Transcript Academy of European Law in cooperation with the Ministry

Academy of European Law
in cooperation with the Ministry of Justice of Finldand
and the German Federal Ministry of Justice
SEMINAR on the APPLICATION of EUROPEAN
COMPETITION LAW by the NATIONAL JUDICIARY (EC
Regulation 1/2003)
Presentation on ‘Relevance of Article 82 EC Treaty for
the National Judges’
Pierluigi Congedo, King’s College London
Trier, 30-31 March 2009
1
Outline
• Introduction on Art. 82 EC
• Recent developments with respect to Art. 82 EC: caselaw, EC Discussion Paper, EC Guidance on Art. 82 EC
• EC Regulation n. 1/2003, Art. 82 EC and National Judges
• Difficulties behind Art. 82-related private actions
• National experiences: the British scenario (references to
Italy)
• Lack of detailed national legislation and guidance
• The imperative of making European Law provisions
directly applicable at national level
• Conclusion
2
Introduction on Article 82 EC
• The Treaty provision, the EC Regulations, the
Modernisation EC Regulation 1/2003
• Article 82 EC Treaty, modelled on the basis of
Section 2 of the Sherman Act, but with its own
identity
3
US Sherman Act (1890)
Section 2. Monopolizing trade a felony; penalty
“Every person who shall monopolize, or attempt to
monopolize, or combine or conspire with any other person
or persons, to monopolize any part of the trade or
commerce among the several States, or with foreign
nations, shall be deemed guilty of a felony, and, on
conviction thereof, shall be punished by fine not exceeding
$10,000,000 if a corporation, or, if any other person,
$350,000, or by imprisonment not exceeding three years, or
by both said punishments, in the discretion of the court.”
• Caso Standard Oil
• Caso Alcoa
• Caso AT&T
4
Sherman Act
• Monopolization is not per se prohibited, if
reached and maintained on the basis of merits
(see Microsoft, in particular in the Netscape saga)
• What is prohibited is to LEVERAGE the dominant
position not only to obtain high profits, BUT also
to reinforce the dominant position hindering the
survaival of existing or potential competition
5
Article 82 EC
We recall the fundamental provision:
“ Any abuse by one or more
undertakings of a dominant position
within the common market or in a
substantial part of it shall be prohibited
as incompatible with the common
market in so far as it may affect trade
between Member States […]
6
Article 82 EC (follows)
Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or
selling prices or other unfair trading conditions;
(b) limiting production, markets or technical
development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent
transactions with other trading parties, thereby
placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to
acceptance by the other parties of supplementary
obligations which, by their nature or according to
commercial usage, have no connection with the
subject of such contracts.
7
Recent evolution
• For fifty years Art. 82 EC was applied at EU and
National level as a legal ground for public
encorcement
• Very rare cases of ‘private enforcement’ (legal
actions for damages) based on Art. 81 EC and
even more rare based on Art. 82 EC
• EC Regulation 17/62 was the common legal
basis to be followed by the Commission to
deal with infringements of Art. 81 and 82 EC
• ‘Revolution’ behind the EC Regulation 1/2003
8
Why EC Regulation 1/2003
(a) Decision of de-centralisation of the enforcement
in a 27-member States community
(b) Common position of the European
Commissioners (Monti and Kroes) to reinforce
the deterrence of public enforcement opening to
private enforcement
(c) Need of clarifying the rules of the two-level
enforcement (i) Commission/National
Authority(ies) and (ii) National Courts
9
John Locke, Second Treatise on Civil Government
[Chapter II, para. 11, 1690]
• ‘From these two distinct rights (the one of punishing the
crime, for restraint and preventing the like offence, which
right of punishing is in everybody, the other of taking
reparation, which belongs only to the injured party) comes it
to pass that the magistrate, who by being magistrate hath the
common right of punishing put into his hands, can often,
where the public good demands not the execution of the law,
remit the punishment of criminal offences by his own
authority, but yet cannot remit the satisfaction due to any
private man for the damage he has received.
That he who hath suffered the damage has a right to demand
his own name, and he alone can remit.’
