Legislation and jurisdiction
Development of antitrust litigation
How would you summarise the development of private antitrust litigation in your jurisdiction?
Private antitrust litigation has a long tradition in Germany and the enforcement of competition law through litigation continues to increase. There are broadly three different kinds of private antitrust litigation:
- damages claims based on infringements of antitrust law;
- claims based on abusive behaviour of dominant companies; and
- contractual claims being defended on competition law grounds.
Regarding claims challenging abusive behaviour by dominant companies, there is a large and established body of case law spanning more than 40 years including, for example, refusal to supply and access to essential facilities claims.
Private antitrust litigation also has a long tradition in Germany in relation to competition law grounds being used to challenge or defend the validity of contracts in civil law cases.
Damages actions by victims of anticompetitive agreements against participants in the infringement were strengthened significantly as of 1 July 2005 (broadening of the circle of potential claimants, alleviation of the standards of proof, restriction of the passing-on defence, etc) and again as of 9 June 2017 when Directive 104/2014/EU (Damages Directive) was implemented into German law (codification of prima facie evidence that cartels lead to damages, extension of limitation periods, introduction of disclosure procedure, etc). Even before the Damages Directive had been implemented, Germany was a favourable forum for antitrust damages claims in Europe. Most of the principles set out in the Damages Directive applied in Germany for many years, either as part of written laws (such as standing of indirect purchasers, binding effect of decisions by competition authorities, joint and several liability, etc) or of the case law (such as availability of certain types of joint (de facto collective) actions, prima facie evidence that cartels lead to damages, availability of the passing-on defence under certain circumstances, etc). By implementing the Damages Directive, the German legislator has further strengthened private damages actions. Inter alia, prima facie evidence that competition law infringements lead to damages has been explicitly implemented in the German Act against Restraints of Competition (ARC) (see question 15). Further, it is confirmed that limitation periods do not start before a competition law infringement is terminated and both, limitation periods and suspension periods, have been extended significantly (see question 17). In addition, a disclosure procedure has been established. However, whether this will actually facilitate or rather delay damages claims remains to be seen (see question 9).
Taking into account the longstanding experience of the courts with antitrust damages claims and the recent changes as a result of the Damages Directive, it can be expected that Germany will continue to be an important forum for antitrust damages claims in Europe. In fact, Brexit implications may further strengthen the importance of Germany as a forum for damages claims resulting from competition law infringements covering more than one EU member state.
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 in Germany. Claims for injunctive relief are primarily based on section 33 of the ARC and damages claims are based on sections 33a to 33h of the ARC.
In addition, claims for injunctive relief and for damages may under certain circumstances be based on section 8 and section 9 respectively of the German Act against Unfair Competition. A further legal basis can be found in general tort law, in other words, in section 823 et seq of the German Civil Code (CC).
The invalidity of agreements for competition law reasons is based on section 134 of the of the CC in connection with section 1 of the ARC.
In a judgment of 28 June 2011 (KZR 75/10), the German Federal Supreme Court held that also indirect purchasers can bring damage claims against the members of a cartel (see question 15). Therefore, if manufacturers engage in a price-fixing cartel and charge excessive prices, it is not only their contractual partners (eg, wholesalers or retailers) who might be able to claim for damages. Rather, anyone downstream to whom the whole or a part of the overcharge has been passed on, has standing to bring a claim. If certain conditions are met, it is actually presumed that (a part of) the damage was passed on to indirect purchasers (section 33c of the ARC). However, indirect purchasers bear the burden of proof as to the amount of the damage suffered and as to the causal link between this damage and the infringement of antitrust law.
If based on statute, what is the relevant legislation and which are the relevant courts and tribunals?
For the relevant legislation, see question 2. In terms of jurisdiction, there are specific courts with specialised chambers dealing with antitrust cases.
According to section 87(1) of the ARC, regional courts have exclusive jurisdiction over civil actions based on national competition law or articles 101 and 102 of the Treaty on the Functioning of the European Union, regardless of the amount in dispute. The federal states in Germany have been granted the authority to designate one or more specific regional courts that decide exclusively on antitrust matters within the relevant federal state (section 89 of the ARC). Almost all of the federal states have exercised this authority. Within these specific regional courts, specialised chambers have been established to deal exclusively with antitrust matters. However, as an exception to the general rule, according to section 95(2) number 1 of the German Code on Court Constitution, cartel damages actions are no longer heard by these specialised chambers but by the common civil chambers.
