International Antitrust Litigation

International Antitrust Litigation Conflict of Laws and Coordination Edited by Jiirgen Basedow, Stephanie Francq and Laurence Idot PUBLISHING OXFORD AND PORTLAND, OREGON 2012

CONTENTS Series Editors' Preface v Table ofabbreviations xxi Table of Cases xxv Table of Legislation Table of Treaties, Conventions and Agreements etc 1. Introduction 1 JORGEN BASEDOW, STEPHANIE FRANCQ AND LAURENCE IDOT I. Context 1 II. Why Analyse Antitrust Disputes in the Light of Private International Law? 1 A. The International Aspect of Antitrust Litigation 1 B. The Characteristics of Antitrust Litigation 2 C. Examples and Issues 3 i. Example A 3 ii. Example B 4 iii. Example C 4 iv. Example D 4 D. The Normative Context 7 III. Aims of the Research Project 8 Content and Structure of the Book 9 V. Working Method A. Who? B. Working Method C. Methodological Premises PART I. INTERNATIONAL ANTITRUST LITIGATION - ISSUES 15 JURISDICTION EU CROSS-BORDER LITIGATION 15 2. How to apply Articles 5( and 5(3) of the Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach VILA COSTA I. Introduction II. Introductory Proposal: There Is No Need to Amend the Brussels I Regulation with a View to Facilitating Private Enforcement of Competition Law III. Interpretative Proposals Concerning Article 5(1) 23 IV. Interpretative Proposals Concerning Article 5(3) 26

viii Contents 3. International Cartels and the Place of Acting under Article 5(3) of the Brussels I Regulation 31 JORGEN BASEDOW I. Introduction 31 II. Article 5(3) Regulation 44/2001 32 III. Multistate Effects and Limited Jurisdictional Competence 32 IV. Perspectives on the Place of Acting and Jurisdictional Competence 33 A. Place of Agreement or Concerted Action 33 B. Place of Implementation 34 C. the Defendant as Place Acting 35 V. Variety of Cartel Forms 35 A. Cartels 35 B. Cartel Agreements Made outside of (Quasi-)Corporate Structures 36 C. Single-Instance Cartel Agreements 37 D. Complex Cartel Agreements 37 E. Stable Place of Implementation 38 VI. Summary: A Multiplicity of Places of Acting 39 4. Jurisdiction Issues: Brussels I Regulation Articles 6( 1), and 28 in Antitrust Litigation MICHAEL WILDERSPIN I. Introduction 41 A. Purpose this Paper 41 B. The Relevant Provisions the Brussels I Regulation 42 i. Article 6(1) Brussels I Regulation 42 ii. Article 23 Brussels I Regulation 43 iii. The Provisions on Lis Pendens and Related Actions 43 II. The Provimi Litigation 43 A. Factual Background 43 B. Applications to Strike Out the Actions 44 C. Other Issues Which Are Either Implicit in the Judgment or Were Common Ground between the Parties 45 III. Analysis of the Judgment of the High Court in Provimi in the Light of the European Court's Case-Law 46 A. Article 6(1) 46 B. Article 23 50 IV. Recommendations to Be Made with Regard to Article and Articles and 28 Brussels I Regulation A. Article 6(1) 51 B. Article 23 53 C. Article 27 56 D. Article 28 58

