In brief: the legal framework for private antitrust litigation in European Union

Legislation and jurisdiction

How would you summarise the development of private antitrust litigation in your jurisdiction?

Private antitrust litigation is steadily gaining prominence in Europe. Most European countries report recent increases in case numbers. One of the key drivers is legislative change: the EU Damages Directive (EU Directive 2014/104/EU) was adopted in 2014 and has now been implemented in all member states. National legislators continue to foster the development through additional legislative reforms. For example, in Germany, an amendment passed in January 2021 further facilitated disclosure requests and introduced an additional evidentiary presumption that benefits plaintiffs.

Private antitrust litigation relates to a variety of contractual and non-contractual issues. However, it is cartel damages claims (ie, damages claims relating to violations of the cartel prohibition) that are growing exponentially. According to statistics, from 2014 to 2019 the number of European civil court judgments concerning cartel damages claims more than quadrupled from 50 to 239. In the majority of cases, plaintiffs are successful and courts either establish liability or award damages. Customers of cartelists now typically consider potential damages claims whenever the European Commission (EC) or a national competition authority imposes fines on a cartel. There may even be obligations under corporate law to enforce damages claims.

EC cartel decisions regularly lead to claims being made in the courts of several European countries. In almost all such cross-border cases, claims are filed in at least one of the three European jurisdictions that are traditionally preferred by claimants for cartel damages: the United Kingdom, Germany and the Netherlands. For instance, damages claims relating to the EC’s Air Cargo and TV/Computer Monitors decisions are pending in all three countries. Damages claims relating to the EC’s Car Glass decision have been filed in Germany and the United Kingdom. Damages claims relating to the Gas Insulated Switchgear cartel have been filed at courts in the United Kingdom and the Netherlands. Currently, the EC’s 2016 Trucks decision dominates the antitrust litigation landscape in Europe. Truck manufacturers face claims in practically all European countries, with a focus on the three core jurisdictions as well as Spain.

Along with cartel-related damages claims, those relating to abuses of a dominant position are increasing. The trend has been triggered by a decade-long uptick in the number of both EU and national investigations into potential abuses of a dominant position, particularly in the tech sector and the pharmaceutical sector. For instance, in 2017, the EC fined Google in the Shopping case for abusing its dominant position. Although the decision has been appealed, four related civil damages claims against Google are already pending before national courts: one in Germany (filed in 2019, damages claimed of €500 million), one in the Czech Republic (filed in 2020) and two in the United Kingdom.

Are private antitrust actions mandated by statute? If not, on what basis are they possible? Is standing to bring a claim limited to those directly affected or may indirect purchasers bring claims?

Private antitrust actions are mandated by statute across Europe. Decisive for the development of private antitrust actions in Europe were two judgments by the European Court of Justice (ECJ) in Courage/Crehan (C‑453/99 of 2001) and Manfredi (C-295/04 of 2006), in which the court held that the cartel and abuse of dominance prohibitions under European law are directly applicable and hence afford ‘any individual’ the right to claim damages. Following these judgments, the European and national legislators created or improved the legal frameworks for private antitrust actions.

Standing to bring a claim is extensive under European law and national laws must be construed accordingly. European law is based on the principle of full compensation, as the ECJ held in Manfredi (C-295/04; also see article 12(1) EU Damages Directive). Anyone who has suffered loss that has a causal connection with a competition law infringement may claim damages, irrespective of whether they are a direct or an indirect purchaser. Two ECJ judgments concerning the EC’s Elevators and Escalators cartel decision confirm just how broad standing is. According to the ECJ’s judgment in Kone (C-557/12 of 2014), compensation may be sought in relation to losses resulting from higher prices charged by non-cartelists who acted independently from the cartel and increased their prices under the ‘umbrella’ of the cartel (umbrella damages). In Otis (C‑435/18 of 2019), the ECJ even granted persons the right to claim damages where they were neither active as suppliers nor customers on the market affected by the cartel. The plaintiff, a public body, had subsidised construction projects by granting loans. And it argued that the elevators and escalators cartel had increased construction costs and correspondingly the amount of loans required. Absent the cartel, the plaintiff would have been able to invest the additional amounts more profitably (lost interest profits).

