Transcript DG COMP Staff meeting Priorities and Resources

The civilian consequences of competition law violations
Copenhagen
28 September 2007
How can we construe a European
Model of Private Enforcement?
Emil Paulis
Director Policy and Strategy
DG COMP
European Commission, DG Competition
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How can we construe a European Model
of Private Enforcement?
Five basic questions:
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The problem definition: why does this question need
to be asked?
The foundations of the system: what do we already
have?
The objectives: what do we want to achieve?
The difficulties: what should we avoid?
The timing: what are the next steps towards an
effective European model of private enforcement?
European Commission, DG Competition
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How can we construe a European Model
of Private Enforcement?

General overview of private enforcement
in Europe
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Exclusive focus on public enforcement over last fifty
years
Injunctive relief and contractual liability work fairly
well
Actions for damages in Europe: under-developed
and big gap compared to other jurisdictions
Significant obstacles block effective repair of harm
suffered
European Commission, DG Competition
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I. The problem definition (1)
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What are the problems?
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Disincentives to bring a claim - significant
Access to evidence – difficult
Calculation of damages – difficult
Passing-on defence – uncertain
Collective redress - unavailable
European Commission, DG Competition
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I. The problem definition (2)
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Disincentives to bring a claim
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Cost/benefit analysis unfavorable to victims
Uncertainty of outcome
Access to evidence
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Investigations in antitrust cases are more complex than in
most other civil litigation cases
European disclosure systems « inter partes » are in general
weak, particularly in civil law countries
Focus is more on rights of defence than on access to evidence
European Commission, DG Competition
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I. The problem definition (3)
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Calculation of damages
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In most countries: only compensation, but Member States free
to provide for multiple damages (Manfredi)
At least right to full single damages
Quantification of damages in competition cases will always be
difficult
Passing-on defence
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Possibility for defendants to rely on passing-on defence raises
big hurdles to claims by direct purchasers
No consistent approach of passing-on in the different Member
States
European Commission, DG Competition
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I. The problem definition (4)
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Collective redress - unavailable
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Final consumers and small businesses are most often the
ultimate victims of anti-competitive behaviour
Often scattered and low value claims
Individual actions are not sufficient to compensate society for
the harm caused
Some Member States, incl. Denmark, have engaged in this
debate at national level
The discussions on collective redress in the competition field
have to take account of this wider discussions on collective
redress mechanisms for consumers
European Commission, DG Competition
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II. The foundations of the system: what
do we already have?
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Articles 81 & 82 EC are directly applicable +
enforceable in Court
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Reg 1/2003 has removed exemption monopoly of the
Commission
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Case law of ECJ has confirmed right of victims to claim
repair
– Van Gend & Loos – 1963
– Courage / Crehan – 2001
– Manfredi – 2006
European Commission, DG Competition
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III. The objectives: what do we want to
achieve? (1)
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Private Enforcement as second pillar of competition law
enforcement
 A complement, not a substitute to public enforcement
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A more effective private enforcement pillar would
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Increase corrective justice by compensating the victims
Increase deterrence
Strengthen competition culture
Promote a competitive economy
Need to build a European Model of Private Enforcement
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Solutions tailored to European realities
Solutions firmly bedded in our European cultures and traditions
European Commission, DG Competition
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III. The objectives: what do we want to
achieve? (2)
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Measured and balanced approach
“The Commission does not intend […] to impose a unified European
model of antitrust damages that would regulate all the issues identified in
the Green Paper”
“Some obstacles may be more efficiently tackled at European level,
others at national level. Some obstacles may justify legislative solutions
and others more informal instruments. The issues are diverse and the
solutions will have to take account of this diversity”
Neelie Kroes, Commission/IBA joint conference, Brussels, 8 March 2007
European Commission, DG Competition
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IV. The difficulties: what should we
avoid?
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Inertia
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It will not help those injured by anticompetitive behaviour, nor
strengthen the European economy
Costs resulting from infringements to the competition rules are
currently absorbed by the economy as a whole
These costs should be borne by the infringers, not by the victims and
those who comply with the law
Encouraging unmeritorious litigation
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We want to encourage a competition culture, not a litigation culture
Step-by-step approach and appropriate safeguards necessary
Principle of effectiveness but also of proportionality
European Commission, DG Competition
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V. The timing
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It is time to build up in Europe the private pillar of
antitrust enforcement
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Commission will publish a White Paper beginning 2008,
together with an impact assessment
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Public consultation will follow the adoption
Thank you for your attention
European Commission, DG Competition
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