damage claims in general. Under Article 248, enforcement of the JFTC order. However, it is considered prac- recent court decisions tend to find that the amount of damage tically difficult to obtain such an order, since the aforementioned shall be equivalent to 5 to 10 per cent of the actual contract price requirement of “urgent necessity” would hardly be fulfilled. in bid rigging cases. One of the recent Tokyo High Court decisions held that the 32 Final Remedies amount of damage caused by bid rigging shall be the difference between the actual contract price and the expected contract price, and that the expected contract price shall be presumed 3.1 Please identify the final remedies which may be to be the aggregate amount of (i) one-fifth of the contract price available and describe in each case the tests which a court will apply in deciding whether to grant such a remedy. immediately after the end of the bid rigging, and (ii) four-fifths of the total amount of manufacturing costs and expenses as well as expected profits. The final remedies available for private claimants are compensation for damage and injunction. In order to obtain a final judgment in favour, private claimants must at least prove the facts 3.3 Are fines imposed by competition authorities and/ consisting of the causes of action. It is not necessary to prove or any redress scheme already offered to those harmed by the infringement taken into account by the court when the facts which have been admitted by the defendant. calculating the award? For damage claims based on the violation of the Antimonopoly Act, plaintiffs must prove: (i) the illegality of the defendant’s conduct; (ii) damages; (iii) causal relationship between the Neither the administrative surcharges imposed by the JFTC nor damage and the illegal conduct; and (iv) negligence or wilful- criminal fines imposed by the criminal court are to be consid- ness of the defendant. It is not necessary to prove negligence or ered by the courts in calculating the amount of the award. Under wilfulness of the defendant when claiming damages based on Japanese law, there is no special redress scheme offered to those Article 25 of the Antimonopoly Act. harmed by the infringement. For claims for injunction based on Article 24 of the Antimonopoly Act, plaintiffs must prove that: (i) the defendant’s 42 Evidence conduct falls under certain types of unfair trade practices in violation of Article 8, Item 5 or Article 19 of the Antimonopoly 4.1 What is the standard of proof? Act; (ii) the plaintiffs’ interests are infringed or are likely to be infringed; and (iii) the plaintiffs suffer or are likely to suffer As to the standard of proof, the party with the burden of proof “material” damages by such conduct. must prove that the alleged facts are “highly probable” in order to obtain a court judgment in favour through the civil court 3.2 If damages are an available remedy, on what bases proceedings. can a court determine the amount of the award? Are exemplary damages available? Are there any examples of damages being awarded by the courts in competition 4.2 Who bears the evidential burden of proof? cases which are in the public domain? If so, please identify any notable examples and provide details of the As is the case with other tort cases, the plaintiff alleging the amounts awarded. defendant’s violation of the Antimonopoly Act bears the burden of proof to demonstrate: (i) the illegal conduct of the defendant; In general, the court determines the amount of award based on (ii) damages; (iii) a causal relationship between the damages and the amount of actual damage suffered by a plaintiff. Neither the violation; and (iv) negligence or wilfulness of the defendant. treble damages nor exemplary damages are available under Japanese law. 4.3 Do evidential presumptions play an important With respect to the amount of damage arising from cartel role in damages claims, including any presumptions conducts, the Supreme Court decision of December 8, 1989 of loss in cartel cases that have been applied in your held that the damages shall be the difference between the actual jurisdiction? sales price and the sales price that would have been formed but for the cartel in question (“expected sales price”), and that the The Antimonopoly Act does not provide presumptions of loss sales price immediately before the cartel can be presumed to be in cartel cases. Article 248 of the Code of Civil Procedure the expected sales price unless significant changes in economic allows the court to determine a reasonable amount of damage if factors, such as economic conditions and market struc- it is extremely difficult to prove the precise amount thereof due tures, occur between the time of the cartel and the time when to the nature of the damage. Please see question 3.2. customers purchase the goods at issue. The Supreme Court decision also held that plaintiffs must prove that there is no such significant change in economic 4.4 Are there limitations on the forms of evidence factors and, if such proof is not possible, the presumption which may be put forward by either side? Is expert evidence accepted by the courts? shall not be available and plaintiffs (indirect purchasers) must prove the expected sales price based on factors of price formation, such as specific features of formation of sales price. The Evidence must be submitted by the parties to the court and

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no evidence that is not submitted to the hearing procedures include legal briefs and evidentiary documents submitted by the may be the basis of the judgment to be rendered by the court. JFTC administrative investigator as well as the entrepreneur, Authenticity of documentary evidence must be attested in order but do not include documents within the files of JFTC investi- for the evidence to be admissible as the basis of the judgment. gators which were obtained or created during the course of their There are no particular limitations on the forms of evidence that investigations. Having said that, the JFTC may provide plain- may be admissible, and no hearsay rules are applied to evidence tiffs with access to certain collected documents, including those in Japanese civil proceedings. collected from third parties, during their investigations, through Expert opinions are sometimes used in private competition a request by the court if a damage claim is filed in the court, litigation in order to prove the amount of damage arising from except for certain information such as trade secrets and privacy price cartels and bid rigging. For instance, plaintiffs sometimes information. Even attorney-client privileged documents, which choose economists or economic consultants as experts, and would be subject to protection in other jurisdictions but are not obtain their opinions providing analysis on how and to what protected in Japan, may be produced for judicial review. extent the cartel or bid rigging had an impact on the price of the relevant product so that they can submit such opinion to the (iv) Petition for perusal of case record of civil court court as evidence. Experts can testify before the court. proceedings Furthermore, any person is allowed to review the case record of the civil court proceedings where the validity of the JFTC’s 4.5 What are the rules on disclosure? What, if any, cease and desist orders and administrative surcharge payment documents can be obtained: (i) before proceedings have begun; (ii) during proceedings from the other orders are challenged by entrepreneurs, and any person who has party; and (iii) from third parties (including competition legal “interests” is allowed to obtain a copy of the case record authorities)? including briefs and evidence submitted by the JFTC, which may include documents that the JFTC collected during their investigations. Plaintiffs, or potential plaintiffs for private compe- Unlike common law jurisdictions, there is no comprehensive tition claims, are likely to be included in such person who has discovery scheme available under Japanese law. legal interests and may obtain a copy of the documents collected during the JFTC’s investigations. While the entrepreneur, as a (i) Pre-action disclosure of evidence party to the said civil court proceedings, is entitled to file a peti- Under the Code of Civil Procedure, a potential plaintiff may tion requesting the court not to disclose the documents to any obtain a court order of preservation of evidence before filing third parties, the scope of documents subject to such petition is a lawsuit if there are circumstances in which it would become limited to personal information and trade secrets. difficult to use evidence unless such evidence is reviewed in advance, such order essentially serves as an order of pre-action (v) Petition for perusal of case record of criminal court disclosure of evidence. proceedings In addition, plaintiffs, as victims of crimes for violation of the (ii) Petition for order of document production Antimonopoly Act, could also have access to the documents While the civil court proceedings are pending, a party may request submitted to the pending criminal proceedings if certain require- the court to order the other party or a third party to produce ments are fulfilled. Any person may access the documents particular documents, with certain limitations. For instance, submitted to the criminal proceedings once the proceedings are under the Code of Civil Procedure, there is no obligation to finalised. However, the plaintiffs do not have access to the docu- disclose: (i) a document relating to matters for which the holder ments within the files of public prosecutors that were obtained or a certain related person is likely to be subject to criminal pros- and created during the course of their investigations. ecution or conviction; (ii) a document concerning a secret in relation to a public officer’s duties, which is, if submitted, likely to harm the public interest or substantially hinder the performance 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? of public duties; (iii) a document containing any fact which certain professionals (e.g., a doctor, an attorney-at-law, a registered foreign lawyer) have learnt in the course of their duties and In Japanese civil court proceedings, the court may order a which should be kept secret; (iv) a document containing matters subpoena of witnesses who do not voluntarily appear before concerning technical or professional secrets; or (v) a document the court, without justifiable reason, by which such witnesses prepared exclusively for use by the holder. would be forcibly taken before the court. Penalties may also In an action for injunction under Article 24 of the be imposed on witnesses who have failed, or refused, to appear Antimonopoly Act, a plaintiff may request the court to order the before the court, although such penalties are not severe. In defendant to produce documents even including trade secrets practice, however, it is not common in the civil proceedings for the purpose of proving the infringement unless there is any for the court to order a subpoena or impose penalties, even if a justifiable reason to refuse such production. On the other hand, witness does not appear. a party may request the court to render an order of protection of In general, witnesses are subject to cross-examination in rela- trade secrets in the aforementioned proceedings. tion to the matters raised during questioning in the examination. Even judges may supplementarily examine witnesses. (iii) Petition for perusal of case record of JFTC administrative hearing procedures 4.7 Does an infringement decision by a national or Under the Antimonopoly Act, plaintiffs, as victims of an alleged international competition authority, or an authority from violation of the Antimonopoly Act, may request the JFTC for another country, have probative value as to liability a review and reproduction of the documents submitted to the and enable claimants to pursue follow-on claims for JFTC’s administrative hearing procedures where an entrepre- damages in the courts? neur disputes the validity of a cease and desist order and/or an administrative surcharge payment order. Such documents In cases where a plaintiff brings a damage claim based on Article

25 of the Antimonopoly Act, which may only be filed after the Specifically, the JFTC makes public the order, fact findings and JFTC’s cease and desist order or an administrative surcharge application of the Antimonopoly Act for almost all cases for payment order becomes irrevocable, the Antimonopoly Act which the JFTC has conducted formal investigations. does not allow the defendant to deny their wilfulness or negligence for the violation of the Antimonopoly Act found by those 52 Justification / Defences JFTC orders or the court judgment affirming such orders. Furthermore, it is generally considered that the findings of violation of the Antimonopoly Act by the JFTC orders which 5.1 Is a defence of justification/public interest available? became irrevocable through administrative hearing procedures or civil court proceedings create a rebuttable presumption that the Antimonopoly Act was violated. A private monopolisation and an unreasonable restraint of trade As a matter of practice, even foreign enforcers’ decisions prohibited by the Antimonopoly Act may, theoretically, be justi- could be taken into account by the court in charge of private fied if they are not “contrary to the public interest”. While plain- competition cases to some extent in determining whether the tiffs bear the burden of proving such requirement, the court Antimonopoly Act was violated, particularly when the facts and usually finds that the “contrary to the public interest” requirement evidence are common to both the foreign case and the Japanese is fulfilled as long as the plaintiff proves that the defendant’s acts case. Private claimants may use decisions by sector-specific in question have caused a “substantial restraint of competition”. regulators in order to support their arguments. 5.2 Is the “passing on defence” available and do 4.8 How would courts deal with issues of commercial indirect purchasers have legal standing to sue? confidentiality that may arise in competition proceedings? While the “passing on defence” itself is not recognised in Japan, passing on value (i.e., the amount that direct purchasers have As discussed in question 4.5, certain types of confidential docu- collected from indirect purchasers) will theoretically be taken ment are excluded from the documents subject to the court into account when calculating the amount of damage suffered by order to produce documents under the Code of Civil Procedure. direct purchasers. Even indirect purchasers have legal standing Furthermore, while any person is allowed to review the case to file a lawsuit to claim civil damages arising from a violation record of the civil proceedings, including the documents (briefs of the Antimonopoly Act. However, in cases involving both and evidence) submitted by the parties, the parties are entitled direct and indirect purchaser(s), it will not be easy in practice to to file a petition requesting the court not to disclose personal prove the amount of damages as well as any causal relationship information and trade secrets to any third party. Under such between the violation at issue and the alleged damages. Article scheme, in a case where documents including personal informa- 248 of the Code of Civil Procedure could be of assistance in tion or trade secrets of third parties collected during the course overcoming the practical obstacle involved in determining the of investigations are submitted by the JFTC to the civil court amount of damage, as it allows the court to determine a reason- proceedings where the validity of the JFTC’s cease and desist able amount of damage if it is extremely difficult to prove the orders and administrative surcharge payment orders are chal- amount thereof due to the nature of the damage. lenged by entrepreneurs, the parties to such proceedings are entitled to file a petition requesting the court not to disclose the 5.3 Are defendants able to join other cartel participants personal information and trade secrets to any third parties. to the claim as co-defendants? If so, on what basis may The JFTC restricts access to documents that include trade they be joined? secrets or privacy information in response to the plaintiff’s request for review and reproduction of documents submitted Under the Code of Civil Procedure, a person who has legal inter- to the JFTC administrative hearing procedures and the court’s ests in the result of a lawsuit is allowed to intervene in such lawsuit request for access to the documents as explained in question in order to assist one of the parties thereof. Under such scheme, 4.5. Furthermore, the JFTC may also impose conditions that the court judgment on the merits in the lawsuit will not directly are deemed proper in response to a plaintiff’s request for review apply to the intervener, but the intervener is not allowed to raise and reproduction of documents submitted to the JFTC admin- objections to the facts found by the judgment in a potential subse- istrative hearing procedures. For instance, the JFTC blacks out quent lawsuit between the defendant and the intervener. It would confidential information to the extent necessary before disclo- theoretically be possible for a cartel participant to join a lawsuit sure of the documents. involving other cartel participants as an intervener, as opposed to a co-defendant, under the aforementioned scheme. However, 4.9 Is there provision for the national competition in most cases, there are no advantages for a cartel participant to authority in your jurisdiction (and/or the European intervene in such a lawsuit and we do not see any specific case Commission, in EU Member States) to express its where such intervention has occurred in cartel cases. views or analysis in relation to the case? If so, how common is it for the competition authority (or European Commission) to do so? 62 Timing

There is no explicit provision under the Antimonopoly Act 6.1 Is there a limitation period for bringing a claim for breach of competition law, and if so how long is it and by which the JFTC is obligated to make its findings and anal- when does it start to run? ysis for a particular case public. However, the Antimonopoly Act provides that the JFTC may make the matters public to the extent necessary for the operation of the Antimonopoly Damage claims for breach of competition law must be initiated Act (excluding business secrets), and the JFTC usually makes within (i) 20 years from the date on which the alleged violation a public announcement of the conclusion of its investigation. first occurred, or (ii) three years from the date when the plaintiff

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first became aware of the alleged violation, whichever period 82 Costs elapses earlier. Even after the expiration of the three-year period, the court may uphold damage claims if the defendant does not bring the defence of such expiration. 8.1 Can the claimant/defendant recover its legal costs Damage claims under Article 25 of the Antimonopoly Act from the unsuccessful party? must be initiated within three years from the date when the relevant cease and desist order or administrative surcharge payment In general, a successful party can recover the court costs, which order rendered by the JFTC became irrevocable. include filing fees, fees and travel expenses paid to witnesses and interpreters, from the unsuccessful party. 6.2 Broadly speaking, how long does a typical breach As to attorneys’ fees, Japanese courts do not grant successful of competition law claim take to bring to trial and final parties a right to recover such fee, in principle. However, in judgment? Is it possible to expedite proceedings? cases where compensation for damage is sought based on tort, the court tends to allow a successful party to recover 10 per While the Law on Expediting Trials provides that a period cent of the attorneys’ fees as part of the damages. Also, there is of two years is a target period for the completion of the first scholarly discussion that attorneys’ fees should be recovered by instance of the judicial proceedings, the duration of any given successful parties even in injunction cases. court proceeding may well depend on the complexity of each case. While a minimum of one year is usually required for the 8.2 Are lawyers permitted to act on a contingency fee court to render the judgment for the first instance in ordinary basis? civil cases, private competition cases could last for more than two years because the judges are not necessarily familiar with the Lawyers are permitted to act for claimants on a contingency fee competition laws/regulations, and the issues to be examined by basis in Japan. Although 100 per cent of contingency arrange- the court, including the issue of damages, tend to be complicated. ments are not specifically prohibited under Japanese law, the rules of ethics for lawyers may be interpreted to prevent such 72 Settlement arrangements from being adopted; and such arrangements are rarely used in Japanese practice. 7.1 Do parties require the permission of the court to discontinue breach of competition law claims (for example, if a settlement is reached)? 8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many cases to date? Permission of the court is not required to discontinue claims based on breach of competition law. It is possible for a plain- here is no legislation prohibiting or specifically restricting third- tiff to withdraw the claims until the judgment becomes final. T party funding in Japan. As such, a plaintiff may file a competition When the defendant already submitted a response to the claims law claim with third-party funding; however, it will be considered on the merits, it is necessary to obtain consent from the defendant in order to withdraw the claims. As such, if a settlement is as a violation of the Attorneys Act if the third party provides legal reached between the parties outside the civil court proceedings, advice to the plaintiff and takes a share of any proceeds from the a plaintiff usually agrees to withdraw the claim with the consent lawsuit. We are not aware whether or not the arrangement has of the defendant. been used for competition litigation to date. As an additional note, during the course of civil court proceedings, Japanese courts tend to seek an opportunity to 92 Appeal recommend amicable settlement of disputes before the court (judicial settlement). It is common for the court to ask the 9.1 Can decisions of the court be appealed? parties whether there is any chance of judicial settlement immediately before moving to witness examinations or immediately A claimant has a right to file an appeal against a district court after completing witness examinations (i.e., before concluding judgment with a high court having jurisdiction over the case the proceedings to start preparing a judgment). Once the court (koso appeal), and it is possible to further file an appeal against considers that there is a chance of reaching judicial settlement, a high court judgment with the Supreme Court ( jokoku appeal). the judge tends to have discussions with the plaintiff and the A jokoku appeal to the Supreme Court can be made for limited defendant, respectively, and make an attempt to form terms and reasons under the Code of Civil Procedure. conditions agreeable to both plaintiff and defendant, persuading No specific grounds for an appeal to a high court (koso appeal) the parties to make concessions. When an agreement is reached, are provided under the Code of Civil Procedure and the grounds it is put into the court record and the record has the same effect include error in fact-findings and application of law in the judg- as a final and binding judgment. Many civil cases are resolved ment. An appeal to the Supreme Court ( jokoku appeal) can be by judicial settlements in Japan. made on the ground that the high court judgment contains a violation of the Constitution or on the ground that the proce- 7.2 If collective claims, class actions and/or dures in the lower court contains any of the material illegalities representative actions are permitted, is collective set forth in the Code of Civil Procedure. In addition, parties settlement/settlement by the representative body on may file a “petition for admission of a jokoku appeal”, and the behalf of the claimants also permitted, and if so on what Supreme Court may accept the petition as a jokoku appeal if it basis? deems that the case involves an important issue.

No collective claims, class actions or representative actions are permitted under Japanese law with regard to the violation of the Antimonopoly Act.

102 Leniency 112 Anticipated Reforms

10.1 Is leniency offered by a national competition 11.1 For EU Member States, highlight the anticipated authority in your jurisdiction? If so, is (a) a successful, impact of the EU Directive on Antitrust Damages Actions and (b) an unsuccessful applicant for leniency given at the national level and any amendments to national immunity from civil claims? procedure that are likely to be required.

Leniency is offered by the JFTC for its cartel investigations for We do not anticipate any direct impact of the Directive on administrative surcharge payment orders pursuant to the rele- competition litigation in Japan. vant provisions of the Antimonopoly Act. The first in may enjoy 100 per cent immunity, the second in may enjoy a 50 per 11.2 What approach has been taken for the cent reduction of the administrative surcharges, and the third implementation of the EU Directive on Antitrust through the fifth in may enjoy a 30 per cent reduction thereof. Damages Actions in your jurisdiction? How has the The 2010 Amendment to the Antimonopoly Act increased the Directive been applied by the courts in your jurisdiction? number of leniency applicants up to five applicants: (i) up to five applicants before a dawn raid; and (ii) up to three applicants This is not applicable in Japan. after a dawn raid if there are fewer than five applicants before the dawn raid. It is noteworthy that the 2019 Amendment to the 11.3 Please identify, with reference to transitional Antimonopoly Act will introduce the leniency programme under provisions in national implementing legislation, which the extent of immunity will be determined according to whether the key aspects of the Directive (including the extent of each applicant’s cooperation with the JFTC’s inves- limitation reforms) will apply in your jurisdiction only ‎to infringement decisions post-dating the effective date of tigations. For applicants before a dawn raid, while the first in implementation; or, if some other arrangement applies, may enjoy 100 per cent immunity, the second in may enjoy a 20 please describe it. per cent reduction of the administrative surcharges, the third through the fifth in may enjoy a 10 per cent reduction thereof, and other applicants may enjoy a 5 per cent reduction thereof; This is not applicable in Japan. however, the applicants other than the first in may enjoy an increase in the reduction rate of up to 40 per cent depending 11.4 Are there any other proposed reforms in your on to what extent the applicant has cooperated with the JFTC’s jurisdiction relating to competition litigation? investigations. For applicants after a dawn raid, the number of applicants who may enjoy a 10 per cent reduction thereof is up The commitment procedure, which is a system to resolve to three applicants, while other applicants after a dawn raid may alleged violations of the Antimonopoly Act voluntarily by enjoy a 5 per cent reduction; however, the applicants after a dawn consent, was introduced on December 30, 2018 pursuant to raid may enjoy an increase in the reduction rate of up to 20 per a partial amendment to the Antimonopoly Act included in cent depending on to what extent the applicant has cooperated the Act to Amend the Trans-Pacific Partnership Agreement with the JFTC’s investigations. The leniency applicants must Related Laws. The effective date was set on the day when provide the information and evidence valuable to the JFTC. the Trans-Pacific Partnership agreement came into effect in Regardless of whether successful or unsuccessful, leniency Japan. The government established related laws and regula- applicants in cartel investigations are not entitled to receive tions including the Rules on the Commitment Procedure of immunity from civil claims or any other beneficial treatment in the JFTC. Under the commitment procedure, an entrepre- follow-on private competition cases. neur that received a notice from the JFTC regarding alleged While the recent amendment to the Code of Criminal violation of the Antimonopoly Act may devise a plan to take Procedure has introduced the immunity application programme necessary measures to cease the conduct allegedly violating for criminal violation of the Antimonopoly Act, immunity the Antimonopoly Act and file a petition for approval of such applicants are not entitled to receive any beneficial treatment in plan with the JFTC. In response to such petition, the JFTC follow-on private competition cases. determines whether to approve such plan and, if such plan is approved, determines not to render a cease and desist order and 10.2 Is (a) a successful, and (b) an unsuccessful administrative surcharge payment order against the petitioner. applicant for leniency permitted to withhold evidence While the JFTC will issue a press release with a summary of the disclosed by it when obtaining leniency in any entrepreneur’s conduct allegedly violating the Antimonopoly subsequent court proceedings? Act, the press release will also stipulate that it does not mean that the JFTC found the violation of the Antimonopoly Act. Evidence disclosed to the JFTC by a leniency applicant could Accordingly, it is expected to be difficult for private claimants be disclosed to the subsequent court proceedings through the to use the result of the commitment procedure as evidence for procedures discussed in question 4.5. However, the JFTC has a their claim against the entrepreneur at issue. policy under which it will not disclose information submitted by The 2019 amendment to the Antimonopoly Act will introduce leniency applicants unless the applicant wishes to disclose such the protection of attorney-client privilege to the JFTC’s admin- information. Such information may be excluded from the infor- istrative investigation procedures for unreasonable restraint of mation subject to the plaintiffs’ request for review and reproduc- trade. However, such protection will not apply to private anti- tion of documents submitted to JFTC administrative hearing trust claims before the Japanese civil court proceedings. procedures, and may also be excluded from the information subject to the court’s request for access to the documents, as explained in question 4.5.

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Koki Yanagisawa is a partner in the Litigation Group of Nagashima Ohno & Tsunematsu. His practice focuses on resolution of disputes in the areas of antitrust law, commercial law and employment law. He has represented a variety of Japanese and foreign companies in a wide breadth of industries in litigation, arbitration and other dispute resolution procedures, including the JFTC’s administrative hearing procedures. He was named as one of the top 40 antitrust lawyers under 40 by Global Competition Review in 2012 and is recognised as a Dispute Resolution Star by Benchmark Litigation Asia-Pacific 2018, 2019 and 2020. Mr. Yanagisawa joined Nagashima Ohno & Tsunematsu in 2001. He earned his LL.B. in 2000 from the University of Tokyo, and his LL.M. in 2007 from Columbia Law School, where he was a Harlan Fiske Stone Scholar. He worked as a visiting attorney at Debevoise & Plimpton LLP in New York City from 2007 to 2008.