In practice, however, even with a relatively broad legal concept of standing to bring a claim, standing may not always actually be proven in individual cases. Thus, following the ECJ’s Otis judgment, the Austrian courts must now determine whether there actually was a causal link between the cartel and the alleged lost opportunities to invest the money more profitably. Indirect purchasers often struggle to prove the causal link between a potential overcharge at the first market level and higher prices at ‘their’ downstream market level. Moreover, a generous approach to standing leads to practical issues. For instance, allowing indirect claims creates the risk of duplicative damages awards in all cases in which direct and indirect customers claim damages at the same time.

If based on statute, what is the relevant legislation and which are the relevant courts and tribunals?

Private antitrust claims are governed by the two general provisions under European law prohibiting cartels and abuses of a dominant position, article 101 and article 102 TFEU, as well as the Council Regulation (EC) No. 1/2003 implementing these provisions. In addition, the European legislator has issued a far-reaching directive concerning civil damages claims, the EU Damages Directive (EU Directive 2014/104/EU).

Some issues are not specifically addressed by European law and therefore regulated by national laws, namely procedural questions such as the provision of evidence and substantive questions such as the quantification of harm. However, European law has primacy over national laws (ECJ in Costa/ENEL, C-6/64 of 1964). According to the ECJ, national rules must respect two basic principles: the principle of equivalence and the principle of effectiveness. Applicable national laws governing cross-border cases must not be less favourable than those governing similar domestic cases (principle of equivalence) and must not make it in practice impossible or excessively difficult to exercise EU rights (principle of effectiveness).

The relevant courts and tribunals are primarily national civil courts. Claimants must file civil claims at national courts. The European institutions may, nevertheless, become involved in private antitrust litigation in two ways:

• National courts can refer questions on the interpretation of EU law that arise in the context of private antitrust litigation to the ECJ. Many rulings by the ECJ on crucial private antitrust litigation questions, such as the rulings in Kone, Skanska and Otis, derive from national court referrals. Preliminary rulings are binding on all courts in EU member states.
• The EC may become involved in national civil proceedings by way of amicus curiae briefs. These are opinions on the interpretation of EU law (article 15 Council Regulation (EC) No. 1/2003). Usually, national courts take the initiative and consult the EC, but the EC may also proactively issue an opinion. In contrast to rulings from the ECJ, the EC’s opinions are not binding. In National Grid/ABB, a follow-on damages claim relating to the gas insulated switchgear cartel, the English High Court consulted the EC on a question around the disclosure of leniency material, but ultimately decided not to follow the EC’s arguments. While the EC had rejected disclosure to protect its leniency regime, the English court ordered the disclosure of extracts of certain documents containing leniency material. Another example concerns the trucks cartel. The German Regional Court of Hanover decided to ask the ECJ for a preliminary ruling on how to interpret the EC’s decision in the Trucks case and explained that the court opted against approaching the EC because an amicus curiae brief would not be binding (matter Landkreis Northeim). Often, however, the EC’s opinion has de facto authority.

Private actions

In what types of antitrust matters are private actions available? Is a finding of infringement by a competition authority required to initiate a private antitrust action in your jurisdiction? What is the effect of a finding of infringement by a competition authority on national courts?

Private actions are available in all types of antitrust infringements, according to the European Court of Justice (ECJ) (judgments Courage/Crehan (C‑453/99 of 2001) and Manfredi (C-295/04 of 2006)).

A finding of infringement by a competition authority is – de jure – not required to initiate a private antitrust action, but – de facto – most claims follow decisions by the EC or a national competition authority (follow-on claims). Prominent examples are damages claims relating to the trucks and air cargo cartels. A finding of infringement by a competition authority has the following effect:

• decisions by the EC bind national courts and irrefutably establish proof of the infringement, according to article 16 Council Regulation (EC) No. 1/2003 and article 9 EU Damages Directive; and
• decisions by national competition authorities are generally only binding in the respective home jurisdiction while, in other countries, they constitute prima facie evidence of an infringement, according to the EU Damages Directive. In two member states, Germany and Austria, infringement decisions by a competition authority of another member state are also binding.

