CONFERENCES: CARTELS - EUROPEAN UNION - PRIVATE ENFORCEMENT - OBJECT/EFFECT

2nd Concurrences Cartels Workshop: An advanced seminar on substantive and procedural EU developments - Opening Keynote Speech (Webinar - Jan. 20th, 2021)

Introduction

[Dear Ladies and Gentlemen,]

It is a pleasure for me to speak to you this afternoon, thereby opening the first session of today’s and tomorrow’s seminar on substantive and procedural developments in EU competition law.

This seminar comes quite at the right time: EU competition law has indeed seen many interesting developments in the course of the last years, and there are many exciting developments yet to come in 2021. Thus, I am sure there will be plenty of stimulating points to discuss during this two-days-webinar.

Structure of the intervention

For my part, I will share with you a little tour d’horizon of some recent and still ongoing developments in EU competition law in two fields that seem particularly relevant and trendsetting to me at the moment.

These fields are

(I.)First, the interplay between EU law and national law in the field of private enforcement of EU competition law, and,

(II.)Second, the per-object/per-effect-distinction as regards infringements of Article 101 TFEU.

I. The interplay between EU law and national law in the field of private enforcement of EU competition law

Actions for damages caused by the infringement of the EU competition rules brought before the courts of the Member States, the so-called private enforcement of EU competition law, are, in addition to public enforcement, the second pillar of the implementation of EU competition law.

Private enforcement is a good example for the complex interplay between EU law and national law, because the right to compensation for cartel damages results directly from the treaty provisions, whereas the enforcement of such actions before the national courts takes place according to national law.

Consequently, the Court has already found in earlier cases such as Manfredi [1] that the question of how compensation is to be granted is a matter of national law in combination with the principle of effectiveness. This concerns, in particular, jurisdiction, procedure, time-limits and the furnishing of proof. On the other hand, the upstream question of whether compensation actually is to be granted remains one of EU law, because the principle that any individual is entitled to claim compensation for the harm suffered due to an infringement of the competition rules follows from EU law itself. [2]

However, drawing the distinction between questions that are governed by national law in combination with the principle of effectiveness and questions that are governed directly by EU law is never a simple task. Thus, the fine-tuning of the founding principles established by the Court is an ongoing process.

When it comes to compensation for harm suffered due to infringements of EU competition law, the main questions to be answered are: Who has to compensate whom for what and how?

The question of who has to compensate for harm caused by a competition law infringement was at the very heart of the Skanska case. In that case, the Court made clear that a parent company who has taken over a company fined for the participation in a cartel can be held liable for damages caused by the latter even if the two companies are, according to national law, distinct legal entities. This follows from the principle of economic continuity and the concept of an “undertaking” under EU competition law. [3] The determination of the persons who are liable to pay compensation for cartel damages relates indeed to the question of whether such compensation is actually granted and not to its technical implementation. Thus, this question is directly governed by EU law. Accordingly, the parent company can be held liable for damages caused by the competition law infringement committed by the overtaken company.

Now in the Sumal case [4], pending before the Grand Chamber of the Court, the question is whether the doctrine of the single economic unit can, in the context of intra-group relationships, not only lead to the extension of liability from subsidiaries to the parent company, but also, inversely, to the extension of liability from a parent company to its subsidiaries. This question arises in the context of a claim introduced by Sumal against Mercedes Benz Trucks España for damages caused by the so-called truck cartel, one of the participants of which was Daimler, Mercedes Benz Trucks España’s parent company. As the referring court points out, this question is practically very relevant because it is easier to sue national subsidiaries than their parent companies who were found liable for an infringement by competition authorities in another country.

In the same vein, the question of who is entitled to claim compensation for what kind of harm suffered entails many tricky details. This issue was in the center of the already well-known Kone [5] and, just a little more than one year ago, the Otis case. In that case, the question was whether a public body who granted promotional loans to purchasers of products covered by a cartel may request compensation for loss caused by that cartel. The answer of the Court was, in principle, affirmative: In earlier case law, the Court had already stated that ‘any individual’ is entitled to claim compensation from the members of a cartel for any type of loss caused by that cartel [6] The neuralgic point thus is, and that was made very clear by the Court in Otis, whether there is a sufficient causal link between the harm suffered by a person and an anticompetitive behavior [7] This question concerns the very existence of a right to compensation in each individual case and must thus be answered on the basis of EU law. National law can, in turn, only be decisive for the concrete procedural modalities for actually establishing a causal link between the harmful event and the harm that has allegedly been suffered.