The parties can appeal to the higher regional courts. Again, the majority of the federal states in Germany have determined a single court of appeal that has exclusive jurisdiction over antitrust matters. In addition, these courts of appeal have established specialised antitrust divisions. Both the regional courts and the higher regional courts are trial courts which hear evidence on facts in addition to legal arguments.
The decisions of the higher regional courts can be appealed on points of law before the German Federal Supreme Court, which also has a specialist antitrust division. Such an appeal is possible if the court of appeal grants leave to do so or if, on application by one of the parties, the appeal is admitted by the German Federal Supreme Court.
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 (injunctive relief or damages) are available in any type of antitrust matter. Claims can be made against members of cartels as well as against companies that abuse a dominant position or any party to a potentially anticompetitive agreement.
In addition, it is possible to object to a merger if, for example, competitors or other affected market participants take the position that the respective merger should have been prohibited by the German Federal Cartel Office (FCO). Such claims fall within the exclusive jurisdiction of the Higher Regional Court of Düsseldorf.
A finding of infringement by a competition authority is not required to initiate a private antitrust action. However, without a decision of a competition authority the full burden of proof that an infringement has occurred rests on the claimant. If a competition authority investigates certain conduct it is, therefore, advisable to await the finding of the authority. According to section 33b ARC, national courts are bound by a finding that an infringement has occurred, once such a finding forms part of a final decision by the FCO, the European Commission or any competition authority of another EU member state.
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?
The international competence of German courts in antitrust matters is governed either by Council Regulation (EU) No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters or by the Lugano Convention 2007 on jurisdiction and the enforcement of judgments in civil and commercial matters or by German procedural law.
According to Regulation (EU) No. 1215/2012, German courts have, for example, jurisdiction in antitrust matters if the defendant is domiciled in Germany (article 2(1)) or in cases of cartel damages actions where the harmful event occurred or may have occurred in Germany (article 7(2)). A place is considered to be the place where the harmful event occurred if only one of the essential facts constituting the offence occurred there. This is both the place where the defendant committed the competition law infringement (scene of the behaviour), as well as the place at which interference with the object of legal protection occurred (place of interference). In the event of an alleged cartel activity, the scene of the behaviour and the place of interference are often different. The scene of the behaviour is the place where the cartel activities were initiated and, or practised. The place of interference would be the place where competition was restricted; in particular, where a potential claimant suffered loss as a consequence of the cartel activity (regularly the operational location or registered seat of the claimant since that is the place where the overcharge was paid).
If one defendant of a group of joint and severally liable defendants can be sued in Germany, all of the defendants can be sued before the German courts if there is a sufficiently close relationship between the claims against all of the defendants. In cartel cases, a claim against all participants may, therefore, be brought against all defendants if one defendant can be sued in Germany (the ‘anchor defendant’). In a pending damages action regarding the Hydrogen Peroxide cartel, only one of the six defendants was based in Germany and served as the anchor defendant. Since the anchor defendant reached a settlement with the claimant (the professional claimant company Cartels Damages Claims SA), none of the remaining defendants is based in Germany. The European Court of Justice (ECJ) found that jurisdiction remains with the German court unless the claimant and the defendant who reached the settlement colluded to artificially establish jurisdiction (decision dated 21 May 2015, C-352/13).
In the event that German procedural law applies, German courts have, in particular, jurisdiction for cartel damages actions against any cartel member if the cartel activity occurred in Germany. According to section 32 of the German Code of Civil Procedure (CCP), jurisdiction in matters of tort (here, illegal cartel activity) is connected to the place where the harmful event occurred. In this regard, the same principles apply as under Regulation (EU) No. 1215/2012. Other important provisions are sections 13, 17 and 21 of the CCP, which state that the court at the place where the defendant is domiciled or where a defendant has its seat or a branch is the locally competent court. In cases where a claim against several cartel participants is brought at the court of domicile of one participant, this court can be declared to have jurisdiction by the competent higher regional court according to section 36(1) No. 3 of the CCP.
Can private actions be brought against both corporations and individuals, including those from other jurisdictions?