Contents APPLICABLE LAW IN THE EU - ROME I AND ROME II 5. Private Enforcement of Antitrust Provisions and the Rome I Regulation 63 MARC FALLON AND STEPHANIE FRANCQ I. Introduction 63 II. How Do Antitrust Rules Apply in Contractual Litigation? 64 III. A. Basic Principles Governing the Designation of the Lex Contractus 64 i. The Rules Governing the Identification of the Applicable Law 64 ii. Exceptions 66 B. Basic Principles Governing the Applicability of Competition Law 67 i. Influence of Competition Law on the Substance and Validity of Contracts 68 a. General Remarks: the Influence of Competition Law is Incidental in regard to the Contractual Regime 68 b. Influence of EU Competition Law on Contractual Litigation 69 c. Influence of Article 101(3) TFEU and Block Exemption Regulations 70 ii. The Nature of Competition Law from the Point of View of Private International Law 73 C. The Intervention of Competition Law Rules in International Contractual Litigation 74 i. EU Competition Law 74 a. Primary Law 74 b. Secondary Law 76 ii. National Competition Law 77 a. The Interplay of Article 4 and Article 9 Rome I 77 b. Conflict of Competition Laws of Different Legal Systems 79 D. Conclusion 81 Specific Issue: The Nullity of the Contract or Part Thereof and its Consequences 82 A. Nullity the Contract Part Thereof 83 i. Material Scope of the Provision on Nullity 83 ii. The Law Applicable to Issues Related to the Nullity of the Contractual Agreement but Falling Outside the Scope of Article 101(2) TFEU 86 B. Assessment Damages and Nemo Auditur 88 i. Taking into Account Substantive Overriding EU Requirements 88 ii. Ascertaining the Applicable Law 89 C. Conclusion 90

x Contents 6. International Antitrust Claims under the Rome II Regulation 91 STEPHANIE FRANCQ AND WOLFGANG WURMNEST I. Introduction 91 II. Legislative History 93 III. Foundations of Article 6 Rome II 96 A. Determining the Scope the Rome II Regulation 96 i. General Remarks 96 ii. Non-Contractual Obligations 96 iii. Civil and Commercial Matters 97 B. Article 6 Rome II in the General System of the Regulation 98 i. Overview 98 ii. Is Article 6(3) Rome II a Universal Provision? 100 C. The Interplay between Articles II 103 i. Background 103 ii. No Need to Distinguish Articles 6( and (3) Rome II? 104 iii. The Dividing Line between Unfair Competition and Restriction of Competition 105 D. Necessary Legislative Amendments 107 IV. Nature of the Rules Designated by Article 6(3) Rome II 107 A. Problem Stated 107 i. Various Aspects of Competition Law 107 ii. Market Rules Determine their Own Scope of Application 109 B. Solution for Articles TFEU 110 C. Possible Solutions for Market Rules of National Origin i. Article 6(3) Rome II as an 'Open Gate' ii. Market Rules as Overriding Mandatory Rules (Article 16 Rome II) iii. Market Rules as Rules of Safety and Conduct (Article 17 Rome II) D. Necessary Legislative Amendments V. The Law of the Affected Market, Article 6(3)(a) Rome II A. Defining the Relevant Market 120 B. Nature Link Required 122 C. Necessary Legislative Amendments 124 VI. 6(3)(b) II 124 A. General Remarks 124 B. Unwritten Limitations of the Concentration Rule? 125 i. Problem Stated 125 ii. Limitations with Regard to the Application of National Competition Law 126 iii. Limitations with Regard to the Kind of Damage Sustained by the Plaintiff 127 C. Necessary Legislative Amendments 128 VII. Conclusion 128

Contents xi 7. Relevance of the Distinction between the Contractual and Non-Contractual Spheres (Jurisdiction and Applicable Law) SYLVAINE POILLOT-PERUZZETTO I. Introduction 131 II. Preliminary Question: Is the Debate Related to the Distinction between Contractual and Non-Contractual Spheres an Odd Issue in the Context of Actions for Damages Based on a Breach of EU Competition Law? III. Assessment of the Distinction between Contractual and Non-Contractual Claims Arising out of a Restriction of Competition A. Distinction the Texts 139 B. Distinctions as Far as the Reasoning and the Solutions are Concerned 139 i. The Distinctions and the Issue of Determining Jurisdiction a. Tort 140 b. Contract 140 ii. The Distinction and the Issue of Applicable Law 140 a. Differences Based on the Assessment of a Specific Policy b. Differences Based on the Specification of the Policy c. Differences between Solutions on the Basis of Examples 141 d. Results of the Comparison 144 IV. How the Distinction Conflicts with European Principles 145 A. The European Principles Involved 145 i. Specificity of the European Legal Order and Its Directions 145 ii. Competition Policy as a Pillar of the Internal Market a. The Importance the Basis 146 b. The Effects of the Basis in Competition Law: the Specificity of Private Actions Based on Competition in the Member States 147 iii. Freedom, and Justice 147 a. Predictability, Legal Certainty and Justice 147 b. Fundamental Place of the European Citizen 148 c. Simplification of Litigation 148 d. No Distortion of Competition between Litigants 148 e. Consistency among the European Texts 148 B. The Elements the Conflict 149 i. The Difficult Implementation of the Distinction between Contractual and Non-Contractual Obligations Conflicts with Certainty, Predictability, Necessity of Simplification and Effectiveness of Competition Policy a. Conflicts Resulting from the Existence of the Primary Distinction between Contractual and Obligations 149 b. Conflicts Resulting from the Difficulties of Implementation of the Distinction within the Categories

