[2005] Comp Law 239 THE EU GREEN PAPER ON PRIVATE DAMAGE ACTIONS AN AMBITIOUS RESPONSE TO A VERY DIFFICULT SET OF PRACTICAL AND PHILOSOPHIC ISSUES SECTION Donald I. Baker The message is clear: The Commission wants to make exercising the right to claim damages for breach of Community competition law easier. 1 Or as Competition Commissioner Neelie Kroes explains it, Businesses and individuals who suffer losses because of illegal activities such as cartels have a right to compensation The Green Paper sets out options for making that right a reality, and so making companies that break the competition rules pay for the harm that they do. 2 In trying to make that right a reality, the European Commission has chosen to take on a very difficult set of issues which are outlined in its Green Paper on Damages actions for breach of the EC antitrust rules 3 and more fully discussed in the accompanying Commission Staff Working Paper 4. The core reality is that, while the EC antitrust rules are European, it is for the legal systems of the Member States to provide the detailed rules for bringing damages actions. 5 These legal systems vary greatly not only in their procedural rules, but in their philosophic approaches as to when and how (and how much) to compensate victims of legal wrongs. The Commission deserves praise for putting its credibility, resources and effort into this undertaking. Its Green Paper offers a thoughtful and fairly comprehensive set of options on how to approach many of the key practical questions that will be raised by any national legislative effort to introduce private rights of recovery under the public laws prohibiting cartels, unreasonable restraints of trade, and monopolistic abuses. 1 2 3 4 5 Baker & Miller PLLC, Washington, DC. European Commission press release (MEMO/05/489), European Commission Green Paper on damages actions for breach of EC Treaty antitrust rules frequently asked questions (20 December 2005) (Frequent Questions). European Commission press release (IP/05/1634), Competition: Commission launches consultation on facilitating damages claims for breach of EU competition law (20 December 2005) (Commission Release) (emphasis added). European Commission (COM(2005) 672, SEC(2005) 1732), Green Paper - Damages actions for breach of the EC antitrust rules (19 December 2005) (Green Paper). European Commission (COM(2005) 672), Commission Staff Working Paper - Annex to the Green Paper - Damages actions for breach of the EC antitrust rules (19 December 2005) (Staff Working Paper). Green Paper, op cit, n 3, at para 1.2 (emphasis added).
240 [2005] Comp Law Yet there appears to be an enormous gap between surfacing some interesting ideas and actually achieving an active programme of private enforcement of the EC competition rules across Europe. It seems considerably more likely that very little will happen than that too much will happen, as some thoughtful Europeans seem to fear. To start with, it seems almost certain that different Member States will adopt different rules (if they adopt any at all) on exactly when and how the victim(s) of an antitrust wrong can recover damages. Each national parliament probably ought to be asking some basic questions about exactly when and why it wants to make exercising the right to claim damages for breach of Community competition law easier. Should the Member State be seeking (1) to provide normal tort-law compensation to consumer victims of cartels or monopolies? (2) to provide a safeguard against political timidity or bureaucratic caution by those enforcing the competition rules? (3) to make up for insufficient funding and resources of the Commission or national enforcement agencies? (4) to increase deterrence and antitrust awareness among potential violators and other enterprises? (5) to compensate competitor-victims of monopolistic bullies? (6) to protect worthy locals against aggressive outsiders? and/or (7) to enhance the position of the apparently weaker parties to ongoing contractual relationships (franchisees, dealers, etc)? How likely is it that the parliaments in Helsinki, Bratislava, Rome, Dublin and 21 other capitals will give similar answers to all these questions? What happens if many parliaments duck the basic questions with vague statutory language that leaves it to still-inexperienced national courts to try to figure out the answers on a case-by-case basis? The Commission is less than clear itself on these questions. The Green Paper emphasises that compensation of cartel victims is a primary goal, but does not seem to give guidance on the outer boundaries of private antitrust relief, even though answers to these questions could well affect what a national parliament is willing to do in response to the Green Paper or other exhortations by the Commission. Substantial national diversity on private antitrust remedies within the EU would not be without real costs to society. If private plaintiffs were able to generate diverse judicial outcomes in different Member States, this reality would be likely to lead to forum shopping within the EU, and perhaps even conflicts among governments over exercise of jurisdiction by systems allowing more favourable rules for private recoveries for competition law violations. 