In the news
Today the EU Damages Directive has been formally adopted by the Council of the European Union. The Directive has been a long time in the making and the European Commission hopes that it will encourage and facilitate the bringing of antitrust damages claims, particularly compensation claims by business and consumers who have suffered loss as a result of cartel conduct. The EU Member States have two years to implement the Directive, but it is anticipated that Courts in the Members States will begin to apply its provisions in the meantime to the extent that they are able to do so.
- Does the Directive matter to my business?
The Directive will create risks and opportunities for all businesses. The Directive matters to you if:
- You have been involved in an antitrust infringement or are currently subject to an antitrust infringement investigation. The Directive is intended to make it easier to enforce rights and get compensation for anyone who may have suffered a loss as a result of unlawful anti-competitive conduct.
- Anyone in your supply chain has been involved in an antitrust infringement. You may be able to bring a claim if you believe you have suffered loss, and you may become involved in disputes between other companies in your supply chain if any losses were arguably passed through you or down to you.
- There are disputes in your industry around vertical issues such as alleged dominance, exclusivity, exclusionary conduct and foreclosure. Although primarily focused on compensation for victims of cartels, the Directive will also make it easier for the victims of vertical abuses to recover losses suffered.
- How will the Directive change things in France?
The Directive contradicts a number of traditional principles of French law, and its transposition will deeply modify the legal regime of private damages claims in case of competition law infringements. Some key changes include:
- The introduction of presumptions in favour of claimants, including the presumption that any cartel infringements has caused loss. This will lead to a shifting of the burden of proof onto the defendant. So far, in France, the burden of proof lies on the claimant.
- National Courts are empowered to estimate the harm in case its quantification by the claimant is practically impossible or excessively difficult. This might significantly help claimants in France.
- In case of a claim by a direct purchaser, the defendant will bear the onus of proving that the overcharge was passed on. This also means a shifting of the burden of proof onto the defendant, which will face a difficult task since it usually does not have access to the relevant data.
- Member States which do not currently have a document disclosure regime as part of their civil litigation system will be required to introduce powers to order disclosure in antitrust damages cases. Although such powers exist in French law, the Directive is likely to make disclosure easier.
- The Directive provides for a protection of documents elaborated or collected through leniency proceedings, which is narrower than what currently exists in France: under the Directive, only leniency statements and settlement submissions are protected from disclosure.
- The Directive sets limitation periods of five years for antitrust damages claims, similar to the French limitation periods. However, it introduces specific rules for the starting point, suspension or interruption of the limitation periods, which will in practice extend them.
- The rules on joint and several liability will change, with a successful immunity applicant having some exceptional protection from joint and several liability.
- What should I do about the Directive?
You should consider the following issues in relation to any actual or potential antitrust dispute in which you are or may be involved:
- Do you have the right resources in place to assess your risk and devise an overall strategy to deal with the increased likelihood of claims across multiple jurisdictions and multiple levels of the supply chain?
- Can you avoid a proliferation of claims, with the resulting long-lasting impact on contingent liabilities, cost in money and management time, disruption to the business, damage to ongoing customer relationships and impact on your overall bottom line?
- How will you deal efficiently and effectively with claims that are threatened or brought, particularly with regard to the increasing burden in terms of disclosure, increased limitation periods in many jurisdictions and an increasingly sophisticated claimant bar, often with global reach?
- If you feel that you are a victim of antitrust infringement, for example an abuse of dominance or an exclusionary practice, are there any developments you can take advantage of to help remedy the problem?