•
10
Discussion Paper (Dec. 2005) and Guidance on Art. 82
EC (Dec. 2008)
• Focusing on Art. 82 EC, after the ‘Big enlargement’ and
the ‘de-centralization’, the European Commission
launched the so-called Discussion Paper, mainly to
elaborate a common approach on the basis of the most
recent case-law
• As many times said by Richard Whish, the discussion
paper is aimed at the creation of guidance documents
which will simply clarify and list the main
ECJ/Commission cases, to be considered
constitutionally part of the ‘DNA’ of Art. 82 EC
11
Art. 82 EC and Discussion Paper 2005
• Definition of dominance and collective dominance [§44]
“For collective dominance to exist under Article 82, two or
more undertakings must, from an economic point of view,
present themselves or act together on a a particular market
as a collective entity – it is not required that the
undertakins concerned adopt identical conduct on the
market in every respsect. What matters is that they are
able to adopt a common policy on the market and act to a
considerable extent independently of their competitors,
their customers, and also of consumers” (case-law
mentioned: Compagnie Maritime Belge -1996; Irish Sugar –
1997; EMS v. Commission 1998; but, in particular, Airtours,
TFI 2002)
12
Discussion paper: guidance also for the
national judge
• Why: see § 48, 49, 50 Discussion Paper
They provide, in a smashingly clear way (and in 15
lines…), the three criteria to assess whether the
Commission, the NCA, the judge are in presence
of a ‘collective dominance’ situation:
(i) ‘First, each undertaking must be able to monitor
whether or not the other undertakings are
adhering to the common policy’
13
Other criteria
• (ii) ‘Secondly, the implementation of the common policy must be
sustainable over time, which presupposes the existence of sufficient
deterrent mechanisms, which are sufficiently severe to convince all
the undertakings concerned that it is in their best interest to adhere
to the common policy’;
• (iii) ‘Finally, it must be established that competitive constraints do
not jeopardise the implementation of the common strategy’
(position and strenght of the rivals; market position and strenght of
the buyers; potential new entries)
• Query: a new application of Nash’s ‘non-cooperative games’
theory?
14
Discussion paper and definition of Abuse
Another piece of ‘guidance’ for the judges: the definition of abuse (in
exclusionary conducts)
See para. 57: it expressely recalls Hoffmann La Roche (European Court
of Justice Case 85/76)
“[abuse is] an objective concept relating to the behaviour of an
undertaking in a dominant position which is such as to influence the
structure of the market where, as a result of the very presence of
the undertsking in question, the degree of competition is weakened
and which, throught recourse to methods different from those
which condition normal competition in products or services on basis
of the transaction of commerical operators, has the effect of
hindering the maintenance of the degree of competition still existing
in the market or the growth of that competition”
15
Another classification: price versus non-price
based exclusionary conduct
• Non-price based: contractual tying, single branding
contract, ‘naked’ refusal to supply (see para 61 et s.)
• BUT, what about princing conducts?
• High stand-alone prices in comparison to a bundled
price for two products may ‘tie’ these two products
• High rebates in change of ‘single branding’
• A new gender: the ‘constructive’ refusal to supply: I
provide you with the access but to such a burdensome
conditions that at the end I prefer to exit the market
16
Pricing abuse conducts
• The Discussion Paper provides with technical
indications on how to calculate and take into
consideration the Average Total Costs, the
Average Avoidable Costs, and the Average
Variable Costs – in other way, it takes its
lesson from the AKZO Chemie case, and takes
its distances from the Areeda-Turner Test
BUT
• It also develops the theory of ‘safe harbour’
17
The ‘as efficient competitor’
• In particular, the Discussion Paper acknowledges
that the dominant company conduct must be also
assessed not only in consideration of the one-toone relation with an alledgedly abused
competitor, but aslo having in mind another ‘as
efficient’ competitor –
• If another, ‘as efficient’, competitor would survive
to competition, why to consider abusive a specific
conduct? [see para. 66 et s.]