6 Moreover, any serious lack of consensus on the definitions of wrongs and remedies within the EU would surely make the task of antitrust compliance more complex and costly for enterprises operating in numerous Member States a burden that will only escalate, as more and more enterprises begin to operate in multiple Member States. Here we should be 6 The UK courts may become a favoured forum for private antitrust plaintiffs from elsewhere in the EU because of broader discovery rules and other litigation advantages. See the Provimi litigation where the High Court sustained English jurisdiction for foreign plaintiffs in relation to transactions that took place on the Continent: Roche Products Ltd v Provimi Ltd [2003] EWHC 961 (Comm), [2005] All ER 683. In addition, the UK has provided jurisdiction for private damage claims before a specialised tribunal, the Competition Appeal Tribunal (CAT), for follow-on cases from EC Commission and UK Office of Fair Trading (OFT) infringement decisions; and in these proceedings the CAT would be bound by the Commission or OFT findings that had been sustained on review. See Staff Working Paper, op cit, n 4, at para 87, discussing ss 18 and 20 of the Enterprise Act 2002, inserted as ss 47A and 58A of the Competition Act 1998.
[2005] Comp Law 241 concerned not only about the administrative costs of compliance, but also about the costs of business opportunities foregone because of cautious legal advice generated by legal confusion. THE DIFFICULT ISSUES ADDRESSED The legal systems of the Member States are generally much less favourable to private plaintiffs than is the case in the USA, where private antitrust litigation has come to dwarf government enforcement in terms cases brought, trials completed and economic impact on parties. The Commission staff clearly recognises this reality, and thus, a substantial part of the Green Paper is devoted to improving the incentives and lowering the barriers for private antitrust plaintiffs, but without mimicking the US incentives and practices. 7 Here are the most important issues addressed, as I see them. Litigation cost rules constitute a particularly critical obstacle, because the various loser pays rules in the Member States are (as they seem intended to be) an important deterrent to a private plaintiff bringing a novel civil action; and initially almost any private antitrust action is going to be novel, both for the plaintiff and the court! The Green Paper addresses this issue directly: Rules on cost recovery play and important role as incentives or disincentives for bringing an action. 8 The authors respond with Option 27: Establish a rule that the unsuccessful [antitrust] plaintiff will have to pay costs only if they acted in a manifestly unreasonable way by bringing the case. Alternatively, Option 27 suggests that the court be given the discretionary power at the beginning of the trial that the claimant not be exposed to any cost recovery even if the action were to be unsuccessful. The litigation costs issue in Europe is illuminated by the fact that the most cited case in the Green Paper and the Staff Working Paper has not been litigated under a normal loser pays cost rule. Rather, the litigation out of which the famous Courage Ltd v Crehan case emerged 9 has been litigated by counsel acting on behalf of an insolvent English publican and being compensated by the Legal Services Commission (LSC). 10 If Mr Crehan should ultimately prevail in his prolonged battle through the British and European courts, LSC would recover its costs from the defendant brewer; but, even if it prevails, the defendant (now only Inntrepreneur) could have to pay all (or most) of its own costs of a pricy trip through the judicial stratosphere. Thus, this landmark case is in fact being litigated under a rule that 7 8 9 10 The purpose of this Green Paper and the Commission Staff Working Paper is to identify the main obstacles to a more efficient system of damage claims and to set out different options for further reflection and possible action both for follow-on actions ( brought after a competition authority has found an infringement) and for stand-alone actions Green Paper, op cit, n 3, at para 1.3. Ibid, at para 2.7. (Case C-453/99) [2001] ECR 1-6297. When the case was commenced in the early 1990s, it was apparently identified as a test case and legal aid was provided to Crehan. The statutory authority for legal aid in business disputes was repealed in 1999 and Crehan s legal aid certificates have recently expired. The current appeal to the House of Lords is, I understand, being supported by exceptional funding granted by the Lord Chancellor based on the importance of the case.
