Telfer, Robert Thomas Currie (2017) Forum shopping and the private enforcement of EU competition law: is forum shopping a dead letter? PhD thesis. http://theses.gla.ac.uk/8002/ Copyright and moral rights for this work are retained by the author A copy can be downloaded for personal non-commercial research or study, without prior permission or charge This work cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Glasgow Theses Service http://theses.gla.ac.uk/ [email protected] Forum shopping and the private enforcement of EU competition law: is forum shopping a dead letter? Robert Thomas Currie Telfer LL.B (Hons) LL.M Submitted for fulfilment of the requirements of the degree of PhD School of Law College of Social Sciences University of Glasgow September 2016 ABSTRACT This thesis examines the relationship between the private enforcement of EU competition law and forum shopping with a particular focus on cross-border collective end-consumer redress. There is no coherent framework across the EU for these types of cases. This lack of uniformity has the potential to create recourse to different national courts. Lawyers may engage in forum shopping when filing lawsuits on behalf of the victims of mass torts. Such practices can provide Member States with incentives to amend their laws to attract collective proceedings and create competition between national judicial systems. However, forum shopping is not the only concern. There appears to be a paucity of cross- border collective claims. This is coupled with an apparent lack of motivation for end- consumers to seek a remedy, particularly if the only choice is to litigate outside their own legal regime. Addressing this situation is vital given that end-consumers regularly suffer harm in the form of higher prices, lower output, reduced quality and limited innovation as a result of antitrust infringements but they are rarely compensated due to legal and practical obstacles. To each end-consumer the harm may indeed be de minimis. However, the aggregate harm can amount to a considerable sum. In the absence of effective redress procedures, infringing undertakings retain the spoils of their unlawful conduct. Against this background, this thesis examines the extent to which the conflicts-of-laws rules encourage forum shopping and considers the appropriate forum and the appropriate procedural measures that need to be adopted in order to facilitate effective and equal access to justice for end-consumer victims of EU competition law violations. 1 TABLE OF CONTENTS Table of Cases………………………………………………………………………………6 Table of Legislation……………………………………………………………………….11 Acknowledgments…………………………………………………………………………13 Author’s Declaration………………………………………………………………………14 Abbreviations……………………………………………………………………………...15 Introduction…………………………………………………………………………….….18 0.1 Introduction……………………………………………………………………18 0.2 Research Questions……………………………………………………………21 0.3 Methodology……………………………………………………………….….21 0.4 Structure……………………………………………………………………….21 Chapter 1 Background………………………………………………………………….….23 1.0 The definition of forum shopping………………………………………….….23 1.1 The relationship between forum shopping and the private enforcement of EU competition law…………………………………………………………………....25 1.2 The relationship between forum shopping and collective redress flowing from a breach of the EU competition rules………………………………………………..27 1.3 Failure to establish a coherent framework of EU collective redress and forum shopping…………………………………………………………………………...30 1.4 The current lack of cross-border provisions in the Recommendation and the potential for forum shopping………………………………………………………34 1.5 The main reason for the lack of an EU-wide collective redress procedure: the US experience…………………………………………………………………......35 1.6 Forum shopping only one part of the picture…………………………….……38 1.7 Concluding remarks…………………………………………………………...43 Chapter 2 The conflicts-of-laws, forum shopping and end-consumer cross-border collective redress in competition law…………………………………………………………………45 2.0 Introduction……………………………………………………………………45 2.1 Background to jurisdiction…………………………………………………….45 2.2 Domicile of the defendant………………………………………………….….49 2.3 Place where the harmful event occurred or may occur…………………….….52 The interpretation of Article 7(2)………………………………………….54 2 The place of acting in a collective antitrust case……………………….….57 Place where the harm was felt………………………………………….….58 2.4 The ‘anchor defendant’…………………………………………………….….63 2.5 Article 7(5)…………………………………………………………………….67 2.6 The rules of jurisdiction, forum shopping and the risk of parallel claims….