18
Discussion Paper: the ‘objective necessity
defence’ and the ‘efficiency defence’
• Para. 80: ‘The dominant company may be able to show
that the conduct concerned is objectively necessary…’
(i.e. safety, health of the dangerous product) –
evidence must be based on ‘objective factors’
• Para. 84: Efficiency defence:
• (i) that efficiencies are realised or likely to be realised
as a result of the conduct concerned;
• (ii) that the conduct concerned is indispensable to
realise these efficiencies;
• (iii) that the efficiencies benefit consumers;
• (iv) that competition in respect of a substantial part of
the products concerned is not eliminated
19
Another interpretative tool for judges (and
NCA)
• The Art. 82 EC Guidance published on 3
December 2008 [3 December 08] Com (2008)
available at http://ec.europa.eu/competition/antitrust/art82/index.html
• Great expectations for the Communication from the Commission
‘Guidance on the Commission’s Enforcement in Applying Article 82
EC Treaty to Abusive Exclusionary Conducts by Dominant
Undertakings
• [§6] It confirms that the Commission’s enforcement policy is aimed
at ensuring that ‘undertakings which hold a dominant position do
not exclude their rivals by other means than competing on the
merits of the products or services they provide’.
•
20
Commission’s Guidance (follows) – notion of
dominance
• Nothing new with respect to existing case-law: i.e.
dominance is that power to behave to an appreciable
extent independently of its competitors, its customers
and ultimately of consumers [See §10]
• In other words, a synthesis of
United Brands Company [case C-27/76]
Michelin 2 [case C-322/81]
Tetra Pack II [case T-83/91]
Irish Sugar [case T-228/97]
21
Economic assessment of the dominant
undertaking’s competitors and ‘the position of
the customers or input suppliers’
(i) A panoply of behaviours as well as the
effective ‘weight’ of a minor competitor shall be
taken into consideration, when assessing the
dominant position of the incumbent. In regulated
industries, this means that even an undertaking
with a small market share but a highly innovative
profile can play a key-role when assessing the
impact of a foreclosing conduct.
22
REAL POSITION OF THE COMPETITOR: THE
DYNAMIC PERSPECTIVE
• (ii) The assessment of the real position of the
competitor in the market shall be carried out
having in mind a dynamic perspective, (even) in
absence of the abusive conduct … i.e. possibility
that the competitor would have been even more
efficient in a certain period of time (because of
potential network and learning effects) [§23]
• We can see here a reference to a ‘dynamic perspective’
See Case Deutsche Telekom v Commission, 10 April 2008
(Case T-271/03)
23
The Guidance is particularly interesting for the
definition of some exclusionary behaviours in
particular:
• Tying, refusal to supply and, most importantly,
MARGIN SQUEEZE
• It is evident the legacy of the Microsft decision
(24 March 2004) but also of the TFI judgment (17
September 2007), substantially uphelding the
Commission’s position on Microsoft
Margin squeeze: legacy of the recent cases
Deutsche Telecom, Telefonica and previous caselaw
24
In the ‘refusal to supply and margin squeeze’
section we find the ‘chromosomes’ of the main
‘essential facilities’ ECJ cases
•
The judge will keep in mind the four/five main cases recalled by the Guidance
2008:
•
The Guidance re-assesses the fundamental principle that ‘any undertaking,
whether dominant or not, should have the right to choose its trading partners and
to dispose freely of its property’
IN FACT, it has in mind the following cases:
•
•
•
Cases: Joined cases C-241/91 -242/91 RTE/ITP v Commission (Magill) [§ 50]
Case C-418/01 IMS Health v NDC Health [2004] [§35]
Case T-201/04 Microsoft v Commission [§319, 330-332 and 336]
•
(the distribution network is not considered ‘essential facility’ in Oscar Bronner)
25
In the Guidance the growing importance of two
exclusionary conducts, refusal to supply and margin
squeeze, is finally underlined
• Refusal to supply:
• (i) refusal to supply products to existing or new
customers
• (ii) to license intellectual property rights
[including when this is necessary to provide
interface information (see judgment 17.09.07
Case T-201/04 Microsoft v Commission)]
• (iii) refusal to grant access to an essential facility
or a network [see B&I Line v Sealink Harbours
and Stena Sealink 1992; Sea Containers v Stena
Sealink – interim measures 1993]
26
As in the Discussion Paper, is acknowledged the
existence of ‘masked’ refusals to supply
• It is not required a plan refusal (‘no, I do not let
you get in’)
• The abuse might also consist in ‘constructive
refusal’
• For example it can take the ‘form of unduly
delaying or otherwise degrading the supply of the
product [I would add ‘or the service’] or involve
the imposition of unreasonable conditions in
return for the supply’ [see §78]
27
More difficult to define and assess
margin squeeze
Definition taken from the Guidance [para. 80]:
‘[when] a dominant undertaking may charge a price for
the product on the upstream market which, compared
to the price it charges on the downstream market, does
not allow even an equally efficient competitor to trade
profitably in the downstream market on a lasting basis
(a so-called “margin squeeze”). In margin squeeze
cases the benchmark which the Commission will
generally rely on to determine the costs of an equally
efficient competitor are the LRAIC [Long Run Average
Incremental Cost] of the downstream division of the
integrated dominant undertaking’.