Yes. Provided that German courts have jurisdiction in accordance with the conditions as set out in question 5, private actions can be brought against both corporations and individuals (including those from other jurisdictions).
Private action procedure
May litigation be funded by third parties? Are contingency fees available?
In Germany, litigation may be funded by third parties. There are several litigation financing companies in Germany. They fund civil litigation costs and bear the financial risk if the claim has a sufficient chance of success. In the event of a successful outcome of the proceeding, the litigation financing company will usually receive a certain percentage of the proceeds recovered by the claimant.
In the event of a cartel damages claim, there are further financing possibilities. Several firms and investment funds specialise in acquiring and pursuing cartel damages claims at their own risk and cost. The injured party will generally receive a certain amount of the proceeds recovered by these firms; sometimes, litigation funds even pay a certain amount upfront when acquiring the claim. It has to be mentioned that German courts only accept claims by such firms or investment funds if they are sufficiently funded to bear procedural cost in case of defeat (see question 19).
In addition, contingency fees are, at least to a certain extent, available in Germany. In 2008, the German legislature lifted the total ban on contingency fees to implement a prior decision of the German Federal Constitutional Court. The German Federal Constitutional Court had held on 12 December 2006 that the prohibition of contingency fees was unconstitutional insofar as it did not contain any exceptions to the general rule. Therefore, contingency fees are now permitted if the claimant would be prevented from asserting his or her rights without contingency fees owing to his or her economic situation. In addition, the agreement on contingency fees has to meet certain formal requirements in accordance with section 4(2) and (3) of the German act on the remuneration of lawyers. The agreement must, for example, state for which compensation (estimated statutory fees or if applicable contractual fees that are not contingency fees) the lawyer would have agreed to take the case in the absence of a contingency fee and lay out the conditions that entitle the lawyer to claim compensation.
Are jury trials available?
No. There are no jury trials available in Germany. In first instance, damages cases are exclusively heard in one of the respective regional courts’ civil chambers consisting of (usually) three professional judges. All other cases may either be heard in a civil chamber or a chamber of commerce. If the cartel chamber responsible for the case is a chamber of commerce, two of the judges will be honorary lay judges who are businessmen. For more details on courts, see questions 3 and 18.
What pretrial discovery procedures are available?
While German law did traditionally not provide for discovery proceedings equivalent to those in common-law jurisdictions, the Damages Directive has led to the introduction of a limited disclosure procedure in connection with antitrust damages claims. Section 33g of the ARC introduces a right to access to information required to seek antitrust damages. In order to claim access to information from either the potential defendant or another third party, a claimant has to demonstrate probable cause that he or she has a right to seek damages and indicate the information as specific as possible. In return, a defendant has the right to access to information from either the claimant or a third party, if an action of damages is already pending (ie, not pretrial) and if the defendant describes the information as specific as possible and explains why they are needed (usually to quantify a pass-on by the claimant). In general, the interests of the party claiming access to information and the interest of the party that is in the (alleged) possession of such information need to be balanced against each other. In this regard, the following aspects have to be considered:
- relevance and value of information;
- the extent to which available information has been exhausted;
- effort and cost to provide requested information;
- confidential nature of information; and
- effectiveness of public competition law enforcement.
Access to leniency statements and acknowledgements in connection with settlement discussions with competition authorities are explicitly exempted from the access to information. However, information in the possession of leniency applicants other than leniency statements are not exempted.
Various procedural aspects concerning the application of Section 33g of the ARC are further specified by section 89b to 89e of the ARC. For example, section 89b(1) of the ARC refers to section 142 of the CCP. According to section 142 of the CCP, the judge can order the defendant or a third party to produce a certain specified document that it possesses that is relevant to substantiate the claim, provided that the document can be specified by the claimant and the claimant or the defendant has referred to the document during the proceedings. While section 142 of the CCP was previously only available once proceedings had been initiated, it is now also available for pretrial disclosure requests in line with section 33g of the ARC.
In addition to requests against third parties, the claimant can request access to the records of the FCO or other relevant competition authorities according to section 89c of the ARC. Section 89c of the ARC is a newly introduced lex-specialis of the general right to inspection of files according to section 406(e) of the German Code of Criminal Procedure on which such requests were based before section 89b of the ARC entered into force. Leniency statements and acknowledgements in connection with settlement discussions with competition authorities are exempted as well. It is important to note that requests for information against competition authorities are secondary to requests against other parties. Pursuant to section 89c(1), sentence 1, No. 1 of the ARC access to the records of competition authorities shall only be granted if the requested information cannot be obtained with reasonable effort from another party.