242 [2005] Comp Law approximates the cost rule used for antitrust cases in the USA. 11 Whether it would have been brought under the normal English loser pays cost rules seems highly unlikely, given the legal uncertainties and the relatively small economic stakes for the publican plaintiff. 12 The Green Paper deals with other key issues at greater length, and with more options, but for me no issue is more important than the cost rules if the right to recovery, asserted by Commissioner Kroes, is to become an everyday reality in the courts across the EU. Access to evidence is another key issue because antitrust litigation tends to be highly fact specific including facts about agreement, intent and market effects. The Green Paper deals thoughtfully with a series of related issues including obligations to preserve evidence, sanctions for destruction of evidence by a target, providing the plaintiff with access to materials submitted to a government agency, and even access for a national court to evidence in the Commission s own files. 13 Use of prior government infringement decisions. The Green Paper also considers the hugely important question of what evidentiary weight should be given by a national court to a prior Commission (or national authority) finding that the same conduct challenged in the subsequent private case constitutes an infringement of EC or national competition law. This seems an important issue if a major goal of the private litigation is to help cartel victims recover their losses and to increase deterrence for would-be cartel participants. This consideration supports Green Paper Option 8: Infringement decisions by competition authorities of the EU Member States to be made binding on civil courts or, alternatively, reversal of the burden of proof where such an infringement decision exists. 14 Given the difficulties that private plaintiffs will often face in getting evidence, this Option 8 is an important recommendation. Indeed, follow-on cases based on government decisions may well be the area in which private antitrust litigation becomes a recurring reality. The issue of fault. The Staff Working Paper explains that, Member States take diverse approaches on the question of fault [S]even countries appear to require fault in relation to the infringement or in relation to the effects of the infringement. 15 This introduction of subjective intent would constitute an additional barrier to private enforcement, since there is no parallel requirement that the Commission make a fault determination in 11 12 13 14 15 Under s 4(a) of the Clayton Act (15 USC 15(a)), the successful private antitrust plaintiff is entitled to recover the cost of suit, including a reasonable attorney s fee. This is a departure from the normal US rule that each side pay its own attorneys fees, regardless how the case comes out. This is related to the collective actions/representative actions issue discussed below. While a single publican has a limited economic interest, publicans subject to tied-house agreements have in the aggregate a very large interest in the questions at issue in Courage Ltd v Crehan (Case C-453/99) [2001] ECR 1-6297. See Green Paper, op cit, n 3, at para 2.01 In the USA, a final judgment or decree in any action brought by the Justice Department (but not a finding by the Federal Trade Commission) shall be prima facie evidence against such defendant as to all matters which would be an estoppel as between the Justice Department and the defendant in a subsequent private action. Clayton Act, s 5(a) (15 USC 16(a)). This important provision covers court decisions in which the government has prevailed and guilty pleas to a criminal charges, but not civil consent decrees. Staff Working Paper, op cit, n 4, at para 101.
