Rules to compensate victims of cartels and anti-competitive practices

The European Union (EU) has adopted rules allowing companies to receive full compensation for actual losses and lost profits that they suffer as a result of a cartel in their sector. Although Articles 101 and 102 of the Treaty on the Functioning of the European Union guarantee the right to full compensation, until now, its practical exercise has been difficult.

ACT

Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union

SUMMARY

The European Union (EU) has adopted rules allowing companies to receive full compensation for actual losses and lost profits that they suffer as a result of a cartel in their sector. Although Articles 101 and 102 of the Treaty on the Functioning of the European Union guarantee the right to full compensation, until now, its practical exercise has been difficult.

WHAT DOES THIS DIRECTIVE DO?

It lays down new rules allowing firms that are victims of cartel* or antitrust violations to be compensated for damages. It also seeks to make leniency programmes more efficient (i.e. cases where firms that admit their involvement in a cartel or abuses of dominant market positions pay a reduced fine or are given immunity).

KEY POINTS

Disclosure of evidence: EU countries must ensure that their national courts can order firms to disclose evidence when victims claim compensation. Confidential business information must be protected.

Claims: victims must be allowed at least 5 years to claim damages following the competition authority’s final decision on the infringement.

Proof of infringement: the national competition authority’s final decision on an infringement automatically constitutes proof of that infringement before the courts of the EU country in which the infringement took place.

Passing-on of overcharges: any company, whether a direct or indirect purchaser, that has suffered harm may claim compensation. The claimant carries burden of proof for a passing-on of an overcharge.

Liability: where several firms infringe the competition rules together, they are held jointly and severally liable for the entire damage. A firm that co-infringes has the right to obtain a contribution from other co-infringers if it has paid more compensation than its share. That share and the criteria on which it is based (such as turnover, market share or role in the cartel) must be decided by the court according to national law.

Effect of national decisions: final national decisions on infringements can be presented as evidence before another EU country’s national courts, in accordance with that country’s laws. This strengthens the position of victims when claiming for damages.

WHEN DOES THE DIRECTIVE APPLY?

It entered into force on 25 December 2014 and should be transposed into national law by 27 December 2016.

For more information, see the European Commission’s webpage on the Directive on Antitrust Damages Actions.

KEY TERMS

* Cartel: a group of similar but independent companies which join together to fix prices, to limit production or to share markets or customers between them.

Last updated: 20.05.2015