On 17 June 2011, the Commission published for consultation a draft guidance paper on quantifying harm in actions for damages based on breaches of Article 101 or 102 TFEU8. The guidance paper aims at offering non-binding assistance to courts and parties involved in antitrust damages actions. It provides insights into the harm caused by the infringement of the competition rules and provides guidance on the main methods and techniques that are available to quantify such harm.
The Guidance paper focuses on two main categories of harmful scenarios: (i) Infringers exploit their market power by raising the prices their direct customers pay; or (ii) undertakings infringe Articles 101 and 102 TFEU by excluding competitors from a market or reducing their market share.
The Guidance Paper is purely informative. It does not bind national courts and does not alter legal rules applicable in EU Member States to damages actions based on breach of article 101 and 102 TFEU.
The draft paper reaffirms the right of injured parties to be compensated. Each member state must lay down the detailed rules governing the exercise of the right to compensation guaranteed by EU Law. These rules, however, must not render excessively difficult or practically impossible the exercise of rights conferred on individuals by EU law (principle of effectiveness), and they must not be less favourable than those governing damages actions for breaches of similar rights conferred by domestic law (principle of equivalence).
The compensation consists of “placing the injured party in the position it would have been in had there been no infringement”. The compensation includes reparation not only for actual loss suffered but also for loss of profit and the payment of interest.
The draft guidance paper makes clear that national court should check whether sufficient data are available to the party charged with the burden of proof to apply the method and technique. National courts “can use pieces of direct evidence relevant for the quantification of harm, such as documents produced by an infringing undertaking in the course of business regarding agreed price increases and their implementation or assessing the development of its market position”.
The Counterfactual scenario
The antitrust damages quantification requires first to establish the ‘non-infringement scenario’ or the ‘counterfactual scenario’. In other words, to determine what is likely to have happened without the infringement. It is therefore necessary to construct a reference scenario with which the actual situation can be compared. The draft guidance paper points out that it is impossible to know with certainty how a market would have exactly evolved in the absence of the infringement of Article 101 or 102 TFEU. Prices, sales volumes, and profit margins depend on a range of factors and complex interactions between market participants that are not easily estimated. Estimation of the hypothetical non-infringement scenario will thus by definition rely on a number of assumptions. The draft guidance paper then sets out a number of construction methods for quantifying the harm.
The Commission seeks to receive the views of stakeholders who are directly concerned by antitrust damages actions, including members of the judiciary, parties to actions and legal advisors. All interested parties have until 30 September 2011 to send their comments.