On 14 December 2020, the Commission published a report on the implementation of the Antitrust Damages Directive (the Directive). The Commission observes a significant increase in antitrust damages actions since the adoption of the Directive. However, there is insufficient experience with the new Directive to properly evaluate its application. Instead, the Commission provides a concise overview of the implementation of some key aspects of the Directive.
The Commission also commented on its own role in ensuring the effective application of the Directive, and on several landmark judgments of the Court of Justice. For now, the Commission drew a positive conclusion with regard to the consistent implementation of the Directive. The report does not go into great depth, but does confirm that antitrust damages are on the rise across the EU. The Commission intends to continue to monitor this development and to review the Directive in the future.
The Directive aims to ensure the effective exercise of the right to full compensation following antitrust infringements and to improve the interaction between public and private enforcement of EU antitrust law. Article 20 of the Directive requires the Commission to review the effects of the application of the Directive before 27 December 2020; however, the majority of Member States did not meet the implementation deadline, which was set at 27 December 2016. The Commission therefore states in its report that it plans to evaluate the Directive once sufficient experience from the application exists. For now, the Commission has taken the opportunity to highlight a number of developments surrounding the implementation of the Directive.
Rise of antitrust damages
The Commission takes note of the considerable increase of antitrust damages actions since the adoption of the proposal of the Directive. These actions have also become more widespread across the Union.
Implementation of the Directive
The report contains an overview of the transposition of the Directive into the national laws of the Member States. For the most part, the provisions were adopted more or less literally. The report does not contain much of an in-depth analysis, but points out the different ways in which the Directive has been implemented:
- The general scope of the Directive is often extended to infringements that are purely national. In addition, the German and Portuguese implementation also cover claims based on infringements of declaratory actions, injunctions and interim measures.
- Member States have varying rules on the sanctioning of breaches of rules on disclosure. This is regulated in Article 7 and 8 of the Directive. The rules differ in terms of what conduct is permitted and with respect to the group of persons who can be sanctioned. Many Member States have also introduced financial penalties (and in some cases, even imprisonment) for breaches of these rules.
- Germany and Austria have extended the scope of Article 9(2) of the Directive. In these jurisdictions, decisions of competition authorities in other Member States have the same binding effect in follow-on litigation as decisions of their own national competition authority.
- Some Member States have prolonged the limitation period for bringing actions for damages. Article 10 of the Directive prescribes a minimum limitation period of five years; Cyprus and Ireland for instance apply a six-year period, and Latvia a ten-year period.
- Three Member States have further elaborated the rebuttable presumption that a cartel causes harm, provided in Article 17 of the Directive. In Hungary and Latvia, a cartel is presumed to cause a 10 percent overcharge, and in Romania an overcharge of 20 percent.
The role of the Commission and the Court of Justice
The Commission also discussed its own contribution to the implementation of the Directive, including the guidelines on passing-on of overcharge to indirect purchasers and the confidentiality communication to protect confidential information when responding to disclosure orders. Neither of these documents are binding, but should provide guidance for national judges in antitrust damages cases. The Commission continued with a summary of four key rulings of the Court of Justice (Cogeco, Skanska, Tibor-Trans and Otis). Among others, the Commission stated that it welcomes the outcome of the Skanska judgment. In the opinion of the Commission, this ruling confirms that the undertaking concept in public enforcement also applies in private enforcement. The exact implications of this judgment, however, remain to be determined, especially in cases where there was no corporate restructuring and the principle of ‘economic continuity’ is not applicable.
The Commission concludes that the Directive has been implemented consistently across the Member States. The Commission intends to continue to review the developments regarding anti-trust damages, and to publish a new report once sufficient case law on the application of the Directive is available. For now, we can conclude that the Directive has raised awareness, which resulted in an increase of antitrust damages actions across the Union.
This article was published in the Competition Newsletter of January 2021. Other articles in this newsletter: