Trusting European Member States to Comply With the EC’s Antitrust Damages Directive

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David Burstyner, Feb 25, 2015

You could be forgiven for thinking that 2014 was the culmination of the 30-year evolution of European Competition Damage claims depicted in the Chart below. It heralded the pan-European Damages Directive, and increased support for these actions by European businesses.

This culture shift is perhaps best proven by Deutsche Bahn’s very public air cargo cartel claim initiative, which includes financing, coordinating, and recruiting other claimants amid a captivating PR strategy. Deutsche Bahn’s claim of around EUR 2 billion, cited as the largest European cartel damage claim to date, is brought by direct purchasers at the same time as indirect purchaser claims are pending in respect of the same cartel.

At the same time, the law still needs to catch up. The Directive paves the way but, although it came into force as European law on December 25, 2014, Member States have until December 27, 2016 to implement it into their own systems. In the meantime, national courts continue to deliver decisions independent of the Directive, in some cases snubbing their noses at it (as the Brussels Commercial Court did in its Elevator Cartel Decision) and in other cases lamenting the European Commission’s own obfuscation in damage cases (as the U.K. High Court did in the Air Cargo litigation).

This may indicate that the crux of the challenges ahead is the need for greater harmonization across Europe. Presently, antitrust misdeeds are regulated and penalized EU wide by the European Commission applying EU-wide legislation but at a compensation level claimants can only turn to domestic courts. Uncertainty exists as to which Member State’s tort laws apply to the cross border factual matrix of many cases. Claimants frequently have to choose between jurisdictions that operate differently. Plus, no matter what applicable law or jurisdiction claimants select, defendants will inevitably run interference by arguing that the choices are wrong. These factors make it a labyrinth just to reach the stage where the substantive merits can be argued.

Finally, while the Directive is an exclusively competition law initiative, it is noteworthy that the backdrop includes the broader 2013 Recommendation of the Commission that Member States introduce collective redress mechanisms by July 2015.