Nagashima Ohno & Tsunematsu Tel: +81 3 6889 7250 JP Tower, 2-7-2 Marunouchi Email: [email protected] Chiyoda-ku, Tokyo 100-7036 URL: www.noandt.com Japan

Nagashima Ohno & Tsunematsu is the first integrated full-service law firm and large-scale corporate reorganisations. The over 450 lawyers of the in Japan and one of the foremost providers of international and commer- firm, including over 30 experienced foreign attorneys from various jurisdic- cial legal services based in Tokyo. The firm’s overseas network includes tions, work together in customised teams to provide clients with the exper- offices in New York, Singapore, Bangkok, Ho Chi Minh City, Hanoi and tise and experience specifically required for each client matter. Shanghai, associated local law firms in Jakarta and Beijing where our www.noandt.com lawyers are on-site, and collaborative relationships with prominent local law firms throughout Asia and other regions. In representing our leading domestic and international clients, we have successfully structured and negotiated many of the largest and most significant corporate, finance and real estate transactions related to Japan. The firm has extensive corporate and litigation capabilities spanning key commercial areas such as antitrust, intellectual property, labour and taxation, and is known for path-breaking domestic and cross-border risk management/corporate governance cases

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Gwang Hyeon Baek

Barun Law LLC Seung Jae Jeon

major civil cases which involved violations of the competition 12 General law. However, the number of private competition law litigations has been increasing recently. 1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition law. 1.2 What is the legal basis for bringing an action for breach of competition law? Three categories of litigation may be brought regarding the violation of the competition laws in Korea, such as the As mentioned above, the Korean competition law authorises the Monopoly Regulation and Fair Trade Act, the Fair Transactions KFTC to impose administrative sanctions. in Subcontracting Act, the Franchise Business Promotion Act, Due to the exclusive complaint system, the prosecutor’s office etc., which are the primary governing laws related to competi- has not been authorised to prosecute competition cases inde- tion in Korea (hereinafter collectively referred to as the “compe- pendently until now. However, it is expected that other inves- tition law”). tigative agencies, including the prosecutor’s office, will soon be Firstly, one may bring administrative litigation to the court able to investigate and prosecute competition law cases inde- to cancel an order made by the Korea Fair Trade Commission pendently after the abolishment or reform of the exclusive (the “KFTC”). Once the KFTC’s sanction measures (corrective complaint system. measures, fines, etc.) have been issued, the parties that received The right to claim for damages of private parties is stip- the sanctions may bring administrative litigations to the court ulated in competition law. Although the right to request an seeking the cancellation of the KFTC’s measures. Since about injunction is not stipulated in competition law, it is acknowl- 90 per cent of the enforcement of competition law in Korea edged by general legal principles, especially in the fields where consists of KFTC actions, this is the most common type of liti- the necessity of strong preventative measures is recognised (e.g., gation related to competition law. defamation). Secondly, there can be criminal litigation. The KFTC can report firms (usually corporations) and individuals (firm execu- tives) that have committed significant violations of the compe- 1.3 Is the legal basis for competition law claims tition law to the prosecutor’s office. The Korean competition derived from international, national or regional law? law adopts the “exclusive complaint system”, which requires a criminal complaint filed by the KFTC in order for the prose- The legal basis for the competition law claims discussed above is cutor’s office to prosecute competition law violations. Thus, derived from the national law enacted by the National Assembly the process of criminal litigation relating to competition law of South Korea. The Executive Branch, in addition to the in Korea is that the KFTC investigates the cases, issues the members of the National Assembly, also has the right to intro- corrective measures, and then files criminal complaints with the duce bills, and the government-introduced bills for special- prosecutor’s office in the case of significant violations, based ised areas such as competition law are frequently adopted at the on which the prosecutor’s office may prosecute. However, National Assembly. the gradual abolishment of the exclusive complaint system is currently being promoted, and it is expected that the prosecu- 1.4 Are there specialist courts in your jurisdiction to tor’s office will be able to independently prosecute competition which competition law cases are assigned? law violation cases in the future. Thirdly, there can be civil litigation between private parties. Civil litigation takes place in various forms. For example, a The KFTC corrective measures substitute the first trial. The plaintiff may initiate civil litigation claiming damages caused Seoul High Court has exclusive jurisdiction for administrative by the defendant’s violation of the competition law. There can litigation for cancellation of KFTC measures. In case the judg- also be civil litigation for an invalid contract claim based on the ment of the Seoul High Court is appealed, the case is transferred fact that particular contract provisions violate competition law. straight to the Supreme Court of Korea. For criminal litigations Plus, one may seek a court injunction on the opposite party’s and civil litigations, there is no court with exclusive jurisdic- violation of the competition law (e.g., abusive advertisement). tion or specialty. The first trial proceeds at a district court with Since these private enforcements are less frequent than public general jurisdiction, the second trial proceeds at a high court, enforcement (by the KFTC) in Korea, there have not been many and the third trial proceeds at the Supreme Court of Korea.

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1.5 Who has standing to bring an action for breach of 2.2 What interim remedies are available and under competition law and what are the available mechanisms what conditions will a court grant them? for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions by representative bodies or any other form of public If a person that has received sanctions issued by the KFTC interest litigation? If collective claims or class actions applies to an administrative court for an injunctive relief to are permitted, are these permitted on an “opt-in” or “opt- suspend the enforcement of the KFTC’s sanctions, the admin- out” basis? istrative court determines whether such injunctive relief should be granted after considering all relevant factors, including There is no class action system in Korea. Each and all of the whether the enforcement of the KFTC’s sanctions will cause plaintiffs seeking claims for damages must participate in the irreparable harm. If the administrative court denies the appli- litigation. If multiple plaintiffs initiate separate litigations on cation for such injunctive relief, the sanctions will be enforced the same issue, such litigations can sometimes be merged and even for the duration of the administrative litigations proceed- proceed as if they are a one-trial process, although they are prac- ings – for example, a person who was subject to an order issued tically separate and independent litigations for each plaintiff. by the KFTC to pay a certain amount of fine would pay the fine while the administrative litigation proceedings are ongoing, and the fine will be returned if the person is successful in invali- 1.6 What jurisdictional factors will determine whether a dating the KFTC’s sanctions in the administrative lawsuit. court is entitled to take on a competition law claim? On the other hand, if an aggrieved person applies for an injunctive relief in a civil court seeking the prohibition of a A victim of the breach of competition law may choose to report transacting party’s violation of competition law, the civil court to the KFTC or to file a civil litigation (there is no court of in question will review the application with a stricter scru- exclusive jurisdiction for a civil litigation regarding competition tiny, similar to the scrutiny applied for the merits of the case. law). Both proceedings are independent on the aspects of juris- Therefore, it is rare for aggrieved parties to seek such injunc- diction. In other words, it does not matter which one of the two tive relief in a civil court, and it is more common for aggrieved proceedings is brought up first, and the victim may initiate both parties to seek remedies before the KFTC, in the hope that the proceedings simultaneously. In practice, when the civil litiga- transacting party violating competition law will cease its violation is pending, the KFTC sometimes waits and investigates tive acts in order to evade the KFTC’s sanctions. after the civil litigation is completed, and vice versa. 32 Final Remedies 1.7 Does your jurisdiction have a reputation for attracting claimants or, on the contrary, defendant 3.1 Please identify the final remedies which may be applications to seize jurisdiction, and if so, why? available and describe in each case the tests which a court will apply in deciding whether to grant such a remedy. This issue is not of importance as administrative litigations that seek the cancellation of KFTC measures are the norm in Korea. Even if a follow-up civil litigation is raised, usually this is after (i) As an administrative remedy, the KFTC may issue correc- the KFTC’s measures are issued. tive measures or impose a fine. The corrective measures include not only a suspension order on the acts that violate competition law, but also an order to take corrective actions. 1.8 Is the judicial process adversarial or inquisitorial? For example, if the KFTC determines that a business combination (i.e., merger, stock acquisitions, etc.) violates Fundamentally, the Korean litigation structure follows the competition law, it can order the acquiring company to sell adversarial process. Although an inquisitorial nature is partially a certain amount of stocks in the target company. included in the case of criminal litigation, in practice, it is rare The KFTC fine is an administrative penalty which func- for an inquisitorial process to be brought up in a criminal trial tions as retribution for acts that violate competition law involving the breach of competition law. and as the redemption of unjust enrichment. The fine belongs to the government and is not distributed to the 22 Interim Remedies victim. (ii) As a civil remedy, a victim can bring a civil action claiming 2.1 Are interim remedies available in competition law for damages or petition for injunctive relief. In practice, cases? the injunction is not used much, and most victims choose to report to the KFTC. Persons who have violated competition law in Korea may be subject to sanctions issued by the KFTC. Such persons may 3.2 If damages are an available remedy, on what bases raise an administrative legal action seeking the cancellation of can a court determine the amount of the award? Are such sanctions, and in doing so, may request the court for an exemplary damages available? Are there any examples of damages being awarded by the courts in competition injunctive remedy that suspends the enforcement of the KFTC’s cases which are in the public domain? If so, please sanction during the litigation proceedings. identify any notable examples and provide details of the Furthermore, if a person who has been aggrieved by his/her/ amounts awarded. its transacting party’s violation of Korean competition law files a civil lawsuit, an injunctive relief may be sought with the court. In principle, the damages that can be awarded are limited to However, if the aggrieved party elects to seek a remedy before actual damages, and exemplary damages are not awarded unless the KFTC by filing a report with the KFTC, no injunctive relief it is specifically allowed in a statute. Although a small number equivalent to that provided by a civil court is available, as of yet. of statutes, such as the Fair Transactions in Subcontracting

Act, the Franchise Business Promotion Act, etc., allow treble 4.5 What are the rules on disclosure? What, if any, damages, it is currently difficult to find cases where the court documents can be obtained: (i) before proceedings has actually awarded treble damages. have begun; (ii) during proceedings from the other party; and (iii) from third parties (including competition authorities)? 3.3 Are fines imposed by competition authorities and/ or any redress scheme already offered to those harmed by the infringement taken into account by the court when (i) There is no pre-litigation discovery process in Korea. calculating the award? (ii) Once civil and administrative litigations have commenced, parties can file a motion for an order to submit documents, In principle, the fine imposed by the KFTC or the criminal specifying the types and contents of the requested docu- court is not considered in assessing damages in civil litigation. ments. If the court accepts the motion, the other party has This is because of the distinction between an administrative the obligation to submit the requested documents. If the matter, a criminal matter, and a civil matter. other party does not comply with the order, the contents of Exceptionally, when calculating treble damages allowed the requested documents claimed by the requesting party under the Fair Transactions in the Subcontracting Act and the are deemed true in the litigation. There is no other disad- Franchise Business Promotion Act, the court considers the vantage or fine for not following the court’s order. amount of fines already imposed by the KFTC. It is interpreted (iii) During the litigation, it is also possible for a court to that one of the reasons why there has been no case where the request third-party agencies to verify the facts and submit court awarded treble damages is because the defendants who such verification to the court. However, the court’s verifi- faced the civil litigation were already fined by the KFTC. cation request is non-binding, and the third-party agency often does not answer to the court’s request. 42 Evidence 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? 4.1 What is the standard of proof?

In the case of civil or administrative litigation, the standard of In litigation, if the witness does not appear in court, the court proof is that a fact must be proven to the extent of high prob- can impose fines or issue a warrant and force the witness to ability about which there can be no reasonable doubt. The appear in court. The right to cross-examination by the other standard of proof in criminal litigation is higher, and the famous party is guaranteed. “beyond reasonable doubt” standard applies in criminal cases. On the other hand, during the KFTC’s investigations, there is no administrative procedure to force a witness to appear. Instead, there is a system in which the KFTC can reduce the 4.2 Who bears the evidential burden of proof? amount of the fine imposed on a subject of the investigation who actively cooperates during the investigation process. The KFTC In administrative litigations for the cancellation of KFTC meas- does not allow the fine to be reduced for a subject of the inves- ures, the KFTC must prove the legality of the measures. That tigation who does not cooperate with bringing witnesses to the is, the KFTC has the burden of proof. KFTC, which is an indirect method to secure witness attend- Likewise, in criminal litigations, the prosecutor’s office has ance. In the KFTC’s investigation, the right to cross-examine the burden of proof. the witness is not guaranteed. In civil litigations, a plaintiff who files a claim for damages has the burden of proof. The reason why most victims in Korea 4.7 Does an infringement decision by a national or choose to report to the KFTC is because of the burden of proof international competition authority, or an authority from in civil litigations. another country, have probative value as to liability and enable claimants to pursue follow-on claims for damages in the courts? 4.3 Do evidential presumptions play an important role in damages claims, including any presumptions of loss in cartel cases that have been applied in your Although a KFTC corrective measure or a decision made by jurisdiction? a foreign competition authority does not bind Korean courts, such measure or decision might function as important evidence. Under Korean competition law, the amount of damage is not There are opportunities to dispute the KFTC measures or deci- presumed, and the damage amount must be calculated by a valu- sion made by a foreign competition authority, but it is not easy ation method in individual cases. For this reason, the evidence to do so in practice. that may be used as a valuation standard (i.e., comparative data before and after the price-fixing period) is important. 4.8 How would courts deal with issues of commercial confidentiality that may arise in competition proceedings? 4.4 Are there limitations on the forms of evidence which may be put forward by either side? Is expert evidence accepted by the courts? Since court records other than the court opinion are not disclosed to third parties in Korea, the evidence submitted There is no restriction on the format of evidence submitted in the process of litigation can remain confidential to some to courts. Expert testimony is also allowed, and courts hear degree. In the case of confidential information that cannot be evidence with judicial discretion. disclosed even to interested parties, parties to the litigation and the court can review the information by themselves without leaving the information on the court record. If the KFTC

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investigation involves confidential information, the KFTC may 62 Timing maintain the information confidential to third persons (such as the complainant) upon the request of the person subject to the investigation (i.e., the respondent). 6.1 Is there a limitation period for bringing a claim for breach of competition law, and if so how long is it and when does it start to run? 4.9 Is there provision for the national competition authority in your jurisdiction (and/or the European The statute of limitation for the KFTC to issue a corrective Commission, in EU Member States) to express its views or analysis in relation to the case? If so, how measure is stipulated in the law. For example, in cases of viola- common is it for the competition authority (or European tion of the Monopoly Regulation and Fair Trade Act, the KFTC Commission) to do so? must issue its corrective measures within seven years from the date the violation ended. Exceptionally, in the case of cartels, if the KFTC commences its investigation within seven years The KFTC publicly announces most of the contents of the from the date when the violation ended, the KFTC may issue imposed sanction measures or the suspect of suspicion to the its corrective measures within five years after the investigations press. commenced – thus, the limitation period may be extended for up to 12 years at most. In cases of a violation of the Subcontract Act, 52 Justification/Defences the violation must be reported within three years from the date of the termination of a subcontract, and the KFTC must issue 5.1 Is a defence of justification/public interest corrective measures within three years from the reporting date. available? There is also a statute of limitation on filing a civil lawsuit. The statute of limitation ends three years from the date when the plaintiff has acknowledged the existence of the violation of It is possible up to a certain point. There are two types of regula- law or the illegality of an activity. The statute of limitations also tions by the Korean competition law: (i) regulations that protect ends after 10 years from the date of the violation. competition itself (i.e., antitrust, prohibition of anti-competitive business combinations, cartels); and (ii) regulations that protect a particular competing party (i.e., unfair trade practices). The act 6.2 Broadly speaking, how long does a typical breach that violates regulation type (i) is illegal only when competition of competition law claim take to bring to trial and final is limited or there is concern that it is limited. Thus, it is possible judgment? Is it possible to expedite proceedings? to raise a defence that competition is not being limited or that the act promotes the public interest or consumers even though it is The timescale of a KFTC investigation varies depending on the anti-competitive. However, it is rare in practice for such defence type of violation. For price-fixing cases, it takes roughly two years to be accepted in court. for the KFTC from the beginning of the investigation. For unfair trade cases, it takes roughly one year from the filing date. The period can be longer, depending on the complexity of the case. 5.2 Is the “passing on defence” available and do In the case of administrative litigation for the cancellation of indirect purchasers have legal standing to sue? KFTC measures, it usually takes one to two years to get the court judgment. As a matter of principle, Korean courts do not recognise the Civil litigations are expected to take about a year for each passing-on defence. For example, in the case where baking instance. The litigation period can be extended to several years companies claimed for damages due to price-fixing of flour if the hearing date is set after waiting for the KFTC measure manufacturers, the defendants, flour manufacturers, raised the first, or if it involves complex economic analysis such as a calcu- passing-on defence. Their defence was that there was no damage lation of damages. to plaintiffs, the baking companies, because the price of bread also increased due to the increased price of flour. However, the 72 Settlement court did not accept this defence. 7.1 Do parties require the permission of the court 5.3 Are defendants able to join other cartel participants to discontinue breach of competition law claims (for to the claim as co-defendants? If so, on what basis may example, if a settlement is reached)? they be joined? (i) In a KFTC investigation on an unfair trade activity where This situation is not common in Korea because price-fixing such activity was reported to the KFTC by a third party, victims (usually agencies that placed bids) generally raise claims it is common for the KFTC to drop the investigation if for damages against all members of a cartel. As a joint tort- the parties reached an agreement and withdrew the report. feasor, each member of the cartel is jointly liable. Therefore, However, if the investigation reached the point where only based on the plaintiff’s decision, he or she can choose (i) to be the determination of the degree of sanctions remains, compensated equally by each member of the cartel, or (ii) to the KFTC may proceed with the investigation and order claim total damages against one member of the cartel, letting corrective measures even if the report was withdrawn the members of the cartel sort out their respective share of the by the reporting party, if the KFTC determines that the damages later. degree of illegality is high. If a plaintiff sues only some members of a cartel, the plaintiff (ii) In other types of KFTC investigations such as antitrust, may want to notify the other members of the cartel who were prohibitions on anti-competitive business combinations, not sued in the lawsuit so that the effect of the court judgment price fixing, etc., the KFTC does not drop the investiga- can reach those notified members. The notified members can tion even if the parties reached a settlement agreement. choose to join the lawsuit as a supplementary participant. (iii) In civil litigations, the case can, of course, be dropped by a settlement between the parties.

7.2 If collective claims, class actions and/or The leniency system only applies to the administrative sanc- representative actions are permitted, is collective tions imposed by the KFTC, and it does not exempt any civil or settlement/settlement by the representative body on criminal liabilities of the parties. behalf of the claimants also permitted, and if so on what basis? 10.2 Is (a) a successful, and (b) an unsuccessful applicant for leniency permitted to withhold evidence As explained above, collective claims, class actions or represent- disclosed by it when obtaining leniency in any ative actions are not permitted in Korea. subsequent court proceedings?

82 Costs The principle is that the evidence disclosed to the KFTC by a party to obtain leniency is treated in the same way as the other 8.1 Can the claimant/defendant recover its legal costs general evidence. from the unsuccessful party? However, when there is a risk that the identities of the parties who obtained primary or secondary leniency by voluntarily (i) In the case of a KFTC investigation, the subject of the disclosing the price-fixing activities might be revealed, the investigation cannot recover its legal costs from the KFTC KFTC may maintain the confidentiality of the evidence. even if it is determined that there was no violation of the competition law. 112 Anticipated Reforms (ii) In the case of litigation, the prevailing party may recover its legal costs up to a certain amount from the non-prevailing 11.1 For EU Member States, highlight the anticipated party. impact of the EU Directive on Antitrust Damages Actions at the national level and any amendments to national procedure that are likely to be required. 8.2 Are lawyers permitted to act on a contingency fee basis? This is not applicable in Korea. Yes, lawyers are permitted to act on a contingency fee basis. Currently, however, there is controversy regarding a contin- 11.2 What approach has been taken for the gency fee for criminal lawyers. implementation of the EU Directive on Antitrust Damages Actions in your jurisdiction? How has the Directive been applied by the courts in your jurisdiction? 8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many cases to date? This is not applicable in Korea.

Although there is no provision in Korean laws that explicitly 11.3 Please identify, with reference to transitional prohibits third-party funding of competition law claims, it must provisions in national implementing legislation, not constitute illegal activity under other laws such as breach of whether the key aspects of the Directive (including fiduciary duty, etc. limitation reforms) will apply in your jurisdiction only to infringement decisions post-dating the effective date of implementation; or, if some other arrangement applies, 92 Appeal please describe it.

9.1 Can decisions of the court be appealed? This is not applicable in Korea.

The decisions of the courts can be appealed to the higher courts 11.4 Are there any other proposed reforms in your (please refer to the answer to question 1.4 above). jurisdiction relating to competition litigation? 102 Leniency On June 11, 2020, the KFTC announced a proposal to compre- hensively amend the Monopoly Regulation and Fair Trade Act. 10.1 Is leniency offered by a national competition The proposed amendment abolishes the mandatory require- authority in your jurisdiction? If so, is (a) a successful, ment of a KFTC complaint (i.e., requiring that a complaint must and (b) an unsuccessful applicant for leniency given immunity from civil claims? be raised by the KFTC in order for the prosecutors to investigate and indict any violation of the Monopoly Regulation and Fair Trade Act) for cases involving hardcore cartels such as Korean competition law allows the leniency system in price- price collusion, bid-rigging, etc. The proposed amendment also fixing cases, in which the KFTC provides a penalty reduction to doubles the maximum amount of fine that may be imposed, and a party that voluntarily discloses its price-fixing activities. The provides for an expanded civil remedy for persons aggrieved by disclosing party eligible for primary leniency enjoys a 100 per a violation of competition law. However, this proposed amend- cent reduction of a fine and immunity from a criminal charge. ment is expected to face significant challenges in order to pass The disclosing party eligible for secondary leniency enjoys a the legislature, and thus it is difficult to estimate when the 50 per cent reduction of a fine and immunity from a criminal proposed amendment will be adopted, and what changes will charge. There are no guaranteed advantages for the disclosing be made to the proposed amendment in the legislative process. party eligible for tertiary leniency, although an up to 20 per cent reduction of a fine may be allowed if the party diligently cooperates with the KFTC’s investigation.

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Gwang Hyeon Baek is a partner attorney at Barun Law LLC. Since joining the firm in 2011, his practice has focused on antitrust/competition matters. He has accumulated in-depth experience and expertise in the field of antitrust/competition in a variety of cases involving different industries. He has advised in cases concerning unjust solicitation of customers, abuse of business position (refusal to deal), abuse of market dominance, breach of the Fair Transactions in Subcontracting Act (reduction of unit price), unjust insider trading, etc. He served as a visiting scholar at the American University and has been serving as an adjunct professor (Monopoly Regulation and Fair Trade Act) at Korea University Law School. Mr. Baek received his LL.B. from Korean University College of Law and is a member of the Bar of the Republic of Korea.

Barun Law LLC Tel: +82 2 3479 2497 Barun Law Building, 92 gil 7 Email: [email protected] Teheran-ro, Gangnam-gu URL: www.barunlaw.com Seoul 06181 Korea

Seung Jae Jeon is an associate attorney at Barun Law LLC. After joining the firm in 2014, he accumulated experience in the field of antitrust/competition. He represented and advised in cases concerning the unfair collective practices, sanctions against improper businesses, consumer protection in electronic commerce, labelling and advertising, etc. He received his B.S. and M.S. from Korea Advanced Institute of Science and Technology (“KAIST”) and graduated from Hanyang University Law School. He is a member of the Bar of the Republic of Korea.