xii Contents ii. The Variety of the Solutions Induced by the Existence of the Distinction Conflicts with Principles of the Area of Freedom, Security and Justice as well as with the Objective of Effectiveness of EU Competition Law 153 a. Different Choice of Jurisdiction for the Plaintiff Conflicts with the Principle of Non-Distortion of Competition between the Litigants when they Sue for Damages on the Basis of a Breach of Competition Rules b. Possible Party Autonomy in Case of Contractual Obligations Conflicts with Competition Policy and with the Principles of the Area of Freedom, Security and Justice 153 c. Different Connecting Factors and Different Reasonings whether the Obligation Is Contractual or Non-Contractual for the Same Prohibited Behaviour Conflicts with the Principle of Consistency and with the Necessity not to Distort Competition between the Litigants d. Possible Use of Article 4(4) Rome I Regulation for a Contractual Obligation Conflicts with the Necessary Predictability of the Solutions for the Plaintiff 154 e. The Impossibility of Adoption of a Single Applicable Law to an Action Brought against Several Defendants (Namely Distributors) on the Basis of Several and Similar Contractual Obligations May Be Considered in Conflict with at Least Three European Principles iii. The Lack of Specific Rules for Contract Conflicts with the Objective of Effectiveness of European Competition Policy and the Principle of Consistency V. Proposals of Means of Convergence 155 A. Formal Solution 155 i. The Solution of Formal Unity of Competition Matters Through a Single Text 155 ii. The Solution of Formal Diversity through Three Texts Containing Equivalent Provisions 156 B. Substantive Common Solutions VI. Conclusion 157 ALTERNATIVE FORMS OF LITIGATION 159 8. International Litigation and Competition Law: the Case of Collective Redress 161 L I. Introduction II. The Requirements Emanating from EU Competition Law 162 III. Current State of Collective Redress in the EU 165 A. Collective Redress in the Legal Systems of the Member States

Contents xiii i. Representative Actions 165 ii. Collective Actions 167 B. The Propositions of the European Commission 168 IV. Specific Issues Raised by Collective Redress Instruments 170 A. Representative Actions 170 i. Recognition of the Representative Entity 170 ii. Admissibility of the Type of Action iii. Defining the Eligible Representative Entities 172 a. Issues 172 b. Questions of Interchangeability or Substitution c. The Commission's Proposals iv. Represented Individuals 178 v. Distribution of Damages 180 B. Collective Actions 182 V. Jurisdictional Aspects 183 VI. Applicable Law VII. Recognition and Enforcement of Collective Redress Rulings 185 Conclusion 189 9. Arbitration and EU Competition Law 191 P I. Introduction 191 II. Modernised EU Competition Law and Arbitration 192 III. IV. A. From Distrust to Embrace B. How Competition Law Issues Arise in Arbitration 194 C. of Competition Law 194 D. Competences of Arbitrators in the Decentralised System of Enforcement 196 The Application of EU Competition Law by International Arbitration Tribunals 198 A. EU Competition Law as Applicable Law in Trans-border Disputes in General 198 B. The Specific Arbitration 200 The Institutional Position of Arbitration in its Relationship with the European Commission 202 A. Arbitration Is Not Covered by the Cooperation Duties of Regulation 1/2003 202 B. General Exclusion of Arbitration from the Courts Cooperation Notice 204 C. A Notice on Cooperation with Arbitrators? 206 V. Conflicts of Resolution between Arbitration and Competition Authorities 207 A. Arbitration and Article 16 Regulation 1/2003 207 B. Arbitration and National Laws Conferring a Binding Effect on NCAs' Decisions