28
Legal grounds for National Courts to intervene
on the basis of both Article 81 and 82 EC
• General principle of direct application
(‘efficacité directe’) and horizontal application
of some EC Treaty provisions
Case-law:
• Van Gen Loos C-26/72
• Defrenne/Sabena C-43/75
• Courage/Crehan C-453/99
29
EC Regulation 1/2003
• New legal grounds for direct application of
Art. 82 EC (and 81 EC of course):
• Art. 3 “Relationship between Articles 81 and
82 EC and National competition law” – This
article states that “where the competition
authorities of Member States or national
courts apply national competition law “within
the meaning” of Art. 81/82 EC, they shall also
apply Art. 81/82 EC”
30
EC Regulation 1/2003 (follows)
• Article 6 “Power of the national courts” states:
National Courts shall have the power to
apply Articles 81 and 82 EC
[Art. 15: cooperation between the
Commission and the National Courts, i.e.
exchange of information]
31
Reaction in Member States – The
United Kingdom
• UK Enterprise ACT 2002
Section 18 “Damages” inserted Art. 47A in the
Competition Act 98 re:
“Award of damages by the Tribunal” (CAT)
for violation of Chapter I and II Prohibitions and
Article 81 and 82 EC but …
18
32
Three (alternative) conditions must be
met in UK
• 1. The OFT has made a decision that Chapter
I or II or Article 81 or 82 EC has been
infringed
• 2. The Tribunal has made a decision
• 3. The European Commission has made a
decision
19
33
ENTERPRISE ACT 2002: Article 19 and consumer
protection claims
• Article 19 inserted also Article 47 B to the
Competition Act 98:
“A claim may be made under section 47A by a
specified body on behalf of two or more
individuals who have claims under that section
as consumers and in respect of the same
infringement”
34
The most known case of private enforcement is
about a violation of Art. 81 and 82 EC:
Crehan/Courage
Crehan was the tenant of two pubs in Staines, West
London
He was required to purchase a fixed minimum quantity
of beer from the Brewer Courage Ltd
Courage sued Crehan for £ 15,266 unpaid deliveries of
beer
Crehan’s complaints: Courage sold at lower prices to
other pubs, so his business failed
35
Crehan/Courage saga
• In fact the private action in this case is far from
encouraging … long-lasting proceedings, many
‘changes of direction’ and legal uncertainty, very
low amount of damages and interests
acknowledged
• 1 st step:
The High Court, on the basis of the principle ‘in
pari causa turpitudinis’, rejected the claim that
Crehan had been abused and forced to be part of
an illegal agreement under Art. 81 EC
36
Crehan/Courage
• 2 nd step:
• The Court of Appeal (of England and Wales), after
preliminary ruling by the ECJ confirming that
where anti-competitive conducts are ascertained
(in particular Art. 81 EC), damages must be
awarded, awards the damages [Case C-453/99
Courage v. Crehan [2001] ECR I (judgment of 20
September 2001; [2001] 5 C.M.L.R. 28)
37
A turning point in United Kingdom
• The Court of Appeal considered that the High
Court, in ignoring previous Commission
decisions in ‘consimili casu’, infringed Art. 10
EC, that expressely requires the highest
cooperation between national institutions and
European Community entities.
• The Court of Appeal awarded a nonextraordinary amount of damages: £ 131,336
38
4 th step: the House of Lords
• However, the House of Lords [Inntrepreneur v Crehan, 2006] on the
19 July 2006 rejected the position adopted by the Court of Appeal.
• It established that the national court could not be considered itself
bound by a European Commission decision, when the parties and
the facts on which it is called to make a judgment are not the
same…
• The Court of Appeal would have been ‘unfair’ vis-à-vis Courage
(Inntrepreneur) and would have infringed his right of defence.