Barun Law LLC Tel: +82 2 3479 2661 Barun Law Building, 92 gil 7 Email: [email protected] Teheran-ro, Gangnam-gu URL: www.barunlaw.com Seoul 06181 Korea

Barun Law LLC (“Barun Law”) is Korea’s fastest-growing and most dynamic full-service law firm. Founded in 1998, Barun Law has quickly taken its place among Korea’s top full-service law firms. Conveniently located in Seoul’s Gangnam Business District, next to one of Asia’s largest and most prestigious convention centre complexes, Barun Law comprises over 200 attorneys who, together with highly qualified support staff, provide a full range of legal services. The firm’s partners include some of the most prominent and well-respected members of the Korean Bar, while a sophisticated and highly experienced team of foreign lawyers adds international savvy and recognised expertise, creating a substantial comfort factor for international clients. www.barunlaw.com

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Claudia de los Ríos Olascoaga

Ledesma Uribe y Rodriguez Rivero S.C. Bernardo Carlos Ledesma Uribe

12 General act or deed performed by Economic Agents with the purpose or effect of impeding access to competitors or limit their ability to compete in the markets.” 1.1 Please identify the scope of claims that may be It should be noted that, according to the Political Constitution brought in your jurisdiction for breach of competition of the United Mexican States (hereinafter, the “Mexican law. Constitution”), the Federal Telecommunications Institute (“IFT”) is the competent authority to apply the LFCE regarding economic The Mexican Federal Economic Competition Law (“LFCE”) competition matters in the radio broadcasting and telecommuni- has the purpose of investigating, combatting, prosecuting, cations sectors. punishing and eliminating monopolies, monopolistic practices, unlawful concentrations, barriers to economic competition and 1.2 What is the legal basis for bringing an action for free markets. breach of competition law? In this sense, the scope of claims that may be brought to the Federal Economic Competition Commission (“COFECE”) for breaches of competition law are: 1) The Mexican Constitution, which is the main law in Mexico. a) Monopolistic practices: The LFCE distinguishes two types of monopolistic practice: absolute; and relative. 2) The LFCE and the Federal Law of Telecommunications 1) Absolute monopolistic practices: according to article and Broadcasting, derived from article 28 of the Mexican Constitution. 53 of the LFCE, these practices consist of all contracts, 3) Organisational Statutes of COFECE and IFT. agreements, arrangements or combinations amongst 4) The Regulatory Provisions. competing Economic Agents, which have as their 5) The Federal Civil Code and the Federal Code of Civil purpose or effect any of the following: (i) to fix, raise, Procedure. coordinate or manipulate the sale or purchase price; 6) The Commerce Code, the General Law of Negotiable (ii) to establish an obligation not to produce, process, Instruments and Credit Operations and the Law of distribute, market or acquire a restricted or limited Business Corporations. amount of goods or services; (iii) to divide, distribute 7) The Federal Administrative Procedure Law. or segment the market; (iv) to establish, arrange or 8) The Federal Criminal Code and the National Code of coordinate bids or abstentions from tenders; and (v) Criminal Procedures. to exchange information with any of the purposes or 9) The Amparo Trial Law (“Ley de Amparo”), derived effects mentioned above. from articles 103 and 107 of the Mexican Constitution. 2) Relative monopolistic practices: according to arti- (Resolutions of COFECE or IFT can be followed only via cles 54 and 56 of the LFCE, these practices consist Amparo trial.) of any act carried out by one or more Economic Agents that individually or jointly exert substantial market power in the relevant market and has or may 1.3 Is the legal basis for competition law claims have as its purpose or effect, the undue displacement derived from international, national or regional law? of other Economic Agents substantial impediment of their access or establishment of exclusive advantages Although Mexico must comply with the treaties and its interna- in favour of one or several Economic Agents. For tional obligations, the legal basis for competition law claims are further examples, please see article 56 of the LFCE. derived from the above-mentioned constitutional and national b) Unlawful concentrations: According to articles 61 and law. 62 of the LFCE, this consists of any merger, acquisition However, for resolutions, Mexico can take into account inter- of control, or any other act by means of which companies, national criteria. associations, stock, partnership interest, trusts or assets in general are consolidated, which is carried out among any 1.4 Are there specialist courts in your jurisdiction to Economic Agent, whose purpose or effect is to hinder, which competition law cases are assigned? harm or impede competition and free market access. c) Barriers to competition and free market: The LFCE In Mexico, there are two specialised administrative district defines this term as: “Any structural market characteristic, courts for antitrust law and telecommunications (hereinafter,

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“District Courts”) and two specialised administrative tribu- 1.7 Does your jurisdiction have a reputation for nals for antitrust law and telecommunications (hereinafter, attracting claimants or, on the contrary, defendant “Tribunals”), which hear Amparo trials. applications to seize jurisdiction, and if so, why? Occasionally, the Mexican Supreme Court of Justice can hear Amparo trials. Antitrust investigations in Mexico are initiated ex officio or via request. Until April 2020, of 747 investigations before COFECE 1.5 Who has standing to bring an action for breach of and the now defunct Federal Competition Commission (“CFC”), competition law and what are the available mechanisms 617 were initiated via request, and only 130 ex officio. This means for multiple claimants? For instance, is there a that COFECE, at least, has a reputation for attracting claimants. possibility of collective claims, class actions, actions by representative bodies or any other form of public interest litigation? If collective claims or class actions 1.8 Is the judicial process adversarial or inquisitorial? are permitted, are these permitted on an “opt-in” or “opt- out” basis? In Mexico, trial-like procedures before COFECE or IFT are both adversarial and inquisitorial. In Mexico, collective claims, class actions, actions by representa- The Investigative Authority, an independent organ of tive bodies and any form of public interest litigation is permitted COFECE/IFT, is not only responsible for conducting the inves- and can be used by the Federal Attorney’s Office of Consumers tigation stage (the inquisitorial phase) but is also party to the (“PROFECO”), NGOs and civil associations, among others. trial-like procedure (the adversarial phase). However, if the According to articles 66 and 67 of the LFCE, any person may Investigative Authority closes an investigation, the Board of bring complaints before the Investigative Authority of COFECE Commissioners can reopen it. or IFT, in connection with absolute or relative monopolistic practices and unlawful concentrations. 22 Interim Remedies Also, investigations shall be initiated ex officio or per the request of the Federal Executive Branch, directly or through the 2.1 Are interim remedies available in competition law Ministry of Economy, PROFECO or upon a private request. cases? Furthermore, according to article 134 of the LFCE, individuals or entities that may have suffered damages or losses deriving from a monopolistic practice or an unlawful concen- Yes, interim remedies are available in the Mexican legal system. tration have the right to file judicial actions in defence of their rights before Civil Courts. 2.2 What interim remedies are available and under what conditions will a court grant them? 1.6 What jurisdictional factors will determine whether a court is entitled to take on a competition law claim? According to articles 135 and 136 of the LFCE, the Investigative Authority may, at any moment, request the Board In practice, in Mexico, the following criteria are implemented: of Commissioners to issue “injunctive measures” concerning the a) Territory: Antitrust matters in Mexico have a “Federal” subject matter of a complaint or investigation that it considers character, meaning there are no state laws on economic necessary to avoid damages that are difficult to redress or to competition. assure efficiency in the investigation’s results and procedure’s b) Matter: COFECE is the entity entitled to investigate and resolution. The condition is that there must have been damage combat monopolies, monopolistic practices, concentrations caused to free market access and economic competition. and other restrictions to the efficient functioning of the Furthermore, article 100 of the LFCE establishes that, before markets, and IFT is the competent authority for economic the statement of probable responsibility is issued in a procedure competition matters in the radiobroadcasting and telecom- for a relative monopolistic practice or unlawful concentration, munications sectors. the Economic Agent subject to the investigation may express Specialised District Courts, as well as Specialised Tribunals, its intention to attain an “exemption and fine reduction benefit”. The are entitled to hear a claim against unconstitutional or conditions to accept this request are: (i) a commitment to suspend, unlawful acts committed by COFECE or IFT via an eliminate or correct the corresponding practice or concentration, Amparo trial, and claims about damages or losses deriving in order to restore free market access and economic competition; from a monopolistic practice or an unlawful concentration. and (ii) the proposed means are legally and economically feasible c) Stage: The investigation will be followed by the and appropriate to achieve the purpose. Investigative Authority of COFECE or IFT. Then, a trial- Additionally, the Mexican Constitution and Amparo Trial like procedure is followed by COFECE or IFT. Law set out that Economic Agents can claim against uncon- If COFECE or IFT solve and sanction Economic Agents for stitutional or unlawful acts committed by COFECE or IFT breaching antitrust law, or during the trial-like procedure there through an “indirect Amparo trial ”, which may be heard by the is an unconstitutional or unlawful act, the District Courts are District Courts. The conditions are established in article 107 of competent. the Amparo Trial Law. Finally, if Economic Agents claim that a resolution by the District Courts is unconstitutional or unlawful, a Tribunal will 32 Final Remedies be competent. 3.1 Please identify the final remedies which may be available and describe in each case the tests which a court will apply in deciding whether to grant such a remedy.

The LFCE establishes the following sanctions as final remedies:

■ The correction or suppression of the monopolistic practice other evidence, such as econometric analysis and patterns, price or unlawful concentration in question. correlations, statements from Economic Agents and private ■ The partial or total divestiture of an unlawful concentra- communications. tion and the termination of control or suppression of the acts thereof, as the case may be. 4.2 Who bears the evidential burden of proof? ■ Measures to regulate access to essential facilities under the control of one or several Economic Agents, for having exercised the relative monopolistic practice established Upon conclusion of the Investigation, if the Investigative Authority under article 56, subsection XII of the LFCE. found objective elements that indicate the probable responsibility ■ Ineligibility to act as an undertaking’s board member, of the Economic Agents under investigation, it shall bring before manager, director, executive, agent, representative or legal the Board of Commissioners its intention to initiate a trial-like representative for a maximum five-year period. procedure. Therefore, in the trial-like procedure, the Investigative ■ Fines of up to 10 per cent of the Economic Agent’s annual Authority bears the evidential burden of proof. income. ■ Civil or criminal liability. Criminal liability is considered 4.3 Do evidential presumptions play an important only for horizontal practices, for having rendered false role in damages claims, including any presumptions statements or for having submitted false information. of loss in cartel cases that have been applied in your ■ Divestiture or transfer of the Economic Agent’s assets, jurisdiction? rights, partnership interest or stock. Evidential presumptions are available in damages or losses 3.2 If damages are an available remedy, on what bases claims that are derived from a monopolistic practice or an can a court determine the amount of the award? Are unlawful concentration before the Civil Courts. exemplary damages available? Are there any examples Nonetheless, there are as of yet no examples of this in the of damages being awarded by the courts in competition Mexican jurisdiction. cases which are in the public domain? If so, please identify any notable examples and provide details of the amounts awarded. 4.4 Are there limitations on the forms of evidence which may be put forward by either side? Is expert Once COFECE’s resolution is final and conclusive, individ- evidence accepted by the courts? uals that may have suffered damages or losses deriving from a monopolistic practice or an unlawful concentration have the In Mexico, there are no limitations on the forms of evidence that right to ask for compensation before the Civil Courts. may be presented before COFECE/IFT by the Investigative There are currently no examples of damages being awarded by Authority or Economic Agents. the courts in competition cases, only in some civil claims cases. Expert evidence is accepted by COFECE/IFT, the District Courts and Tribunals. 3.3 Are fines imposed by competition authorities and/ or any redress scheme already offered to those harmed 4.5 What are the rules on disclosure? What, if any, by the infringement taken into account by the court when documents can be obtained: (i) before proceedings have calculating the award? begun; (ii) during proceedings from the other party; and (iii) from third parties (including competition authorities)? Fines are imposed by competition authorities (COFECE/IFT) in the final resolution, taking into account some elements such as Rules of disclosure are contained in several Mexican laws, such the damage caused, indications of intention, share of the offender as articles 124 and 125 of the LFCE. In general terms, one can in the market, size of the affected market, duration of the practice find the following rules: or concentration, as well as economic capacity, among others. ■ Before proceedings have begun: all the information However, the fine can be challenged in an Amparo trial and documents obtained directly by COFECE during before the District Courts and Tribunals, who can determine its investigations and on-site inspections shall be consid- and notify COFECE/IFT of the legal factors established by law ered as Reserved, Confidential Information or Public that must be taken into account to determine the fine if they Information (defined in question 4.8 below) and access were not duly applied. to the file is not permitted. Under no circumstances may COFECE grant access to Confidential Information, nor 42 Evidence may it publish said information, and it must take the necessary measures to safeguard such information. 4.1 What is the standard of proof? ■ During proceedings involving the other party: in trial-like procedures, only Economic Agents with legal During the investigation, the Investigative Authority may deter- standing may have access to the file, with the exception of mine elements that indicate the probable responsibility of the Confidential Information. Economic Agents under investigation, through direct or indi- ■ From third parties (including competition authorities): rect evidence; for example: requirements to submit information third parties may only obtain Public Information. or documents; interviews; on-site inspections, etc. The determined elements would be considered in a decision to initiate a 4.6 Can witnesses be forced to appear? To what extent, trial-like procedure. if any, is cross-examination of witnesses possible? Then, during the trial-like procedure, they would be used by the Investigative Authority as proof. Article 119 of the LFCE establishes the obligation to cooperate The Mexican Supreme Court of Justice has recognised indi- with COFECE (this includes appearing for interviews) and rect evidence in support of horizontal practices, correlated with

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article 126 of the LFCE provides some enforcement measures 5.2 Is the “passing on defence” available and do (for example: warnings; fines; assistance of the police force or indirect purchasers have legal standing to sue? other public authorities; and even arrest). However, article 20, letter B, point II of the Mexican Constitution sets out the right The “passing on defence” is not available in Mexico. to not declare. Currently, cross-examination of witnesses in antitrust claims in Mexico is not available; notwithstanding, a witness in an inves- 5.3 Are defendants able to join other cartel participants tigation phase could be called by the Board of Commissioners in to the claim as co-defendants? If so, on what basis may they be joined? a trial-like procedure.

Mexican legislation does not prohibit defendants from one cartel 4.7 Does an infringement decision by a national or joining another as co-defendants. As yet, there have been no international competition authority, or an authority from another country, have probative value as to liability such cases in Mexico. and enable claimants to pursue follow-on claims for damages in the courts? 62 Timing

Resolutions from international competition authorities or 6.1 Is there a limitation period for bringing a claim for authorities from another country are not binding in Mexico; breach of competition law, and if so how long is it and however, if the sanctioned conduct had effects in the Mexican when does it start to run? territory, directly or indirectly, COFECE/IFT could acknowledge decisions by foreign authorities. According to article 137 of the LFCE, the ability to initiate an investigation expires after 10 years, starting from the date on which the unlawful concentration was executed, or, in other 4.8 How would courts deal with issues of commercial cases, from the moment the unlawful conduct ceased. confidentiality that may arise in competition proceedings? 6.2 Broadly speaking, how long does a typical breach All information and documents are considered as Reserved, of competition law claim take to bring to trial and final judgment? Is it possible to expedite proceedings? Confidential or Public Information: ■ Reserved Information is a category of information that may only be accessed by the Economic Agents with legal An investigation could take up to 30 months. A trial-like proce- standing in a particular procedure. dure could take up to 10 months. An Amparo trial could take, ■ Confidential Information is only considered as such at approximately, between one-and-a-half to three years. the Economic Agent’s request, and upon validation that the information has this characteristic. 72 Settlement ■ Public Information is that which has been disclosed by any means of public dissemination or is found in public 7.1 Do parties require the permission of the court registries or publicly accessible sources. to discontinue breach of competition law claims (for example, if a settlement is reached)?

4.9 Is there provision for the national competition authority in your jurisdiction (and/or the European After COFECE/IFT has initiated an investigation, it is not Commission, in EU Member States) to express its possible to discontinue breach of competition law claims, with views or analysis in relation to the case? If so, how the exception of a “commitment” (when the parties promise common is it for the competition authority (or European to stop doing the act(s) that is affecting free market access and Commission) to do so? economic competition).

Yes, article 12 of the LFCE, sections XII to XX, establishes 7.2 If collective claims, class actions and/or that COFECE has the power to issue opinions and provide representative actions are permitted, is collective general orientation in matters related to free market access and settlement/settlement by the representative body on economic competition; however, these are not binding. behalf of the claimants also permitted, and if so on what It is quite common for COFECE/IFT to express their views, basis? but never in relation to a specific case or Economic Agent. After COFECE/IFT has initiated an investigation, it is not 52 Justification / Defences possible to discontinue breach of competition law claims. If a “damages and losses” claim of a representative body is allowed by the Civil Courts, the settlement shall also be approved 5.1 Is a defence of justification/public interest by those Courts. available? 82 Costs This defence may be available for certain relative monopolistic practices, if it is proven that these practices produce gains in efficiency and favourably impact upon economic competition 8.1 Can the claimant/defendant recover its legal costs from the unsuccessful party? and free market access, thus overcoming their possible anticompetitive effects and consequently resulting in an improvement in consumer welfare. However, this is not applicable for horizontal Yes, it is possible to recover legal costs and expenses, but only or absolute monopolistic practices, because they are illegal per se. from “damages and losses” proceedings.

8.2 Are lawyers permitted to act on a contingency fee 112 Anticipated Reforms basis?

11.1 For EU Member States, highlight the anticipated Yes, in Mexico, lawyers are permitted to act on a contingency impact of the EU Directive on Antitrust Damages Actions fee basis. at the national level and any amendments to national procedure that are likely to be required.

8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many This does not apply to Mexico. cases to date?

11.2 What approach has been taken for the Third-party funding of competition law claims is not prohib- implementation of the EU Directive on Antitrust ited; however, there are, as of yet, no examples of this in Mexico. Damages Actions in your jurisdiction? How has the Directive been applied by the courts in your jurisdiction? 92 Appeal Although, for its resolutions, COFECE/IFT can take into 9.1 Can decisions of the court be appealed? account international criteria, the EU Directive on Antitrust Damages Actions is not binding on Mexico. Yes, the Mexican Constitution and the Amparo Trial Law set out that Economic Agents can appeal COFECE or IFT resolutions 11.3 Please identify, with reference to transitional through Amparo trials, which are heard first by the District provisions in national implementing legislation, Courts. Also, District Court resolutions can be appealed before whether the key aspects of the Directive (including limitation reforms) will apply in your jurisdiction only ‎to Tribunals or the Mexican Supreme Court of Justice (“SCJN”), infringement decisions post-dating the effective date of whose final decisions cannot be appealed. implementation; or, if some other arrangement applies, please describe it. 102 Leniency Although, for its resolutions, COFECE/IFT can take into 10.1 Is leniency offered by a national competition account international criteria, neither the EU Directive nor authority in your jurisdiction? If so, is (a) a successful, other international criteria are binding on Mexico. and (b) an unsuccessful applicant for leniency given immunity from civil claims? 11.4 Are there any other proposed reforms in your jurisdiction relating to competition litigation? Yes, article 103 of the LFCE establishes a “sanction reduction benefit” for those who have participated directly or indirectly in a horizontal or absolute monopolistic practice. However, under During the last year, there have been some reforms in certain no circumstances can it be applicable for civil claims. areas, such as the leniency programme and protection of confidential information of Economic Agents in the possession of law firms, among others; however, there are currently no proposed 10.2 Is (a) a successful, and (b) an unsuccessful reforms relating to competition litigation. applicant for leniency permitted to withhold evidence disclosed by it when obtaining leniency in any subsequent court proceedings?

“Immunity programmes” are applicable for civil claims. All information and the identity of immunity applicants is considered confidential; therefore, COFECE must take the necessary measures to safeguard such information. There are no judicial criteria regarding the provision of confidential information by COFECE before other authorities.

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Claudia de los Ríos Olascoaga has been named as a specialist in Economic Competition Law in many international publications, such as: Chambers and Partners (2014 to 2020 Editions); Best Lawyers; and Who’s Who (2013 to 2020 Editions). She is a non-governmental advisor to the Federal Competition Commission in the International Competition Network (“ICN”).

Ledesma Uribe y Rodriguez Rivero S.C. Tel: +52 55 7156 2195 Vosgos 345 PB, Lomas de Virreyes Email: [email protected] Miguel Hidalgo, C.P. 11000 URL: www.rrabogados.com.mx Mexico City Mexico

Bernardo Carlos Ledesma Uribe has been named as a specialist in Administrative Law and Economic Competition Law in many international publications, such as: Chambers and Partners; Best Lawyers; and Latin Lawyer. He has qualified from several courses in Tax Law, Administrative Law and Economic Competition Law.

Ledesma Uribe y Rodriguez Rivero S.C. Tel: +52 55 7156 2195 Vosgos 345 PB, Lomas de Virreyes Email: [email protected] Miguel Hidalgo, C.P. 11000 URL: www.rrabogados.com.mx Mexico City Mexico

Ledesma Uribe y Rodriguez Rivero law firm specialises in Constitutional Law, Amparo Proceedings, Economic Competition and Federal, State and Municipal Administrative Law, in regard to both consulting and litigation. The firm is designed as a small boutique law firm that offers personalised service, tailored solutions regarding the particular needs of each case and a high degree of analysis of issues. Our philosophy is based on the importance of establishing a close relationship and close cooperation with our clients to achieve a genuine integration between them and our team of lawyers, for deeper understanding of their interests and concerns. www.rrabogados.com.mx

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Steven Verschuur

Osborne Clarke Jeroen Bedaux

12 General daad ), whereby the breach of Article 101 or 102 TFEU (the prohibition of anti-competitive agreements and abuse of dominant position) constitutes a tortious act (see the answer to question 1.2 1.1 Please identify the scope of claims that may be above). brought in your jurisdiction for breach of competition law. 1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned? Claims for damages resulting from competition law violations can be brought by any individual or legal entity. Most actions for damages are “follow-on claims” that are There are no specialised courts to which civil competition law based on previous decisions by the European Commission cases are assigned. However, in most courts (in particular at the (“Commission”) or national competition authorities – such as level of the Court of Appeal), there are specialised judges with the Dutch Competition Authority (Autoriteit Consument en Markt, in-depth knowledge of competition law. “ACM”) finding an infringement of EU or national competition On 1 January 2019, the Netherlands Commercial Court laws. (“NCC”) was launched. The aim of the NCC is to handle complex However, such claims can also be brought on a “stand-alone” international disputes, which can include damages claims for basis, whereby the claimant itself has to demonstrate the exis- competition law violations. The jurisdiction of the NCC requires tence of an infringement without being able to rely on any explicit agreement between parties. The NCC has a number of previous finding by a competition authority. benefits, such as: fixed court fees; relatively short procedural time frames; procedures in the English language; specialist judges and modern technology being used (for example, audio/video record- 1.2 What is the legal basis for bringing an action for breach of competition law? ings, videoconferencing, electronic filing of documents, and electronic communication). In addition to the NCC, a specialist chamber of the Amsterdam Court of Appeal, the Netherlands Claims for violations of competition laws are typically based on Commercial Court of Appeal, has been set up to hear appeals. tort (Article 6:162 of the Dutch Civil Code, “DCC”). Indeed, violations of competition law constitute a breach of a statutory duty (wettelijke plicht) and thereby qualify as a tortious act 1.5 Who has standing to bring an action for breach of (onrechtmatige daad ). Claimants may also base their claims upon: competition law and what are the available mechanisms (a) Article 6:74 DCC, which provides a claim for damages in for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions the event of breach of contract; (b) Article 6:212 DCC, which by representative bodies or any other form of public provides a claim for damages in the event of unjust enrichment; interest litigation? If collective claims or class actions or (c) Article 6:203 DCC, which provides a claim for damages in are permitted, are these permitted on an “opt-in” or “opt- the event of undue payment. out” basis? Companies that have jointly infringed competition law are in principle jointly and severally liable for the damages resulting Any individual or legal entity that has suffered damage as a from that infringement. This follows from a specific provision result of a breach of competition law has standing to bring an (Article 6:193m DCC) implementing a corresponding provi- action to claim compensation. sion from the Directive on Antitrust Damages Actions. The If there are multiple claimants that have joined forces, they same principle generally applies to cases that were initiated before 26 December 2014 (thereby falling outside the scope of usually assign their claim to a special purpose vehicle (“claim the Directive on Antitrust Damages Actions) on the basis of vehicle”) that will effectively bundle the claims and claim the Article 6:166 DCC, which provides for joint and several liability damage suffered by all the underlying claimants. In claiming the for so-called “group acts”. damages, the special purpose vehicle acts in its own name and on its own account. The validity of this kind of assignment has been confirmed in various judgments (CDC/Kemira, Court of Appeal 1.3 Is the legal basis for competition law claims Amsterdam, 4 February 2020, ECLI:NL:GHAMS:2020:194 derived from international, national or regional law? and SECC/Kone, District Court Rotterdam, 23 October 2019, ECLI:NL:RBROT:2019:8230). The legal basis is derived from both EU law and national law. Most claims are based on the national law concept of tort (onrechtmatige

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Under the Collective Mass Claims Settlement Act (Wet collec- 1.7 Does your jurisdiction have a reputation for tieve afwikkeling massaschade), legal entities whose purpose is to attracting claimants or, on the contrary, defendant protect the interests of victims can negotiate settlements with applications to seize jurisdiction, and if so, why? companies accused of causing damage (such as cartel participants). Subsequently, they can request the Court of Appeal in The Netherlands is generally seen as an attractive jurisdiction Amsterdam to declare the settlement legally binding upon all for claimants. The main reasons are: relatively fast proceed- victims. However, victims have the right to “opt out” within a ings; relatively low-cost orders (reducing the litigation risks); and certain period of time. In competition law cases, this mechanism sophisticated courts with extensive experience in complex inter- is rarely used. national disputes. On 19 March 2019, the Dutch Senate adopted the legislative The attractiveness of the Netherlands is evidenced by the bill on the Settlement of Damages in Collective Actions (Wet fact that a large number of follow-on damage actions relating afwikkeling massaschade in collectieve actie). The Act: (a) allows claim to cartels prosecuted by the Commission have been initiated vehicles to claim monetary damages in a collective action on an before Dutch courts in recent years. Examples include: Air opt-out basis; (b) adds enhanced requirements for the standing Cargo; Elevators & Escalators; Gas Insulated Switchgear; Trucks; of a claim vehicle and the admissibility to be assessed at an early Paraf f in Wa x ; Sodium Chlorate; Cathode Ray Tubes; Pre-stressing Steel; stage of the proceedings; (c) provides that the class action must and Dutch Bitumen. have a sufficiently close connection with the Dutch jurisdiction – which is the case if: (i) the majority of the persons on behalf 1.8 Is the judicial process adversarial or inquisitorial? of whom the class action is initiated are Dutch residents; (ii) the defendant resides in the Netherlands; or (iii) the events on which the class action is based occurred in the Netherlands; (d) provides The judicial process is adversarial. that if multiple claim organisations bring class actions, the court will appoint an exclusive representative that litigates the class 22 Interim Remedies action on behalf of all interested persons; and (e) provides for the obligation for the parties to try to negotiate a settlement after an 2.1 Are interim remedies available in competition law exclusive representative has been appointed. cases? The Act applies to collective actions initiated after the date of entering into force of this Act for events which took place on or Interim remedies are available. Petitions for interim relief are after 15 November 2016. to be filed as separate preliminary relief proceedings or pending the main proceedings (Articles 223 and 254–257 of the Dutch 1.6 What jurisdictional factors will determine whether a Code on Civil Procedure, “DCCP”). court is entitled to take on a competition law claim? 2.2 What interim remedies are available and under The main situations where Dutch courts have jurisdiction to what conditions will a court grant them? take on a competition law claim are: ■ the defendant is domiciled in the Netherlands; Interim remedies can only be granted if the claimant has an ■ the harmful event (e.g. the conclusion of the purchase actual pressing interest in the remedies for which it applied; contract containing prices inflated by the competition for example, if the claimant cannot be expected to wait for the law violation) occurred in the Netherlands (Tennet/ABB outcome of the main proceedings and remedies must be of a District Court Arnhem, 26 October 2011, ECLI:NL: provisional nature. RBARN:2011:BU3546); Interim remedies will be heard by a single interim relief judge ■ there is a valid choice of forum clause in the agree- in so-called summary proceedings (kort geding). The interim ment between the claimant and the defendant on which relief judge has wide discretion in issuing interim orders. These the claim is based, which is considered not to apply to can include cease and desist orders, orders to take certain general choice of forum clauses based on which it was not actions, seizure of assets or evidence, orders to make an advance reasonably foreseeable for the purchaser that these would payment, etc. cover damages resulting from competition law violations In general, the interim relief judge’s decision will depend on: (SECC/Kone, District Court Rotterdam, 23 October 2019, (a) the likelihood that the claim in the main proceedings will be ECLI:NL:RBROT:2019:8230); or awarded; (b) whether there is a risk of irreparable harm if the ■ the claim against the defendant is closely linked to a claim outcome of the main proceedings is awaited; (c) the interests of against a Dutch defendant (the “anchor defendant”). the parties and third parties; and (d) the complexity of the matter. An example of an “anchor defendant” resulting in a Dutch As competition law proceedings tend to be relatively complex, court assuming jurisdiction is the CDC/Sodium Chlorate case they are less suitable to be addressed in summary proceedings. (District Court Amsterdam, 4 June 2014, ECLI:NL:RBAMS: As a result, interim remedies are not often requested, let alone 2014: 3190, first instance; Court of Appeal Amsterdam, 21 July awarded, in competition law proceedings. 2015, ECLI:NL:GHAMS:2015:3006, appeal). The District Court of Amsterdam and the Amsterdam Court of Appeal 32 Final Remedies accepted jurisdiction, whilst none of the claimants or defendants were domiciled in the Netherlands and none of the facts 3.1 Please identify the final remedies which may be did specifically relate to the Netherlands, with the only connec- available and describe in each case the tests which tion with the Netherlands being that the holding company a court will apply in deciding whether to grant such a Akzo Nobel (the “anchor defendant”) was held liable by the remedy. Commission for the involvement of one of its subsidiaries in the Sodium Chlorate cartel. The main remedy that is usually sought is an award of damages or, less frequently, invalidation of contractual clauses. In order

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to be entitled to damages, the claimant has to prove an unlawful The operative part of the Commission’s decision has to be act, damage suffered and a causal link between the unlawful act interpreted in light of its recitals setting out the Commission’s and the damage. reasoning (SECC/Kone, District Court Rotterdam, 29 May 2019, ECLI:NL:RBROT:2019:4441). A final decision by the ACM also constitutes binding evidence. 3.2 If damages are an available remedy, on what bases A fact is deemed proven if the court considers it “sufficiently can a court determine the amount of the award? Are exemplary damages available? Are there any examples plausible”. In this assessment, the court is free in its assessment of damages being awarded by the courts in competition of the evidence provided by the parties. cases which are in the public domain? If so, please identify any notable examples and provide details of the 4.2 Who bears the evidential burden of proof? amounts awarded.