xiv Contents C. Direct Intervention by the Commission as an Exceptional Corrective Mechanism VI. The Ultimate Safeguard: the Public Policy Control of Arbitral Awards 213 A. Eco Swiss 213 B. The Extent the Public Policy Control 214 C. A Proposed Balanced Approach for Review of Arbitral Awards 218 D. Conclusion 221 Beyond EU 223 Jurisdiction and Choice of Law in International Antitrust Law - A US Perspective 225 HANNAH L AND RALF MICHAELS I. Introduction 225 A. The Value of a US Perspective 225 B. Doctrinal Matters 227 II. Personal Jurisdiction 228 A. Personal Jurisdiction 228 i. Targeting 228 ii. Conspiracy 229 B. Forum non Conveniens 230 III. Applicable Law 231 A. Actions for Monetary Damages 231 i. Damages Claims as Part of Applicable Antitrust Law 231 ii. Effects Doctrine 232 iii. Concentration of Applicable Law 233 iv. Application of Foreign Law 235 B. Contract Validity 237 i. Party Autonomy 238 ii. Federal Antitrust Law and State Contract Law 238 iii. US Antitrust Law and Foreign Contract Law 239 iv. Foreign Antitrust Law and State Contract Law 239 IV. Issues in Class Action Certification 240 A. Jurisdiction Over Non-Resident Class Members 240 B. Applicable Law 241 C. Recognition of Foreign Judgments: The Question of Preclusion 243 V. Conclusion 244 Recognition and Enforcement of Foreign Judgments 245 CATHERINE I. Introduction 245 II. Which Model to Choose? 246 A. The United States 246 B. The European Union 249

Contents xv III. Specific Issues in Competition Law 251 A. Punitive Damages 252 B. Administrative Penalties in Addition to Civil Damages 254 C. Judgment Handed Down After a Collective Action 255 IV. Conclusion 256 PART II. INTERNATIONAL ANTITRUST LITIGATION - COORDINATION ISSUES 257 COORDINATION BETWEEN COMPETITION AUTHORITIES AND COURTS 257 12. Access to Evidence and Files of Competition Authorities 259 LAURENCE IDOT I. Introduction 259 II. Access to Evidence in the Context of the European Union 263 A. Acknowledgement a Right Access 263 i. Disclosure Inter Partes 263 a. Situation in Positive Law (De Lege Lata) 263 b. The Proposed Solutions (De Lege Ferenda) 268 ii. Access to the Competition Authorities' Files 270 a. Situation in Positive Law (De Lege Lata) 270 b. Proposed Solutions (De Lege Ferenda) 272 B. The Limits to the Right of Access 273 i. Identification of the Limits Accepted in Competition Laws 273 a. The Rights and Privileges Granted to Undertakings Involved in Administrative Proceedings 273 b. The Restrictions on the Authorities' Right to Disclose 275 ii. The Introduction the International Dimension 276 a. The Pre-Draft Solutions 277 b. The Suggested Improvements 278 III. Access to Evidence in a Truly International Context 279 A. The Current Situation 280 i. Access for a Claimant in a Private Action to Evidence Located Abroad 280 a. The Limits of International Cooperation 281 b. The Development of Unilateral Application 282 ii. The Use in Foreign Proceedings of Documents Located in the United States 283 B. The Possible Means 284 i. Experience Gained from International Cooperation in Competition Matters 284 ii. The Lessons to Be Learned from International Cooperation in Matters of Mutual Legal Assistance 286