Section 89d(4) of the ARC explicitly stipulates that the rules contained in section 33g of the ARC and sections 89b et seq of the ARC shall conclusively govern requests for access to information. In this regard, section 89d(4) of the ARC states that general civil procedural rules such as section 421 et seq of the CCP (right to request that the defendant should produce individual specified documents in court proceedings) only apply if and to the extent the claimant has a right to access to information pursuant to section 33g of the ARC.
Whether the extended rules on access to information will actually facilitate, or rather hamper damages claims, remains to be seen. Enforcing (pretrial) disclosure will likely result in significant delays and may therefore not always be attractive. On the other hand, defendants trying to delay cases by claiming access to information in connection with an alleged pass-on is may become a regular pattern. This is especially true as section 89b(3) and (4) of the ARC provide for the possibility of a stay of proceedings and an interlocutory judgment regarding access to information.
What evidence is admissible?
The claimant may base its claim on any available evidence, including:
- documentary evidence (contracts, website printouts, emails, letters, attendance notes, telephone notes, etc);
- evidence by witness;
- expert evidence;
- evidence by interrogation of the parties; or
- evidence by inspection.
Of the above points, the first three are by far the most relevant in antitrust proceedings.
In addition, when a decision of the FCO, the European Commission or any other European competition authority has become final, the claimant can rely on the findings of the relevant competition authority instead of providing evidence for the competition law infringement (section 33b of the ARC and article 16(1) of Regulation (EC) No. 1/2003).
Legal privilege protection
What evidence is protected by legal privilege?
Generally, the concept of legal privilege does not exist in Germany.
In German civil proceedings, the concept of legal privilege is of less relevance than in a number of other jurisdictions, because there are no discovery proceedings equivalent to those in common-law jurisdictions. Even the newly introduced limited disclosure procedure pursuant to section 33g of the ARC does not contain rules on legal privilege. In general, both (potential) claimants and defendants can request access to information in the possession of others. Restrictions only apply to leniency statements and acknowledgements in connection with settlement discussions with competition authorities (see question 9).
The same applies with regard to access to the records of a competition authority. Communications between the defendant and its in-house counsel or external lawyers can be found in the FCO’s file because the concept of legal privilege does not exist in the event that the FCO conducts cartel investigations and seizes documents. The FCO is entitled to seize all documents in the possession of the in-house counsel unless they concern ‘defence correspondence’. Defence correspondence is correspondence that is prepared in awareness of, and relates directly to, the actual defence in quasi-criminal cartel investigations or other antitrust proceedings that can lead to the imposition of a fine.
Documents in the possession of the defendant’s external lawyer are protected by attorney privilege and cannot be seized. This is confirmed by section 33g(6) of the ARC.
Trade secrets are generally not privileged under German civil procedural law. However, confidentiality aspects have to be considered in relation with a request for disclosure of information pursuant to section 33g of the ARC. If access to the information is granted, the court has to ensure that trade or business secrets will be protected; for example, through redaction of the relevant documents.
Are private actions available where there has been a criminal conviction in respect of the same matter?
Private actions are available regardless of whether there has been a prosecution under competition or criminal law. There is no difference between private actions as to whether there has been a criminal conviction or not.
Utilising of criminal evidence
Can the evidence or findings in criminal proceedings be relied on by plaintiffs in parallel private actions? Are leniency applicants protected from follow-on litigation? Do the competition authorities routinely disclose documents obtained in their investigations to private claimants?
Pursuant to section 33b of the ARC, the claimant can rely on the findings of competition authorities.
In the case of a fining decision of the FCO or the European Commission, the claimant can introduce the decision as documentary evidence in civil proceedings. If the decision is final, the court is bound by the findings of the decision (section 33b of the ARC). In addition, the claimant has the right to access the respective authority’s records in accordance with section 89c of the ARC (see question 9 in this regard).