Facts which are sufficiently disputed have to be proven by the Dutch courts can only award compensatory damages. Exemplary party invoking the legal consequences of asserted facts and or punitive damages are not available. rights, unless a different distribution of the burden of proof Damages should compensate the entire loss suffered by the arises from a special provision or from the requirements of victim (including interest). As a precise calculation of the actual reasonableness and fairness. The burden of proof may be loss is usually very difficult to make in competition law cases, shifted if the other party has made it unreasonably difficult for courts tend to make abstract estimates of the damages. the party which bears the burden of proof to substantiate its The main precedent where damages have been awarded by claim (see question 4.1 above). a Dutch Court for competition law violations is TenneT/ABB. In competition law cases, the claimant has to prove: the exis- In this case, the District Court Gelderland ordered ABB to pay tence of the infringement; the damage suffered; and a causal link an amount of approximately EUR 68 million in compensation between the infringement and the damage. for damages allegedly suffered by TenneT as a result of the Gas In “follow-on” actions, where the claimant relies on a previous Insulated Switchgear cartel in which ABB participated. This finding by the Commission or a national competition authority, judgment is currently under appeal. the existence of the infringement is a given (see question 4.3 In various other cases, cartel participants have agreed to pay below). In recent judgments, Dutch courts have established that damages as part of settlements that have not been made public. claimants need to demonstrate which specific products they have actually purchased from the cartel participants during the 3.3 Are fines imposed by competition authorities and/ infringement period (EWD/UTC, Court of Appeal Arnhem- or any redress scheme already offered to those harmed Leeuwarden, 5 February 2019, ECLI:NL:GHARL:2019:1060; by the infringement taken into account by the court when Retail Cartel Damage Claims e.a./DAF e.a., District Court calculating the award? Amsterdam, 15 May 2019, ECLI:NL:RBAMS:2019:3574). In “standalone” actions, the claimant itself has to prove the existence of the alleged infringement. This typically means that When calculating the award, Dutch courts do not take account the claimant will have to explain the definition, structure, char- of fines imposed by competition authorities. This is because acteristics and functioning of the relevant markets and demon- victims are entitled to full compensation. Compensation already strate the effects of the alleged infringement on those markets. received by a specific claimant (for example, on the basis of a redress scheme) should be taken into account when determining the (remaining) damage suffered by that particular claimant. 4.3 Do evidential presumptions play an important role in damages claims, including any presumptions of loss in cartel cases that have been applied in your 42 Evidence jurisdiction?

4.1 What is the standard of proof? See question 4.2 above (last paragraph). Under Dutch law, it is presumed that cartel infringements cause harm and that possible According to Article 152 DCCP, evidence may be produced by overcharges are passed on to indirect purchasers (in line with the all means. The judge is free in his assessment of the evidence Directive on Antitrust Damages Actions). In ABB/TenneT, the produced, unless the law states otherwise. Supreme Court (Hoge Raad ) applied this presumption even to a The claimant has to state all relevant facts to support its claim. fact pattern that predated the entry into force of the Directive The next step is for the defendant to dispute those facts. Facts on Antitrust Damages Actions (ABB/TenneT, Supreme Court, 8 that are not sufficiently disputed will have to be accepted by the July 2016, ECLI:NL:HR:2016:1483). court as being true. Facts that are sufficiently disputed by the other party will 4.4 Are there limitations on the forms of evidence have to be proven by the party invoking the legal consequences which may be put forward by either side? Is expert of these asserted facts and rights. This is also true for affir- evidence accepted by the courts? mative defences, such as the passing-on defence or claims that certain anti-competitive behaviour is justified based on Article There are in principle no limitations on the forms of evidence 103(3) TFEU, where the party invoking the defence will have to that parties may put forward. prove that the applicable criteria are fulfilled. In competition law cases, parties often submit expert One important exception to the general rule is binding evidence, in particular economic reports on the existence and evidence, which restricts the judge in its assessment of the facts quantum of damage. (Article 151 DCCP). According to the Masterfoods case law and Courts have the right to appoint independent experts. This Article 16(1) of Regulation 1/2003, a Commission decision has not yet happened in “follow-on” damage actions, but it has finding an infringement of competition law has to be accepted happened several times in other, somewhat similar, civil proceed- by national courts as binding evidence of that infringement. ings (for example, civil litigation related to state aid).

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4.5 What are the rules on disclosure? What, if any, practice of “confidentiality rings”, “gag orders” or other (prac- documents can be obtained: (i) before proceedings tical) measures to ensure confidentiality of certain information. have begun; (ii) during proceedings from the other On 23 October 2018, the Dutch Trade Secrets Act (Wet party; and (iii) from third parties (including competition bescherming bedrijfsgeheimen) entered into force. This act imple- authorities)? ments the EU Trade Secrets Directive (Directive 2016/943/ EU), which sets out rules for the protection of trade secrets. There is no specific discovery procedure available. No documents have to be disclosed pre-trial or during the trial. In prin- 4.9 Is there provision for the national competition ciple, parties are free to decide which documents they submit to authority in your jurisdiction (and/or the European the court. Commission, in EU Member States) to express its At the request of one of the parties to the proceedings, Dutch views or analysis in relation to the case? If so, how courts can order the disclosure by the other party of certain docu- common is it for the competition authority (or European ments if the documents are sufficiently specified, the requesting Commission) to do so? party has a legitimate interest in obtaining the documents and the documents relate to a legal relationship between the parties At the request of a Dutch court, the ACM may provide assis- (which can include a possible legal obligation of one party to pay tance in the quantification of the damages caused by a competi- damages to the other party). In several cartel damage litigation tion law infringement. cases, Dutch courts have requested various parties (both claim- Furthermore, the ACM can, on its own initiative, submit ants and defendants) to produce certain documents. written observations to Dutch courts on the application of EU A request for disclosure can be made before proceedings have competition law. The Commission can do the same, if and when been initiated, but in practice Dutch courts tend to fulfil such the coherent application of EU competition law across the EU requests only at a more advanced stage of the proceedings, when requires it to do so. it is clear which issues are in dispute and may require further Finally, Dutch courts may ask the Commission to transmit rele- evidence in order to be resolved. vant information or provide its opinion on questions concerning Disclosure can be refused by the court because of the confi- the application of EU competition law. dentiality of the information. Thus far, none of these instruments have been used in compe- In competition law cases, Dutch courts are not allowed to order tition law damage cases. the disclosure of leniency statements, settlement submissions or information specifically prepared for investigations by competi- 52 Justification / Defences tion authorities, as long as the investigation is still ongoing.

5.1 Is a defence of justification/public interest 4.6 Can witnesses be forced to appear? To what extent, available? if any, is cross-examination of witnesses possible? Such defences are available (for example, under Article 101(3) Any individual that is called upon to testify must appear as a TFEU), but these are hardly ever invoked in civil proceedings witness. Exceptions are only made for certain professionals relating to competition law. In cases where the Commission or and family members entitled to privilege. Witnesses are first the ACM has established an infringement of competition law in questioned by the judge and, subsequently, the parties are given a definitive decision (thereby rejecting the defence), there is no the opportunity to question the witness. However, there is no room to raise any such defence in a subsequent civil procedure “US-style” cross-examination. relating to the same infringement.

4.7 Does an infringement decision by a national or 5.2 Is the “passing on defence” available and do international competition authority, or an authority from indirect purchasers have legal standing to sue? another country, have probative value as to liability and enable claimants to pursue follow-on claims for damages in the courts? Indirect purchasers have standing to claim damages. In the same vein, the passing-on defence is available. In order for such a defence to be successful, there needs to be a direct link Under Dutch law, a final decision by the Commission or the between the overcharge paid by the purchasers and the costs ACM or by a review court constitutes irrefutable evidence of that they pass on to their customers (the indirect purchasers). the existence of the competition law infringement established in that decision. Similar final decisions taken in other Member States of the 5.3 Are defendants able to join other cartel participants EU can be presented before Dutch courts as prima facie evidence to the claim as co-defendants? If so, on what basis may of an infringement of competition law. they be joined?

4.8 How would courts deal with issues of commercial Yes, Dutch law allows defendants to – voluntarily – join other confidentiality that may arise in competition parties as co-defendants to the proceedings (Article 217 DCCP). proceedings? Pursuant to Article 217 DCCP, a claim by a third party to join in the proceedings will only be awarded if the third party has an interest in the proceedings at hand. The criterion to deter- There is no established procedure in civil competition law mine what is considered to be such an interest is very broad and cases to protect business secrets and other confidential infor- is already fulfilled if the third party that wants to join in the mation. In fact, if a party refuses to disclose certain informa- proceedings experiences unfavourable consequences from the tion, the court may draw adverse inferences from such refusal. outcome of the proceedings. Unlike certain other countries, there is no (as of yet) established

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62 Timing 72 Settlement

6.1 Is there a limitation period for bringing a claim for 7.1 Do parties require the permission of the court breach of competition law, and if so how long is it and to discontinue breach of competition law claims (for when does it start to run? example, if a settlement is reached)?

In proceedings initiated after 26 December 2014 (that fall within No, that is not required. the scope of the Actions for Antitrust Damages Directive), two limitation periods apply: a subjective limitation period; and an 7.2 If collective claims, class actions and/or objective limitation period. representative actions are permitted, is collective The subjective limitation period is five years and starts to run settlement/settlement by the representative body on after the infringement ended and the victim became aware of: the behalf of the claimants also permitted, and if so on what infringement; the fact that the infringement caused harm to them; basis? and the identity of the infringing undertakings (the awareness of which is typically not assumed to exist until the Commission or Under the Collective Mass Claims Settlement Act (Wet collec- ACM issues its decision). The objective limitation period is 20 tieve afwikkeling massaschade), legal entities whose purpose is to years and starts to run on the day after the infringement ended. protect the interests of victims can negotiate settlements with Both limitation periods are effectively suspended from the start companies accused of causing damage (such as cartel partici- of an investigation by a competition authority into possible pants). Subsequently, they can request the Court of Appeal in infringement until one year after the issuance by that authority Amsterdam to declare the settlement legally binding upon all of its final decision concluding the investigation. Mediation victims. However, victims have the right to “opt out” within between claimant(s) and defendant(s) will suspend the limitation a certain period of time. See also the answer to question 1.5. periods in a similar way. Apart from these automatic suspen- sions, claimants still have the possibility to interrupt (stuiten) 82 Costs the subjective limitation period pending an investigation by a competition authority or pending mediation, in which case the subjective limitation period starts to run afresh. This can be 8.1 Can the claimant/defendant recover its legal costs done through a simple interruption letter (stuitingsbrief ) from the from the unsuccessful party? claimant(s) to the defendant(s). The objective limitation period cannot be interrupted. Yes, based on a court-approved scale of costs and depending In proceedings initiated before 26 December 2014, the appli- on the nature and/or number of procedural steps (i.e. written cable limitation periods are slightly different. The subjective submissions and oral hearings). The adverse cost orders usually limitation period is five years, but starts to run when the victim cover only a small part of the actual costs that the successful becomes aware of the fact that it suffered damage and of the party incurred as a result of the proceedings. However, the identity of the individual or legal entity liable for the damage. bill on Settlement of Damages in Collective Actions (see ques- This limitation period can be interrupted by a simple interruption 1.5) allows courts to deviate from the court-approved scale tion letter. The objective limitation period is 20 years and starts of costs by awarding a higher compensation of lawyer’s fees to to run on the day the damage was inflicted. This limitation the winning party. For example, if the court finds – summarily period cannot be interrupted. apparent – that the claim is unfounded, it can order the claim The limitation period of claims for the annulment of legal acts vehicle to compensate a higher amount of lawyers’ fees, up to that infringe competition law is three years (Article 3:52 DCC). five times the amount following from the court-approved scale The limitation period of three years starts to run as from the of costs. If a court orders a collective claim settlement, the court date the claimant is entitled to invoke the annulment. may order the defendant to compensate reasonable and propor- In recent cases, Dutch courts have applied limitation periods tionate court costs and other costs that the claim vehicle has governed by the laws of other countries (such as Finland, incurred. Germany and Sweden) and have in some cases even disapplied these limitation periods because they would breach the principle 8.2 Are lawyers permitted to act on a contingency fee of effectiveness deriving from EU law (Deutsche Bahn e.a./Nedri basis? Spanstaal e.a., Court of Appeal ’s-Hertogenbosch, 28 January 2020, ECLI:NL:GHSHE:2020:293; CDC/Kemira, Court of Appeal Amsterdam, 4 February 2020, ECLI:NL:GHAMS:2020:194). Lawyers are not allowed to act on a contingency fee (“no win, no fee”) basis. However, success fees are generally allowed, as long as the lawyer gets paid a certain fee regardless of the outcome 6.2 Broadly speaking, how long does a typical breach of the case. of competition law claim take to bring to trial and final judgment? Is it possible to expedite proceedings? 8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many The duration of the proceedings largely depends on the cases to date? complexity of the case, the workload of the court and the litigation strategy of the parties involved. Typically, proceedings take at least one to two years per instance, but many (complex) compe- Third-party funding is permitted and is often used in follow-on tition law cases take substantially longer. damages cases in the Netherlands.

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92 Appeal main changes concerned: the introduction of a presumption of harm caused by competition law infringements; specific rules on (joint and several) liability of cartel participants; additional rules 9.1 Can decisions of the court be appealed? on disclosure of evidence; clarification of limitation periods; and the binding nature of decisions of the ACM. Judgments issued by a District Court (rechtbank) in first instance can be appealed to a Courts of Appeal ( ), which gerechtshof 11.2 What approach has been taken for the will carry out a full review of issues of fact and issues of law. implementation of the EU Directive on Antitrust Judgments of a Court of Appeal can be appealed to the Supreme Damages Actions in your jurisdiction? How has the Court (Hoge Raad ), which will deal with issues of law only. Directive been applied by the courts in your jurisdiction? Additionally, the Supreme Court will assess whether the judgment of the Court of Appeal does not contain manifest errors The Directive is implemented in Articles 6:193a–6:193t DCC of assessment. A manifest error of assessment may be found and Articles 161a and 845–850 DCCP. The Antitrust Damages if the judgment ignores facts which have been put forward by Directive has not yet been applied by Dutch courts. This is the parties and which may have materially affected the operative because no judgments on the merits have been issued thus far part of the judgment. in cases that were initiated after the implementing rules of the Directive entered into force. 102 Leniency It should be noted that in some cases, the courts have already interpreted Dutch law in the spirit of the Antitrust Damages 10.1 Is leniency offered by a national competition Directive, even though this Directive was not yet applicable authority in your jurisdiction? If so, is (a) a successful, when these cases were initiated. In particular, reference was and (b) an unsuccessful applicant for leniency given made to Article 17 of the Antitrust Damages Directive (the immunity from civil claims? rebuttable presumption that cartel infringements cause harm) and Article 3 of the Antitrust Damages Directive (full compen- The ACM operates a leniency programme that is largely similar sation shall not lead to overcompensation, whether by means of to that of the Commission. Leniency applicants do not enjoy punitive, multiple or other types of damages). immunity from civil damage claims. Undertakings that have received immunity from fines are only liable for damages 11.3 Please identify, with reference to transitional suffered by their own (direct or indirect) purchasers. This is provisions in national implementing legislation, only different when claimants cannot obtain full compensation whether the key aspects of the Directive (including from the other cartel members, in which case they can claim limitation reforms) will apply in your jurisdiction only ‎to damages from the immunity recipient. infringement decisions post-dating the effective date of implementation; or, if some other arrangement applies, please describe it. 10.2 Is (a) a successful, and (b) an unsuccessful applicant for leniency permitted to withhold evidence disclosed by it when obtaining leniency in any The rules implementing the Antitrust Damages Directive apply subsequent court proceedings? to all civil proceedings relating to competition law (including the ones that were initiated before 26 December 2014), with the exception of the rules of a non-substantive (i.e. procedural) Dutch courts are not allowed to order the disclosure of leniency nature. These rules, in particular rules on limitation periods and statements. disclosure of evidence, only apply in proceedings that were initiated after 26 December 2014. 112 Anticipated Reforms

11.4 Are there any other proposed reforms in your 11.1 For EU Member States, highlight the anticipated jurisdiction relating to competition litigation? impact of the EU Directive on Antitrust Damages Actions at the national level and any amendments to national procedure that are likely to be required. No, there are no other proposed reforms in the Netherlands relating to competition litigation. The legislation to implement the Directive on Antitrust Damages Actions entered into force on 28 January 2017. The

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Steven Verschuur heads up our EU law practice in Brussels. He is a leading expert in state aid, competition, merger control and trade. Steven has extensive experience in proceedings and investigations before the European Commission and the national competition authorities of Belgium and the Netherlands. He has litigated a large number of cases in the Court of Justice of the EU and domestic courts and is also a specialist across several of Osborne Clarke’s key international sectors, including retail and consumer, life sciences and healthcare, and energy and utilities. Steven joined Osborne Clarke in 2019 from the Brussels office of an international legal practice. He is admitted in Brussels and Amsterdam and works both with the Belgian and Dutch offices of the firm. Steven has a DEA in European Law from the University of Liège and a doctorate from the University of Utrecht.

Osborne Clarke Tel: +32 2 515 93 82 Bastion Tower Email: [email protected] Marsveldplein 5 Place du Champ de Mars URL: www.osborneclarke.com B-1050 Brussels Belgium

Jeroen Bedaux is a commercial and corporate litigator based in Amsterdam. He specialises in commercial litigation (product liability, specific performance and breach of contract), banking and finance litigation (including class actions and mass claims), fraud and compliance, construction litigation, corporate litigation and directors’ and officers’ liability. Jeroen litigates on a number of class action and mass claims for financial institutions, multinationals and directors. He is involved in multi- jurisdiction fraud cases and has been responsible for some ground-breaking judgments. Jeroen has significant experience in highly complex construction litigation for leading local and international construction companies. He represents IT companies in court cases and arbitrations regarding failed IT projects and termination of distribution & agency agreements. He represents pharmaceuticals in product recall and liability cases as well as in distribution and agency disputes. He specialises in the tech, media and comms, financial services, real estate and infrastructure and retail sectors.

Osborne Clarke Tel: +31 20 702 8614 Jachthavenweg 130 Email: [email protected] 1081 KJ Amsterdam URL: www.osborneclarke.com The Netherlands

Osborne Clarke is an international legal practice with over 270 expert part- Competition law requires strength across the major European jurisdictions. ners and more than 850 talented lawyers in 24 locations. Our sector-based Our pan-European footprint means that we are able to work quickly and approach enables us to help our clients tackle the issues they are facing efficiently in the jurisdictions where you operate and across borders. today, and prepare for the ones that they will face tomorrow. www.osborneclarke.com Our competition team advises on all competition law matters including mergers and joint ventures, abuse of dominance, cartels, and state aid. We advise on investigations before the European Commission and national competition authorities, including in Belgium and the Netherlands. Additionally, our team also advises on compliance and dawn raids as well as on trade regulations. We have long-standing experience in defending our clients’ international interests. No matter where you are located, you can access our entire range of legal capabilities and sector expertise from any of our offices.

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Norway Norway

Siri Teigum

Eivind J Vesterkjær

Advokatfirmaet Thommessen AS Heidi Jorkjend

1.5 Who has standing to bring an action for breach of 12 General competition law and what are the available mechanisms for multiple claimants? For instance, is there a 1.1 Please identify the scope of claims that may be possibility of collective claims, class actions, actions brought in your jurisdiction for breach of competition by representative bodies or any other form of public law. interest litigation? If collective claims or class actions are permitted, are these permitted on an “opt-in” or “opt- out” basis? Private enforcement (i.e. specific performance, injunctive relief or damages) are available in any antitrust matter. Action can be sought after members of cartels as well as companies that abuse Generally, every natural or legal person who can substantiate a a dominant position or any party to a potentially anticompetitive claim based on a breach of competition law can bring forward a agreement. Such action may be based on breaches of section 10 respective action. of the Competition Act and article 53 of the EEA Agreement Class actions are governed by Chapter 35 of the Civil (both mirroring article 101 of the Treaty on the Functioning Procedure Act, which covers both the joinder of parties in ordi- of the European Union (TFEU)), as well as section 11 of the nary proceedings and specific rules applicable to class actions. Competition Act and article 54 of the EEA Agreement (both The Civil Procedure Act recognises both opt-in and opt-out mirroring article 102 of the TFEU). class actions: ■ opt-in: the court will define the class in its approval of the class action. Anyone who falls within its scope is entitled 1.2 What is the legal basis for bringing an action for to be registered as a member within the time limit set by breach of competition law? the court; and ■ opt-out: the court will define the class in its approval of the There is no specific legal basis for private antitrust actions. Such class action. Anyone who falls within its scope is automat- actions are governed by the general rules and principles of the ically a member unless they withdraw from the class. All law on damages. The claimant must substantiate an economic members will be bound by a subsequent ruling. loss, a basis for liability and a causal link between the harmful The court will ultimately decide whether an opt-in or opt-out event and the loss. model is suitable for each specific class action. The court must approve the class action pursuant to section 35(4) of the Dispute Act based on the following cumulative 1.3 Is the legal basis for competition law claims derived from international, national or regional law? conditions as set out in section 35(2): (i) several persons have claims or obligations with an identical or mostly similar factual or legal basis; (ii) the claims can be heard by a court with the same While competition law itself is largely based on and influenced composition and mainly pursuant to the same procedural rules; by EU competition law, private enforcement is generally based (iii) a class action is the most appropriate way of dealing with all on national tort and procedural rules. claims; and (iv) it is possible to nominate a class representative.

1.4 Are there specialist courts in your jurisdiction to 1.6 What jurisdictional factors will determine whether a which competition law cases are assigned? court is entitled to take on a competition law claim?

