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April 18, 2014

EU Commission Can Bring Follow-On Actions for Damages on Behalf of the European Union in Cartel Cases

The background to the case is an investigation by the Commission into a cartel for the sale, installation, maintenance and renewal of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands.  In February 2007, the Commission imposed a fine of almost € 1 billion on four companies for their participation in this cartel.  The EU General Court upheld the fines against three of the companies and reduced the fine against the fourth.  Appeals against the General Court’s judgments are pending currently.

In June 2008, the Commission began an action for damages in the Brussels Commercial Court against all four companies, claiming damages for harm suffered by EU institutions as customers of the cartel.  The Brussels Commercial Court referred the following questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling:

  • Was the EU Commission the proper plaintiff to represent the European Union in an action before a national court in the specific context of this case?
  • Does the Charter of Fundamental Rights of the European Union (the Charter) preclude the Commission from taking an action for damages as a result of harm allegedly suffered by EU institutions in the context where an EU Commission finding of EU competition law infringement by the defendants forms part of the plaintiff’s case?

The Commission Can Represent EU Institutions in Civil Actions

The CJEU ruled that the Commission could represent validly EU institutions in civil actions before national courts under Article 282 of the EC Treaty, which was applicable at the time the Commission initiated its action for damages.  Indeed, according to Article 282, the Community shall be considered as any other legal person in each of the Member States, including when it is a party to legal proceedings, and shall be represented by the Commission to this end.

Interestingly, the revised Article 335 of the Treaty on the functioning of the European Union, which replaces Article 282 EC, says that each EU institution will now represent itself in matters relating to their activities.

The Charter Does Not Preclude the Commission from Seeking Compensation in Cases Involving its Own Decisions. 

The reasoning of the CJEU is that any party suffering injury as a result of a cartel should be able to claim compensation where a causal link between the injury and the infringing behaviour or agreement is established before the national court.  In other words, EU institutions must be treated the same as other cartel victims.  Nevertheless, the right of EU institutions to seek compensation must be exercised in accordance with the rights of the defendants protected by Article 47 of the Charter, such as the right of access to a tribunal and the principle of equality of arms.

In relation to the right of access to a tribunal, the CJEU said the fact that a national court—in this case the Brussels Commercial Court—is bound by the Commission’s decision finding an infringement of competition law does not amount to a denial of the defendant’s right of access to a tribunal.  Indeed, the defendant still has the right to appeal the Commission’s decision before the General Court and, further, before the ECJ, which will therefore always have the last word.

In relation to the principle of equality of arms, the CJEU noted that each party must be afforded a reasonable opportunity to present its case under conditions that do not place it at a disadvantage vis-à-vis the other parties.  The main issue was, therefore, whether or not the Commission had access to more information than the cartelists when preparing its submissions before the national court.  The CJEU ruled that as the Commission department initiating the action for damages did not have access to the confidential file that resulted in the infringement decision, a breach of the principle of equality of arms was precluded.  In other words, there is apparently sufficient separation between the different branches of the Commission for the Commission and the defendants to be considered as being in the same position before national courts. 

Pursuant to this judgment, companies should now bear in mind that the Commission is no longer just the investigator, prosecutor and judge of a cartel, but also a potential damages claimant.  An infringement decision by the Commission for anti-competitive behaviour can now result in damages actions—not only by companies and consumers, but also by the Commission and/or other EU institutions themselves, including the Parliament and the Council—when they suffer directly as a result of the anticompetitive behaviour at issue.  This judgment is therefore particularly relevant to those companies that  cater to the needs of EU institutions , or any suppliers to EU institutions such as stationers, IT companies, software suppliers, etc.

© 2014 McDermott Will & Emery

About the Author

Louise-Astrid Aberg, McDermott WIll Emery Law firm, Antitrust Attorney
Associate

Louise-Astrid Aberg is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Paris office. She focuses her practice on competition law.

+33 1 81 69 15 00

About the Author

Lionel Lesur, Corporate Competition Attorney, McDermott Will, law firm, Paris
Associate

Lionel Lesur is an associate in the law firm of McDermott Will & Emery and is based in the Firm’s Paris office. He focuses his practice on corporate law and competition law.

33 1 81 69 15 20
Partner

Philipp Werner is a partner in the international law firm of McDermott Will & Emery, based in its Brussels office.   His practice focuses on European and German competition law including State aid, merger control, cartels and abuse of dominance, and his clients include companies in the automotive, infrastructure, transport and health care sectors.

32 2 282 35 67

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