Leniency applicants are only to a limited degree protected from follow-on litigation. In general, leniency applicants can be sued for damages. However, there is a modification of the concept of joint and several liability (for details of the general concept see question 33). According to section 33e of the ARC, leniency applicants only have to compensate for damages caused by their own supplies. An obligation to compensate for damages resulting from supplies of other participants in the infringement only arises if full compensation cannot not be obtained from the other participants in the infringement. In addition, third parties that want to commence an action for damages against the leniency applicant will not be granted access to the leniency application (see question 9).
Stay of proceedings
In which circumstances can a defendant petition the court for a stay of proceedings in a private antitrust action?
A civil court can order a stay of proceedings pursuant to section 148 of the CCP if its findings are dependent on circumstances that are already the subject of either another dispute before a court or an investigation by an authority. As a result, the courts can stay a follow-on damages action if the foregoing infringement decision of the authority is appealed against by the defendants (ie, if the decision is not final). However, in order not to undermine the private enforcement of antitrust cases, there is a strong tendency among courts not to stay proceedings despite pending appeals against the underlying infringement decision. In addition, a stay of proceedings is possible in connection with proceedings regarding access to information (see question 9).
Standard of proof
What is the applicable standard of proof for claimants? Is passing on a matter for the claimant or defendant to prove? What is the applicable standard of proof?
Standard of proof
As a general rule, the court has to be convinced that the facts as presented by the claimant are true. No absolute certainty is necessary in this regard. However, it is required that the judge does not have any reasonable doubts concerning the truth of the facts.
In relation to the amount of loss incurred by the claimant in a damages case, the standard of proof is considerably reduced under German law, as follows:
- pursuant to section 33a(2) of the ARC, a prima facie evidence applies according to which cartels result in damages; and
- the court can estimate the amount of damages suffered by the claimant according to section 33a(3) of the ARC and section 287 of the CCP.
Claimants are not required to exactly calculate the damages the suffered as a result of the cartel. It is only necessary that the claimant provides a reliable factual basis for such an estimate. In cartel cases, the court can, as an additional option, base its estimate of the amount of loss incurred on the profits earned by the defendants through illegal cartel activities (section 33a(3) of the ARC).
Where the claimant asserts lost profits, the burden of proof is further alleviated by section 252 of the CC. According to section 252 of the CC, lost profits are, for example, those that the claimant would probably have earned in the normal course of events.
Burden of proof
In principle, the claimant has to demonstrate and provide evidence for the facts forming the basis of the competition law infringement as well as of the loss incurred. However, the claimant may benefit from a shift in the burden of proof or presumptions in certain situations. In cartel cases, a prima facie evidence applies according to which cartels result in damages (section 33a(2) of the ARC). In discrimination cases against dominant companies, the claimant only has to prove that there has been a different treatment. It is then on the defendant to demonstrate and to provide evidence that the discrimination of the claimant is justified. A further assumption is provided for in section 20(5) of the ARC, according to which it is presumed under certain conditions that selling below cost is illegal.
There are no quantitative rules of thumb or rebuttable presumptions of a quantitative nature in German competition law.
The German Federal Court of Justice, in a landmark ruling handed down on 28 June 2011 (KZR 75/10), has held that members of a cartel are able to defend themselves against a claim for damages by raising the defence that the relevant applicants have passed on the damage caused by higher prices to a downstream market (the ‘passing-on’ defence). However, the passing-on defence is only available under the principle of ‘adjustment of damages by benefits received’. As a result, the burden of proof is on the defendant that the direct purchaser passed the damage down to the next level of costumers. That means the defendant has to prove, first, that the overcharge has been passed on and, second, the extent to which the overcharge has been passed on. As of 9 June 2017, the German legislature has codified these principles in section 33c of the ARC. As a result of the introduction of section 33c of the ARC it is open, whether the passing-on defence is not available if it leads to an unjust benefit for the defendant. This can particularly be the case if the indirect purchasers consist of a large fragmented group, which makes it unlikely that the indirect purchasers will seek damages. While the principle of an ‘adjustment of damages by benefits received’ is only available if the adjustment (ie, the pass-on defence) does not result in an unjust benefit of the cartelist, the newly introduced section 33c of the ARC does not contain any wording to that effect. As a result, it may well be that based on section 33c of the ARC, German courts will acknowledge the pass-on defence, even if this leads to a situation under which the defendant who, without doubt, caused a damage will not be held liable for the overcharge. However, even if a passing-on can be demonstrated by the defendant, the claimant can claim lost profits as a result of volume effects; that is, if the higher resale price (including the overcharge) results in reduced sales by the direct purchaser.