There are no specialist courts dealing with private enforcement To the extent applicable, the Lugano Convention 2007 on juris- of competition law. Note that a defendant seeking annulment diction and the enforcement of judgments in civil and commer- of a decision made by the Norwegian Competition Authority cial matters governs the jurisdiction of Norwegian courts in anti- (NCA) must appeal to the Competition Appeals Board. trust matters. Otherwise, jurisdiction is covered by Norwegian

procedural law. According to the Lugano Convention 2007, a 2.2 What interim remedies are available and under Norwegian court may be competent if the defendant is domi- what conditions will a court grant them? ciled (article 2(1)) in Norway. Furthermore, matters relating to tort, delict or quasi-delict may be brought before the court where Interim measures are available both for monetary claims and the harmful event occurred or may occur pursuant to article 5(3) claims requiring specific performance. of the Lugano Convention 2007. This is a narrow exception to Pursuant to Chapter 33 of the Dispute Act, arrest of assets article 2(1) (see C-220/88 (Dumez), paragraphs 17 to 19; and the is permissible if the debtor’s conduct gives grounds to fear that Norwegian Supreme Court in Rt 2011.897 Marin Alpin, para- enforcement of the claim would otherwise be evaded or consid- graph 47. Article 5(3) of the Lugano Convention 2007 is only erably impeded or would have to take place outside the realm. applicable if there are “particularly close connecting factors” The claimant might have to provide security in favour of the between the dispute and the legal venue. defendant, and may have to compensate the defendant for any A Norwegian court would likely assume jurisdiction in a case loss related to the arrest in case it is subsequently established where either (i) the defendant resides or has its business seat that the claimant did not have a valid claim when the arrest was in Norway, (ii) the infringement wholly or partly took place in ordered. Furthermore, courts can require a specific perfor- Norway, or (iii) the claimants are direct customers of a member mance from the defendant as an interim measure. Such perfor- of the alleged cartel or are otherwise able to prove an immediate mance may be, for example, the act of supplying the claimant harm as a result of the alleged competition infringement. with certain goods, if the claimant would otherwise lose impor- Pursuant to article 6(1) of the Lugano Convention 2007, if one tant customers. The standard of proof is lower than for the prin- defendant of a group of jointly and severally liable defendants cipal claim in the main proceedings. An applicant for an interim can be sued in Norway (the “anchor defendant”; for cartel cases, remedy must provide only prima facie evidence for their claim see CJEU in C-352/13 (CDC )), all of the defendants can be sued and that the realisation of such claim strongly depends on the before the Norwegian courts if there is a sufficiently close rela- interim measure (urgency). As a general rule, an interim relief tionship between the claims against all of the defendants. The must not result in the fulfilment of the final remedy. claim against the anchor defendant must be so closely connected with the claims against the other defendants that it is essential to hear and assess them together to avoid inconsistent judgments. 32 Final Remedies This was recently confirmed by a Supreme Court decision (HR-2019-2206-A) which upheld a decision by the Oslo District 3.1 Please identify the final remedies which may be Court of 1 July 2018 in which the District Court assumed juris- available and describe in each case the tests which diction pursuant to article 6(1) of the Lugano Convention 2007, a court will apply in deciding whether to grant such a remedy. in a case brought by several Norwegian and foreign plaintiffs belonging to the Posten Group against a number of foreign addressees to the European Commission decision in AT.39824 Any agreements or decisions prohibited pursuant to this section (Trucks) and a Norwegian subsidiary of one of the foreign defend- shall be automatically void. Final remedies are based on the ants. The Court found that it did not matter that the subsidiary principle of natural restitution. According to this, the injured itself was not an addressee of the Commission decision. party has to be put in the position it would have been in had To some extent, the parties can influence the place of venue; the infringement not occurred. The principle of natural resti- for example, if the defendants agree that the harmful event tution may not only lead to pecuniary compensation but also occurred in Norway. The jurisdiction of Norwegian courts specific performance in the form of omission or an obligation could equally be affected by an arbitration clause. Norwegian to contract. Particularly in cases of abusive refusals to supply, law allows for a wide interpretation of arbitration clauses (see the defendant may be ordered by the court to contract with the Supreme Court judgments in Rt 1991 paragraph 291, Rt 1994 claimant at arm’s length. While the nature of the remedy is paragraph 1489 and HR-2017-1932-A). dependent on the claimant’s request (i.e. pecuniary compensation or specific performance or a combination), the extent of the remedy (i.e. the amount of the compensation or the terms of a 1.7 Does your jurisdiction have a reputation for contract) are at the court’s discretion. attracting claimants or, on the contrary, defendant applications to seize jurisdiction, and if so, why? 3.2 If damages are an available remedy, on what bases A very limited number of cases regarding only competition can a court determine the amount of the award? Are exemplary damages available? Are there any examples damages have been tried in front of Norwegian courts. Therefore, of damages being awarded by the courts in competition there is no notable reputation of the Norwegian courts to favour cases which are in the public domain? If so, please either claimant or defendant. identify any notable examples and provide details of the amounts awarded. 1.8 Is the judicial process adversarial or inquisitorial? Damages are generally awarded in the amount that compensates The judicial process is inquisitorial. the claimant for their loss. The calculation of this amount is primarily based on general tort law. As such, damages are calculated on the basis of the difference between the financial posi- 22 Interim Remedies tion of the claimant after the infringement occurred and the hypothetical financial position the claimant would have been 2.1 Are interim remedies available in competition law in had the competition law infringement not occurred. As the cases? financial status of the claimant has to be considered as a whole, not only are their losses in income or profit or lost investment Yes, Norwegian procedural law provides for different interim taken into account, but also any benefits received in the context measures based on Chapters 32–34 of the Dispute Act. of the anticompetitive behaviour.

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Norwegian law does not provide for punitive or exemplary securing of evidence before actual proceedings have begun damages. Only the net financial loss of the claimant will be (see Chapter 28 of the Disputes Act). In order to have evidence compensated. secured, the applicant must show that (i) it can be of significance in a dispute to which they may become a party or intervener, and (ii) there is either a clear risk of the evidence being lost or there 3.3 Are fines imposed by competition authorities and/ or any redress scheme already offered to those harmed are other reasons that make it important to obtain the evidence by the infringement taken into account by the court when before the actual proceedings have started. calculating the award? After a court procedure has commenced, there is a general obligation for anyone (whether they are a party to the procedure or a third party) to produce any written document that might No, fines imposed by the competition authority should not play be of probative importance (see sections 21(4) and 21(5) of the a role for the calculation of damages. However, there is not yet Dispute Act) following a respective court order. A party seeking a clear precedent to this question. such an order from the court must identify the document and outline the information the document is expected to comprise. 42 Evidence The disclosure obligation is subject to the principle of proportionality as set out in section 21(8) of the Dispute Act and the 4.1 What is the standard of proof? principle of relevance under section 21(7) of the Dispute Act.

Parties may rely on all kinds of documents, statements and 4.6 Can witnesses be forced to appear? To what extent, testimony to prove their case. The court is free to evaluate the if any, is cross-examination of witnesses possible? evidence purely at its own discretion. To be awarded compensation for an alleged competition law Yes, witnesses who were summoned to the court hearing have infringement, the court must be convinced that it is more likely a duty to testify if they are residents of or (under certain condi- than not that there has been an infringement, an economic loss, tions) are staying in a Nordic country. Generally, the party who and a causal link between the two. summoned the witness will begin examination, followed by the other parties and finally the court. Questioning shall be 4.2 Who bears the evidential burden of proof? conducted in a productive way that ensures clear and truthful testimony and is considerate towards the witness. The claimant bears the full burden of proof. In cases where an investigation by the NCA is ongoing or expected, it is therefore 4.7 Does an infringement decision by a national or advisable to wait for the result of the investigation, as it may be international competition authority, or an authority from used to prove at least that an infringement has occurred. another country, have probative value as to liability and enable claimants to pursue follow-on claims for damages in the courts? 4.3 Do evidential presumptions play an important role in damages claims, including any presumptions of loss in cartel cases that have been applied in your jurisdiction? The court will not be bound by a competition authority’s decision. However, a decision establishing an infringement is usually persuasive evidence. Equally, a court decision in a criminal or The relevance of such presumptions under Norwegian law public competition case is not binding to the private damages remains unclear so far based on the very limited private anti- case, but will be of significant weight. trust litigation, which has not yet resulted in any relevant precedent for this. 4.8 How would courts deal with issues of commercial confidentiality that may arise in competition 4.4 Are there limitations on the forms of evidence proceedings? which may be put forward by either side? Is expert evidence accepted by the courts? As follows section 22(10) of the Dispute Act, generally speaking, business secrets and other information that may be considered The courts generally accept statements by expert witnesses. under professional secrecy are inadmissible. However, the However, according to section 21(12) of the Dispute Act, written court may consider the conflicting interests of secrecy on one statements may only be used to a limited extent as evidence in hand, and presenting the evidence on the other, and weigh them court proceedings. They may only be presented as evidence if against each other. As a result, the court may rule that infor- the parties agree to it or if the parties have the possibility to mation under professional secrecy is indeed admissible if the question the person who gave it. Therefore, a written state- rationale for presenting the evidence prevails. ment cannot be submitted before it has been established that the person who gave it will appear in court to answer questions. 4.9 Is there provision for the national competition authority in your jurisdiction (and/or the European 4.5 What are the rules on disclosure? What, if any, Commission, in EU Member States) to express its documents can be obtained: (i) before proceedings views or analysis in relation to the case? If so, how have begun; (ii) during proceedings from the other common is it for the competition authority (or European party; and (iii) from third parties (including competition Commission) to do so? authorities)?

There is no such provision in Norwegian law. While discovery procedures generally do not exist under Norwegian law, anyone may petition the court to order the

must accept evidence presented by the other parties as binding 52 Justification/Defences for them, according to section 15(5) of the Dispute Act. An alternative to joining the proceedings as a party is to inter- 5.1 Is a defence of justification/public interest vene in support of one of them. According to section 15(7) of available? the Dispute Act, this is possible under the general requirements set out in sections 1(3) to 1(5) of the Dispute Act. In case of If an infringement is established, there is no defence of justifi- organisations, this means that a claim must fall within its general cation/public interest. However, the amount of the damages scope and the organisation must demonstrate a genuine need to can be reduced if the plaintiff has contributed to the damage have the claim decided. The threat of a potential recourse claim by fault or negligence. Also, it would have an impact on the of the defendant against the intervening party would normally amount of the damages if the plaintiff has benefitted from the suffice as grounds for such actual need. The intervening party infringement. does not have the status of an independent party but must act to the benefit of the party it supports and within the same deadlines as this party. 5.2 Is the “passing on defence” available and do indirect purchasers have legal standing to sue? 62 Timing If the plaintiff has presented evidence making it likely that it 6.1 Is there a limitation period for bringing a claim for suffered an economic loss directly related to the competition breach of competition law, and if so how long is it and infringement, it could be for the defendant to prove a “passing-on when does it start to run? defence”, but it remains to be seen how the Norwegian courts will deal with this when cases of this kind are brought before them. As set out in section 34 (1) of the Competition Act, the general Indirect Norwegian purchasers may, in principle, bring claims limitation rules of the Limitation Act 1979 apply. In follow-on against Norwegian companies, but bear the burden of proof as claims, the limitation period is extended to one year after a to the amount of the damage suffered and as to the causal link legally binding decision or judgment (i.e. when the possibility between this damage and the infringement of antitrust law. If to appeal has expired) has been issued (section 34 (2) of the the claim is brought against foreign defendants, questions of Competition Act). jurisdiction will arise (see articles 2, 5 (3) and 6 (1) of the Lugano Stand-alone claims are subject to general limitation rules. A Convention 2007). claim for damages resulting from the infringement of competition law will have to be brought forward as a claim in tort. As a general rule, a claim for damages in tort will become time- 5.3 Are defendants able to join other cartel participants barred three years after “the day when the claimant acquired, or to the claim as co-defendants? If so, on what basis may should have acquired, sufficient knowledge of the tort and the they be joined? injuring party” (section 9 of the Limitation Act 1979). In this context, “sufficient” generally translates as adequate in order to As a general rule, all parties to a joint infringement of competi- present a claim against the injuring party. In contrast, knowl- tion law are jointly and severally liable. Principally, each party edge of the damage suffered by the infringement is not required. is individually liable for the consequences of the joint infringe- Once sufficient knowledge, or negligent lack thereof, has been ment as a whole, as long as liability is established. The fact that established, a claim will be time-barred within three years. one party may be less responsible for the infringement than It is therefore essential to establish to what extent the poten- the others can only affect the distribution of liability between tial claimant has had “knowledge” or “negligent lack thereof” of the infringing parties, not their liability towards the party that (i) the infringement, and (ii) the injuring party. suffered a loss. Varying degrees of liability among the infringing If the claimant has not presented the claim because he lacked parties, together with other factors, may be considered in the the necessary knowledge of the claim or the infringing party, distribution of liability between them (section 5(3)(2) of the “limitation” occurs at the earliest opportunity of one year after Norwegian Torts Act). the date the claimant had or reasonably ought to have had such Against this background, an action can be brought against knowledge. multiple parties jointly pursuant to section 15(2) of the Dispute Furthermore, a claim based on cartel activities may lead to Act if they do not object, or if the cases are so closely connected (partial) invalidity of the underlying contract, resulting in a claim that they should be heard in the same proceeding. Under the for reimbursement of a potential overcharge. For the purposes same prerequisites, claims can also be connected during the of limitation, such a claim would be considered contractual and course of a court case as long as this does not substantially therefore falling under section 10 of the Limitation Act 1979. delay or complicate the proceedings. For example, if both Following this provision, the claim will be time-barred one year the defendant and the (joining) co-defendant aim at having after the creditor had necessary knowledge of the claim and of the plaintiff’s claim dismissed, the cases would be sufficiently the infringing party. closely connected. There is an absolute limitation period of 20 years after the Furthermore, third parties can join on either the plaintiff’s cartel ended. or defendant’s side based on section 15(3) of the Dispute Act if According to section 28 of the Limitation Act 1979, the parties they intend to submit their own claim connected to the subject can influence when a claim is time-barred. While the parties matter of the dispute, or if the claim is closely connected to the may not agree to exclude the limitation of a claim completely, original claim of the party they intend to join. After having they may agree to extend the limitation period by three years successfully joined the case, the former third party will be from the date of the agreement if the claim already exists. equipped with the same rights and face the same duties as the However, the limitation period may not be extended longer than party it has joined. Generally, multiple parties on the same side 10 years beyond the date of ordinary limitation. will be considered independent in relation to the other party, but

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6.2 Broadly speaking, how long does a typical breach 8.2 Are lawyers permitted to act on a contingency fee of competition law claim take to bring to trial and final basis? judgment? Is it possible to expedite proceedings? The legally binding Norwegian Bar Association’s Code of Ethics Court proceedings do not follow a standard timeframe. states that a lawyer’s fee cannot be calculated as a percentage or Depending on the complexity of the case and the number of a proportion of the outcome or value of the case. However, instances, the length of a trial can vary between roughly one differentiated fees depending on the outcome or discretionary year in straightforward cases with no appeal, and five years or success fees (e.g. no win, no fee) are allowed. more for complex cases with (multiple) appeal(s). There are no statutory tools that can be used to accelerate court proceedings. 8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many 72 Settlement cases to date?

7.1 Do parties require the permission of the court Litigation may generally be funded by third parties, but we are to discontinue breach of competition law claims (for not aware of any competition law claims where this has been example, if a settlement is reached)? the case.

Not outside of class actions, as described in question 7.2. below. 92 Appeal

7.2 If collective claims, class actions and/or 9.1 Can decisions of the court be appealed? representative actions are permitted, is collective settlement/settlement by the representative body on behalf of the claimants also permitted, and if so on what Decisions by the District Court can be reviewed by the Court of basis? Appeals regarding both its factual and legal findings. A further review by the Supreme Court is subject to procedural limitations on appeal. Settlements in class actions are generally permitted by Norwegian law. Only in opt-out scenarios (see section 35(7) of the Dispute Act) does the settlement require the approval of 102 Leniency the court pursuant to section 35(11)(3) of the Dispute Act. The background for this rule is that claims in opt-out cases often 10.1 Is leniency offered by a national competition have low individual value, meaning that the members of the authority in your jurisdiction? If so, is (a) a successful, class action are not expected to participate actively; they may and (b) an unsuccessful applicant for leniency given even be unaware of the class action. The requirement of a immunity from civil claims? court approval intends to ensure that the members have been informed of the settlement and that its content is satisfactory. Yes, the NCA may grant leniency. Successful or not, leniency applicants are not protected from follow-on litigation. 82 Costs 10.2 Is (a) a successful, and (b) an unsuccessful 8.1 Can the claimant/defendant recover its legal costs applicant for leniency permitted to withhold evidence from the unsuccessful party? disclosed by it when obtaining leniency in any subsequent court proceedings? The general rule in Norwegian civil litigation is that the losing party must reimburse the winning party’s/parties’ necessary Information relating to an admission of guilt submitted by defence costs and attorneys’ fees. Based on the parties’ claims undertakings in applications for leniency or during settlement presented in the oral hearing, the court decides in its verdict if negotiations (regardless of whether they are successful or not) and to what extent the winning party must be compensated for may not be submitted as evidence according to section 22(3) its costs (which is often lower than the claimed amount). If the of the Dispute Act, as well as the statutory duty of confiden- winning party is considered responsible for the case coming to tiality set out in section 27 of the Competition Act. In addi- court (e.g. by refusing a reasonable settlement offer) or if the tion, all parties and their representatives which obtain such court for other reasons finds it reasonable to not impose such an information must keep it confidential (see section 27(a) of the obligation upon the losing party, it may choose not to require the Competition Act). From this, it follows that a leniency applicant defendant to compensate the winning party. may not be required to submit evidence relating to information For class actions, section 35(13)(1) of the Dispute Act allows on admissions of guilt or material covered by section 27(2) of the the court to determine the class representative’s and the legal Competition Act. counsel’s fees and coverage of expenses. Class members in Arguably, the same should apply to information submitted in opt-in actions have to compensate the class representative for a leniency application to the European Commission (see Prop. costs imposed on him for remuneration and refund of disburse- 75 L (2012–2013), clause 8.1.6 and NOU 2012.7 clause 12.1.5). ments to the extent that such liability is a condition for registra- This also includes references to the defendants’ leniency decla- tion. In contrast, class members in opt-out cases do not have to rations or settlement statements in the decision as it is disclosed compensate the class representative (or any other party in the to the parties. action, for that matter).

112 Anticipated Reforms 11.2 What approach has been taken for the implementation of the EU Directive on Antitrust Damages Actions in your jurisdiction? How has the 11.1 For EU Member States, highlight the anticipated Directive been applied by the courts in your jurisdiction? impact of the EU Directive on Antitrust Damages Actions at the national level and any amendments to national procedure that are likely to be required. The EU Directive on Antitrust Damages Actions has not been implemented into Norwegian law. The Directive is currently pending for incorporation in the EEA Agreement. As an EEA Member State, Norway is required by article 7 of the EEA Agreement (which mirrors article 288 of the TFEU) to implement EU Directives into national law. The imple- 11.3 Please identify, with reference to transitional mentation of the Directive on Antitrust Damages Actions will provisions in national implementing legislation, require a wide variety of changes and amendments to different whether the key aspects of the Directive (including Norwegian laws. Scholars have prepared such changes de lege limitation reforms) will apply in your jurisdiction only to infringement decisions post-dating the effective date of ferenda, but no official legislative proposal yet exists. Potential implementation; or, if some other arrangement applies, amendments regard, for example, expressed rules on the avail- please describe it. ability of a follow-on defence, prima facie evidence of a competition law infringement leading to increased prices and other rules on evidence, the extent to which parties are jointly liable So far, no indication on transitional provisions is available. and have recourse claims against each other, the statute of limitation, and the probative value of decisions by other national 11.4 Are there any other proposed reforms in your competition authorities. jurisdiction relating to competition litigation?

Nothing at the time of writing.

Competition Litigation 2021 © Published and reproduced with kind permission by Global Legal Group Ltd, London Advokatfirmaet Thommessen AS 157

Siri Teigum heads Thommessen’s EU/EEA and competition law practice group. She is a seasoned competition expert advising on investigations and compliance, as well as representing clients in cartel litigation. Key areas of expertise include competition law, public procurements, state aid, investigations and compliance and litigation. Siri assists clients with cartel investigations and dispute resolution. She has handled different types of EEA law and competition cases before the European Free Trade Association (EFTA) Surveillance Authority, the EFTA Court, the European Commission, the Court of Justice of the European Union (CJEU) and Norwegian courts, with good outcomes for clients. She also acts as an arbitrator.

Advokatfirmaet Thommessen AS Tel: +47 2311 1121 / +47 9091 2355 Haakon VIIs gate 10 Email: [email protected] NO-0116 Oslo URL: www.thommessen.no Norway

Eivind Vesterkjær is a partner in Thommessen’s EU/EEA and competition law practice group and has extensive experience advising on competition law (including cartel cases), competition compliance and commercial agreements in a variety of sectors and industries, including telecommunications, finance, shipping, life sciences, and consumer retail. Eivind has worked on matters within EU/EEA law and competition law since the EEA Agreement came into force in 1993. Eivind is a member of the Norwegian Bar Association’s expert group on European law and competition law.

Advokatfirmaet Thommessen AS Tel: +47 2311 1123 / +47 9096 6843 Haakon VIIs gate 10 Email: [email protected] NO-0116 Oslo URL: www.thommessen.no Norway

Heidi Jorkjend is a managing associate in Thommessen’s EU/EEA and competition law practice group. Heidi has extensive experience advising on all aspects of competition law, primarily focusing on investigations and litigation (including cartel cases), general compliance and merger control. She has worked in a variety of sectors, including shipping, telecommunications, publishing, foodstuffs and finance.

Advokatfirmaet Thommessen AS Tel: +47 2311 1339 / +47 9848 8329 Haakon VIIs gate 10 Email: [email protected] NO-0116 Oslo URL: www.thommessen.no Norway

Advokatfirmaet Thommessen AS has offices in Oslo, Bergen, Stavanger the courts and the Competition Complaints Board. Thommessen also has and London and is the Norwegian member of Lex Mundi. The firm provides experience with national and international damages cases for both defend- advice to Norwegian and international companies as well as organisations ants and claimants. in the public and private sectors, ranging from SMEs to large multinational www.thommessen.no corporations. Approximately 200 lawyers work at Thommessen today, of whom 17 are specialised in EU/EEA and competition law. The firm has a market-leading competition law practice, and is well known for its handling of major cases pertaining to abuse of dominance and cartel investigations. Thommessen’s EU/EEA and competition law practice acts for major clients across a range of sectors including telecommunications, finance, life sciences, shipping, and foodstuffs. Lawyers regularly assist clients in relation to unannounced inspections, the subsequent investigation phase, statements of objection, and legal challenges of negative decisions before

Competition Litigation 2021 © Published and reproduced with kind permission by Global Legal Group Ltd, London 158 Chapter 20 Spain Spain

Josep Galvez

Maximilian O’Driscoll

Galvez Pascual Ander Garcia

12 General As for sanctioning decisions taken by authorities of other Member States, they are not given the same importance as if they were the national authorities or the European Commission. 1.1 Please identify the scope of claims that may be In this sense, if the authorities of the other Member States make brought in your jurisdiction for breach of competition a decision based on Articles 101 or 102 of the TFEU, a presump- law. tion is established that can be rebutted. On the other hand, if such foreign authorities issue an anticompetitive decision based Anticompetitive behaviour can be sanctioned in Spain through on their legal system, it will have no probative value in Spanish a double body of regulations. On the one hand, at the national territory and follow-on actions may not be brought based on level, we have Articles 1 (collusive behaviour) and 2 (abuse of such decisions. dominant position) of the Defence of Competition Act (“DCA”). In this type of action, plaintiffs are not obliged to prove the On the other hand, we have the Treaty on the Functioning of existence of an infringement or its scope. However, they will the European Union (“TFEU”) in its Articles 101 and 102. have to prove the existence of the damage and its quantification. When faced with an anticompetitive agreement or commer- It is essential to mention that since they base their arguments on cial practice, Spanish judges and courts may apply both the a previous decision certifying the presence of the anticompeti- national regulations and the European Union regulations set out tive activity, follow-on actions can only be directed against the above under Article 3 of Council Regulation (EC) No. 1/2003 addressees of the decisions; that is, against those who have been of 16 December 2002. sanctioned by them. Secondly, there are the so-called “stand-alone actions”. These 1.2 What is the legal basis for bringing an action for actions are considerably more complicated, since the plaintiffs breach of competition law? must prove the existence of the anticompetitive activity as well as the damage suffered and its quantification. As mentioned above, the legal basis is provided by Articles 1 and 2 of the Competition Act and Articles 101 and 102 of the TFEU. 1.3 Is the legal basis for competition law claims These Articles and the corresponding actions, that will now derived from international, national or regional law? be detailed, to act against anticompetitive activities are in turn based on Article 1902 of the Civil Code (“CC”), which imposes A party who has been aggrieved by the existence of anticom- the obligation to compensate for damages caused by the perfor- petitive activity may bring its claim before the Spanish courts mance of unlawful conduct. in different cases: First of all, we have so-called “follow-on actions”. Section 75.1 (i) Where the defendant is domiciled in Spain. of the DCA states that the decision of a competition authority (ii) Where the parties consent to Spanish jurisdiction. is binding on the court hearing the claim arising from the anti- (iii) In the case of contractual obligations, where the obliga- competitive conduct. In this sense, it should be expressed that tions arise or must be fulfilled in Spain. the binding effect extends to all the characteristics of the find- (iv) In non-contractual obligations, where the act or omission ings related to the infringement, such as the facts, the infringing giving rise to the liability arises in Spain. parties, the evidence of their behaviour and the assessment of When deciding whether to sue in Spain or elsewhere, it is the prohibition infringed. However, to be able to carry out this vitally important to know the costs of the proceedings. In type of action, it is necessary for the decision referred to be final. Spain, the general rule is that the losing party must pay lawyers’ In addition to decisions by national bodies, these actions can fees and the corresponding court costs in the proceedings unless also be brought when the European Commission itself decides the court considers that the matter in question has a significant to impose a penalty under Article 15 of Regulation 1/2003. This component of difficulty, in which case each party must bear its has been precisely the case with what is popularly known as the costs, as well as if the claim is only partially upheld or dismissed. Trucks cartel.