[2005] Comp Law 243 finding an infringement of Arts 81 and 82 EC of the EC Treaty. 16 The Green Paper offers options that would (i) allow the plaintiff to rely on proof of infringement alone in all cases or only in relation to the most serious antitrust law infringements, 17 or (ii) allow the defendant to show that he excusably erred in law or in fact. 18 This whole issue of fault is likely to be an important one because such evidence is often hard to find, and imposing such a proof requirement would weaken the practical value of the plaintiff s use of government infringement findings to make its case. Recovery of damages. The Green Paper addresses both (a) definition of allowable damages, and (b) quantification of damages. 19 These are difficult questions that require reasonably precise answers before private antitrust damage actions are likely to become a significant reality. On the damage definition question, the Commission asks whether recovery ought to be based on the plaintiff s loss or recapture of the illegal gain made by the infringer. 20 The latter would be a radical idea particularly in civil law countries wedded to fundamental compensation only principles 21 but it would avoid the passing on issue that the Green Paper addressed next. The Green Paper also offers the surely controversial idea of a bounty to encourage certain private actions namely, Double damages for [cases against] horizontal cartels. Such awards could be automatic, conditional or at the discretion of the court. 22 On the damage quantification question, the Staff Working Paper recognises the fundamental reality: Quantification of damages in competition litigation can be particularly complex given the economic nature of the illegality and the difficulty of reconstructing what the situation of the claimant would have been absent the infringement, as usually required under tort rules. 23 The Green Paper simply suggests the possibility of allowing simplified damage calculations, Should the court have the power to assess quantum on the basis of an equitable approach? 24 or Should the Commission publish guidelines on the quantification of damages?. 25 Dealing with downstream effects. The Green Paper deals directly with the intertwined issues of indirect purchaser standing and passing on defences that have bedeviled the US courts for 16 17 18 19 20 21 22 23 24 25 Ibid, at para 104 (which explains that the Commission must find intent or negligence before it can impose fines for an infringement). Green Paper, op cit, n 3, Options 11 and 12. Ibid, Option 13. Ibid, at para 2.3. Ibid, Options 14 and 15. In this context, see the observations in the Opinion of Advocate General Geelhoed in Manfredi v Lloyd Adriatico Assicurazioni (Case C-295/04) (unreported) 26 January 2006, especially at paras 62-70. Green Paper, op cit, n 3, Option 16. Ibid, at para 125. Ibid, Option 18. Ibid, Option 19.
244 [2005] Comp Law almost four decades. 26 The frequent reality is that antitrust injury will not be confined to the market in which the abuse occurs. Rather, some of the effects of an antitrust wrong (eg, cartel overcharges) will flow down a chain of distribution or causation to subsequent purchasers and resellers, but become more difficult to prove as they become remote in the process. Thus, in a cartel or a monopoly overcharge case, three policy questions are almost certain to arise: (1) can the initial purchaser recover the entire amount of the overcharge? (2) can the defendant defeat recovery by showing that the plaintiff has passed all or part of the overcharge on to its customers? and (3) can an injured indirect purchaser sue for overcharges passed on to it? These questions become doubly complex where the overcharge applies to an input that is incorporated into a new product, rather than a product that is resold down the chain in its original form. The Green Paper considers options of (a) allowing or rejecting a passing on defence, and (b) allowing or rejecting the right of an indirect purchaser to sue. 27 It then proposes something more novel and complex in Option 24: A two-step procedure, in which the passing-on defense is excluded, the infringer can be sued by any victim and, in a second step, the overcharge is distributed among all parties who have suffered a loss. The authors admit: This option is technically difficult but has the advantage of providing fair compensation for all victims. They are absolutely right that this is the best solution, if it can be made to work, and is clearly much superior to what the USA has done. 28 It deserves very careful study and support. Consumer interests: collective and representative actions. This issue has both economic and political dimensions. The Staff Working Paper explains: Collective and representative actions are particularly important in the context of defending consumer interests Easier enforcement of legal rights and increased ability to recover economic losses are essential to bringing European citizens and their associations closer to European laws and policies. 29 26 27 28 29 See DI Baker, Hitting the Potholes in the Illinois Brick Road (2002) Antitrust Magazine 14. The US Supreme Court has (a) rejected passing on defenses in Hanover Shoe, Inc v United Shoe Machinery Corp 392 US 481 (1968) (b) denied indirect purchasers standing to sue under the Clayton Act in Illinois Brick Co v Illinois, 431 US 720 (1977), but (c) permitted the states to create indirect purchaser causes of actions for the same wrongs in California v ARC America Corp, 490 US 93 (1989). The net effect is to create duplicative litigation, potential windfalls of initial purchasers and double recoveries for the same overcharges. Green Paper, op cit, n 3, Options 21-23. See DI Baker, Revisiting History what have we learned about private antitrust enforcement that we would recommend to others? (2004) 16 Loyola Consumer Law Rev 379, at pp 391-4, where I had recommended a somewhat similar approach as a way of resolving the duplicative litigation and recovery situation in the USA. Staff Working Paper, op cit, n 4, at paras 193-194.