• Therefore the Court of Appeal judgment was overturned. No
damages awarded.
39
Some key-facts at the end of the saga..
• June 2005: Mr Crehan faces bankruptcy and a
loss of legal aid
• May 2006: Spiraling costs and intervention by the
Office of Fair Trading could delay the case
• June 2006: The Lords refuses to hear submissions
on potential damages
• July 2006: The Lords overturns the Court of
Appeal ruling from 2004 and finds in favor of
Inntrepreneur.
[source: http://www.thepublican.com/story.asp?storyCode=52437]
40
Another private litigation based (also) on
Art. 82 EC – interim measures
• In July 2006 Adidas won the first round vis-à-vis the High Court in
England, against the request of the International Tennis Federation,
the Lawn Tennis Association, the All England Lawn Tennis and the
Croquet Club, Tennis Australia, Fédération Française de Tennis and
the US Tennis Association, to DO NOT USE the famous three strips
that characterise the Adidas trade-mark/industrial design because
this fact would have infringed the ‘federal regulation’ (no publicity
on the clothes).
• Adidas filed the request of interim relief at the High Court
(otherwise would have been forced to stop playing both in England
and in the USA-based ‘Open’) on the basis of infringment of Art.82
(and 81 EC) carried out by the International Tennis Federation.
• The case was finally settled before the final judgment.
41
Case British Horseracing Board [BHB] v.
Attheraces – 2 February 2007
• Another Art. 82 EC (and Chapter II Prohibition)-based
case
AtTheRaces provides foreign bookmakers with both the
broadcasting service of horses races AND with the data
with respect to the races of British horses.
AtTheRaces sues BHB (the British Horseracing Board) on
the basis of Art. 82 EC with respect to the excessive
prices paid for BHB’s data and refusal to supply.
The High Court acknowledged that BHB had abused of its
dominant position, forcing AtTheRace to pay excessive
prices and carrying out ‘refusal to supply’ activity.
42
However, the Court of Appeal quashed the
HC judgment
• The Court of Appeal considered that the price
paid for the aggregated data was not
excessive.
• Extremely important judgment in UK because
the court defined what should be considered
‘excessive’ in a Chapter II / Art. 82 EC litigation
and on the concept of ‘essential facilities’
43
Findings of the Court of Appeal in AtTheRaces
case (2007)
– the BHB could still exploit the information commercially, even without the added
protection of IP rights
– The BHB could impose contractual restrictions on third parties, who acquired the
information, for use in a particular way
– BHB could also take into account the economic benefit Attheraces derived from
the data, when setting its prices
•
•
•
•
(in 2005 the ECJ in a preliminary ruling in the case William Hill v. BHB had ascertained
that the BHB data, non aggregated, were not an ‘essential facility’:
“In a judgment which appeared to reverse the fortunes of BHB, the ECJ underlined the
requirement that, in order to qualify for protection, there had to be substantial
investment in the database itself. Resources spent in creating the data in the database
could not be taken into account. Thus, the owner had to show that he had spent
significant investment on the right sort of activities, i.e. obtaining, verifying or
presenting contents, before the database right would attach to the database.
The ECJ went one step further and also said at the end of its first ruling that “the
resources used to draw up a list of horses in a race and to carry out checks in that
connection, do not constitute investment in the obtaining and verification of the
contents of the database in which that list appears”.
http://www.twobirds.com/English/News/Articles/Pages/The_end_of_the_race_for_The_BHB.aspx)
44
Other recent cases in UK of damages actions
under Section 47 A of CA98
The Competition Appeal Tribunal has recently dealt with relatively
numerous cases (in comparison with other European courts),
mostly based on Art. 81 EC infringments:
i.e.