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On the other hand, within the Spanish courts, those compe- 1.5 Who has standing to bring an action for breach of tent to hear this type of action based on Articles 1 or 2 of the competition law and what are the available mechanisms Law on the Defence of Competition or Articles 101 or 102 for multiple claimants? For instance, is there a of the TFEU will be the commercial courts. However, it is possibility of collective claims, class actions, actions worth mentioning that through the transposition of Directive by representative bodies or any other form of public 2014/104/EU (the “Damages Directive”), an attempt has been interest litigation? If collective claims or class actions are permitted, are these permitted on an “opt-in” or “opt- made to facilitate both out-of-court settlements and the use of out” basis? alternative dispute resolution mechanisms such as arbitration.

The Spanish jurisdiction is not known to be beneficial for the 1.4 Are there specialist courts in your jurisdiction to imposition of both follow-on and stand-alone actions. This is which competition law cases are assigned? due to the requirement of proof for plaintiffs, which is very difficult to achieve. However, after the transposition of the Damages Both natural and legal persons may claim damages to compen- Directive, this fact has changed. The aim of the transposition sate for anticompetitive activities. It is important to note that was precisely to facilitate this kind of action, by reducing specific the use of an indirect means of proof, such as the purchase requirements laid down in the previous regulation. This has led invoice if it is authentic and no written contract is kept, is suffi- to a considerable increase in the number of cases in court, with cient to prove the claimant’s legal standing. the Trucks cartel being particularly important. However, we Follow-on actions limit claims to the dates on which the cannot forget the Milk cartel, a case that is now arising, where competition authority’s decision finds that illegal activity has companies such as Nestle, Pascual and Danone may be involved occurred, so that if the acquisition was made outside those dates, in claims amounting to one billion euros. whether earlier or later, it will be necessary for the injured party to prove in the proceedings that the anticompetitive practices 1.6 What jurisdictional factors will determine whether a went beyond the dates set out in the decision. court is entitled to take on a competition law claim? Concerning the different types of contracts that may exist in the commercial traffic, it should be mentioned that an action for compensation is not subject to the existence of any specific If we are dealing with a case with a European Union dimension, agreement, but that all are susceptible to compensation. Thus, in which the plaintiffs are domiciled in different Member States, in the judgments relating to the Trucks cartel, payment has been the applicable body of law is Regulation (EU) No. 1215/2012 of awarded to customers who signed contracts for the sale, leasing the European Parliament and of the Council of 12 December or renting of trucks, among others. 2012 on jurisdiction and the recognition and enforcement of However, it should be noted that the transposition of the judgments in civil and commercial matters. Damages Directive did not impose a method on the Member As far as Spanish legislation is concerned, Article 22-bis of States for the pursuit of collective actions under competition law. Organic Law 6/1985 provides, as mentioned in question 1.3, that In general, the Spanish legal system provides for two methods a party who has been aggrieved by the existence of anticompet- of filing class actions. itive activity may bring its claim before the Spanish courts in ■ Firstly, private claims can be brought together in a single different cases: class action when they have the same purpose (Articles ■ Where the defendant is domiciled in Spain. 12 and 72 of the Civil Procedure Act 2000 (“CPA”)). In ■ Where the parties consent to Spanish jurisdiction. the particular case of claims arising from competition Furthermore, outside the scope of the aforementioned Article, law, specific claims arising from the same anticompetitive the jurisdiction of the Spanish courts has also been recognised events could be joined. in the following cases: ■ Secondly, it would be a matter of bringing a class action on ■ In the case of contractual obligations, where the obliga- behalf of the injured parties. In this second case, in which tions arise or must be fulfilled in Spain. a class action is brought directly, it is necessary to distin- ■ In non-contractual obligations where the act or omission guish whether we are dealing with a group of identified or giving rise to the liability arises in Spain. easily identifiable victims or whether the group of victims is not easily recognisable. 1.7 Does your jurisdiction have a reputation for (i) In the first case, legally constituted consumer associa- attracting claimants or, on the contrary, defendant tions may bring collective actions to defend the inter- applications to seize jurisdiction, and if so, why? ests of their members or the interests of consumers and end-users in general. It is also possible for the consumers If we look at the past and compare with countries around us, concerned to join the class action brought by the associ- we can conclude that the number of actions, both follow on and ations at any time, but this must be before the judgment stand alone, is considerably low in Spain, the main cause being is delivered. Also, it is crucial to remember Article 6.7 of the rigour required in the proof. the Consumer Protection Act, which allows a group of However, after the entry into force of the transposition of the consumers who constitute the majority of those harmed European Damages Directive, an increase in cases and quanti- by an infringement to bring a class action on their behalf. ties can be observed, largely due to the changes introduced with (ii) In the second case, only the State Prosecutor and the regard to evidence. consumer associations considered to be “broadly repre- It can, therefore, be seen that, following the change in sentative” can initiate the action in court. However, this the Spanish legal system, cases are increasing considerably. has so far only been attempted once in the context of a However, we are still far from other jurisdictions that are much competition infringement and was finally dismissed as more active in this area. The low cost of the Spanish jurisdic- the association lost the status of “sufficiently represent- tion, a reasonable time period until a first instance ruling is ative” during the procedure. This single case followed issued (from 12 to 18 months), and the few risks that the plain- the European Commission’s decision of 4 July 2008 tiffs bear make the Spanish jurisdiction likely to gain ground in (COMP/38.784) against Telefónica. this area.

1.8 Is the judicial process adversarial or inquisitorial? the substance of the case, to make a provisional and indic- ative judgment in favour of the merits of his claim. ■ Unless the court rules otherwise, the applicant for the interim At this point, it is worth mentioning that the burden of proof measures must provide sufficient security for the damages of the damage sustained lies with the plaintiff, which is why incurred as a result of the adoption of these measures. most of the claims to date have been settled. However, after the The specific precautionary measures that can be taken during entry into force of the transposition of the Damage Directive, the procedure are described in Article 727 of the CPA. However, this burden, although still borne by the plaintiffs, has been this is a non-exhaustive list, which allows for the adoption of reduced. In the first place, it is established that in the case of measures not covered by the very different nature of the various cartels, the damage is presumed to exist because of the statistical procedures. data collected so far, so it is up to the defendants to prove the Among those proposed in the mentioned Article, we can lack of damage caused. Secondly, a duty is imposed to provide highlight: the necessary information by the defendants or third parties ■ preventive custody of goods; concerning the plaintiff so that he can better substantiate his ■ judicial intervention or administration of productive claim and be able to prove the alleged facts. However, a judicial assets; authorisation is required to do so. ■ asset inventory building; and Furthermore, case law has made it clear that in the case of ■ registry records. cartels where information on damages is presumably in the hands of the defendants when submitting expert reports on the damages caused by the sanctioned conduct, the attitude of the 32 Final Remedies defendants cannot be reduced to denying any damage or simply criticising the plaintiff’s expert report; they must actively present 3.1 Please identify the final remedies which may be an expert report that objectively calculates the damage caused. available and describe in each case the tests which In this sense, the new regulation recognises that Spanish judges a court will apply in deciding whether to grant such a remedy. and courts have the competence to establish what the loss is, and can even depart from what any of the parties have said. As can be seen both from the legislative point of view and from In Spain, there are four possible sanctions for anticompetitive the case law, an attempt has been made to facilitate proof, which behaviour: has made Spain rebound in actions relating to competition. ■ Fines. ■ Restitution. 22 Interim Remedies ■ Nullity of conduct. ■ Compensation for damages. Fines can only be imposed by the competition authorities in 2.1 Are interim remedies available in competition law their corresponding sanctioning decision, while compensation cases? to victims is a matter for the courts. Either body may impose the other two sanctions without distinction. Precautionary measures can be adopted both in a judicial proce- It is important to bear in mind that the fine and the compen- dure, in which the injured parties claim their corresponding sation to those affected are totally independent, without the compensation for damages, and in the administrative process payment of a greater or lesser penalty having any importance in itself, in which the authority’s defence body investigates the the subsequent calculation of the corresponding compensation. perpetrator of anticompetitive activity. In the first case, it must be the parties who request precautionary measures. In the second case, the administrative body is 3.2 If damages are an available remedy, on what bases can a court determine the amount of the award? Are given the power to request precautionary measures ex officio, and exemplary damages available? Are there any examples can impose fines of up to 12,000 euros per day the party does of damages being awarded by the courts in competition not comply with the precautionary measures. cases which are in the public domain? If so, please identify any notable examples and provide details of the amounts awarded. 2.2 What interim remedies are available and under what conditions will a court grant them? According to Article 72 of the Law on Competition, the injured According to Article 726 of the CPA, judges and courts may parties, whether natural or legal persons, have the right to claim grant precautionary measures against the property and rights of from the offender and obtain full compensation. The term “full defendants provided that they meet the following requirements: compensation” refers to consequential damage, loss of profit ■ Their ultimate goal is only to ensure the effectiveness of a and payment of interest. However, this expression may in no future judgment. way imply overcompensation for the imposition of punitive or ■ There is no other measure to ensure the purpose above- other penalties. mentioned that is less harmful to the defendant. As regards the method of calculation, there is no method in In addition to the above for preventive measures to be taken the Spanish legal system for calculating damages, and the parties by the judicial authority, the three requirements set out in Article themselves must prove the damage caused. However, it should 728 of the CPA must be met: be noted that judges and courts are empowered to deviate from ■ Interim measures shall be taken only if it is proved that the estimates provided by the parties, provided that they do so failure to do so will prevent the full effect of a future with good reason. More specifically, if after proving that the judgment. injured party has suffered damage, he is not able to determine its ■ The applicant for precautionary measures must also submit amount, Article 76 of the Law on Competition in its second para- with his application the data, arguments and documentary graph empowers the judges and courts to estimate the damage justifications that will lead the court, without prejudging suffered. Also, this same Article allows the courts to request

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the competition authorities to inform them of the criteria that conduct. In this sense, it should be expressed that the binding could be used to determine the damage caused. As an example, effect extends to all the characteristics of the findings related to we can cite the Trucks cartel, where many of the judgments base the infringement, such as the facts, the infringing parties, the their argument for calculating the damage on the Oxera report evidence of their behaviour and the assessment of the prohi- and “The Practical Guide to Quantifying Damage in Claims for bition infringed. However, to be able to carry out this type of Non-Compliance” set out by the Spanish National Commission action, it is necessary for the decision to be final. of Markets and Competition (“CNMC”). In addition to decisions of national bodies, these actions can also be brought by the European Commission itself, when imposing a penalty under Article 15 of Regulation 1/2003. 3.3 Are fines imposed by competition authorities and/ or any redress scheme already offered to those harmed As for sanctioning decisions taken by authorities of other by the infringement taken into account by the court when Member States, they are not given the same importance as if calculating the award? they were the Spanish national authority or the European Commission. In this sense, if an authority of another Member State makes a decision based on Article 101 or 102 of the TFEU, The sanctions imposed by the competition authorities do not a presumption is established that can be rebutted. On the other affect the calculation of compensation by the judges and courts hand, if such foreign authority issues an anticompetitive deci- when compensating the damages caused to the injured parties. sion based on its legal system, it will have no probative value However, as mentioned, these sanctions are taken into account in Spanish territory and follow-on actions may not be brought in the follow-on actions, where the plaintiff does not have to based on such decision. prove the existence of the action that caused the damage suffered However, with regard to stand-alone actions these presump- because it considers that such action has been previously proven. tions are not important, since the plaintiffs must prove the exis- In this regard, mention should be made of Article 64.3.c of tence of the anticompetitive activity. the Spanish Competition Act 2007 (“SCA”), which states that if acts have been carried out to repair the damage, the penalty may be reduced; however, this Article applies to the competition 4.4 Are there limitations on the forms of evidence authorities that are sanctioning the various criminal activities, which may be put forward by either side? Is expert not to the judges and courts that are deciding on compensation. evidence accepted by the courts?

42 Evidence There is no limitation on the forms of evidence. Article 299 of the Code of Civil Procedure establishes what evidence may 4.1 What is the standard of proof? be used during proceedings, although the list is not exhaustive: ■ Interrogation of the parties. ■ Public and private documents. For a lawsuit to be successful, it must prove the following: ■ Expert opinions: experts are required to attend the hearing ■ The existence of an activity or omission contrary to under penalty of a fine of 180 to 600 euros. competition law. ■ Judicial recognition. ■ The existence of negligence. ■ Interrogation of witnesses: witnesses are required to attend ■ Quantification of the damage suffered. the hearing under penalty of a fine of 180 to 600 euros. ■ A link between the damage and the activity. ■ Means of reproducing words, sounds and images. Where the claim concerns cartels, the existence of the damage As for the calculation of the damage suffered, an expert can will be presumed unless there is proof to the contrary; the accu- only make the calculation of the damage suffered using their racy of the damage produced must be specified. scientific, technical and practical knowledge of economics and industrial organisation. 4.2 Who bears the evidential burden of proof? The Spanish courts have already ruled on this point on many occasions, especially in the case of cartels. They have concluded The proof corresponds in any case to whoever claims it, that there is an “impossibility of making a perfect reproduc- according to Article 76 of the SCA; however, the level of proof tion of what the situation would have been if the unlawful will be different depending on whether the action is follow on conduct had not taken place, which is a problem common to or stand alone. all damage assessments consisting of projections of what would ■ In stand-alone actions, the existence of an infringement of have happened if it had not taken place”. However, case law competition law must be proved. does require the expert report on which the claim is based to ■ In both actions, the defendant has to prove the existence make an estimate of the damage suffered based on reasonable and quantification of the damage, as well as: and technically sound assumptions and to use correct and not ■ the liability of the infringer; and erroneous data. ■ the causal relationship between the unlawful activity When it comes to cartels, Spanish case law has made it clear and the damage caused. that cartels must actively collaborate in the quantification of damage. In this sense, it is worth mentioning the Supreme Court’s Decision 651/2013, in which it said that: “in a case (…), 4.3 Do evidential presumptions play an important where the defendant has engaged in unlawful conduct gener- role in damages claims, including any presumptions ating damage, it can be generally stated that it is not sufficient of loss in cartel cases that have been applied in your that the expert’s report provided by the person responsible for jurisdiction? the damage is limited to questioning the accuracy and precision of the quantification made by the expert’s report carried out at As explained above, in so-called follow-on actions, the SCA the request of the injured party, but it must justify an alternative states that the decision of a competition authority is binding quantification that is better founded (…).” on the court hearing the claim arising from the anticompetitive

Therefore, not only will cartels be required to provide the party to show the evidence that they may have at the request of information necessary to calculate the damage, but they will one of the parties, when, due to reasoned facts, it can be proven also have to assess the damage caused without being able to that competition law has been violated. The Article itself simply criticise the plaintiff’s calculation or state that there is shows what kind of information they may have to share, such no damage. as the prices applied successively to the products and services In the specific case of the Trucks cartel, it can be seen that concerned, from the first transmission to making them avail- the expert reports of both parties oppose each other, with the able to consumers or end-users. The disclosure of evidence in plaintiff’s reports not being very concise and limiting them- possession of any of the parties will have to be ordered by the selves to explaining the academic literature. At the same time, judge. The judge will have to measure the convenience of such the defendants’ export reports are dedicated to criticising the disclosure by analysing different variables such as the evidence plaintiffs’ reports and denying any damage. For this reason, the held in advance by the party requesting it, the cost of such disclo- courts are not accepting either expert report in the vast majority sure or the importance that such information may have for the of cases. It is also for this reason that it is the judges and courts party who is to disclose it. At the same time, it is established that themselves who, following a more than consolidated line of juris- in any case, the cost of the exhibition of the evidence must be prudence, are taking charge of estimating the damage suffered. charged to the party requesting the exhibition, duty is imposed In addition to the overcharge paid, the compensation also on all parties involved in the process, and that the judicial body covers the interest generated. This right to interest has been must ensure that the information exhibited is kept confidential. specified in that it must be accounted for from the moment the Also, to build a substantial claim, a request for information damage is suffered, generally at the time of purchase, and that is permitted to be made before the filing of the lawsuit, with the interest must be the legal interest on the money established the claim itself, or during the proceedings. However, for the in the General State Budget. The possibility of the capitalisa- court to allow this action, it will be necessary for the claimant to tion of interest so that it, in turn, generates interest, has been have sufficient evidence that such information is essential to the raised in various judgments, but there is still no position on this proceedings, as well as to assess the cost of disclosure of such information, which, in any case, must be paid by the claimant. issue. On the other hand, in follow-on actions, compensation To ensure compliance with this new regulation, a penalty has can only be the overprice paid for the existence of competitive been imposed for non-compliance that may range from 600 to conduct and interests. Still, compensation cannot be extended 60,000 euros per day of delay, payment of legal costs, including to concepts such as financial costs, maintenance and even taxes. criminal prosecution for judicial disobedience. In addition to the above, the court can conclude that the conclusions that were 4.5 What are the rules on disclosure? What, if any, sought to be proven with the undisclosed information were true, documents can be obtained: (i) before proceedings have following the theory of tacit confession. begun; (ii) during proceedings from the other party; and (iii) from third parties (including competition authorities)? 4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible? Taking into account how difficult it can be for plaintiffs to prove the existence of anticompetitive activities, the Spanish legal system, after the transposition of the European Damages There is an obligation for witnesses to come forward, otherwise Directive, has introduced a legal tool to facilitate this fact. It is they may face penalties ranging from 180 to 600 euros (Article 292 of the CPA), although in practice these sanctions are not none other than the possibility of requesting and obliging the very often imposed. delivery of relevant information that may be in the hands of the Once a witness has been called to testify, the other party defendant, any third party or even a competition authority. may also ask him/her any questions he/she deems appropriate, This is so because, as it is a claim for damages, it is the plain- without having to go in the same direction as the questions tiff himself who has to bear the burden of proof; although, as asked by the party who called him/her to testify. mentioned above, the evidence is different if we are dealing with However, although there is no limit to cross-examination, the follow-on or stand-alone actions. Specifically, the following is judge or court will reject questions that: established: ■ Are irrelevant. ■ In stand-alone actions, the claimant must prove the exist- ■ Are not known to the witness. ence of an infringement of competition law. ■ Contain assessment. ■ In both actions, the defendant must prove the existence and quantification of the damage. ■ The claimant must prove the liability of the infringer. 4.7 Does an infringement decision by a national or ■ The claimant must prove the causal relationship between international competition authority, or an authority from another country, have probative value as to liability the unlawful activity and the damage caused. and enable claimants to pursue follow-on claims for Until the moment of transposition, the tools that the Spanish damages in the courts? legal system granted were considerably reduced in this aspect. With the new regulation introduced by the European Damages Directive, the plaintiffs now have more options. The As mentioned above, when the decision has been taken by a new right granted to plaintiffs allows them to request assistance national authority or by the European Commission, its conclusions will be binding in the processes carried out in the Spanish from the court so that the court can impose a duty to provide the territory, as the facts involved in such decisions are irrefutable. necessary information to prove the circumstances mentioned In addition, where the decision has been taken by a compe- above. This can range from written reports to the participation tition authority of another Member State in application of of witnesses during the trial. Community law, a presumption will be established that the Royal Decree-Law 9/2017 modified the Law on Civil defendant may reverse the decision. On the other hand, if the Procedure on some aspects related to evidence. In this regard, said authority of another Member State bases its decision on its it is worth mentioning Article 283-bis a), which states that the own national law, it will not have any effect on the legal proceed- judge or court may request the plaintiff, defendant or a third ings taking place in Spain.

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4.8 How would courts deal with issues of commercial The latter provision is particularly relevant since it provides confidentiality that may arise in competition proceedings? that the anticompetitive prohibitions referred to in the same Article shall be permitted, provided that they contribute to improving manufacturing, commercialisation or to promoting As mentioned above, the court may order the release of confi- technical or economic progress, without any prior decision to dential information to the other party; what happens in these that effect being required. cases must be analysed. However, in addition to the above, three requirements must To this end, Article 283a b) of the Code of Civil Procedure be met: was introduced as a result of the transposition of the European ■ Firstly, consumers must be able to participate equitably in Damages Directive. This Article again stresses that such confi- these benefits. dential information may be ordered by the court to be handed ■ Secondly, parties cannot demand additional requirements over to the other party. Still, at the same time, it imposes several from companies in the sector to achieve this goal. conditions. ■ Thirdly, that it does not enable the companies involved to The Article provides that the fact that the information is eliminate competition. confidential is not sufficient grounds for the defence to deny This defence cannot be brought against follow-on actions, as the other party access to it, although the other party must have there is a prior decision by a competition authority sanctioning demonstrated a certain presumption of damage. the anticompetitive activity. Therefore, this defence can only be In these cases, the Article empowers the court to take all used in stand-alone actions. measures it deems appropriate to ensure the confidentiality of the information. By way of example, but which is by no means a closed list, the fifth precept of the Article sets out several meas- 5.2 Is the “passing on defence” available and do ures that may be ordered by judges and courts: indirect purchasers have legal standing to sue? (1) Dissociate sensitive passages in documents or other media. (2) Conduct hearings in camera or restrict access to them. The new Article 78 of the SCA crystallises the theory of passing (3) Limit the persons permitted to examine the evidence. on. In this sense, it is worth mentioning that there will be no (4) Commission experts to prepare summaries of information damage for the plaintiff in those situations where he has passed in a non-confidential form or in any other non-confidential on the damage to his clients, and therefore there will be no way. right to compensation for the extra cost paid. That is, when the (5) Draft a non-confidential version of a court decision in damage suffered due to the anticompetitive activity is transferred which passages containing confidential data are deleted. to its customers, it will not be entitled to compensation. The (6) Limit access to specific sources of evidence to representa- Court of the European Union has already analysed this theory in tives, legal defenders of the parties and experts subject to Judgment 651/13, and it has also been examined at the national confidentiality obligations. level. Especially relevant is the Supreme Court’s ruling on the Sugar cartel, concluding that it is not sufficient to prove that the 4.9 Is there provision for the national competition direct purchaser has also increased the price of its products. It authority in your jurisdiction (and/or the European is necessary to prove that by increasing the price charged to its Commission, in EU Member States) to express its customers, it has managed to pass on the damage suffered by views or analysis in relation to the case? If so, how the price increase resulting from the cartel’s action. If the price common is it for the competition authority (or European increase has not succeeded in passing on all that damage because Commission) to do so? there has been a decrease in sales, the passing-on defence cannot be estimated or cannot be made in its entirety. Article 16 of the SCA allows national bodies or those of the The proof of the transfer of the damage caused as a result autonomous communities for the defence of competition to of the existence of illegal activity is the duty of the defendant. collaborate with judicial bodies, both ex officio and at the request However, the legal system grants him the power to demand the of the latter, to give their informed opinion of competition law necessary information from the plaintiff or any third party. at both the national and international levels. However, in those cases where the defendants manage In practice, there are certain situations in which this opinion to prove that their direct purchasers passed on the damage is given, although they are not numerous. suffered to their customers, while it is true that their liability For example, the CNMC participated in the Wanadoo vs towards their direct customers disappears, account must be Telefónica case in 2007 as well as in the Ryanair vs AENA case, taken of Article 72, which provides that any person who has and has given its opinion in cases in other sectors such as those suffered damage as a result of infringement of competition law relating to oil, franchises or credit cards. shall be entitled to claim full compensation from the infringer. Therefore, even if they can get rid of their responsibility towards 52 Justification/Defences the direct buyers, they will not be able to get rid of all of their indirect responsibility. In this sense, Article 79 of the SCA establishes a presumption of damage to the indirect purchaser 5.1 Is a defence of justification/public interest in the following circumstances: available? ■ The defendant has violated competition law. ■ This unlawful act had the direct consequence that the The first of the defences that parties responsible for anticom- direct purchaser had to bear a surcharge. petitive attitudes can enjoy is Article 6 of the Competition Law. ■ The indirect purchaser acquires the goods from these This Article grants the National Competition Commission the direct purchasers. power not to apply Articles 1 or 2 of the same rule to a specific The Article itself states that this presumption can be over- agreement or commercial practice, either when these agree- come, but it is up to the defendant to prove that the overcharge ments or practices do not fit into the cases outlined in these paid by the direct purchaser is not passed on to the indirect Articles or when the assumptions of Article 1.3 are met. purchaser.

