A new era for antitrust damages
Today marks the entry into force of the law which implements Directive No. 2014/104/EU of the European Parliament and Council of 26 November 2014 on certain rules governing actions for compensation of damages arising out of anti-competitive practices (the Damages Directive) into the Belgian legal order (the Law on Antitrust Damages). The Law on Antitrust Damages, which was adopted by the Belgian Parliament on 18 May 2017, establishes a specific civil liability regime to facilitate the recovery of damages suffered by victims of anti-competitive practices and introduces a number of claimant-friendly changes to the generally applicable liability regime in Belgium, such as a presumption that cartels cause harm, specific rules on the passing-on of cartel overcharges and the disclosure of evidence.
The core provisions of the Damages Directive were inserted in a new Title 3 in Book XVII of the Belgian Code of Economic Law.
Several presumptions will facilitate antitrust damages claims
The Law on Antitrust Damages introduces several legal presumptions which lower a claimant’s burden of proof and are therefore expected to help claimants to successfully bring actions for antitrust damages.
• Fault: there is now a presumption that the existence of the anti-competitive practices is irrefutably demonstrated when they have been established by the Belgian Competition Authority (BCA) in a final decision (or, upon appeal, by the Brussels Court of Appeals). Infringement decisions of competition authorities in other Member States can furthermore constitute prima facie evidence of a fault. The authority of decisions of the European Commission follows directly from Article 16 of Regulation 1/2003 and is therefore not explicitly covered by the Law on Antitrust Damages.
• Damages: the Law on Antitrust Damages introduces a rebuttable presumption that cartel infringements cause harm. The presumption only applies to cartel infringements (other types of anti-competitive conduct do not benefit from the presumption) and only covers the existence of damage, meaning that the claimant will still have to prove the amount of the damage it suffered. The legislator has recognised the complexity of quantifying antitrust damages by introducing the possibility for the judge to estimate the amount of the damage and thereby request the assistance of the BCA.
• Pass-on: the Law on Antitrust Damages makes it easier for indirect purchasers to claim damages as it introduces a presumption that suppliers (at least partially) pass on cartel overcharges. Indirect purchasers (e.g. final consumers) can invoke the rebuttable presumption of passing-on when three conditions are met:
o the indirect purchaser purchased the goods or services (directly or indirectly) affected by the anti-competitive practice.
The presumption does not cover the amount of the overcharge passed on to the claimant, which needs to be proven by the claimant or estimated by the judge.
Defendants can invoke passing-on as a defence against a claim for damages by a direct purchaser when the direct purchaser has passed-on the alleged overcharge to its own customers. Defendants cannot, however, rely on a presumption of passing-on, which means that they have to adduce evidence that the direct purchaser (claimant) passed-on the alleged overcharge and did therefore not suffer any damages.
Disclosure of evidence
The Law on Antitrust Damages introduces specific rules on the disclosure of certain categories of evidence. These rules reflect the balance that the Damages Directive has tried to strike between protecting the public enforcement of competition law and remedying the information asymmetry between claimants and defendants. The Law on Antitrust Damages distinguishes between three categories of evidence:
• Grey list: evidence in the possession of the BCA which can only be disclosed once the BCA has closed its proceedings, such as (i) information that was prepared specifically for the proceedings before the BCA, (ii) information prepared by the BCA and sent to the parties in the course of its proceedings, and (iii) settlement submissions that have been withdrawn.
• Black list: leniency statements and settlement submissions benefit from an absolute protection against disclosure in antitrust damages proceedings. Belgian judges could previously order the disclosure of these documents, but they were in practice unlikely to do so.
• White list: all evidence that is not on the grey or black list. Judges will be able to order the disclosure of evidence on the white list, insofar as such disclosure is proportionate. This disclosure regime is very similar to the current framework for the disclosure of evidence under Belgian civil procedure (Article 877 of the Belgian Judicial Code). The Law on Antitrust Damages extends the power of the national judge to order the disclosure of “categories of evidence”, where in theory it was previously only possible to order the disclosure of specified items of evidence. The new regime furthermore includes specific rules on the protection of confidential information.
National judges will be able to request the BCA to disclose evidence included in its files when parties are not reasonably able to provide that evidence.
Particularly noteworthy is the introduction of a sanctioning mechanism aimed at ensuring compliance with the new disclosure regime: the Law on Antitrust Damages has introduced the possibility for judges to impose fines of up to €10 million on (third) parties and their legal representatives for not complying with disclosure obligations.
Joint and several liability for co-cartelists
In line with the generally applicable tort law principles, companies involved in the same anti-competitive behaviour (e.g. co-cartelists) are jointly and severally liable for the harm caused. The new regime provides for two exceptions to this rule for immunity recipients and small and medium-sized companies. These two categories of defendants will in principle only be liable towards their own direct and indirect purchasers. They will only be liable towards other injured parties when full compensation cannot be obtained from the other companies that were involved in the infringement.
Belgian law deviates from the Damages Directive on this point, as the latter provides that SMEs are only liable towards their own direct and indirect purchasers where the application of the normal rules of joint and several liability would irretrievably jeopardise the SME’s economic viability and cause its assets to lose all value, even if this means that certain claimants (direct and indirect of co-cartelists) will not be compensated in full.
Collective actions for the recovery of damages resulting from antitrust (and other regulatory) breaches were introduced in Belgium by the law of 28 March 2014 on the collective redress mechanism (Article XVII.35 et seq of the Belgian Code of Economic Law). The scope of the collective actions regime was, however, limited to infringements of Belgian competition law. The Law on Antitrust Damages now extends the scope of the Belgian collective actions regime to include infringements of EU competition law. The Law on Antitrust Damages moreover specifies that the new provisions extend to antitrust proceedings brought under the collective action regime.
The Law on Antitrust Damages provides that the common limitation periods apply to antitrust damages actions (Article 2262bis of the Belgian Civil Code), meaning that antitrust claims are time-barred after 5 years. The Law on Antitrust Damages specifies that the limitation period starts on the day following from when the claimant knew or ought to know about (i) the behaviour and the fact that it constitutes an infringement of competition law, (ii) the fact that the infringement caused harm, and (iii) the identity of the infringer. In any event, antirust claims must be commenced at the latest after 20 years from the end of the infringement.
The Law on Antitrust Damages provides that limitation periods are interrupted by investigatory measures by the competition authority with respect to the infringement to which the damages action relates. This new rule is in line with the Constitutional Court ruling of 10 March 2016 which partly declared Article 2262bis of the Civil Code unconstitutional insofar as it resulted in antitrust damages actions being time-barred before a final decision on the infringement was issued.
The Law on Antitrust Damages entered into force on 22 June 2017, ten days after its publication in the Staatsblad / Moniteur. The procedural provisions of the Law on Antitrust Damages will apply retroactively to all actions for damages introduced after 26 December 2014 (corresponding to the entry into force of the Damages Directive). The Damages Directive specifies that the substantive provisions cannot apply retroactively. It is expected that national courts may seek guidance from the European Court of Justice on the distinction between the procedural and substantive provisions of the Directive.