On 10 November 2014, the European Council of Ministers adopted a proposal from the European Commission (the “Commission”) for a directive on antitrust damages actions.[1]  The new directive is expected to be formally signed during the European Parliament’s plenary session at the end of this month, and EU member states will then have two years to implement the new directive.[2]

The proposals have been controversial throughout.  The directive was originally proposed by the Commission in June 2013 (read our briefing here), but a number of elements were hotly contested by some member states, including a proposal that courts in one EU member state would be bound by a cartel decision from another member state. The EU’s three main institutions provisionally agreed on compromise wording in March 2014 (read our briefing here).  Further amendments were made to the directive prior to its adoption by the Council of Ministers. 

Even now, the directive does not have the unanimous approval of all EU member states.  Germany, Poland and Slovenia are understood to have abstained from the final vote of the Council of Ministers, having issued a statement expressing their discontent with the (albeit limited) derogation granted to SMEs[3] (as defined in Commission Recommendation 2003/361/EC) from joint and several liability for damages.

On some of the more controversial provisions, the new directive appears to offer greater safeguards for defendants than the original proposal put forward by the Commission in June 2013, which was perceived as favouring Claimants. Details of the provisions are set out below 

  • A final infringement decision by a national competition authority or appeal court of a member state will be binding for the purposes of a damages action brought in that member state; an infringement decision from another member state will beprima facie evidence that the infringement has occurred;
  • Leniency statements and settlement submissions will be protected from disclosure for all times;
  • Compensation under the Directive should not lead to over-compensation, thus not imposing any obligations in relation to punitive or multiple damages;
  • Cartelists will be jointly and severally liable for the harm caused by their infringement and each cartelist will be bound to provide compensation for the harm in full. However, derogations from this principle are provided for both immunity recipients and SMEs who will in certain circumstances be liable only to their own direct or indirect purchasers;
  • Indirect purchasers may also have a right of action, and subject to certain conditions, the directive creates a rebuttable presumption that an overcharge has been passed on to an indirect purchaser;
  • Defendants in a damages action may invoke the ‘passing on’ defence, that is, that the claimant passed on the whole or part of the overcharge resulting from the defendant’s infringement to its customers.

The Commission will also issue guidelines on the ‘passing on’ of overcharges.

Comment

The adoption of the new directive by the Council of Ministers represents a significant step forward for legislation that has its origin in a Green Paper published almost nine years ago.

For some member states, the directive represents the implementation of a very different regime to that currently in place in their jurisdictions.  For others such as the UK, the directive will represent less of a change.  The UK regime for competition damages actions is already one of the most developed in Europe.  Earlier this month, the UK government confirmed its intention to proceed with ‘opt-out’ collective damages actions before the Competition Appeal Tribunal, as part of a package of measures to enable consumers and businesses who have suffered loss due to anti-competitive conduct to obtain redress.