[2005] Comp Law 245 Because individual consumer actions will be very unlikely for practical reasons, the Green Paper offers two options in a section entitled Defending consumer interests : (i) [a] cause of action for consumer associations without depriving individual consumers of bringing an action, and (ii) [a] special provision for collective actions by groups of purchasers other than final consumers. 30 Neither the Green Paper nor the Staff Working Paper explains why the Commission did not include a third option collective actions by groups of final consumers. The probable answer is that the consumer class action idea would be certainly be seen as radical in Europe where collective actions by consumer associations is still a new and evolving idea in a number of Member States and unknown in the rest. Moreover, the US experience with consumer class actions has probably been regarded with some concern by a Commission anxious to avoid importing a litigation culture into Europe. 31 The French Government is reported to be studying such a possibility and the UK Government is the one Member State to have explicitly authorised representative consumer actions in competition law cases. 32 As far as I know, no such actions have been filed. Other technical issues. The Green Paper and the Staff Working Paper deal intelligently with a number of other practical issues that deserve study and resolution but, while important, these tend to be more operational issues, rather than constituting fundamental barriers to the kinds of private antitrust actions that the Commission wishes to see. Thus, the Green Paper discusses options for making jurisdictional and choice of law determinations, 33 for awarding prejudgment interest, 34 for use of court-appointed experts, 35 for suspension of limitation periods during agency investigations, 36 for protecting government leniency programmes, 37 and for clarifying causation rules. 38 They are testimony to the breadth of interest and thoughtfulness of the Commission s working group on private damage actions. IMPORTANT ISSUES LEFT FOR ANOTHER DAY Despite the comprehensive coverage of relevant subjects in the Green Paper, the Commission has chosen not to address at least two important questions: How do injunction actions relate to damage claims for the same or related violations? When, if ever, will the victim of an antitrust infringement be compelled to have to submit its damage claims to arbitration rather than to a national court? 30 31 32 33 34 35 36 37 38 Green Paper, op cit, n 3, at para 2.5, Options 25 and 26. Frequent Questions, op cit, n 1. See discussion below at n 37. Staff Working Paper, op cit, n 4, at para 207, discussing s 47B of the Competition Act 1998, as inserted by s 19 of the Enterprise Act 2002. This provision provides for representative consumer actions before the CAT from an infringement decision of the UK OFT or EC Commission. Green Paper, op cit, n 3, at para 2.8, Options 31-34. Ibid, at para 2.3, Option 16. Ibid, at para. 2.9, Option 35. Ibid, at para 2.9, Option 36. Ibid, at para 2.7 (on the general issue), and para 2.1 (on the exclusion of leniency applications from discovery). Ibid, at para 2.9, Question N.