In cases where an indirect purchaser wants to benefit from the passing-on of the overcharge by the direct purchaser and aims to seek damages, the indirect purchaser can benefit from a shift in the burden of proof pursuant to section 33c(2) of the ARC. A pass-on is presumed if the defendant infringed competition law, the competition law infringement led to higher prices for the direct purchaser and the indirect purchaser purchased the cartelised products. It is then for the defendant to prove that a passing-on has not occurred.
What is the typical timetable for collective and single party proceedings? Is it possible to accelerate proceedings?
There is no standard timetable for court proceedings. Generally, the duration of court proceedings is relatively short in comparison with other European jurisdictions. According to information from the German Federal Ministry of Justice and the German Federal Supreme Court, civil court proceedings at first and second instance on average last nine to 10 months each and, in the event of an appeal on questions of law to the German Federal Supreme Court, a further 12 to 24 months. This appears, however, a bit too optimistic if compared with the actual duration of proceedings. It is more realistic to expect 12 to 24 months for each of the first and second instance too. This results in an overall duration of usually four to six years if the case is heard through all instances.
The parties in German civil proceedings have no explicit rights to accelerate proceedings. However, German procedural law contains several general provisions that aim to accelerate proceedings (eg, rules on time limits and estoppel).
In addition, every party has the possibility to accelerate the proceedings by its own conduct, such as by not requesting an extension of time limits for briefs, etc.
What are the relevant limitation periods?
The question of whether a claim is time-barred or not is governed by substantive law. As of 9 June 2017, there have been changes to the statute of limitation. The standard limitation period for cartel damages claims has been extended from three years to five years (section 33h(1) of the ARC). The time limit starts running with the end of the year in which the claim arose and the claimant became aware of the circumstances giving rise to the claim and the identity of the (potential) defendant or should have become aware without gross negligence. In addition, there is an absolute limitation period for antitrust damages claims of 10 years from the date on which the claim arose. While it has been disputed in the past whether the limitation periods start to run from the time when the infringement was committed or only from the time when the infringement has come to an end, section 33h(2) and (3) of the ARC now clarify that the limitation periods do not start to run before the infringement has come to an end. However, 30 years after the date on which the act causing the injury was committed, all damages claims are time-barred.
The limitation is suspended for the time of investigations of the FCO, the European Commission or the competition authority of another EU member state or for the time of court proceedings in connection with a request for access to information of the claimant in accordance with section 33g of the ARC (section 33h (6) of the ARC). The suspension period has been extended as well. The claims will expire no earlier than one year after the final decision of the respective authority or court. Against the background that it is disputed whether the preceding provision applies to claims that arose prior to the entry into force of that provision, the German legislature decided to include transitional provisions specifically on limitation (section 186 (3), sentences 2 and 3 of the ARC).
What appeals are available? Is appeal available on the facts or on the law?
The parties may appeal a decision of a regional court on the facts and on the law to the competent higher regional court. The decisions of the higher regional courts may be appealed on points of law before the German Federal Supreme Court. Such an appeal is possible if the court of appeal grants leave to do so or if the appeal is, upon application of either party, admitted by the German Federal Supreme Court (see question 3).
Are collective proceedings available in respect of antitrust claims?
German civil procedure law does not formally provide for collective proceedings in competition law matters.
However, despite the lack of collective proceedings, there is a possibility of submitting bundled damages claims through third parties. This possibility is of particular interest for end users and smaller companies that otherwise do not have the financial resources to assert their legal rights.
