Antitrust Damages Actions in the EU; A Real Possibility or Wishful Thinking?

Abstract: According to traditional economic theory an environment with free competition is seen as the only environment where optimal allocation of resources and thus a maximizing of consumer welfare and economic growth can be achieved. Successful enforcement of Competition law is considered vital for the achievement of its objectives. Throughout the history of the EU the enforcement of Competition law has mainly been carried out through public measures. However, the Commission has been persistent in attempting to encourage private enforcement before national courts for the last decades. At the same time it received support from the ECJ, which first explicitly recognized a right to damages in antitrust cases in 2001, and then reaffirmed that judgement in 2006. The purpose of this Thesis is to establish how realistic the possibility of EU citizens being compensated for a loss caused by infringement of antitrust rules is, with a special focus on cartel infringements, and whether and how the most recent development on EU level, the Commission's White Paper from 2008, is influencing that possibility. The research will be limited to the UK and Germany. Furthermore, the overall discussion will be limited to private enforcement as a supplement to public enforcement rather than as a replacement of it. The 2008 White Paper had the primary object of improving the legal conditions for victims to exercise their right under the Treaty to reparation of all damage suffered as a result of a breach of EU antitrust rules. In the White Paper the Commission made suggestions of changes in areas which had earlier been identified as containing obstacles to private enforcement. The suggestions that were made concerned the following: the standing of indirect purchasers, collective redress, access to evidence, the binding effect of NCA decisions, fault requirements, damages, the passing-on of overcharges, limitation periods, the costs of damages actions and the interaction between leniency programmes and actions for damages. The UK and Germany have both acknowledged the importance of a private enforcement system. They have also shown great initiative with regards to encouraging and facilitating actions for damages in antitrust cases by making significant changes to their legislation. Furthermore, although case-law on private enforcement of damages relating to infringements of Competition law is still somewhat sparse, especially in Germany, in both countries there has been a notable increase in the number of cases brought and settled before judgement has been given. This does give evidence to the fact that recent developments in both countries have led to an increase in Competition law awareness and the awareness of violators' liability towards the victims of his infringement. It is still hard to speculate without further research on the effectiveness of each of these countries systems, whether either one is better than the other. In many ways they are alike. However, it must be noted that where the countries differ, the UK does come closer to what the Commission considers to be necessary for the right to damages to be effectively protected. The overall conclusion from researching both countries is that the obstacles to private enforcement the Commission has identified still exist and that the White Paper has had no influence on those. If public enforcement was perfect, an optimal number of cases would be prosecuted and optimal sanctions imposed. However, public enforcement of Competition law will always be limited by the resources given to competition authorities, making it highly unlikely that they will ever reach the optimal level. It is therefore assumed that private enforcement can serve as a compliment to public enforcement by bringing the level of enforcement closer to the optimum. However, changing the national rules of tort law on EU level by positive harmonization, does undeniably risk an incoherence and fragmentation within the national systems. Thus, passive harmonization might be a more feasible way to go about such a change.