246 [2005] Comp Law Because these questions are sure to arise in the development of private damage remedies in Europe, they deserve at least a brief discussion now. Injunctive actions. The Green Paper mentions initially that, The Treaty rules can also be used in actions for injunctive relief, 39 but never offers any explanation at all on whether or how the policy options offered for damage cases might be applied for injunctive cases. Nor is there discussion of issues that might arise where the plaintiff seeks in a single action both compensation for past injuries and injunction against continuation the injurious conduct. It seems to me that national parliaments should be affirmatively encouraged to adopt parallel rules for antitrust damages and injunction cases. These would include the litigation cost rules (Option 27), access to evidence rules (Options 1 7), use of government infringement findings as evidence (Options 8 10), consumer and collective actions (Options 25, 26), and jurisdiction and choice of laws (Options 31 34). If this is what the Commission intended, it should make the point explicitly. If it is not what was intended, the Commission should explain why. To the extent that reducing the burdens on the understaffed Commission (and national authorities) is an important goal, private injunctions should be an important part of the picture. For example, if the excluded private plaintiff is free to bring an essential facilities case under a more favourable cost rule, the Commission (or a national authority) should be freer to decline to exercise jurisdiction over such a dispute. Arbitration of antitrust claims. Use of arbitration, long common in a few businesses, is becoming increasingly common in many businesses. When antitrust claims must be arbitrated has become the subject of considerable litigation and uncertainty ever since the US Supreme Court held, in a case similar to Courage Ltd v Crehan, 40 that the plaintiff dealer s antitrust claim must be arbitrated in Switzerland, rather than tried in a US District Court. 41 The court s theory was that the plaintiff, having agreed to settle disputes with the franchisor by arbitration, must stick to his bargain, even when the dispute was a federal statutory tort. This approach works fairly well where the antitrust dispute simply involves two vertically related parties. But the arbitration problem becomes a lot more complicated in the cartel context, where the antitrust dispute will generally involve multiple parties, including those not subject to the arbitration agreement. Yet this is the very area that the Commission seems particularly anxious to make the right to claim damages easier. 42 The practical problem can be easily illustrated. Suppose that a plaintiff has purchased price-fixed goods from one cartel member under contracts with a general arbitration clause, but under the principles of joint and several liability the plaintiff has antitrust claims against all members of the cartel. Or suppose a class or representative action involving purchasers who have varied contractual relationships with different cartel members. How are such cases to proceed? 39 40 41 42 Ibid, at para 1.1. (Case C-453/99) [2001] ECR 1-6297. Mitsuibishi Motors Corp v Soler Chrysler Plymouth, Inc 473 US 614 (1985). Frequent Questions, op cit, n 1.
[2005] Comp Law 247 One possibility is that the claimant must bring two actions an arbitration claim against the party (or parties) from whom it purchased and a court case against the other members of the cartel. A second possibility is that the claimant ignores the party (or parties) with which it has an arbitration agreement and proceeds in court against the other members of the cartel, on joint and several liability principles. A third (more unlikely) possibility is that the court compels the claimant to arbitrate against all members of the cartel where a standard arbitration clause is used in the industry. 43 Needless to say this situation is a complex mess that makes it significantly harder for cartel victims to recover. As a result, a national parliament seeking to provide more effective remedies for cartel victims might want to exclude such claims from compulsory arbitration clauses. 44 Additional guidance from the Commission would be helpful on this complex set of issues, which go beyond just claims against cartel members. 45 One possible resolution would be for the legislature or the courts to deal with the cartel problem by determining that a general arbitration clause does not apply to a deliberate tort that one party has perpetrated against the other party to the contract. The theory would be that, when they agreed to the arbitration clause, the parties were dealing with contractual disputes, not deliberate, non-disclosed torts. Encouragement to such a resolution is contained in a 2003 English High Court decision in the Roche Products Ltd v Provimi Ltd 46 litigation arising out of the vitamins cartel. There Aikens J refused to enforce choice of forum clauses (requiring trials in specified Swiss, French and German courts), and allowed the antitrust damage trial to go forward in London. 47 This was done based on a detailed analysis of the claims in relation to the agreed choice of forum clauses, rather than some broader basis of public policy. 43 44 45 46 47 See JLM Industries, Inc v Stolt-Nielsen SA, 387 F.3rd 163 (2nd Cir 2004) ( under principles of estoppel, a nonsignatory to an arbitration agreement may compel a signatory to that agreement to arbitrate a dispute where the issues the signatory is seeking to resolve in arbitration are intertwined with the agreement that the estopped party has signed ). This had been the situation in the USA prior to 1985, as a result of earlier judicial decisions. See American Safety Equipment Corp v JP Maguire & Co, 391 F.2d 821 (2nd Cir 1968). See, eg, Coors Brewing Company v Molson Breweries, 51 F.3rd 1157 (10th Cir 1995) and Allied Signal, Inc v BF Goodrich Co, 183 F.3d 568 (7th Cir 1999) both of which involved determinations of non-arbitrability of claims in two-party vertical relationships. [2003] EWHC 961 (Comm), [2005] All ER 683. Ibid. Looking at Swiss, French, and German law, as well as some EC and English law, the judge concluded that the antitrust claims were for statutory torts and the choice of forum clauses were intended to deal with contractual disputes. The fact that the purchasers had no way of knowing about the cartel activities seems appropriately to have influenced the judge that there had been no agreement to resolve these claims in the specified courts, which at least in Germany lacked jurisdiction over competition law claims.
