European Commission consults on facilitating competition damages claims

On 3 April 2008 the European Commission published a White Paper on damages actions for breach of the EU antitrust rules. It sets out for public comment a new model for achieving compensation for consumers and businesses which have suffered loss due to breaches of the EC Treaty rules on restrictive agreements and abuse of a dominant market position. The deadline for comments is 15 July 2008.

The European Commission has previously published for consultation a Green Paper on this subject which raised a number of different possible approaches. The White Paper represents the European Commission’s attempt to foster on-going discussion of this area and set out concrete measures aimed at creating an effective private enforcement system in Europe.

The key recommendations of the White Paper are:

• Single damages – while the Green Paper has raised the issue of whether multiple damages should be permitted, the White Paper favours single damages only;
• Collective redress – the White Paper suggests that representative actions should be permitted provided they are led, for example, by recognised consumer groups and provided victims can choose whether to participate. The European Commission wishes to avoid the emergence of class actions run by law firms for an unidentified number of claimants. The UK already has a procedure for representative actions by recognised bodies;
• Disclosure – the White Paper advocates an EU-wide minimum level of disclosure between the parties in an antitrust damages claim, but with safeguards in place to avoid procedural abuses. For example, the European Commission does not recommend an automatic right to discovery and notes that adequate protection must be given to leniency documentation;
• Binding effect of final decisions – the White Paper recommends that in order to avoid the time and cost of re-litigation, final decisions of Member States’ competition authorities should be considered sufficient proof of an infringement in subsequent actions for damages. Anti-trust infringement decisions of the UK’s Office of Fair Trading and Competition Appeal Tribunal are already binding on UK courts. In addition, the UK already has a dedicated procedure for follow-on claims which focuses on quantum of damages.

The White Paper is an opportunity for businesses to engage with the European Commission in shaping the future enforcement of competition law.

For the White Paper documentation please click here.