New EU Directive to facilitate damages claims by victims of antitrust violations

EU Member States and the European Parliament have adopted a new Directive aimed at facilitating damages claims by victims of antitrust violations. Member States have an obligation to implement the Directive into their national laws. According to the Finnish Competition and Consumer Authority (FCCA), the Directive will provide an important new tool for implementing competition policy.

The new Directive facilitates damages claims by customers who have overpaid for goods and services due to infringements of the EU antitrust rules, such as cartels or abuses of dominant market positions. In many cases artificial price increases brought about by illegal cartels, for example, can be as much as 15–25%. The Directive is based on the principle of full compensation, which means that victims are entitled to be compensated for any harm suffered as a result of antitrust violations in full.

The Directive removes many practical obstacles that have previously complicated damages claims relating to antitrust violations. If a competition authority of a competent court has previously established that a practice infringes antitrust regulations, victim seeking compensation will not need to prove this again during damages proceedings. This point has been previously subject to legal uncertainty, which may have reduced the number of damages claims.

The Directive also introduces a concept known as “presumption of harm”. This means that if a competition authority of a competent court has previously established the existence of a cartel, victim seeking compensation will only need to quantify the harm suffered and not prove that the cartel actually caused harm. The infringers nevertheless have a right to disprove the presumption of harm. If they are unable to do so, the damages proceedings will be founded on the presumption that the cartel has led to overcharge harm.

The Directive also makes it easier for claimants to quantify the harm suffered by giving courts the right to order defendants to disclose relevant documents to the court. Moreover, regulations on limitation periods have been revised in order to prevent the associated uncertainty from causing an obstacle to claiming damages.

The position of indirect purchasers has also been clarified. Customers of cartels sometimes pass on any overcharge to their customers, i.e. the cartel’s indirect purchasers. The Directive ensures that indirect purchasers also have a right and means to claim damages.

The European approach does not conceive private damages actions as a tool for punishment and deterrence of those who breach antitrust rules but as compensation for harm caused. Sanctions for antitrust violations and the principle of full compensation together create a system that prevents illegal practices more efficiently than before. Businesses that engage in illegal practices now face a higher risk of having to compensate victims for any harm caused in addition to receiving a financial penalty for the violation.

According to the FCCA, the Directive also efficiently preserves the rights and incentives of infringers who want to cooperate with the authorities and avoid penalty payments. The FCCA has emphasised the importance of preserving this so-called leniency programme at various stages of the drawing up of the Directive.

The FCCA believes that the Directive will provide an important new tool for implementing competition policy. Member States have two years to implement the Directive into their national laws. The Ministry of Employment and the Economy chairs a national working group on transposing the Directive into national legislation in Finland.

Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union