• Case 1077/5/7/07 Emerson Electric Co and others v Morgan
Crucible Company plc and others (case based on the European
Commission’s decision in Electrical and Mechanical Carbon and
Graphite Products cartel COMP/38359) – judgments on 17.10.07,
28.04.08; judgment on costs 17.10.08
• Case 1078/7/07 The Consumers Association v JJB Sports Plc (action
for damages on the basis of OFT, CAT and Court of Appeal decisions
in Football Replica Kit. Settled (withdrawn on 14.01.08 – still on
going for the costs)
45
An Art. 82 EC private litigation in UK: Case 1105/5/7/08
Freightliner Ltd and others v English Welsh & Scottish
Railways Ltd
•
•
•
Action for damages arising from a decision of the ORR (Office of Rail Regulation) of
19 December 2006 finding that EWS had abused of its dominant position. The case
was withdrawn from the Court on 28 January 2009 (probably settled)
Parties: - English Welsh and Scottish Railway Limited (EWS) is the largest freight
operator in the UK, operating approximately 8,000 rail freight services each week.
- Freightliner Heavy Haul (Freightliner) is a bulk rail freight operator. In early 2001,
Freightliner entered the market for coal haulage by rail through a contractual
relationship with ECSL. At that time Freightliner became EWS's only direct
competitor in the market for coal haulage by rail in the UK.
The ORR (also) found that EWS had abused its dominant position through
predatory pricing in respect of prices offered to London Electricity Group and UK
Coal.
EWS had offered London Electricity Group and UK Coal prices that were
substantially below its average total cost for the flows in question.
Important note: the UK OFT has published a discussion paper on Private Actions in
Competition Law, 18.04.07 – and recommendations in November 2007
46
Another UK case of private litigation based on art. 82
EC
• British Leyland Motor Corporation v T.I. Silencers Limited
[1981] 2 C.M.L.R. – based on both Art. 81 and 82 EC
British Leyland (dominant) v. T.I. Silencers (abused) – at
stake a problem with royalties over copyright detained by
BL – T.I. did want to pay those royalties
Interesting because the Court of Appeal also concluded
that the judgment did not have to address the implications
of claims to damages in those circumstances because it
proceeded on the basis that a co-contractor could not
recover damages for the consequences of a breach of Art.
81 (1) (position reversed by the ECJ in Courage v Crehan)
47
Case-law on Art. 82 (or Art.82-related) and National courts in
other jurisdictions
• Difficult to find a more-representative member
State for private actions based (also) on Art. 82
EC than United Kingdom
• In Italy, the most known case is Manfredi, a lawsuit triggered by Mr. Manfredi in a local lower
court to be reimboursed of the extra-money paid
to his insurer as a consequence of Art. 81-based
conducts, a follow-on claim based on the famous
Car Insurance cartel decided by the Italian
Competition Authority in July 2000.
• In fact, can not be considered an Art. 82 EC case…
48
ECJ in the Manfredi case (2006)
• However, the ECJ ruling given in July 2006 is important
because clarified the possibility to claim damages at
national level for Art. 81 and 82 EC infringement.
• “The Court ruled inter alia that article 81 EC must be
interpreted as meaning that any individual can rely on the
invalidity of an anticompetitive agreement and, where
there is a causal relationship between the latter and the
harm suffered, claim compensation for that harm. In the
absence of Community rules governing the matter, it is for
the domestic legal system of each Member State to
prescribe the detailed rules governing the exercise of that
right, provided that the principles of equivalence and
effectiveness are observed”
•
[see http://www.concurrences.com/rubrique.php3?id_rubrique=662&lang=en]
49
Manfredi (follows)
• Ruling on a reference from an Italian court,
the ECJ has confirmed that it must be open to
any individual to seek damages for loss caused
by a contract or by conduct liable to restrict or
distort competition. Otherwise the
effectiveness of Article 81 and 82 EC would be
put at risk. The court stresses, however, that
there must be a causal relationship between
the harm and the agreement or practice
prohibited by Article 81 EC .
50
Final remarks on actions based on the violation
of Art. 82 EC in national courts
• Many questions arising from the direct application in the
national courts are the same in presence of damages claimed
on the basis of Art. 81 AND/OR Art. 82 EC
• One of the main questions is the ‘burden of proof’: is it
possible to rely exclusively on the basis of the administrative
(Commission/NCA) decision?
• One of the key factor of success is the fact that the plaintiff
may rely on the proofs already gathered by the administrative
bodies. Clear rules should be adopted by single member
states
51
Another key-point: what is the legal value
of an administrative decision for the court?