xvi Contents 13. Exchange of Information and Opinions between European Competition Authorities and Courts - From a Swedish Perspective 289 ROBERT MOLDEN I. Introduction 289 II. III. IV. A. Introduction to the EU - Framework of Regulation 1/2003 289 B. Introduction to Swedish Competition Law Procedure - The New Swedish Competition Act of 2008 The Right of National Courts to Request a Preliminary Ruling from the Court of Justice in Competition Law Cases 293 A. General Observations on Preliminary Rulings by the Court of Justice 293 B. Swedish Courts' Requests for a Preliminary Ruling from the European Court of Justice in Competition Law Cases 294 i. The Case 294 ii. The TeliaSonera ADSL Case 295 The Right of NCAs and the Commission to Submit Amicus Curiae Observations to National Courts in Competition Law Cases 296 A. General Points on Amicus Curiae Observations in Competition Law Cases 296 i. The Garage Gremeau Case 297 ii. The Case on Tax Deductibility of Commission Fines in the Netherlands 298 iii. The Pierre Fabre Dermo-Cosmetique Case 299 B. Amicus Curiae Observations Issued by the SCA to Swedish Courts in Competition Law Cases 300 i. The Soda-Club Case 300 The Right of National Courts to Request Opinions from the Commission in Competition Law Cases 301 A. General Points on Requests of Opinions from the Commission by National Courts in Competition Law Cases B. Requests for Opinions from the Commission by Swedish Courts in Competition Law Cases 302 i. The Harbour Case 302 ii. Ekfors Case 303 C. The Right of Swedish Courts to Request Opinions from the Swedish Competition Authority in Competition Law Cases 304 i. The SAS v Luftfartsverket Case 305 V. The Right of National Courts to Request Information from the Commission in Competition Law Cases 306 VI. The Obligation of Member States to Forward National Judgments on EU Competition Law to the European Commission 307 A. General Points 307 B. The Swedish Example: Non-Transparent Provisions 308

Contents xvii C. The German Example: Transparent Provisions 309 VII. Why National Courts Are Not Entitled by Regulation 1/2003 to Request Information and Opinions from NCAs - Proposal to Consider Amending Regulation /2003 in this Respect A. Asymmetry Articles 15(1) and 15(3) 310 B. An Overview of the Legislative History of the Coordination Measures Embodied in Article Regulation 1/2003 i. The Obligation to Forward Copies of National Judgments on EU Competition Law to the Commission - Article ii. The Right of NCAs and the Commission to Submit Amicus Curiae Observations to National Courts - Article 15(3) iii. The Right of National Courts to Request Information and Opinions from the Commission -Article 15(1) 312 C. Analysis of the Legislative Process 313 14. Discovery in a Global Economy MAURICE E I. Introduction 315 II. Litigants Abroad Who Seek Discovery in the US 315 A. When Does the US Court Have Statutory Authority to Order Discovery Under Section 1782(a)? i. Who Can Seek Discovery Under Section 1782? 317 ii. What Foreign Proceedings Qualify Under Section 1782(a)? iii. When Can an Interested Person Seek Discovery under Section 1782? 319 iv. What Kind of Discovery Is Available under Section 1782(a)? 320 B. When Will the US Courts Exercise Their Discretion and Permit Discovery under Section i. Is the Person from Whom Discovery Is Sought a Participant in the Foreign Proceeding? 322 ii. Comity Considerations 323 iii. Is the Applicant's Discovery Request under Section an Attempt to Circumvent Foreign Proof-Gathering Restrictions or Other Policies of a Foreign Country or the United States? 324 iv. Is the Discovery Request Unduly Intrusive or Burdensome? 325 III. When Can Private Litigants in the US Seek Discovery Abroad? 326 A. Does the US Court Have the Statutory Authority to Order the Requested Discovery? 326 i. Federal Rules of Civil Procedure Versus the Hague Convention 327 ii. Personal Jurisdiction 328 iii. US Court's Subpoena Power 329 iv. Seeking Discovery from Corporations Operating Through Subsidiaries in Various Countries 329

