Antitrust Damage Claims Research Articles

The Indirect Purchaser Rule and Private Enforcement of Antitrust Law: A Reassessment

Abstract Despite broad statutory language authorizing “any person” injured by an antitrust law violation to sue for damages, the Supreme Court of the United States has construed that language to bar antitrust damages claims by indirect purchasers, such as consumers two or more steps removed from antitrust violators. The Court and some scholars have justified the indirect purchaser rule on the ground that assigning direct purchasers exclusive rights to recover antitrust damages increases the likelihood of suit. But this article presents new evidence that the rule reduced private antitrust litigation by twenty percent. It argues that the rule should be abandoned, consistent with the statutory text.

Private antitrust enforcement in digital market

The increasing popularity of private antitrust enforcement in the EU is reflected by number of antitrust damages claims in the member states, following the transposition of the Damages Directive. Meanwhile, rapid growth of digitization in every aspect of social and economic life, particularly in business like commerce and services, has taken place. Recently, the above phenomenon was intensified by COVID-19. This paper aims at discussing private antitrust enforcement and antitrust damages claims in the context of digital transformation of the market. To this extent, there are several main characteristics of the market (e.g. multi-sided platforms, the role of third-party sellers, etc.), that have to be taken into consideration in the above discussion.

Antitrust Damage Claims: A View From Efta Court

Articles 101 and 102 TFEU have become a pattern for competition rules provided in Articles 53 and 54 of the EEA Agreement, which entered into force on 1 January 1994. Both EU competition law and EEA competition law can be enforced before national courts. Lodging damage claims in the EU was facilitated by Directive 2014/104/EU. The so-called Antitrust Damages Directive was highly inspired by the jurisprudence of the Court of Justice of the European Union. Although Directive 2014/104/EU has not been incorporated into the EEA law, damage claims resulting from violations of EEA competition rules are judged by national courts in the EEA Member States, which is why some aspects of private enforcement of competition law have become a point of interest for the EFTA Court, being – together with the Court of Justice of the European Union – the EEA court. Firstly, the article aims at checking if the EFTA Court jurisprudence on antitrust damage claims follows the guidelines formulated in the case law of the Court of Justice. Since the positive answer to this question is highly probable, secondly, the article aims at identifying the extent of the impact of EU jurisprudence in private enforcement cases on judgments of the EFTA Court. The article concludes that the EFTA Court’s activities regarding antitrust damage claims follow the route indicated by the Court of Justice of the European Union. Four identified judgments regarding – directly or indirectly – antitrust damage claims (Nye Kystlink, Fjarskipti, Schenker I and Schenker V), delivered by the EFTA Court, seem to strengthen its position as an institution that is able to guarantee a coherence between EEA and EU competition law. EFTA Court’s judgments in private enforcement cases are also a point of interest and reference for EU Advocates General and can become an inspiration for both EU and national case law.

Access to the Commission File and Confidentiality of Information under European Competition Law in the Context of Antitrust Damages Claims

Access to the Commission File and Confidentiality of Information under European Competition Law in the Context of Antitrust Damages Claims

Promotion and Harmonization of Antitrust Damages Claims by Directive EU/2014/104?

Directive EU/2014/104 is the latest legal instrument that crystalizes the evolution of EU competition law enforcement. This paper assesses critically the features of the Directive and the challenges it poses for its implementation by Member States. The Directive codifies the case law of the EUCJ and it encroaches upon the autonomy of Member States in setting the institutions, remedies and procedures available for victims’ of antitrust infringements. Although the Directive provides a fragmented and incomplete set of rules that only partially harmonizes antitrust damages claims in the EU, and it’s slanted towards follow-on cartel damages claims, it has publicised the availability of damages claims, creating momentum that will transform how competition law is enforced in the future.

Toward a Coherent Policy on Cartel Damages

The focus of cartel damages law is on the recovery of the cartel overcharge. Parties other than purchasers are often neglected, not only as a matter of judicial practice, but also due to legal restrictions. We argue that a narrow concept of standing—which excludes parties that supply either the cartel or the firms that purchase from the cartel with complementary product components—falls short of achieving effective antitrust enforcement and corrective justice in the best possible way. We provide a framework with two complementary products and show that under neither competition nor cartelization do the allocation and the distribution of surpluses depend on whether producers of complements purchase from the cartel or supply the cartel or the cartel’s customers. Thus, we argue that prima facie producers of complements should be treated alike, regardless of their position in the supply chain. Moreover, based on various factors that determine the enforcement effect of antitrust damages claims and their role as an instrument to achieve corrective justice, we show that a broad concept of standing is, indeed, the preferable legal solution. While its implementation would require a change in position by the U.S. federal courts, we submit that it would amount to a consistent completion of the legal framework within the E.U.