Following Brexit, decisions by the EC issued after 1 January 2021 do not bind courts in the United Kingdom. This means that claimants cannot simply rely on a decision by the EC to prove an infringement but rather must prove it separately. However, even though an infringement decision by the EC is not binding, it could have significant evidential value. Moreover, if the EC’s decision was rendered before 1 January 2021 or if the EC initiated its investigation before that date, decisions by the EC still have a binding effect in the United Kingdom.

Standalone civil claims, brought without any prior infringement decision, are rare. Prominent examples are the damages actions launched in the United Kingdom and Germany against MasterCard and Visa concerning inflated interchange fees charged in the context of their card payment systems. While no infringement decisions were ever issued against the defendants, the EC did close its investigation on the basis of commitments that removed its competition concerns. Such commitment decisions are not binding on civil courts, but they help plaintiffs to substantiate a competition law infringement. Another example is a bundled damages actions by over 100 sawmills against five German federal states, funded by an international litigation finance provider. The sawmills claim damages of over €850 million caused by a log wood cartel. The cartel was investigated but not sanctioned by the German Federal Cartel Office – the authority issued a prohibition order against one of the federal states in 2015, but it was later revoked by the German Federal Court of Justice on formal grounds. An example of a standalone claim without any prior enforcement measures by a competition authority is ValueLicensing’s claim against Microsoft that was recently filed at the English High Court. ValueLicensing is claiming damages of over £270 million due to alleged anti-competitive contractual practices and an abuse of a dominant position.

What nexus with the jurisdiction is required to found a private action? To what extent can the parties influence in which jurisdiction a claim will be heard?

European law, namely Council Regulation (EU) No. 1215/2012 (Brussels I), provides a jurisdictional regime for all cases with links to more than one country in the EU. It is directly applicable in all member states. In private antitrust actions and, in particular, cartel damages actions, plaintiffs often have the option to choose between different venues.

First, under the general rule in article 4(1) Brussels I, a defendant may be sued in the courts of a member state in which the defendant is domiciled.

Secondly, under the special rule concerning tort claims in article 7(2) Brussels I, claimants may bring a claim in the courts of the member state ‘where the harmful event occurred’. This notion covers both the place where the event giving rise to the damage took place and the place where the resulting damage occurred (ie, it can open up two different venues). The claim can be brought in either of the available venues:

• The place where the event giving rise to the damage took place, the first alternative, is the place where the anticompetitive conduct was implemented (ie, where the cartel was concluded) (ECJ in CDC/Hydrogen Peroxide, C-352/13 of 2015) or where the abusive conduct occurred (eg, the predatory prices were offered (ECJ in flyLAL Lithuania, C-27/17 of 2018)).
• Four ECJ judgments deal with the second alternative, the place where the damage occurred. In flyLAL Lithuania (C-27/17 of 2018), an abuse of dominance case, the ECJ held that the damage occurs in the member state whose markets were affected by the abuse. According to the judgment in CDC/Hydrogen Peroxide (C-352/13 of 2015), the damage caused by a cartel in general occurs at the claimant’s registered office. Finally, the Tibor-Trans (C-451/18 of 2019) case is another cartel damages case (related to the trucks cartel), but the claimant was an indirect purchaser of the cartelist. In its decision, the ECJ did not refer to the claimant’s registered office, but, in line with the principles previously established for abuse of dominance cases, considered the place where the damage occurred to be the member state whose markets were affected by the cartel and where the claimant had suffered damage due to distortion of market prices. The ECJ specified the Tibor-Trans ruling in RH/AB Volvo (C-30/20 of 2021), another case related to the trucks cartel. The ECJ held that, in damages claims related to cartels, the member state where the damage occurred is the member state where the claimant bought cartelised goods. In cases where the claimant bought cartelised goods in several member states, jurisdiction should be concentrated at the claimant's main seat according to the ECJ – a pragmatic principle. Finally, the ECJ confirmed that article 7(2) Brussels I not only regulates international but also local jurisdiction within the respective member state.

