The Italian Supreme Court (Corte di Cassazione) recently issued a landmark judgment on private antitrust actions. The principles set out by the Court effectively require lower courts to ensure that claimants in competition damages claims are entitled to gain access to the necessary evidence to support their claims, significantly enhancing their prospects of success.

Background

A number of wholesalers had brought a competition damages action against CARGEST, the company holding the concession for the exclusive management of the main wholesale food market in Rome. The claimants argued that CARGEST had abused its dominant position by imposing excessively burdensome and discriminatory contractual conditions for the lease of premises at the market. They argued that the relevant market, in which Cargest had abused its dominant position, was the market for the management and lease of trading premises located in that specific market. In support of their proposed market definition, they relied on a lack of substitutability with similar markets located outside Rome, mainly due to higher transport costs and other barriers to entry.

However, the Court of Appeal (which had first instance jurisdiction in competition damages claims) struck out the claim stating, inter alia, that the claimants had provided only generic allegations but had not provided sufficient evidence of the alleged market definition and, consequently, of the abuse. In particular, for the claim to be successful, the evidence should have included specific and more detailed examples of the alleged lack of substitutability and a comparative analysis between the various commercial alternatives available to wholesalers.

The principles set out by the Supreme Court

The main ground for the Supreme Court's criticism of the judgment of the Court of Appeal was that it imposed a burden of proof on the claimant that was too mechanistic and strict for a "stand-alone" antitrust claim. These - as opposed to "follow-on claims" - are civil claims which are not backed by a previous decision of the Antitrust Authority or the European Commission finding an infringement of competition Law. The Supreme Court noted that stand-alone claims cases are characterized by a significant "asymmetry of information", given that the relevant data and information in support of the claim normally lies under the control or knowledge of the person who is responsible for the breach, and is often very difficult to obtain. In the case of a follow-on claim, there will generally be the evidence previously collected by the relevant competition authority, together with its findings. In stand-alone cases, the need to carry out complex economic and technical assessments would in practice male such actions too costly and uncertain, discouraging claimants from bringing them.

The Supreme Court expressly recalled the well-known judgment of the ECJ in Courage v. Crehan (that set out the right to damages for infringements of competition law), noting:

  1. the duty of the Italian Civil Courts to give effective protection to civil rights deriving from national and EU antitrust provisions
  2. the important function of private enforcement and national judges in the wider context of protecting competition
  3. (and setting out at some length) the duties of cooperation between civil judges and the Commission in accordance with the requirements of Regulation 1/2003.

Furthermore - and more surprisingly - the Supreme Court cited extensively the provisions of the competition damages Directive 104/2014, which harmonizes national rules on antitrust damages claims, even though the Directive has not been yet transposed into Italian Law. Briefly, the Court noted that the Directive (Article 4) imposes an obligation upon Member States to apply national substantive and procedural rules on damages claims "in such a way that they do not render practically impossible or excessively difficult the exercise of the Union right to full compensation for harm caused by an infringement of competition law".The Directive therefore prohibits Member States from applying rigid rules on evidence, which could substantially jeopardise the effective exercise of antitrust actions. In fact the Directive goes further than that, setting out a complex series of rules on the disclosure of evidence, that the national judge must apply where an antitrust infringement appears"plausible". 

In the light of the above principles, the Court held that Italian judges must also apply the current procedural rules in a manner that guarantees the full and correct enforcement of the competition rules. The powers available to them include those to order the production of documents, to request information and, in particular, to order technical reports ("consulenza tecnica d'ufficio") in order to acquire useful information. If necessary, the judges should make use of all available procedural rules and legal instruments in order to obtain a complete picture of the competition scenario and of the alleged infringement.

Comment

Taking into account not only the principles set out by the Supreme Court, but also the wording used by the judges, it is clear that the judgment represents an unexpected "leap forward" in the enforcement of the antitrust rules in Italy. It may bring about significant practical changes in the legal system, by greatly encouraging the exercise of antitrust actions by private parties allegedly suffering loss as a result of infringements of competition law. Moreover, the words of the Supreme Court indicate that:

  1. the principles and rules enshrined in the competition damages Directive are in practice already effective and will strongly influence the application of the existing national rules on compensation in order to provide the widest antitrust protection
  2. in antitrust cases, the principle of the burden of the proof upon the plaintiff will be substantially diminished; it may in future be sufficient for the plaintiff to bring strong indirect evidence, even if not detailed, of an antitrust breach which, as the Supreme Court said, is capable of "altering his freedom of competition of infringing his right to benefit from competition in trade". Where the evidence is not complete but indicates a"plausible" antitrust infringement, the court should on its own initiative use all available procedural tools in order to guarantee the widest discovery of evidence.   

The above appears even more important in the light of the potential increase in private antitrust actions, following the adoption of a law which will allow and regulate the exercise of consumer class actions. A draft is currently before Parliament and could become effective by the end of 2015 or the start of 2016.