Consensual Dispute Resolution in the Damage Directive. Implementation in CEE Countries

This paper discusses the use of consensual dispute resolution for the purpose of antitrust damage claims as introduced by the Directive. It presents these type of claims in a broader context of arbitration (or ADR), in comparison with traditional claim settling before a state court. Particular focus is on selected CEE countries and their implementation of the Directive, serving as an example of the transposition of the Directive’s rules (Article 18 and 19) into national systems in the area of consensual dispute resolution. Specific institutions intended to encourage consensual resolution included in the Directive (and transposed into national systems) are being commented on as well. Lastly, the paper briefs on the advantages of ADR in general, and concludes that even post-Directive, ADR remains attractive as a complimentary instrument to public enforcement and state judiciary enforcement

Toward a Coherent Policy on Cartel Damages

The focus of cartel damages law is on the recovery of the cartel overcharge. Parties other than purchasers are often neglected, not only as a matter of judicial practice, but also due to legal restrictions. We argue that a narrow concept of standing-which excludes parties that supply either the cartel or the firms that purchase from the cartel with complementary product components—falls short of achieving effective antitrust enforcement and corrective justice in the best possible way. We provide a framework with two complementary products and show that under neither competition nor cartelization do the allocation and the distribution of surpluses depend on the market organization in place. Thus, we argue that prima facie producers of complements should be treated alike, regardless of whether they purchase from the cartel or supply the cartel or the cartel’s customers. Moreover, based on various factors that determine the enforcement effect of antitrust damage claims and their role as an instrument to achieve corrective justice, we show that a broad concept of standing is, indeed, the preferable legal solution. While its implementation required a change of the position by the U.S. federal courts, we submit that it would amount to a consistent completion of the legal framework within the EU.

Development of Private Enforcement of Competition Law in Lithuania

The article reviews the jurisprudence of Lithuanian courts on private enforcement of competition law and identifies the main obstacles for the development of this practice. The analysis of the jurisprudence makes it possible to summarise that: most rulings of the Lithuanian courts relate to cases on the abuse of dominance; usually, dominant undertakings were allegedly applying discriminatory conditions towards the injured party and; most of the claims were presented as follow-on actions after a decision of the Competition Council. The courts held that damages caused by a breach of competition law have to be recovered in accordance with Lithuania’s main principles of civil responsibility. At the same time, the courts made it clear that their jurisprudence is based on the rulings of European Courts and the main principles of EU competition law. The main obstacles for the successful development of antitrust damages claims in Lithuania are, inter alia: complexity of competition cases; difficulty in obtaining substantive evidence; proving a consequential relationship and; high legal costs. The article also analyses substantial and procedural provisions of Lithuanian legislation that regulate the submission of antitrust damage claims.

Private Enforcement of Competition Law The Case of Estonia

Jurisprudence on private enforcement of competition law has so far been almost non-existent in Estonia. Most cases where competition law issues are raised within the context of damage claims are solved by out-of-court settlements. One of the main reasons for this scarcity is the fact that this is a fairly unfamiliar field for Estonian lawyers, attorneys and judges. The first reason for the low number of private enforcement of competition law cases in Estonia is therefore lacking awareness and legal uncertainty. The other key barrier lies in burden of proof issues associated with damage claims. It has proven very difficult in practice for an injured person to prove that he/she sustained damages as a result of a competition law infringement; even more so to prove the actual extent of such damages. There is no juridical practice yet on how to calculate business losses and judges face considerable difficulties when confronted with this task. Another problem lies in the availability of evidence. As discovery is not possible in Estonia, its civil procedure rules make it difficult for claimants to obtain evidence necessary to prove the facts underlying their claims.Estonian law does not provide for a special procedure for antitrust damage claims – there are no collective claims, no class actions, nor actions by representative bodies or other forms of public interest litigation (no collective redress). It is thus only possible to file damage claims arising from competition law infringements either in normal civil proceedings or as a civil claim within the framework of criminal proceedings on a competition law crime. The need for collective redress has not yet been subject to a legal debate at the national level, and there has not been a single private enforcement case opened by a consumer in Estonia so far. The only Supreme Court case in existence in this field, which was decided in 2011, has cleared the basis and availability of damage claims for competition law infringement. It has shown, at the same time, the many problems connected to calculating damages in this context.

