A. Duality of public and private enforcement of Art. 101 TFEU

1

The legal basis for enforcement of antitrust legislation arises under both EU and national law. The Commission has the authority to enforce EU antitrust provisions at the EU level while national competition authorities and national courts apply both EU and national antitrust legislation within Member States.

Art. 103 of the TFEU and Council Regulation (EC) 1/2003 set out the framework for enforcing the TFEU's antitrust provisions, such as anti-collusion provisions of Art. 101 TFEU. Art. 103 TFEU enables the Commission or National Competition Authority to investigate a potential infringement of these provisions. Rules on procedures for enforcement are set out in Regulation 1/2003.

As EU law does not specify means for the private enforcement of EU antitrust law, such procedural rules are derived from the national legal system of the relevant Member State.

The ECJ found in Courage v Crehanthat the full effectiveness of Art. 101 TFEU would be put at risk if it were not open to individual claims for damages arising due to anticompetitive practices. Such rights serve to deter undertakings from entering into anticompetitive agreements.There is however currently no consistency in an individual's ability to claim for damages at a national level. The Commission has drafted a Green Paper in 2005 and White Paper in 2008 on this issue and a Green Paper in 2008 on collective consumer redress.

B. Effectiveness of Class Action Suits

2

Class action suits (as known in the United States, generally referred to as collective consumer redress in Europe) enable a representative member of a large group of people to bring legal action on behalf of all members of the group. While collusive behaviour may not affect a single consumer or competitor so significantly to warrant the expense and effort of commencing private legal action, the cumulative effect on a whole class of consumers or competitors could be sufficient incentive for a representative litigant to take action.

3

There are numerous advantages to enabling private legal action in this field, including through class action suits. Damages, as discussed above, are a primary consideration in the motivation for undertaking class actions and may result in higher and more punitive penalties to undertakings than the fines imposed by public authorities. High penalties and public relations impact of having injured parties bringing action against an undertaking may serve as a greater deterrent to collusive behaviour, depending on the particulars of the case.

Private legal action and class action suits enable those who are actually affected by collusive behaviour to have a chance at redress, which does not arise under action taken by the Commission or National Competition Authorities, which are led by public interest.

These public interest concerns may also lead public authorities to be more timid in their approach to legal action, as they must consider the cost to the public of investigating collusive conduct and pursuing legal action. Such considerations do not necessarily limit the action of private litigants.

The pursuit of legal action by private litigants may also serve to relieve some of the burden of public agencies in their work against anticompetitive conduct. Where cases are pursued privately, more resources are theoretically made available for focusing on cases where there are no directly affected parties or any parties willing to take private legal action.

4

There are however a number of reasons why private legal action, including class action suits, is not a complete solution for the enforcement of antitrust law. Private litigants with adequate standing may be difficult to identify for some cases, and litigants may be more interested in the pursuit of damages than simply seeking an injunction to cease the collusive behaviour. The American approach to class action suits has seen the capacity for private litigants to be abusive in their pursuit of claims that are not well-founded, and there are concerns that similar situations may arise in Europe should the means of collective redress not be adequately and consistently regulated.

5

The Commission (through the Directorate-General for Competition) and National Competition Authorities have a wide range of investigation powers that are not available to private litigants, thereby ensuring a higher rate of success in legal action taken by public authorities. These powers include the ability to conduct sector enquiries, request information, take statements and conduct inspections. The exercise of this latter power through targeted activities such as dawn raids can yield a high amount of information critical for a successful case and naturally the capacity to acquire information through such means is not available to private litigants.

The Commission has the ability to settle cases under Article 7 of Regulation 1/2003 by accepting undertakings which private litigants have no capacity to implement, monitor and enforce. Although such settlements would bear little interest to a private litigant seeking damages, they do act as an important tool in discontinuing anticompetitive conduct and they allow public agencies to affect behaviour in a more timely way than through the lengthy judicial processes characteristic of class action suits.

 

 

Publication Note

Responsible: Free University of Berlin represented by its President.
Authors: Joseph Crichton
Stage of work: Completed.


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