Trucks cartel are not their subsidiaries, which have not been directly sanctioned To examine what may be the most effective allegation made by by the Commission through a follow-on action, and they can a defendant, we will analyse the results achieved so far in the only be directed against those subsidiaries by means of a stand- Spanish courts in the case of the Trucks cartel. According to alone action. In this sense, the Provincial Court of Barcelona judiciary sources, 166 judgments have been handed down at first submitted a preliminary question to the CJEU that has not yet instance and 24 on appeal. Of the 190 resolutions passed, 141 been answered; but both the first and second instance judgments have been upheld while 49 have been rejected. point in this direction. Claims for damages caused by the Trucks cartel are actions seeking compensation for non-contractual damage caused by an 5.3 Are defendants able to join other cartel participants infringement of Article 101 of the TFEU under Article 1902 to the claim as co-defendants? If so, on what basis may of the CC. Of the decisions given to date, Article 1902 of the they be joined? CC cannot be interpreted in the context of proceedings for damages caused by the cartel of truck manufacturers following According to Article 13 of the Code of Civil Procedure, any the Damages Directive. However, it should be mentioned that person with a legitimate interest may be a party to an open proce- the Provincial Courts of Valencia, Pontevedra and Barcelona dure and may join in at any time. Once the court has issued an found sufficient grounds to indirectly apply some of the rules of order in which it considers that the applicant has a sufficient the Damages Directive, insofar as they consolidate a reiterated legitimate interest, he becomes a party to the proceedings with jurisprudence of the CJEU that must be followed in the inter- all their effects; however, the procedures are not retroactive. pretation of our law. Defendants may, therefore, be parties to proceedings in which If we continue to analyse the judgments, there are two main they are not directly sued, either from the beginning of or during reasons why the lawsuits are being rejected. Firstly, there is the the proceedings, provided that they prove the existence of the said prescription or time limitation, this being the cause of rejection legitimate interest, which in the case of cartels will be undisputed. on 13 occasions and which will be analysed in the next point. Secondly, there is the lack of passive legitimation, that is, who can be sued; this was the cause of 19 rejections. Passive legitima- 62 Timing tion must be determined taking into account which is the action that the plaintiff has carried out. 6.1 Is there a limitation period for bringing a claim for On the one hand, there are actions known as follow on breach of competition law, and if so how long is it and (Article 75 of the SCA), in which the plaintiffs exercise an action when does it start to run? for compensation with the peculiarity that they invoke the binding nature of a previous firm administrative decision, and According to Article 74.1 of Law 15/2007 on the Defence of it is for this reason that they are not obliged to prove the exist- Competition, the time limit for taking legal action against acts that ence of infringement or its scope. However, they will have to harm competition is five years. The regulation that is currently prove the existence of the damage and its quantification, and the in force was introduced by Royal Decree-Law 9/2017 of 26 May, judges and courts can even separate themselves from specific which aims to transpose European Union directives in the finan- facts that are proven in the final sanctioning resolution if they cial, commercial and health fields, and on the posting of workers. have reasons to do so and it is optimally motivated. In this regard, it should be noted that the first additional provi- However, for this action to be carried out, the companies sion establishes that the modification on the limitation period against which the action is brought must be the addressees of will not have retroactive effect. Therefore, we will proceed to such resolution. analyse what the limitation period was before the transposition It should be recalled that, in certain circumstances, a legal of the directive. Before the transposition, there was no specific person who is not the author of an infringement of competition limitation period for actions against competition law infringe- law may nevertheless be punished for the infringing conduct of ments, which is why Article 1968.2 of the CC, which established a another legal person if those two persons form part of the same one-year limitation period, applied. This Article refers to Article economic entity and thus constitute the undertaking which has 1902 of the same code which states that “whoever by action or infringed Article 81 of the EC Treaty. This means that there is omission causes damage to another, intervening negligence or a communication of liability in companies that create a group. fault, is obliged to repair the damage caused”. However, this communication only operates in the ascending Also, the timing of the beginning of the limitation period has line; that is, when it is the subsidiary that carries out the illicit been changed; while in the previous regulation, Article 1968.2 activity, the parent company may have to respond. It does not stated that the period begins to run from the time the injured operate when it is the parent that has been convicted, and the party became aware of it. subsidiary is sued for an act that is attributed to its parent. Nowadays, the limitation period begins from the moment the If what is desired is to exercise an action without basing infringement no longer exists, and the aggrieved party is aware its argument on an infringement already proven in previous of the following aspects: proceedings – that is, if what is desired is a “stand-alone action” ■ What the infringement is that constitutes the unlawful act. – in this case, the demand should not be addressed exclusively ■ The amount of the damage produced by such action. to the addressees of the decision issued previously by a compe- ■ Who the offender is. tition authority. However, they should not only try to prove its In this respect, it should be mentioned that the beginning of quantification and existence of the damage, but also determine the period, where there is a decision by a competition authority the presence of the infringement and its scope. Therefore, while in advance, has been much discussed in Spain. Some argue in follow-on actions only the addressees of the decision have that the deadline should begin from the date the competition standing, in stand-alone actions, any legal person that has acted authority’s press release was published, while others contend against competition law rules can be sued. that it should start from the date the full decision is issued. The In this case, the claims directed against the Trucks cartel are current case where this fact has been discussed is that of the follow on, so they must be directed against the companies to which Trucks cartel, where the courts have concluded that the second the European Commission’s decision is addressed. The applicants of these options should be accepted.

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As regards the interruption of the limitation period, the party of the agreement reached, this agreement not being Article mentioned above indicates two different methods. On enforceable against their will. the one hand, the limitation period will be interrupted for all Article 77 of the SCA, which is the transposition of Article 19 injured parties when a competition authority either initiates an of the Damages Directive, crystallises this need for acceptance investigation or a sanctioning process for the infringement that in extra-judicial agreements. has generated the damage. In this case, the limitation period is interrupted until one year after the authority’s decision. In the 82 Costs second case, the period will also be considered interrupted, but only for the parties involved, when an out-of-court settlement process has been initiated for the damages caused. 8.1 Can the claimant/defendant recover its legal costs from the unsuccessful party?

6.2 Broadly speaking, how long does a typical breach of competition law claim take to bring to trial and final It is important to note that the costs associated with bringing judgment? Is it possible to expedite proceedings? legal proceedings in Spain are substantially lower than in other European jurisdictions, such as France, Germany, the Netherlands and the UK. In Spain, there is no maximum or minimum timeframe for this Concerning the recovery of legal costs, the Spanish courts type of action, and such timeframe will depend on factors as uphold the principle of criterio del vencimiento, i.e. the losing party diverse as the experience of the court in the matter in question, bears both parties’ costs. There are two exceptions to this rule: the workload of the court and the complexity of the case. (i) the case raises serious doubts as regards the facts or the According to statistics, the timeframe for stand-alone actions application of the relevant law; and usually ranges between 12 to 18 months, while follow-on actions generally last around 18 months. In Spain, first instance deci- (ii) the losing party’s pleas are not dismissed. sions can be appealed in the second instance and then in the However, it should be mentioned that this second option does Supreme Court; as such decisions can even reach the European not apply if the losing party litigates impetuously. Union Court, the procedure can be considerably lengthened. The abovementioned test of defeat also applies to antitrust However, it is essential to note that in follow-on actions, proceedings concerning requests for disclosure of evidence. the execution of the first instance ruling is allowed, even if the However, in this case, irrespective of the outcome of the case, procedure continues in higher instances. any party may be ordered to pay the costs of the proceedings if it: 72 Settlement (a) Does not comply with the request for disclosure of evidence. (b) Destroys the relevant evidence. 7.1 Do parties require the permission of the court (c) Does not comply with the requirements for the protection to discontinue breach of competition law claims (for example, if a settlement is reached)? of confidential information. (d) Contravenes the limits on the use of evidence set out in the Consumer Protection Act. Articles 19 to 22 of the CPA outline the circumstances in which Article 241 of the CPA construes the term “legal costs” as parties can dispose of competition law proceedings: including, inter alia, legal representation fees, court agent fees, ■ the parties elect to settle the dispute through mediation or experts’ fees and judicial fees. arbitration (Article 19); Costs are usually calculated by reference to the fee guidelines ■ the claimant waives the action (Article 20); provided by the Bar Association of the province where the case ■ the defendant accepts the claimant’s pleas (Article 21); and ■ the parties settle the claim out of court (Article 22). is being heard. These guidelines provide cost estimates based The permission of the court is not required before parties on the size of the claim. Recently, however, the Supreme Court can dispose of proceedings under Articles 19 to 22 of the CPA has rejected the automatic application of these guidelines, and unless the withdrawal of the claim is legally inadmissible. Such has instead opted to assess costs by reference to the complexity circumstances are infrequent. of the case and hours worked. The losing party can be ordered The CPA does not govern class actions. Therefore, a collective to pay up to one-third of the cost of the proceedings, but this settlement requires the consent of each party to the proceedings. amount may be reduced if the claimant litigates impetuously. Please note that Article 77 of the SCA incorporates Article 19 of the Damages Directive as regards the effect of settlements on 8.2 Are lawyers permitted to act on a contingency fee subsequent actions for damages. Paragraphs 1 and 2 of Article basis? 19 of the Damages Directive provide that: “… following a consensual settlement, the claim of the injured Historically, this kind of agreement has not been permitted in settling party is reduced by the settling co-infringer’s share of the harm that the infringement of competition law inflicted upon the Spanish jurisdiction. It is worth mentioning that Article the injured party… Any remaining claim of the injured settling 16 of the Code of Ethics for Lawyers prohibited the agreement party shall be exercised only against non-settling co-infringers.” of litigation fees when it stated that “litigation fees in the strict sense, which are not included in the concept of professional fees, are prohibited”. 7.2 If collective claims, class actions and/or However, the Supreme Court’s Ruling 5837/2005 of 4 representative actions are permitted, is collective November 2008 considered that this prohibition was against settlement/settlement by the representative body on behalf of the claimants also permitted, and if so on what competition, so today this kind of agreement is valid. basis? Furthermore, it should be noted that the number of cases in which this fee basis has been applied is increasing considerably. Spanish regulations do not regulate collective settlement, which means that there must be individual acceptance by each injured

8.3 Is third party funding of competition law claims ■ Not to have destroyed evidence related to the application permitted? If so, has this option been used in many for exemption or to have disclosed, directly or indirectly, cases to date? to third parties other than the European Commission or other competition authorities its intention to submit this Third-party funding is permitted in Spain; however, it should application or its contents. be mentioned that in this aspect Spain is quite behind countries ■ Not to have taken steps to coerce other undertakings to in our environment, such as Germany and France, and quite participate in the infringement. behind countries like the United Kingdom. Finally, this exemption granted to a company also extends to In spite of this, the market consensus is that after the entry managers who could be held personally liable for the illegal act, into force of the Damages Directive, these funds will become as long as they cooperate with the competent authority. more common in Spain as regulation in this area improves. On the other hand, for Article 66 of the SCA to apply, it is necessary to: ■ provide evidence of the alleged infringement which 92 Appeal provides significant added value; and ■ meet the requirements set out in Article 65.2 (a), (b) and (c). 9.1 Can decisions of the court be appealed? It is important to mention that even if the administrative fine is forgiven, the company remains responsible for the damages caused Decisions of the mercantile courts can be appealed to the by the illegal act to its consumers. In this regard, Article 73 of the provincial courts of the same jurisdiction, and decisions of the SCA establishes the extent to which these companies are liable: provincial courts can be appealed to the Supreme Court. (a) to their direct or indirect purchasers or suppliers; and Decisions of the mercantile courts can be appealed provided (b) to other injured parties, only if full compensation cannot that the appellant has suffered loss and that that loss is equal to be obtained from the other undertakings which were or higher than 3,000 euros. Appeals before provincial courts involved in the same infringement of competition law. allow for a fresh examination of the case, provided that all the same issues are raised. 10.2 Is (a) a successful, and (b) an unsuccessful On the other hand, decisions of the provincial courts can only applicant for leniency permitted to withhold evidence be appealed in exceptional circumstances. Such appeals, also disclosed by it when obtaining leniency in any known as cassation appeals, can only be lodged if: subsequent court proceedings? (a) the case in question concerns the protection of fundamental rights; Article 283-bis (i) in its sixth precept states that at no time can (b) the quantum being claimed is higher than 600,000 euros; the court order a party or third party to produce statements and under a leniency programme. It is important to note that the (c) the decision subject to appeal has “cassational interest”. SCA never differentiates between granted and unsatisfactory A case is of cassational interest if it contradicts the case law leniency applications, so courts must treat them equally. of the provincial courts or Supreme Court, or if it involves the application of laws that have been in force for less than five 112 Anticipated Reforms years, and the Supreme Court is yet to hand down a decision on those laws. 11.1 For EU Member States, highlight the anticipated Decisions relating to procedural violations can be appealed in impact of the EU Directive on Antitrust Damages Actions extraordinary circumstances where there is a: at the national level and any amendments to national (a) breach of the rules on functional jurisdiction and procedure that are likely to be required. competence; (b) breach of procedural rules; Antitrust litigation in Spain has grown substantially since (c) breach of legal regulations safeguarding the proceedings, the implementation of the Damages Directive in May 2017. where such a breach may have compromised the outcome Following the decision of the European Commission on 19 of the case; or July 2016 (Case AT.39824 – Trucks), the most significant anti- (d) infringement of fundamental rights. trust actions of late in Spain have been filed in connection with the Trucks cartel. Nonetheless, legal proceedings relating to 102 Leniency other antitrust infringements have also been brought in Spain in recent years. For example, numerous antitrust actions 10.1 Is leniency offered by a national competition have been brought against the Envelopes cartel, Automobiles authority in your jurisdiction? If so, is (a) a successful, Manufacturer’s cartel and Decennial Insurance cartel. (See and (b) an unsuccessful applicant for leniency given Case S/0316/10, Sobres de Papel, Case S/0482/13, Fabricantes de immunity from civil claims? Automóviles, and Case S/0037/08, Compañías Seguro Decenal.) Unfortunately, recent decisions relating to the types of anti- Articles 65 and 66 of the SCA provide that the CNMC may grant trust cases mentioned above are inconsistent and often contra- both a waiver of the fine and a reduction of it. dictory. The homogeneity of these decisions is, however, set to For the exemption of Article 65 to apply, it is necessary to improve as more and more antitrust cases conclude in Spain. be the first company to provide information that the entity considers relevant in respect of a cartel. However, Article 65 11.2 What approach has been taken for the sets out other requirements that must be met, which are: implementation of the EU Directive on Antitrust ■ To cooperate fully, continuously and diligently with the Damages Actions in your jurisdiction? How has the National Competition Commission. Directive been applied by the courts in your jurisdiction? ■ To cease participation in the alleged infringement at the time it provides the evidence. The transposition of the Damages Directive was not carried

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out in time in Spain. The last day for its transposition was 26 It must be said that the first transitional provision of Royal December 2016; however, its approval took place on 26 May Decree 9/2017 makes it clear that both its third article amending 2017 through Royal Decree 9/2017. the SCA, and Article 4 amending the CPA, have no retroactive This Decree modified both the SCA and CPA. In the former, effect. it introduced substantive rules of jurisdiction, while in the latter Situations where both the illegal activity and the decision of a new title was introduced establishing new procedural rules of the competition authority are followed both before and after exclusive application to competition procedures. the entry into force of the Royal Decree do not generate any As for enforcement by the courts, the biggest competition discussion. case to date has been the Trucks cartel, although it is true that A problem arises when the decision is subsequent to the Royal there have been others, such as the Envelopes cartel and the Decree but the anticompetitive activity is prior; such cases will Milk cartel. have to be resolved by the courts.

11.3 Please identify, with reference to transitional 11.4 Are there any other proposed reforms in your provisions in national implementing legislation, jurisdiction relating to competition litigation? whether the key aspects of the Directive (including limitation reforms) will apply in your jurisdiction only to infringement decisions post-dating the effective date of No reforms to antitrust litigation in Spain are currently antici- implementation; or, if some other arrangement applies, pated as both the CPA and SCA were recently modified by RDL please describe it. 9/2017, which transposed the Damages Directive into Spanish law. Although the transposition is applicable from the moment of its publication in the Boletín Oficial del Estado (“BOE”, the official gazette of Spain), there have been quite a few doubts about its retroactivity.

Josep Galvez is a Former Senior Judge in commercial and civil cases in Spain, the Managing Partner of the Firm Galvez Pascual (Barcelona), and a member of the Del Canto Chambers (London). With more than 20 years of experience in cross-border litigation and international arbitration matters in a wide range of industries, Josep was awarded as a leading Arbitration and Mediation Lawyer in Spain by Best Lawyers© in 2020. He has extensive experience in commercial, civil and banking & finance dispute proceedings with a focus on M&A and corporate litigation, both as counsel and as arbitrator. Josep advises clients on trial and out-of-court disputes and aids in obtaining finance for litigation and arbitration procedures from globally known Third-Party Litigation Funders.

Galvez Pascual Tel: +34 93 414 70 32 Calle Muntaner 292 Email: [email protected] 08021 Barcelona URL: www.galvezpascual.com Spain

Maximilian O’Driscoll works as a paralegal at Galvez Pascual. He has four years’ experience working in major commercial litigation and international arbitration cases at several leading US law firms, including Quinn Emanuel Urquhart & Sullivan LLP, White & Case LLP and Jenner & Block LLP. Max has assisted with follow-on and stand-alone competition law claims in the English High Court and Competition Appeal Tribunal, including Walter Hugh Merricks CBE v Mastercard Incorporated and Others, the largest claim in UK legal history and the first consumer-wide collective action to be brought in the UK.

Galvez Pascual Tel: +34 93 414 70 32 Calle Muntaner 292 Email: [email protected] 08021 Barcelona URL: www.galvezpascual.com Spain

Ander Garcia is currently working as a paralegal at Galvez Pascual before enrolling on a Master’s degree course in Access to Law Profession and Business Law. Ander is a graduate in Business Administration and Management and Law from the University of Deusto, Spain. With experience in the tax and commercial field, Ander has a clear vocation in the international sphere and has a special interest in competition law and commercial contracts.

Galvez Pascual Tel: +34 93 414 70 32 Calle Muntaner 292 Email: [email protected] 08021 Barcelona URL: www.galvezpascual.com Spain

Galvez Pascual is a business litigation and arbitration boutique devoted to the resolution of complex cases and international disputes, representing clients or assisting other firms’ practices in their litigation or arbitration work. Our client base is highly diversified, ranging from multinational, foreign and Spanish corporations, through mercantile and investment banks and hedge funds to international organisations. Also, major international law firms, including foreign firms with Spanish offices that have no court practice, regularly ask us to defend the interests of their clients before the Spanish and EU Courts. Galvez Pascual has its head office based in Barcelona and counts offices in Madrid and London, along with separate agreements with legal firms in most principal cities, which permits worldwide co-operation. www.galvezpascual.com

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USA USA

Todd M. Stenerson

David A. Higbee

Shearman & Sterling LLP Rachel E. Mossman

Sections 4 and 16 of the Clayton Act grant private parties who 12 General have been injured under the competition laws the right to bring civil claims against the violators for damages and injunctive 1.1 Please identify the scope of claims that may be relief, respectively. 15 U.S.C. §§ 15, 26. brought in your jurisdiction for breach of competition Section 7 of the Clayton Act (15 U.S.C. § 18) governs mergers, law. acquisitions, and joint ventures and prohibits such transactions where “the effect of such acquisition may be substantially to The United States has both federal and state competition laws. lessen competition, or tend to create a monopoly”. Section 7 is Under the federal antitrust laws, the government, through the primarily enforced by the DOJ and the FTC, though states attor- Department of Justice (DOJ), brings criminal claims. The DOJ, neys general and private parties may enforce it under Sections 4 the Federal Trade Commission (FTC), and private plaintiffs can and 16 of the Clayton Act. 15 U.S.C. §§ 15(c), 26. bring civil claims. State antitrust laws vary. Federal antitrust law governs both joint and unilateral 1.3 Is the legal basis for competition law claims behaviour. derived from international, national or regional law? It prohibits multi-firm conduct and “contract[s], combination[s], or conspirac[ies]” that unreasonably restrain trade. Classic examples of multi-firm behaviour likely to “unrea- The legal basis for U.S. competition claims is derived from federal sonably” restrain trade include price-fixing, bid-rigging, and (national) and state (regional) law. Except for indirect purchaser market-allocation schemes. Other conduct, like exclusive claims, most antitrust claims are brought under federal law. dealing, non-compete agreements, non-solicitation provisions, International law is typically not invoked for substantive resale price maintenance, and other vertical and horizontal competition claims. The U.S. Supreme Court recently held that restraints are subject to scrutiny under the federal antitrust laws. a federal court determining foreign law should accord respectful The federal antitrust laws forbid a single firm from monopolisa- consideration to a foreign government’s interpretation, but that tion, attempted monopolisation, or conspiracy or combination to a U.S. court is not bound to accord conclusive effect to the monopolise. Possessing a dominant or even a monopoly market foreign government’s statements. Animal Sci. Prods., Inc. v. Hebei share is not by itself illegal, but firms violate the U.S. competition Welcome Pharm. Co., 138 S. Ct. 1865, 585 U.S. __, (2018). laws when they obtain, maintain, or exercise monopoly power in an anticompetitive manner. Examples of potentially problematic 1.4 Are there specialist courts in your jurisdiction to single-firm conduct include tying, bundling, and refusals to deal. which competition law cases are assigned? The federal antitrust laws also govern mergers and acquisitions where the effect may be to substantially lessen competi- There are no specialist courts for competition law. tion. The DOJ and FTC can sue to stop mergers if they determine the combination will substantially lessen competition. 1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms 1.2 What is the legal basis for bringing an action for for multiple claimants? For instance, is there a breach of competition law? possibility of collective claims, class actions, actions by representative bodies or any other form of public interest litigation? If collective claims or class actions The Sherman Antitrust Act is the principal competition law in are permitted, are these permitted on an “opt-in” or “opt- the United States. Section I of the Sherman Act governs multi- out” basis? firm conduct. Section II applies to single-firm conduct and monopolisation. The government may bring civil or criminal actions against violators of the antitrust laws. In addition, private plaintiffs

who have been injured in their “business or property by reason When claims concern conduct that occurred outside of the of anything forbidden in the antitrust laws” have a right to sue United States, to establish jurisdiction the plaintiff must show under the Clayton Act. 15 U.S.C. §§ 15(a). that the foreign conduct imposed a “direct, substantial, and The Supreme Court has limited standing for monetary reasonably foreseeable effect” that caused the plaintiff’s injury. damages under the federal statutes to those plaintiffs who are See Foreign Trade Antitrust Improvements Act, 15 U.S.C. § 6a. “direct purchasers” or are competitors directly injured. Blue Personal jurisdiction and venue: Under the Clayton Act, a plaintiff Shield of Va. v. McCready, 457 U.S. 465 (1982). In addition, the may initiate a suit in any district “in which the defendant resides harm must be caused by the competition-reducing aspects of or is found or has an agent”. 15 U.S.C. § 15. A corporation may the challenged conduct. Brunswick Corp. v. Pueblo Bowl-O-Mat, be sued in any judicial district where it is an “inhabitant” or in any Inc., 429 U.S. 477 (1977). One caveat to this general limitation district where it may be “found” or “transacts business”. 15 U.S.C. is that several states have passed statutes allowing for indirect § 22. Additionally, 28 U.S.C. §1391(c) grants all federal district purchasers to have standing to sue under state antitrust laws. courts personal jurisdiction over “alien” (non-U.S.) defendants. Representative plaintiffs may bring claims on behalf of them- Even where a U.S. court has jurisdiction to decide a compe- selves and similarly situated entities. A case can only proceed tition claim, however, it may not exercise that jurisdiction on as a class action if it meets the prerequisites set forth in Federal comity grounds. Rule of Civil Procedure 23(a): “(1) the class is so numerous that joinder of all members is impracticable 1.7 Does your jurisdiction have a reputation for (“numerosity”); (2) there are questions of law or fact common to the attracting claimants or, on the contrary, defendant class (“commonality”); (3) the claims or defenses of the representative applications to seize jurisdiction, and if so, why? parties are typical of the claims or defenses of the class (“typicality”); (4) the representative parties will fairly and adequately protect the The availability of treble damages, attorneys’ fees and costs interests of the class (“adequate representation”);” unquestionably attracts plaintiffs to bring claims. Antitrust and one of the sections of 23(b): suits are most commonly initiated by plaintiffs and the govern- “(1) prosecuting separate actions by or against individual class members ment, though defendants may occasionally initiate suit under the would create a risk of: Declaratory Judgment Act. (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for 1.8 Is the judicial process adversarial or inquisitorial? the party opposing the class; or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members, The U.S. judicial process is adversarial. not parties, to the individual adjudications or would substantially impair or impede their ability to protect their interests; 22 Interim Remedies (2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corre- 2.1 Are interim remedies available in competition law sponding declaratory relief is appropriate respecting the class as a cases? whole; or (3) the court finds that the questions of law or fact common to class Yes, interim remedies are available. members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” 2.2 What interim remedies are available and under Rules 23(b)(1) and (2) class actions do not permit “opt-outs”, what conditions will a court grant them? while 23(b)(3) class actions do proceed on an “opt-out” basis. Under the Clayton Act, plaintiffs can seek preliminary injunctions “against threatened loss or damage by a violation of the antitrust 1.6 What jurisdictional factors will determine whether a laws”. 15 U.S.C. § 26. For preliminary injunctions, a showing of court is entitled to take on a competition law claim? actual injury is not required, but plaintiffs must show that “irreparable harm” is likely – money damages are not enough. In addi- Courts must have both subject-matter and personal jurisdiction tion, a plaintiff seeking a preliminary injunction must show: (i) a to decide competition law claims. likelihood of success on the merits; (ii) that the threatened injury Subject-matter jurisdiction: Federal district courts have subject- outweighs the harm that the injunction may create for the defen- matter jurisdiction over cases arising under federal statutes dant; and (iii) that the injunction is in the public interest. (called federal question jurisdiction). Federal district courts With the exception of merger disputes and the enforcement also can decide state antitrust law claims when they are brought of non-compete agreements, interim remedies are not typi- with federal claims and arise from the same nucleus of opera- cally sought in U.S. antitrust cases because the alleged harms, if tive facts giving rise to the federal claim. In addition, federal proven, can generally be remedied through monetary damages district courts have subject-matter jurisdiction over controver- and a permanent injunction at the case’s conclusion. sies arising between citizens of different states when the amount In the merger context, the federal government can seek a at issue exceeds $75,000 (diversity jurisdiction). As such, federal “hold separate” order, requiring the acquirer to keep the assets courts can decide state law competition claims where the liti- separate and distinct until the case has been decided. When the gants are from different states and the alleged damages exceed FTC, but not the DOJ, seeks a preliminary injunction to stop $75,000. The Class Action Fairness Act also establishes subject- a merger, at least some courts have interpreted the threshold matter jurisdiction for certain class actions where the amount in for the injunction to be lower, “[u]pon a proper showing that, controversy exceeds $5 million, the class comprises at least 100 weighing the equities and considering the Commission’s like- plaintiffs, and there is at least minimal diversity between the lihood of ultimate success, such action would be in the public parties (i.e., at least one plaintiff class member is diverse from at interest”. 15 U.S.C. § 53(b). See, e.g., FTC v. Whole Foods Mkt. least one defendant). 28 U.S.C. § 1332(d). Inc., 548 F.3d 1028, 1035 (D.C. Cir. 2008).

