19 Commission questionnaire on damages
actions for breaches of EC anti-trust rules
| (27161)
5127/06
COM(05) 672
+ ADD1
| Commission Green Paper — damages actions for breach of the EC anti-trust rules
Commission Staff Working Paper
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| Legal base | — |
| Department | Trade and Industry
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| Basis of consideration | Minister's letter of 16 March 2006
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| Previous Committee Report | HC 34-xvii (2005-06), para 2 (1 February 2006) and HC 34-xx (2005-06), para 10 (1 March 2006)
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| To be discussed in Council | Not applicable
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| Committee's assessment | Legally and politically important
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| Committee's decision | Cleared, but further information requested
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Background
19.1 Articles 81 and 82 of the EC Treaty (the EC anti trust rules)
are directly applicable and are enforced by both public and private
enforcement proceedings. Both public and private enforcement serve
the same set of objectives: to deter anti-competitive practices
prohibited by anti trust law and to protect consumers and firms
against these practices. The European Court of Justice (ECJ) has
ruled that, in addition to annulment proceedings and fines under
the public enforcement regime, effective protection of the rights
granted by the Treaty requires that individuals who have suffered
a loss arising from the infringement of Articles 81 or 82 have
the right to claim damages. The ECJ also emphasised that, in the
absence of Community legislation on the matter, it is for the
legal systems of the Member States to provide for detailed rules
allowing individuals to bring effective damages claims.
The Commission Green Paper
19.2 The Commission Green Paper focuses exclusively on private
damages actions in civil disputes in national courts by consumers
and firms who have suffered loss due to an infringement of the
EC anti trust rules. It notes that in the area of private enforcement
damages actions the situation in Member States is one of "total
under development" in contrast with, for example, the United
States where such actions are commonplace and can lead to very
substantial damages.
19.3 The Green Paper goes on to identify existing
obstacles to taking private actions or damages in the national
courts, which may account for the very few cases that have been
recorded. It mentions in particular:
- the lack of effective access
to evidence by claimants in many jurisdictions;
- divergent national rules as to how damages should
be defined;
- whether or not there should be a fault requirement
for anti trust related damages actions;
- the absence of special procedures in jurisdictions
allowing collective actions by those who suffered damage as a
result of anti trust infringements;
- the high cost risk for claimants;
- the costs, expert evidence and limitation periods
regimes generally; and
- the lack of coordination between the public and
private enforcement regimes for the Community anti-trust rules.
19.4 The Green Paper concludes that the lack of effective
national rules in relation to these issues combined with the considerable
divergence between national legal systems represents a gap in
the effective enforcement of anti trust rules in the EU. The aim
of the paper is to suggest a range of options for consideration
in relation to the issues outlined and for possible action both
by Member States and at Community level in order to encourage
and facilitate private damages actions in competition disputes.
The Commission invites all interested parties to comment on the
issues raised and the detailed options formulated by 21 April
2006 for the purposes of considering future draft legislation.
19.5 When we last considered the Green Paper, we
expressed broad agreement with the Government's support for its
general aims but asked the Minister to explain if the Government
saw any immediate need for either harmonising or complementary
legislation by the Community. We also asked the Minister to indicate
if the Government took the view that the EC Treaty provided an
adequate express legal base for Community legislation regarding
private enforcement of Community competition law or if such measures
would have to be adopted under Article 308EC.
The Minister's letter
19.6 The Minister has now replied and writes as follows:
"The Committee has noted that the European Commission's
Green Paper invites comments from Member States in order to consider
whether it is necessary and appropriate to take action at Community
level to improve conditions for private actions, and asks whether
the Government currently sees any reason for harmonising or complementary
legislation by the Community. The Green Paper consultation is
still at an early stage, too early to suggest possible action
at the Community level. The focus, however, needs to be on how
best to develop a more comparable framework for effective private
enforcement across all 25 Member States. Our current view is that
this is primarily a matter for action by the Member States.
"The Committee has also asked about an express
legal base for possible Community legislation regarding private
enforcement regimes or whether such measures could be adopted
under Article 308 EC. In the absence of any suggestion of a specific
measure, and therefore a sense of its aims and content, questions
of legal base tend to be speculative. A variety of legal bases
may be considered. Article 83 may be relied upon where the draft
regulation or directive gives effect to the principles set out
in Articles 81 and 82. Provisions relating to private damages
actions in competition cases do not, however, appear to fall within
the headings set out in paragraph 83(2). Article 308 EC could
provide a backstop but we suspect that there might be reluctance
to make use of this given that it requires Council unanimity on
a proposal from the Commission after consulting with the European
Parliament. Alternatively, Article 95 of the Treaty may provide
a more suitable legal base. Directive 2004/48/EC on the enforcement
of intellectual property rights was made under Article 95 and
provides for the adoption of 'measures for the approximation of
the provisions laid down by law, regulation or administrative
action in Member States'. The Commission has drawn some parallels
between their approach to intellectual property and competition,
although at this stage, the Commission has not indicated of a
possible legal base should they initiate legislation."
Conclusion
19.7 We thank the Minster for his detailed reply.
We broadly agree with the Government's approach but note that
the Government is still considering its detailed reply to the
Commission's consultation exercise. We clear the document but
ask the Minister to keep us informed on the evolution of the Government's
thinking on the need for Community legislation in the area of
private enforcement of anti-trust rules.
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