Effective Cartel Enforcement in Europe

The European Commission has made clear in a number of recent publications that undertakings that collude to fix prices or share markets should expect fines based on affected commerce, as well as private antitrust damage claims. Research on discovered cartels characterises a modern international cartel in terms of illegal gains, duration of the infringement and success on appeal. This article offers a back-of-the-envelope calculation into the net effective (expected) liability of a representative modern international cartel in Europe. To that end, the history of European cartel enforcement is surveyed in summary statistics. The exercise leads to the conclusion that the European Commission’s recent commitments to punishing cartels are likely to remain insufficient to deter collusion, unless European enforcement also produces a high (perceived) probability of discovery across the board. This calls for active cartel detection.

Effective Cartel Enforcement in Europe

In a number of recent publications, the European Commission has made transparent how it intends to remedy and sanction future found-out cartels. Undertakings that colluded should face high fines, substantial private antitrust damage claims, and be only very selectively granted leniency for cooperation. Recent and on-going academic research into known international cartel investigations sheds light on the order of the effects of collusion in terms of illegal gains, seriousness and duration of the infringement, as well as on the success of cartels in appealing Commission decisions with the CFI/ECJ. This paper exercises through the net effective (expected) liability of a representative modern international cartel. Our back-of-envelope calculus reveals that future punishments for discovered cartels are tough. Yet the expected net cartel liability, even when it fully materializes on the high levels called for by the Commission, is likely to remain far too low still to deter collusion. The Commission should therefore produce high (perceived) probabilities of detection across the board and set the right priorities in enforcement. *Department of Economics and ACLE, Universiteit van Amsterdam. Address: Roetersstraat 11, 1018 WB Amsterdam, The Netherlands, m.p.schinkel@uva.nl. Paper prepared for Frontiers of EC Antitrust Enforcement: The More Economic Approach, 25th Conference on New Political Economy, Saarbrucken, Germany, October 12-14, 2006. This paper draws on various on-going research projects, of which papers are gradually coming out. I am particularly indebted to Yuliya Bolotova, Iwan Bos, Martin Carree, John Connor, Vivek Ghosal, Andrea Guenster, Jakob Rueggeberg, Francesco Russo, Giancarlo Spagnolo and Jan Tuinstra for general discussions and comments, as well as specific pieces of information. Opinions and errors remain mine.

Effective Cartel Enforcement in Europe

The European Commission has made transparent in a number of recent publications that undertakings that colluded to fix prices or share markets can expect fines based on affected commerce as well as private antitrust damage claims. Research on discovered cartels characterizes modern international cartels in terms of illegal gains, duration of the infringement and success on appeal. This paper offers a back-of-the-envelope calculation into the net effective (expected) liability of a representative modern international cartel. The exercise reveals that the Commission's recent commitments to punish cartels are likely to remain insufficient to deter collusion, unless European cartel enforcement produces a high (perceived) probability of discovery across the board. This calls for broad, unbiased, random and active cartel detection.

Consolidating Antitrust Damages in Europe: A Proposal for Standing in Line with Efficient Private Enforcement

One of the lessons from US private antitrust practice is that limitation of defendants’ and plaintiffs’ rights should not be imposed lightly. Three Supreme Court decisions in Hanover Shoe, Illinois Brick and ARC America denying the pass-on defence and limiting standing to sue have resulted in a complex system of multi-district and multi-party litigation that achieves neither fair compensation nor efficient deterrence. Excluding the pass-on defence in Europe is a first step in a similarly irreversible sequence of further corollary requirements. We caution against taking this route and instead propose an alternative institutional design for the European Union. The proposal involves a centralised consolidation of fragmented individual antitrust damage claims. The assessment of damages is allocated to a central authority, which acts as amicus curiae upon a definitive infringement decision in an initiating action before a national court. This advisory position would most naturally be designated to a competition authority. It would conduct a public investigation and assess and specify the combined economic damages caused by the infringement. Its consolidated damage report is offered as an advice to the court, which subsequently apportions individual damages to the initiating plaintiff. Later related claims can refer to the report in consequential actions before national courts. The procedure provides an efficient, single, consistent and complete damage estimate, while still utilising the full detection potential of unrestricted private damage actions. This allows for an effective and efficient mechanism of private antitrust enforcement, whilst achieving compensation of actual damages for those injured by anti-competitive acts.