10 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 February 2006
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| Previous Committee Report | HC 34-xvii (2005-06), para 2 (1 February 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 | Not cleared, further information requested
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Background
10.1 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.[39]
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
10.2 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.
10.3 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 co-ordination between the public
and private enforcement regimes for the Community anti trust rules.
10.4 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.
10.5 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 the need for a
greater degree of harmonisation of private enforcement rules at
a time when national competition authorities are being given an
enhanced role and greater power within a decentralised public
enforcement regime of EC competition law.
The Minster's letter
10.6 The Minister has now replied and writes as follows:
"The Committee has noted that the national competition
authorities have been given an enhanced role and greater power
within a decentralised public enforcement regime of EC competition
law. The European Commission are, however, keen to encourage damages
actions in competition cases on the ground that the private damages
actions should act as a deterrent to those who are minded to breach
competition law and also provide compensation to those who suffer
loss as a result.
"There is considerable diversity between the
Member States as to the circumstances in which a damages claim
may be brought. The Green Paper is concerned with the obstacles
to business and consumers in each of the 25 Member States to bring
private actions. The European Commission are not, so far as we
are aware, currently proposing to introduce draft EU legislation
in the light of the Green Paper. The European Court of Justice
has ruled that effective protection of the rights granted by the
European Treaty requires that individuals who have suffered loss
arising from an infringement of the EU competition rues (Article
81 and 82 of the Treaty) have the right to claim damages. The
European Commission have pointed out that by being able to bring
a damages claim, individual business or consumers in Europe are
brought closer to competition rules and will be more effectively
involved in the enforcement of those rules.
"The UK and a few other Member States, for example,
Germany, have taken a number of measures at national level to
facilitate private actions within their jurisdiction. Other Member
States need to take similar action in respect of their legal framework
so that their businesses and consumers have comparable scope to
bring private actions in their civil courts. The question is how
best the legal systems of the Member States may be developed in
order to facilitate private actions."
Conclusion
10.7 We thank the Minister for his helpful reply.
10.8 We broadly agree with the Government's position
but note that the Green Paper expressly mentions the possibility
of future Community legislation in this area. We ask the Minister
if the Government currently sees any reason for either harmonising
or complementary legislation by the Community.
10.9 We also ask the Minister if the Government
takes the view that the EC Treaty already provides an express
legal base for Community legislation regarding private enforcement
regimes for breaches of EC anti-trust rules or if such measures
would have to be adopted under Article 308 EC. We shall hold the
document under scrutiny until we have received the Minister's
reply.
39 See Carriage v Crehan, case see - 453/99,
judgment of the Court of 20 September 2001, paragraphs 26 &
7. Back
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