….70 2.7 Strengthening communication and interaction between the courts……………77 2.8 The applicable law and competition law………………………………………83 2.9 The rules governing the applicable law…………………………………….….83 Acts restricting free competition……………………………………….….84 The ‘affected market’……………………………………………………...85 Article 6(3)(a) and cases with several affected markets…………………...87 The lex fori in Article 6(3)(b)……………………………………………...88 Party autonomy……………………………………………………………90 2.10 The Rome II Regulation and cross-border collective redress…………….….90 2.11 A new conflicts-of-law rule specifically for collective redress in antitrust scenarios…………………………………………………………………………...91 2.12 Concluding remarks on the conflicts-of-laws…………………………….….97 Chapter 3 Arbitration as an appropriate forum for cross-border end-consumer redress in the wake of anticompetitive conduct………………………………………………………….99 3.0 Introduction…………………………………………………………………....99 3.1 The appeal of US-style class arbitration to an EU setting……………………100 3.2 The class action experience in the US…………………………………….….105 3.3 When is class action available…………………………………………….….107 3.4 Express contemplation of arbitration agreement in the US…………......…....108 3.5 US class action waivers specific to antitrust………………………………....115 3.6 Class arbitration in the absence of an agreement…………………………….120 3.7 The relevance of the US experience to Europe and the appropriateness of a class arbitration mechanism for end-consumer redress following anticompetitive conduct…………………………………………………………………………...131 3.8 The relevance of ‘unfair terms’ in consumer contracts………………………136 3.9 Proposals for harmonised collective ADR………….………………………..143 3.10 Arbitration agreement and opt-in procedure..……………………………....143 3.11 Discovery…………………………………………………………………...144 3.12 Consumer Agency Approval…………………………………………..........146 3.13 Fee-shifting provision – Loser pays………………………………………...148 3 3.14 Capped punitive damages…………………………………………………...149 3.15 Concluding remarks on collective arbitration……………………………....150 Chapter 4 The need to realign the focus and consider the appropriate remedy for end- consumer redress…………………………………………………………………………152 4.0 Introduction……………………………………………………………….….152 4.1 Private enforcement goals: ideals and realities………………………………153 4.2 Consumer attitudes…………………………………………………………...154 4.3 Consumer attitudes towards cross-border trade and consumer protection…...156 4.4 Lessons to be learned from consumer attitudes………………………………162 4.5 The cy-pres doctrine………………………………………………………….164 4.6 How best to use the cy-pres doctrine…………………………………………175 4.7 Concluding remarks on consumer attitudes and the cy-pres doctrine…….….181 Chapter 5 The interface between public and private enforcement in compensating end- consumers………………………………………………………………………………...183 5.1 Introduction……………………………………………………………….….183 5.2 The public/private interface……………………………………………….….184 5.3 Compensation as a mitigating factor…………………………………………188 5.4 Fines………………………………………………………………………….194 5.5 Settlement procedure…………………………………………………………196 5.6 Commitment procedure………………………………………………………196 5.7 Compensation………………………………………………………………...204 5.8 Concluding remarks on damages claims and public compensation………….205 Chapter 6 The appropriateness of an EU Competition Court……………………………207 6.1 Introduction………………………………………………………………......207 6.2 A specialist tribunal under Article 257 TFEU…………………………..........210 6.3 A specialist chamber within the General Court……………………………....217 6.4 A new EU Competition Court…………………………………………….….226 6.5 A World Competition Court………………………………………………….237 6.6 The preferred option for an EU Competition Court………………………….238 6.7 A challenging but worthwhile step…………………………………………...239 6.8 Designing the EU Competition Court…………………………………….….243 6.9 Jurisdiction…………………………………………………………………...243 6.10 Structure…………………………………………………………………….244 6.11 Appointment of judges and their organisation……………………………...249 6.12 Designing a Competition Court appropriate for the EU…………………….253 4 6.13 Concluding remarks on the need for a Competition Court…………………262 Chapter 7 Conclusion…………………………………………………………………….263 7.1 Research questions…………………………………………………………...263 7.2 Developing the research questions…………………………………………...265 7.3 The extent to which the conflicts-of-laws encourage forum shopping………266 7.4 The appropriate forum for cross-border end-consumer cases and the procedural measures required to be adopted in order to facilitate effective and equal access to justice for victims………………………………………………………………...270 7.5 Ranking of ideas developed in this thesis……………………………………276 7.6 Final remarks…………………………………………………………………277 Bibliography……………………………………………………………………………...280