In relation to a cement cartel in which the FCO imposed fines of approximately €660 million in April 2003, the German Federal Supreme Court confirmed in 2009 (judgment dated 7 April 2009, KZR 42/08) the Regional Court of Düsseldorf’s decision of 21 February 2007 admitting a damages claim that was submitted by CDC. CDC has bought the claims of various companies, relying on the argument that the price for cement as purchased from the members of the cement cartel was anticompetitive and therefore too high. As there is no legal basis for class-action lawsuits in relation to private antitrust claims in Germany, the cartel victims assigned their individual claims to CDC for payment of €100 and a certain amount of the proceeds that will be obtained through the court proceedings. CDC pursues the respective claims on its own behalf. However, with first instance judgment of 17 December 2013, the Regional Court of Düsseldorf has dismissed CDC’s damages claim in its entirety for a number of reasons. Most notably, the court decided that the cession of the claims was contrary to public policy according to section 138(1) CC as CDC would not have been able to cover all the expenses of the defendants in case of a complete loss of the case. In appellate proceedings, the Higher Regional Court of Düsseldorf on 18 February 2015 upheld this decision and rejected CDC’s appeal in its entirety. Another attempt by CDC in relation with the cement cartel, after sufficient funding was obtained and cession of the claims was re-conducted, again resulted in a rejection of the entire claim. With first instance judgment of 24 January 2017, the Regional Court of Mannheim found that the claims were by then time-barred. This decision deals with the question whether the provision on the suspension of limitation periods that applied prior to 9 June 2017 also applied to claims that arose, prior to the entry into force of that provision (for more details on limitation, see question 17). As CDC appealed this judgment it remains to be seen whether CDC will in the end be successful in relation to the cement cartel. However, CDC, in tandem, pursues and prepares claims in connection with other cartels such as the German sugar cartel and the European truck cartel.
Are collective proceedings mandated by legislation?
If collective proceedings are allowed, is there a certification process? What is the test?
Have courts certified collective proceedings in antitrust matters?
See question 19.
Opting in/ out
Can plaintiffs opt out or opt in?
Do collective settlements require judicial authorisation?
German procedural law does not provide for class settlements. However, if the parties agree on a settlement no further judicial authorisation is required. For procedural reasons, however, it can be helpful to have a settlement recorded in court.
National collective proceedings
If the country is divided into multiple jurisdictions, is a national collective proceeding possible? Can private actions be brought simultaneously in respect of the same matter in more than one jurisdiction?
Germany is not divided into multiple jurisdictions. Once the claimant has brought a legal action before a German court, it cannot bring a claim in the same matter before another German court (section 261(1) of the CCP).
Has a plaintiffs’ collective-proceeding bar developed?
See question 19.
What forms of compensation are available and on what basis are they allowed?
As a starting point, the amount of damages follows a purely compensatory principle. German damages law does not provide for punitive damages such as triple damages (see question 29).
The calculation of damages suffered by the claimant is primarily based on section 249 of the CC (principle of natural restitution). According to this provision, damages are calculated on the basis of the difference between the financial position of the claimant after the infringement occurred and the hypothetical financial position the claimant would have been in if the competition law infringement had not occurred. The financial status of the affected party has to be considered as a whole; therefore, not only its losses in income and wasted investment have to be taken into account, but also any benefits received as a consequence of the anticompetitive behaviour. Losses incurred include, in particular, lost profits (section 252 of the CC).
However, the principle of natural restitution not only leads to pecuniary compensation but may, particularly in cases of abusive refusals to supply, lead to the defendant being ordered by the court to contract with the claimant and supply him or her with the requested goods or services at non-discriminatory terms.
What other forms of remedy are available? What must a claimant prove to obtain an interim remedy?
Claimants can request that the defendant should refrain from an antitrust violation according to section 33(1) of the ARC. This means that the claimant can either request that the defendant ends a certain behaviour or that the defendant has to perform a certain activity, such as supply the claimant in the future. The request is available even for imminent antitrust violations (section 33(2) of the ARC). In the event of urgency, these claims can exceptionally be enforced by way of interim measures.
German procedural law provides for different interim measures pursuant to sections 935 and 940 of the CCP. In the event of an immediate risk that the financial situation of the defendant will deteriorate, the claimant can request a court to seize assets of the defendant. Furthermore, courts can issue interim measures ordering the defendant to perform a certain action, such as supplying the claimant with certain goods, if the claimant would otherwise lose important customers. The standard of proof is lower than for the principal claim on the merits. An applicant for interim relief must provide prima facie evidence that he or she has a claim and that the realisation of such claim is impossible or severely jeopardised without the interim remedy (urgency). As a general rule, an interim remedy shall not result in the fulfilment of the final remedy.
Are punitive or exemplary damages available?
Punitive or exemplary damages are not available.
Is there provision for interest on damages awards and from when does it accrue?