xviii Contents B. Should the US Court Exercise Its Discretionary Authority to Compel Production? 331 i. EC's Leniency Program 331 ii. Blocking Statutes 333 IV. Friction from US Discovery 336 A. Criticisms about the United States' Liberal Discovery Mechanisms for Foreign Litigants 338 B. Policy Proposals 341 V. Conclusion 342 II.2. COORDINATION WITHIN THE EUROPEAN COMPETITION NETWORK 343 The ECN and Coordination of Public Enforcement of EU Law - Can Lessons Be Learned from International Private Law Jurisdiction Rules and Vice Versa? 345 BARRY J RODGER I. Introduction 345 II. Regulation 1/2003 and the Functioning of the ECN 346 A. The nature ECN 346 B. ECN Functioning 346 III. ECN 'Case Allocation' 348 A. The Network Notice 348 B. 2009 Commission Report on Regulation 1/2003 350 C. Procedures, Sanctions and Inconsistent Outcomes: Divergence and Convergence 351 IV. Leniency and Concurrency 354 V. International Private Law and Conflicts of Jurisdiction 356 A. Introduction 356 B. Lis Alibi Pendens - First Come First Served 357 C. Forum Non Conveniens 358 VI. Concluding Remarks 360 A. Lessons from the US? 360 B. The Private and Public Enforcement Context Compared 360 C. Case Allocation Methods Compared 361 D. Mutual Lessons? 362 E. Future Issues in Case Allocation 363 16. Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-Border Antitrust Investigations 365 DAMIEN MB GERARD I. Introduction 365 II. Issues and Approaches 366 A. Coordination Issues: Dealing with Diversity and Uncertainty 367 i. Diversity 368 ii. Uncertainty 370

Contents xix B. Approaches: Managing Diversity to Ensure Legal Certainty 373 i. Conflictualist Approach 373 ii. Cumulative Approach 376 a. The Position of Individuals in Investigations 376 b. The Kerosene Case 379 c. The European Courts and Evidence Obtained from Third Countries 380 iii. Recognition Approach 381 a. Recital 16 in the Broader Context of Enforcement Cooperation 382 b. Recital 16 in the Broader Context of the European Integration Process 386 III. Solution and Recommendations 387 A. Solution: Successive Application of the Lex Fori Mitigated by the Convergence between National Procedural Enforcement Frameworks 387 i. Control of Legality 388 ii. Control of Admissibility 389 B. Recommendations: Enhance Legal Certainty to Ensure a Proper Balance between Effective Enforcement and Due Process 390 IV. Concluding Remarks 391 17. Recognition of Foreign Decisions within the European Competition Network 393 JORGEN BASEDOW I. Introduction: Integration Policy and Recognition 393 II. The Recognition NCA Decision of another Member State 395 III. The Recognition of an NCA Decision in Civil Proceedings of another Member State 396 The Recognition of Civil Judgments by a Civil Court of a Foreign Member State 398 V. The Recognition of Civil Judgments by an NCA of a Foreign Member State 399 VI. The Recognition 400 VII. Conclusion 402 Policy Proposals 403 How to apply Articles 5(1) and 5(3) of the Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach 405 VILA COSTA International Cartels and the Place of Acting under Article 5(3) of the Brussels I Regulation 407 JORGEN BASEDOW Jurisdiction Issues: Brussels I Regulation Articles 6(1), and 28 in Antitrust Litigation 409 MICHAEL WILDERSPIN

xx Contents Rome I and Antitrust Litigation 413 MARC FALLON 8C STEPHANIE FRANCQ Rome II and Antitrust Litigation 415 STEPHANIE FRANCQ 8c WOLFGANG WURMNEST Relevance of the Distinction between the Contractual and Non-Contractual Spheres and Applicable Law) SYLVAINE POILLOT-PERUZZETTO 8C International Litigation and Competition Law: the Case of Collective Redress 421 L Arbitration and EU Competition Law 425 P KOMNINOS Recognition and Enforcement of Foreign Judgments 427 CATHERINE KESSEDJIAN Access to Evidence and Files of Competition Authorities 429 LAURENCE IDOT Exchange of Information and Opinions between European Competition Authorities and Courts - From a Swedish Perspective 433 ROBERT MOLDEN The ECN and Coordination of Public Enforcement of EU - Can Lessons Be Learned from International Private Law Jurisdiction Rules and 435 BARRY J RODGER Regulation 1/2003 (and Beyond): Balancing Effective Enforcement and Due Process in Cross-Border Antitrust Investigations 437 MB GERARD Recognition of Foreign Decisions within the European Competition Network 439 JORGEN BASEDOW Index 441