• The Commission (see White Paper 2008) actually asks
the Courts to take into consideraion those decisions
[§ 2.3]:
• “Whenever the European Commission finds a breach
of Article 81 or Art. 82 EC, victims of the infringement
can, by virtue of established case law and Art. 16(1) of
EC Reg. 1/2003, rely on this decision as BINDING
PROOF in civil proceedings for damages” (see UK
EA02!) – other States should adopt the same criterion
52
The White Paper and Art. 82 EC
• If the White Paper will have full application in the
Member States, it will be sufficient for the company
that has suffered an abuse to rely on the decision to
get compensation for the damages:
National courts that have to rule in actions for
damages on practices under art. 81 and 82 EC on
which an NCA has already given a final decision, or on
which a review court has given a final judgment
(upholding the NCA decision), cannot take decisions
running counter to any such decision or ruling
53
Relation between White Paper on damages
actions, EC Reg. 1/2003, and Art. 82 Discussion
Paper/Guidance
• If the ‘guidance’ provided by the White Paper
08 will be followed by the single member
States, and pieces of legislation will be
adopted in line with that document, the
national judges will be not required to carry
out their own assessment of the abusive
conducts (in line with the Guidance and the
Discussion Paper)
54
Article 82 EC is not only the basis for damages:
also nullity of the contract
• Art. 82 EC most evident application in front to
national Courts, when and whether any single
member State will adopt detailed legislation
and guidance to apply it at horizontal level, is
to claim damages
• What about declaration that a contract is ‘void
and unenforceable’? (see English Wales & Scottish
Railway Limited v. E.ON. UK plc [2007] EWHC 599)
55
Initiative of the single national Courts to carry
out its own proceedings on the basis of art. 81
and 82 EC infringements
• The case-law we have tackled above is based on ‘follow-on’ claims,
based on previous decisions made by the Commission or the NCA
This is, i.e., what is established by the UK Enterprise Act 02
However, theoretically, on the basis of Reg. 1/2003, single Courts
could make the decision of carrying out the case without a previous
decision (‘stand alon’ cases) (i.e. collective actions)
Crucial role of national legislation
In Italy Bersani Law, introducing the collective actions for
infringement of Art. 81 (and 82) and national equivalent provisions,
is at present on hold … (next date: 1 st July 2009)
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An old principle, which pretends to be clarified
• ‘In the absence of Community rules on this
subject, it is for the domestic legal system of
each Member State to designate the courts
having jurisdiction and to determine the
procedural conditions governing actions at law
intended to ensure the protection of rights
which citizens have from the direct effect of
Community law…’ [Case 33/76, Rewe-Zentral
Finanz v. Landswirtschaftskammer fur das
Saarland [1976]’
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The principle of effectiveness of European Law is
at stake. Conclusion.
• One of the oldest principle of European Law is here at stake
• ‘The full effectiveness of Community law would be
unpaired if individuals were unable to obtain redress when
their rights were infringed by a breach of Community Law’
• [Brasserie du Pecheur, C-46 and 48/93]
• EC Regulation 1/2003 may change things in future, but it is
a slow process. The former monopoly of application of Art.
81(3) by the Commission represented for long time a limit
for national enforcement, and for the development of a
‘litigation culture’ based on Art. 81 and 82 EC
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However things may change …
• Crucial will be to introduce, perhaps, a substantial (financial)
interest in acting in national Courts
• In the US 90% of antitrust cases are dealt with private litigation:
treble damages may be awarded
• Clear rules on how national rules on damages and injuctions should
be adopted
• Need to clarify the burden of proof to show the causal link between
antitrust infringments and actual damage suffered
• Need to further clarify how much the judge should rely on the
Commission documents and decisions, or whether the judge could
rely on further documents provided by the party, or can make their
decisions independently
• See Commission Notice [point B] on the Handling of Complaint by
the Commission under Art. 81 and 82 EC [2004] OJ C101/65 for
further clarification
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Readings
• Basedow, J. Private Enforcement of EC Competition Law
(Kluwer, 2007)
• Jones A. Restitution and European Community Law (LLP,
2000)
• Smith, M, Competition Law: Enforcement and Procedure
(Butterworths, 2001)
• Whish, R., in Lonbay, J. Frontiers of Competition Law (Wiley,
1994)
• Wils, W. , Principles of European Antitrust Enforcement
(Hart Publishing, 2005) Chap. 4
• Comments are welcome to: [email protected]
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