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32 Final Remedies 42 Evidence

3.1 Please identify the final remedies which may be 4.1 What is the standard of proof? available and describe in each case the tests which a court will apply in deciding whether to grant such a remedy. In criminal cases, the government must prove guilt “beyond a reasonable doubt”. In civil cases, the standard is lower. The plaintiff must show In criminal cases, final remedies include prison sentences for through a “preponderance of evidence” or, that it is more likely individuals and criminal fines for individuals or corporations. than not, that the defendant violated the antitrust laws, as To impose such penalties, the government must prove the indi- alleged. vidual or corporation’s guilt beyond a reasonable doubt. In civil cases, final remedies include damages, injunctions, and other forms of equitable relief. Civil plaintiffs must first prove 4.2 Who bears the evidential burden of proof? liability by a preponderance of the evidence, but once liability is established the amount of damages need not be proven with In criminal cases, the government bears the burden of proof. precision. For injunctive relief, a plaintiff must show: In civil cases, the party bringing the claim (whether the “(1) that it has suffered an irreparable injury; (2) that remedies avail- government or private plaintiffs) bears the ultimate burden able at law, such as monetary damages, are inadequate to compensate of proof. However, in some circumstances, certain burdens for that injury; (3) that, considering the balance of hardships between the shift to defendants to show the procompetitive benefits of plaintiff and defendant, a remedy in equity is warranted; and (4) that their behaviour once the plaintiff makes a prima facie case of a the public interest would not be disserved by a permanent injunction.” violation. eBay Inc. v. MercExchange L.L.C., 547 U.S. 388, 391 (2006). Injunctive relief can take many forms, but most often, the court orders the defendant to cease the anticompetitive conduct. 4.3 Do evidential presumptions play an important role in damages claims, including any presumptions of loss in cartel cases that have been applied in your 3.2 If damages are an available remedy, on what bases jurisdiction? can a court determine the amount of the award? Are exemplary damages available? Are there any examples While not technically an evidential presumption, once a plain- of damages being awarded by the courts in competition cases which are in the public domain? If so, please tiff establishes liability, impact and causation, it is common for identify any notable examples and provide details of the a plaintiff to argue that the amount of damages need not be amounts awarded. proven with precision. Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264 (“[E]ven where the defendant by his own wrong has Money damages for direct purchasers are based on the amount prevented a more precise computation, the jury may not render of overcharge caused by the anticompetitive behaviour. a verdict based on speculation or guesswork. But the jury may Competitors typically seek lost profits or the loss of value to make a just and reasonable estimate of the damage based on rele- their businesses. Damage awards are almost always the subject vant data, and render its verdict accordingly. In such circum- of expert opinion and testimony, though the final determination stances, ‘juries are allowed to act on probable and inferential is left to the jury (or judge, in a bench trial). as well as (upon) direct and positive proof’”) (internal citation Trebled damages are automatic for any judgment under the omitted). U.S. antitrust laws. Each violator is held “jointly and severally liable” for all damages, meaning that any one defendant can be 4.4 Are there limitations on the forms of evidence made to pay the entire judgment. Conversely, defendants are which may be put forward by either side? Is expert precluded from seeking contribution from other defendants in evidence accepted by the courts? the damages payment. Damages awarded by a judge or jury are publically avail- Yes, there are limits to the forms of evidence that can be able. However, most antitrust cases settle before a judgment presented. In federal trials, admissibility is governed by the is reached and those settlements, which can be very large, are Federal Rules of Evidence. The threshold test for admissibility not made readily public unless the case is a class action. Class is relevance. Evidence is relevant if it has the tendency to make action settlements must be approved by the courts and there- a fact of consequence in determining the action more or less fore are publicised. In addition, the DOJ publishes the crim- probable than it would be without the evidence. In addition, inal fines it levies. the evidence must pass certain requirements for indicia of reli- ability. Certain evidence, though relevant, may be excluded if 3.3 Are fines imposed by competition authorities and/ the court determines that its introduction would be more preju- or any redress scheme already offered to those harmed dicial than probative. by the infringement taken into account by the court when Expert evidence is accepted by the courts and is offered in calculating the award? nearly every antitrust case. Expert evidence is generally offered on liability, and as appropriate, class certification and damages. No. Defendants found liable in civil cases do not receive a deduc- Federal Rule of Evidence 702 governs what testimony an expert tion from private judgments for fines they may have paid to the may present, and it allows experts to testify to their opinions federal government. However, if a firm has obtained amnesty if: (a) the expert’s specialised knowledge will help the trier of from the federal government through its leniency programme, fact understand or determine a fact at issue; (b) the testimony that defendant’s civil damages will be limited to single damages is based on sufficient facts or data; (c) the testimony is based (rather than the ordinary trebled damages) under the Antitrust on reliable principles and methods; and (d) the expert reliably Criminal Penalty Enhancement and Reform Act. applied the principles and methods to the facts of the case.

Parties often challenge the admissibility of expert testimony, opposing party. During cross-examination, counsel may ask the arguing that the expert fails to meet one or more of the Rule witness leading questions. Fed. R. Evid. 611(c). 702 criteria. Such challenges are known as Daubert challenges, named after the Supreme Court case Daubert v. Merrell Dow Pharm., 4.7 Does an infringement decision by a national or 509 U.S. 579 (1993). In Daubert, the Supreme Court interpreted international competition authority, or an authority from Rule 702 and directed judges to act as “gate keepers” and prevent another country, have probative value as to liability the courts from becoming a forum for “junk science”. In the class and enable claimants to pursue follow-on claims for certification context, the Supreme Court has also required that damages in the courts? the expert evidence must fit the theory of liability in the underlying complaint. Comcast Corp. v. Behrend, 569 U.S. 27 (2013). Yes. A final judgment of guilt in a criminal antitrust case or decree in a civil proceeding brought by or on behalf of the United 4.5 What are the rules on disclosure? What, if any, States under the antitrust laws constitutes “prima facie evidence documents can be obtained: (i) before proceedings against such defendant” in follow-on civil actions based on the have begun; (ii) during proceedings from the other same acts and applicable law. 15 U.S.C. § 16(a). party; and (iii) from third parties (including competition However, “consent judgments or decrees” and pleas of nolo authorities)? contendre (no contest, but no admission) do not have a preclusive effect if entered before any testimony has been taken. Id. The rules on disclosure differ depending on whether the case is criminal or civil. Generally, documents can only be obtained by 4.8 How would courts deal with issues of commercial consent or under Freedom of Information Act requests to the confidentiality that may arise in competition government before proceedings have begun. There are a few proceedings? U.S. jurisdictions that permit pre-filing discovery, but those are relatively rare. After the initiation of a criminal or civil case, Courts enter protective orders to protect commercially sensitive both parties have access to additional tools to gather informa- business information. These orders are usually heavily negoti- tion and documents, both formally and informally, from the ated between the parties and set forth the manner in which the other party and third parties. parties designate information as confidential, who may receive In criminal cases, the Brady doctrine requires the govern- such information, and how it may be used. During discovery, ment to turn over all exculpatory evidence to the defendant. the information so designated is usually only available to persons Brady v. Maryland, 373 U.S. 83 (1963). Federal Rule of Criminal designated by the parties. Procedure 16 also provides a vehicle for defendants to request However, if the parties wish to file confidential material with additional discovery. But, seeking that discovery opens the the courts, they generally do so “under seal” to avoid public defendant up to reciprocal discovery requests. Fed. R. Crim. P. disclosure. To file under seal, parties must move the court to 16(b)(1)(A). Both the government and the defendant can also permit sealed filings and explain the justification for keeping use subpoenas to gather information from third parties in crim- records sealed. Since U.S. courts have a presumption of open- inal cases. Fed. R. Crim. P. 17. ness, such requests may sometimes be denied. For example, in After the initiation of a civil case, both parties have access class actions, courts may require parties to open certain records to broad discovery from each other and third parties. Both so that the public can adequately consider the sufficiency of may request and “obtain discovery regarding any nonprivi- settlements. See, e.g., Shane Grp. Inc. et al. v. Blue Cross Blue Shield leged matter that is relevant to any party’s claim or defense and of Mich., 825 F.3d 299 (6th Cir. 2016). proportional to the needs of the case”. Fed. R. Civ. P. 26(b) (1). Parties can use requests for production of documents (Fed. R. Civ. P. 34), interrogatories (Fed. R. Civ. P. 33), requests for 4.9 Is there provision for the national competition authority in your jurisdiction (and/or the European admissions (Fed. R. Civ. P. 36), and depositions (Fed. R. Civ. P. Commission, in EU Member States) to express its 30–31) to elicit documents, testimony, and other information views or analysis in relation to the case? If so, how from the other party. The parties can elicit documents and testi- common is it for the competition authority (or European mony from third parties using subpoenas under Fed. R. Civ. P. Commission) to do so? 45. Though there are limits on the burden the parties may place on each other and third parties, antitrust discovery is typically Yes. A government entity can offer its views on a private case broad, wide anging, time consuming and very expensive. by: (i) filing an amicus curiae (“friend of the court”) brief setting forth its interest and perspective on the case; (ii) moving to 4.6 Can witnesses be forced to appear? To what extent, intervene in the case as a party; or (iii) filing a statement of if any, is cross-examination of witnesses possible? interest. Recently, the DOJ’s antitrust division has expanded its amicus programme and has filed more statements of interest Yes, if a person is a party or a party’s employee, their pres- in pending civil antitrust cases than had been its previous prac- ence can be compelled so long as the place for testimony is tice. See, e.g., DOJ, No-Poach Approach, Antitrust Division Spring within the state where the person resides, transacts business, is Update 2019, https://www.justice.gov/atr/division-operations/ employed, or if the person is commanded to appear at trial and division-update-spring-2019/no-poach-approach. would not incur substantial expense to do so. Similarly, third- Most often in practice, the government moves to intervene for party witnesses can be forced to appear at trial or for deposi- the limited purpose of protecting an ongoing criminal investi- tion pursuant to Fed. R. Civ. P. 45(c), provided the place for gation from civil discovery by seeking a stay in the private case. testimony is within 100 miles of where the witness resides, is Additionally, when antitrust cases are heard by the U.S. Supreme employed, or regularly transacts business. Court, the Court frequently asks the Solicitor General (the exec- Cross-examination of witnesses is standard practice and utive officer who represents the federal government before the parties have a right to ask questions of witnesses called by the Court) to submit its views through an amicus curiae brief.

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In addition, the Clayton Act tolls the statute of limitations on 52 Justification / Defences any claim that is subject of “any civil or criminal proceeding… instituted by the United States”, during the suit’s pendency and 5.1 Is a defence of justification/public interest for one year after. available? A class action can also toll the limitations period on any claim. American Pipe & Constr. Co. v. Utah, 414 U.S. 538, 553 (1974) (holding No. The U.S. antitrust laws do not have a justification or public that the filing of a class action “tolls the running of the statute for interest defence. However, the U.S. Courts and Congress have all purported members of the class who make timely motions to developed a number of immunities for conduct that might other- intervene after the court has found the suit inappropriate for class wise violate the antitrust laws. For example, labour unions, action status”); see also China Agritech Inc. v. Resh, ___ U.S. ___, certain farming co-ops, some sports leagues, and other such 138 S. Ct. 1800, 1811 (2018) (holding that class action tolling does groups have been given legislative and judicial immunity for not apply to out-of-time successive class actions). behaviour that may otherwise violate the antitrust laws as written. In addition, courts apply “Noerr-Pennington” immunity to 6.2 Broadly speaking, how long does a typical breach legislative or judicial activity (such as lobbying the government of competition law claim take to bring to trial and final or filing a lawsuit) alleged to have harmed competition, as long judgment? Is it possible to expedite proceedings? as that activity is not a “sham”. Antitrust cases can be lengthy. The time from filing to final 5.2 Is the “passing on defence” available and do judgment varies by venue and judge, but even relatively simple indirect purchasers have legal standing to sue? cases usually take at least two years. In complicated cases, such as class actions, it can often take five years (or more) to complete Under federal antitrust law, there is no “pass on defence” and discovery, class proceedings, summary judgment, and trial. indirect purchasers do not have legal standing to bring claims for money damages. Apple Inc. v. Pepper, 587 U.S. ___, 139 S. Ct. 72 Settlement 1514 (2019) (affirming the rule that only direct purchasers can bring claims on the facts presented, but leaving open the possi- 7.1 Do parties require the permission of the court bility that the court may soon revisit this principle). However, to discontinue breach of competition law claims (for some states (about half) permit indirect purchaser damages example, if a settlement is reached)? claims under state law. In some of those states, defendants can be subject to up to 200% (before trebling) of the damage caused. No. As a general matter, private parties may settle and dismiss Although indirect purchasers do not have standing to pursue claims without court approval, but please see question 7.2 money damages, they may seek injunctive relief from the court. below. Claims brought by the government, however, do require court 5.3 Are defendants able to join other cartel participants review and approval of the consent judgment terms under the to the claim as co-defendants? If so, on what basis may Tunney Act. 15 U.S.C. § 16. they be joined? 7.2 If collective claims, class actions and/or Yes, defendants can join other cartel participants as co-defendants. representative actions are permitted, is collective They may do so if the other participant is jointly liable for claims settlement/settlement by the representative body on arising out of the same transactions or occurrences. Fed. R. Civ. behalf of the claimants also permitted, and if so on what P. 20. basis?

62 Timing Yes, in class actions, the class representative can, and often does, settle claims on behalf of the class. But, unlike individual private settlements, class settlements must be considered and approved 6.1 Is there a limitation period for bringing a claim for breach of competition law, and if so how long is it and by the court, and class members must be given an opportunity when does it start to run? to object or, in certain cases, opt out of the settlement. Fed. R. Civ. P. 23(e). Yes. For federal civil antitrust claims, the statute of limitations is four years. 15 U.S.C. § 15b. For federal criminal antitrust 82 Costs claims, the statute of limitations is five years. 18 U.S.C. § 3282. The statute of limitations begins to run at the time of the 8.1 Can the claimant/defendant recover its legal costs “accrual of the cause of action”. The accrual period begins from the unsuccessful party? when the plaintiff suffers injury to her business or property. However, many private antitrust suits are brought challenging Yes. Pursuant to Fed. R. Civ. P. 54(d), a prevailing party can typi- conduct that occurred more than four years prior because the cally recover its costs other than attorneys’ fees, whether plain- statute of limitations can be deferred or “tolled”. tiff or defendant. Additionally, a successful antitrust plaintiff The most common ground for tolling the statute of limita- can recover its attorneys’ fees. Under the Clayton Act, such an tions is the fraudulent concealment doctrine, which can arise award is mandatory when the plaintiff receives trebled damages. if a defendant conceals its conduct such that a diligent plain- 15 U.S.C. §15(a). tiff could not have discovered its injury and filed suit within the Successful defendants typically cannot recover attorneys’ limitations period. If established, fraudulent concealment tolls fees, except if an action is found to be “frivolous, unreasonable, the statute of limitations until the time that the plaintiff knew without foundation, or in bad faith”. 15 U.S.C. § 4304. or should have known of the conduct giving rise to the claim.

8.2 Are lawyers permitted to act on a contingency fee under which the DOJ may seek enhanced sentences if the appli- basis? cant fails to disclose additional antitrust offences that the government later discovers. The revisions suggest a tightening of the Yes, contingency fees are permitted. leniency programme and a more restrictive approach by the DOJ going forward.

8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many 10.2 Is (a) a successful, and (b) an unsuccessful cases to date? applicant for leniency permitted to withhold evidence disclosed by it when obtaining leniency in any subsequent court proceedings? Yes. This type of funding is permitted but not often disclosed, so it is difficult to tell how frequently it is used. However, some No, this is not permitted. courts will permit discovery on how litigation is funded and the Northern District of California has imposed a standing order for all judges mandating the disclosure of people or enti- 112 Anticipated Reforms ties who “fund[ ] the prosecution of any claim or counterclaim” in proposed class, collective, or representative actions. N.D. 11.1 For EU Member States, highlight the anticipated Cal., Standing Order for all Judges of the Northern District of impact of the EU Directive on Antitrust Damages Actions California, ¶ 19 (Nov. 1, 2018). at the national level and any amendments to national procedure that are likely to be required. 92 Appeal The Directive is not applicable. 9.1 Can decisions of the court be appealed? 11.2 What approach has been taken for the Yes. Final decisions in federal civil and criminal litigation, implementation of the EU Directive on Antitrust Damages Actions in your jurisdiction? How has the including antitrust litigation, are subject to appeal as a matter of Directive been applied by the courts in your jurisdiction? right. 28 U.S.C. § 1291. Most state courts also allow appeals of final decisions as a matter of right. Generally, the appeals courts have discretion to hear certain The Directive is not applicable. other Interlocutory Appeals when requested by a party or wait to consider the issue until a final judgment is reached in the case. 11.3 Please identify, with reference to transitional 28 U.S.C. § 1292(b). provisions in national implementing legislation, For non-final class certification decisions, the losing party whether the key aspects of the Directive (including can seek discretionary review from the Courts of Appeals under limitation reforms) will apply in your jurisdiction only to Rule 23(f). infringement decisions post-dating the effective date of implementation; or, if some other arrangement applies, please describe it. 102 Leniency

The Directive is not applicable. 10.1 Is leniency offered by a national competition authority in your jurisdiction? If so, is (a) a successful, and (b) an unsuccessful applicant for leniency given 11.4 Are there any other proposed reforms in your immunity from civil claims? jurisdiction relating to competition litigation?

Yes, the DOJ offers leniency to corporations and individuals Reforms generally occur through judicial decisions and are diffi- who report their cartel activity and cooperate in the DOJ’s inves- cult to predict. However, U.S. antitrust regulators have suggested tigation of the cartel. Leniency is offered to the first corporate that they may ask the courts to reconsider the rule that indirect or individual conspirator to confess participation in an antitrust purchasers cannot bring claims for money damages under the crime, cooperate, and meet other conditions required by the Federal Antitrust statutes. The Supreme Court recently had an DOJ’s leniency policies. Companies that are not first, but coop- opportunity to reconsider the rule and affirmed under the facts erate early, can receive reduced sentences. presented that only direct purchasers may bring antitrust claims Neither successful nor unsuccessful leniency applicants for money damages. Apple Inc. v. Pepper, 587 U.S. ___, 139 S. are immune from civil claims. However, under the Antitrust Ct. 1514 (2019). It remains to be seen whether a different set of Criminal Penalty Enhancement and Reform Act of 2004, Pub. L. facts might result in adjustments to this rule. Under the current No. 108-237, tit. II, 118 Stat. 661 (2004) (ACPERA), successful rule, distinguishing which purchasers are “direct purchasers”, leniency applicants have their damages limited in civil claims to with standing to sue, can be a difficult fact question in litigation. single damages, rather than the ordinary trebled damages under Other changes to antitrust practice may take place at the the Clayton Act. In addition, successful leniency applicants are agency level, through policy changes at the FTC or DOJ, or via not subject to joint-and-several liability as they ordinarily would Congressional action. be under the Clayton Act. To receive such protections in civil litigations, the successful leniency applicant must also cooperate with the plaintiff(s) as required by ACPERA. Acknowledgment In 2017, the DOJ published updated guidance on the leniency The authors would like to thank their colleague Joy Sarr for her programme. Important changes included more limited protec- contribution to this chapter. Joy is an Associate at Shearman & tion for former employees and employees found to be most Sterling LLP. culpable. The update also emphasised the “Penalty Plus” policy,

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Todd M. Stenerson is a partner in Shearman & Sterling LLP’s Litigation practice. Representing both plaintiffs and defendants throughout the courts of the U.S., Todd has played a leading role in matters of importance for decades. In addition to his extensive antitrust, multi-district litigation and arbitration experience, he has handled investigations by the U.S. Department of Justice’s Antitrust Division and the U.S. Securities and Exchange Commission. As part of his complex commercial litigation background, he has handled several dealer termination and RICO cases, as well as business torts and breach of contract cases. AV-rated by Martindale-Hubbell and a BTI Client Service All-Star, recognised by Benchmark Litigation as a National Practice Area Star and Local Litigation Star and shortlisted for Benchmark Litigation’s Antitrust Lawyer of the Year, Todd routinely garners praise from clients and colleagues for his creativity, litigation skills, and commitment to client service.

Shearman & Sterling LLP Tel: +1 202 508 8093 401 9th Street NW Email: [email protected] Suite 800, Washington, D.C. URL: www.shearman.com 20004 USA

David A. Higbee is a partner in Shearman & Sterling LLP’s Antitrust practice. He is the firm’s Global Antitrust Practice Group Leader and Head of the Washington, D.C. office. David, a former Chief of Staff and Deputy Assistant Attorney General at the U.S. Department of Justice Antitrust Division, has a natural affinity with government investigations, merger reviews and civil litigation matters. He has represented clients in varied industries including defence, oil and gas, pharmaceuticals, financial services and technology. David works regularly on matters before the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice. David also served at the White House under President George W. Bush as Special Assistant to the President and Associate Director for Presidential Personnel, advising the President on the appointment of senior officials throughout the Executive branch.

Shearman & Sterling LLP Tel: +1 202 508 8071 401 9th Street NW Email: [email protected] Suite 800, Washington, D.C. URL: www.shearman.com 20004 USA

Rachel E. Mossman is an associate in Shearman & Sterling LLP’s Litigation practice. She has represented plaintiffs and defendants in domestic and international disputes at the trial and appellate level and in multi-district litigation. Her practice focuses on antitrust and class action litigation, but also includes complex commercial, corporate governance, RICO, and contractual claims.

Shearman & Sterling LLP Tel: +1 202 508 8004 401 9th Street NW Email: [email protected] Suite 800, Washington, D.C. URL: www.shearman.com 20004 USA

Shearman & Sterling’s success is built on our clients’ success. We have ■ Counselling and compliance. a distinguished history of supporting clients wherever they do business, ■ Cartel investigations. from major financial centres to emerging and growth markets. We repre- ■ Dominance and monopolisations. sent many of the world’s leading corporations, financial institutions, ■ Antitrust/IP interface. emerging growth companies, governments and state-owned enterprises, ■ Sector inquiries and legislative reviews. often working on ground-breaking matters. With a deep understanding of ■ State aid. our clients’ businesses and industries, our work is driven by their need for ■ Litigation. outstanding legal and commercial advice. www.shearman.com An elite antitrust practice Our strong worldwide experience advising on the full antitrust law spectrum, coupled with a presence in key antitrust jurisdictions, makes us the go-to practice for providing practical guidance. We help companies on issues involving: ■ Distribution and other vertical agreements. ■ Joint ventures and other cooperation and alliance arrangements. ■ Complex merger control at U.S., EU and national level.

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