Third, under article 8(1) Brussels I, in cases in which there are multiple defendants (as often in cartel damages claims), claimants can use one of the defendants as an ‘anchor’ and bring a claim against several of the defendants in any jurisdiction where the anchor defendant is domiciled. The precondition is that the claims against all defendants are so closely connected that it is expedient to hear and determine them together. This typically is the case for cartel damages claims, as confirmed by the ECJ in CDC/Hydrogen Peroxide (C‑352/13 of 2015). In this matter, the ECJ moreover held that, even if the defendant serving as the ‘anchor defendant’ reaches a settlement with the claimant, jurisdiction remains with the competent court unless the settling defendant colluded with the claimant to artificially establish jurisdiction.

Fourth, the parties can agree on a forum under article 25 Brussels I. The ECJ provided guidance on the enforceability of jurisdiction clauses (eg, contained in supply agreements) in the context of private antitrust litigation in two cases. In the judgment CDC/Hydrogen Peroxide (C‑352/13 of 2015), which concerned a cartel damages claim, the ECJ held that jurisdiction clauses only apply to cartel damages claims if the clauses specifically refer to them; generic jurisdiction clauses that refer merely to disputes arising from a contractual relationship do not suffice. In Apple Sales International (C-595/17 of 2018), the ECJ came to a different conclusion for abuses of a dominant position. In this case, the ECJ considered the generic jurisdiction clause to also cover claims based on the abuse. The ECJ explained that the abuse might already have occurred when the contract was entered into so that it had the required direct link with the contractual relationship.

Brexit has changed the rules for claims filed in the UK. Brussels I does no longer apply and the EU Commission has rejected the UK’s application to accede the Lugano Convention of 2007, which followed similar principles. Therefore, in the UK, jurisdiction in private antitrust matters is determined by national law. Antitrust matters fall in the category of tort claims, for which UK courts have jurisdiction if an action is permissibly served on a defendant. This typically requires a prior permission to serve, which, in turn, is granted if the claimant is able to show that damage could have been sustained or an infringement committed in the UK. 

In practice, based on this legal framework, European law often gives claimants the option to choose between different jurisdictions for their claim. Which jurisdiction a claim is filed in often has a significant impact on the course and the outcome of proceedings. Despite the EU Damages Directive defining a common standard on many aspects, differences in national regimes remain and practical approaches by national courts differ on questions such as disclosure, provision of evidence, damages estimation or scope of the passing on defence. Other factors such as the admissibility of litigation funding, the duration of proceedings or the availability of collective proceedings also play a role. 'Forum shopping' is, therefore, a frequent occurrence. For instance, in the Trucks case, a large number of Spanish freight forwarders decided to bring their claims in Germany. Another example is a German car manufacturer that decided to file its damages action relating to the roll-on roll-off vehicle shipping cartel in England.

Can private actions be brought against both corporations and individuals, including those from other jurisdictions?

Articles 101 and 102 of the Treaty on the Functioning of the European Union prohibit anticompetitive behaviour by corporations, not by individuals. Individual liability is therefore determined by national laws. As regards for instance Germany, the Netherlands, Spain and the United Kingdom, private antitrust actions may also be brought against individuals, including those domiciled in other jurisdictions (provided national courts have jurisdiction).

The ECJ dealt with the question of the liable entity for the first time in Skanska (C-724/17 of 2019). The case concerned a damages claim filed against a defendant who had acquired and subsequently dissolved a company involved in a cartel. The defendant claimed it was not liable for damages since it was not involved in the cartel, but the ECJ held that a defendant cannot escape liability through restructuring. The ECJ relied on the concept of ‘undertaking’ under EU law, which is not limited to the respective legal entity, but rather refers to the economic entity with all legal entities belonging to it (ie, usually the whole group of affiliated entities).

The ECJ widened its approach in Sumal (C-882/19 of 2021). The case concerned a different set of facts. No restructuring had occurred and claims were filed against a subsidiary of the entity involved in the cartel. The ECJ held that actions can nevertheless be brought against the subsidiary. According to the ECJ, liability may be attributed to the subsidiary if both entities belong to the same economic unit and therefore form a single undertaking. In addition, a specific link between the subsidiary's economic activity and the subject matter of the infringement must exist, namely, the subsidiary must be active on the market affected by the infringement.