248 [2005] Comp Law CONCLUSION In its Green Paper, the Commission tackled the core problem of insufficient incentives (and overly sufficient risks) for most potential private antitrust plaintiffs in Europe. The Green Paper offers some pragmatic proposals to rebalance risk-reward equation somewhat, but these do not radically change the situation. Nevertheless, when it released the Green Paper in December 2005, the Commission apparently felt compelled to address a fear that fostering private damage actions might lead to a litigation culture in Europe. Thus, among its frequently asked questions, it asked directly: Does the Commission want to introduce a US-style litigation culture in Europe?. 48 The emphatic answer it gave was: No the Commission seeks to encourage a competition culture, not a litigation culture [T]he options put forward by the Commission would not lead to a rise in unmeritorious litigation. This statement is clearly correct, as is the European Court of Justice s stirring endorsement of private litigation in its Courage Ltd v Crehan decision, 49 which the Commission quotes in the same press release: The full effectiveness of Article [81] of the Treaty and, in particular, the practical effect of the prohibition laid down in Article [81(1)] would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition [A]ctions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the Community. 50 The European situation clearly offers the opportunity to enhance the impact of competition law through the introduction of some clearly defined revisions to existing rules and procedures. At the same time, the European rules, practices and psychologies are so different that there would be no risk of creating a US-style litigation culture in Europe, even if all the more expansive Green Paper options were widely adopted by national parliaments. The more pressing question is whether it will be open to any individual to claim damages for loss caused to him for competition law infringements, unless major changes are made in the rules and practices in most Member States. The Commission has put the ball intelligently into play with its Green Paper and now the question is whether the Commission and its allies will be able to convert their corner kick and attain their goal of making the private right of action a practical reality. The most likely area of substantial progress is in follow-on damage cases from government infringement decisions especially if other national parliaments follow the Green Paper option of making government determinations binding on national courts (as the UK has already done). Plaintiffs in these cases would still have the sometimes difficult burden of proving the amount of actual damages but the limitations on evidentiary discovery and the chilling effect 48 49 50 Frequent Questions, op cit, n 1. (Case C-453/99) [2001] ECR 1-6297. Ibid, quoted in Frequent Questions, op cit, n 1.
[2005] Comp Law 249 of loser pay cost rules should be less significant when the Commission or a national authority has already found an infringement and issued an order laying out its evidence. Meanwhile, my biggest concern about private litigation in Europe flows from the still-vague jurisprudence about abuse of dominance under Art 82 EC of the EC Treaty and its national counterparts. This vagueness invites struggling plaintiffs to make questionable abuse of dominance claims against successful enterprises. If it turns out that sympathetic plaintiffs can often prevail with such claims before national courts especially with claims against a much larger defendant from another Member State the result of private antitrust litigation could be to weaken both the competitive efficiency and market integration goals that have been so central to the Commission s long-run mission in the competition area. This risk is not a reason for the Commission to desist in its efforts to make exercising the right to claim damages for breach of competition law easier. 51 It is a reason for the Commission, and the EU Member States, to be very careful in defining the private rights of action that they wish to foster. It is the competitive process, not competitive laggards, which any private antitrust litigation system should seek to protect. 51 Ibid.