To avoid a situation where compensation of the loss incurred is partially devalued, the party in breach of competition law is obliged to pay interest on pecuniary damages (section 33a(4) of the ARC). Interest is calculated from the date the loss accrued.
The obligation to pay interest is particularly important in relation to follow-on actions when the plaintiff waits until the competition authority renders a decision. The general interest rate is 5 per cent above the European Central Bank’s base rate (section 33a(4) of the ARC and section 288 (1)of the CC). Owing to changes in law, interest damages that occurred prior to 1 July 2005 follow different rules, and are generally to be set at 4 per cent or 5 per cent (ie, not base-rate linked).
Consideration of fines
Are the fines imposed by competition authorities taken into account when setting damages?
Fines imposed by the competition authorities are not taken into account when settling damages. Even in the event of a significant fine, the claimant is entitled to seek full compensation. On the other hand, a high fine does not indicate a liability for higher damages.
Who bears the legal costs? Can legal costs be recovered, and if so, on what basis?
As a general rule, the legal costs are borne by the losing party. If there is no full loss or win, the court allocates the legal costs between the parties on a pro rata basis according to the outcome of the case. The legal costs include the costs of the court proceedings as well as the attorneys’ fees. However, attorneys’ fees are calculated on the basis of statutory fees, which are usually well below the fees actually incurred in complex antitrust damages cases. Put differently, the cost risk for claimants is relatively low and it can be determined upfront with certainty. According to section 89a of the ARC, in antitrust cases, the value of the matter may be adjusted if certain conditions are met.
Joint and several liability
Is liability imposed on a joint and several basis?
Joint and several liability exists if two or more individuals or legal persons have caused the damage. As a result, participants in a cartel are jointly and severally liable. Each defendant is then liable for the totality of the damage incurred by the claimant, but the claimant is only entitled to claim the totality of the damage once (section 33d(1) of the ARC and sections 830, 840(1) and 421 of the CC).
With a judgment of 18 November 2014, the German Federal Court of Justice held that the necessary adjustments among the jointly and severally liable cartel members themselves will take place according to section 254(1) of the CC; that is, according to the extent of their respective participation in the cartel. The German legislature has codified this principle in section 33d(2) of the ARC. It is explicitly stated that the general principles of sections 421 et seq of the CC apply to the adjustments among the jointly and severally liable cartel members.
Special provisions apply to small and medium-sized enterprises with small market shares, limited financial resources and minor participation in the cartel (section 33d(3) of the ARC), leniency applicants (section 33e of the ARC; for more details on the protection of leniency applicants see question 13) and cartel members who participated in a settlement (section 33f of the ARC; see also question 34). In general, small and medium-sized enterprises as well as leniency applicants only have to compensate damages of their own (direct and indirect) customers and suppliers. Cartel members who participated in a settlement are freed from liability against the party of the settlement. In all three cases, further liability is only possible if full compensation could not be obtained from the other cartel participants. This additional liability can be excluded in settlements. Adjustments among the jointly and severally liable cartel members are accordingly limited.
Contribution and indemnity
Is there a possibility for contribution and indemnity among defendants? How must such claims be asserted?
The possibility of a contribution claim exists under German law. If the damage is caused by several defendants, they are jointly and severally liable and each defendant can sue another cartel member for internal recourse. Such claims for internal contribution are subsequent to the main action. However, in cases where claimants seek damages only from selected participants in an infringement, it is usual practice that the defendants issue third-party notices on the other participants in the infringement since such third-party notices have the effect that the factual findings of the court dealing with the main action will be binding on the courts dealing with the subsequent actions for internal contribution.
Settlements are, generally, limited to damages resulting from supplies of the parties to the settlement and do not cover damage resulting from supplies of other participants in an infringement. According to section 33f(2) of the ARC, claims for internal contribution are not possible in settlement cases as regards the settled portion of the claim.
Is the ‘passing on’ defence allowed?
See question 15.
Do any other defences exist that permit companies or individuals to defend themselves against competition law liability?
There is no special defence that would permit companies or individuals to defend themselves against competition law liability.
Alternative dispute resolution
Is alternative dispute resolution available?
In principle, arbitration proceedings are available under German law. However, such proceedings are only admissible if an arbitration clause in relation to antitrust damages has been validly agreed between the parties.