By contrast, national legal concepts cannot be decisive for the very question of whether compensation is due under EU law. This was shown in Otis where, according to a specific concept in national law, the right to compensation should be restricted to persons operating as customers on the market concerned by a cartel. The overturning of such national law principles can seem quite revolutionary, as is illustrated by that case: Thus, the referring Austrian court, after having received the ECJ’s answer, consented that the public body who had granted loans to purchasers of cartelized goods was entitled to claim compensation for the harm caused subject to the existence of a causal link between the two. Nevertheless, this was only true for the period during which Austria had been a member of the EU and the question was thus determined by EU law. In contrast, the Austrian court explicitly stated that the public body was not entitled to claim compensation for the harm caused during the previous period, during which the provisions of national law had been decisive for the determination of the right to compensation [8].

To finish, the currently pending Stichting case [9] is worth being mentioned. Here, a Dutch court is asking the Court of Justice whether it has jurisdiction to find that there has been an infringement of European competition rules during the period before the entry into force of regulation 1/2003, even if neither the Commission nor a national competition authority have adopted a prior decision in that regard. Conversely, in Daimler [10], it is the scope of such a Commission infringement decision that is in question, as the referring court asks whether refuse collection vehicles are covered by the findings of the Commission decision on the truck cartel.

Whereas all these cases seem to need an answer directly based on EU law, the compliance of national law with the principle of effectiveness currently arises in Volvo [11], where it is question of the directive on antitrust damages actions, limitation periods for the bringing of compensation claims and the judicial estimation of harm.

In summary, the interplay between EU law and national law in the field of private enforcement of EU competition law remains a suspenseful matter.

But let me now switch to another classic issue of unbroken relevance: The per- object/per-effect-distinction as regards infringements of Article 101 TFEU.

II. The per-object/per-effect-distinction as regards infringements of Article 101 TFEU

As we all know, according to Article 101 TFUE, an agreement which has as its object the prevention, restriction or distortion of competition is prohibited, without it being necessary to examine the effects of that agreement. Indeed, the anticompetitive object and effect of an alleged competition law infringement are alternative conditions for the application of the prohibition laid down in Article 101.

However, since the very beginning of the Court’s case law on what is now Article 101 TFUE, the question of the distinction between per-object- and per- effect-restrictions of competition has been critical.

According to the case law, an agreement is considered having an anticompetitive object if it has, in itself, a sufficient degree of harm to competition for it to be unnecessary to examine its effects in order to determine whether it is capable of restricting competition [12].

But how to detect when this can no longer be taken as established, so that it is necessary to switch to the analysis of the effects of an agreement? This delicate question has, notably, been touched upon by two cases lately, that is, Budapest Bank [13] and Generics [14]. As my fellow Advocate General Bobek stated in this regard in his opinion in Budapest Bank, it is especially the examination of the context of an agreement that serves to – I quote – “check that there are no specific circumstances that may cast doubt on the presumed harmful nature of the agreement in question” [15].

Yet, when does a situation become one in which doubts arise as to the presumed harmfulness and, therefore, the anticompetitive object of a particular agreement?

According to established case law, in order to find that an agreement has, in itself, a sufficient degree of harm to competition for it to be unnecessary to examine its effects, the agreement and its context must reasonably clearly reveal the potential to harm competition [16].

This also means that, in order to conclude that an agreement has an anticompetitive object, it must be possible to determine that it is capable of restricting competition without having to examine its effects. Therefore, it is where it is impossible to determine, despite an analysis of all the relevant inherent contextual factors, whether an agreement is capable of restricting competition, that the analysis must switch to the anticompetitive effects of that agreement [17].

Consequently, if an agreement results in certain benefits for consumers, it may no longer be categorized as restrictive of competition by its object only if the existence of those benefits means that it is no longer possible to know whether it is, as a whole, capable of restricting competition without analyzing its effects. It is indeed only if those benefits give rise to doubts as to the anticompetitive object of the agreement as a whole that it is necessary to move on to an analysis of the effects.

This issue is currently relevant in a whole bundle of cases treating with patent settlement agreements in the pharmaceutical sector.

First, in Generics, the patent settlement agreements at issue in the main proceedings certainly gave rise to some pro-competitive effects such as, notably, a slight reduction in the price of the concerned pharmaceutical product and the improvement in the labelling of medicine packs. Nevertheless, these effects were minimal and probably uncertain. Thus, when set against the overall legal and economic background of the agreements in question, they did not justify reasonable doubts that those agreements revealed sufficient harm to competition for being qualified as per-object-infringements [18].

Currently, this question prominently arises again in the pending Servier cases [19]. They concern patent settlement agreements concluded by the French medical firm Servier with several producers of generic medicinal products. The General Court found that one of the agreements in question did not meet the requirements for being qualified as restrictive of competition by its very object [20]. That case is even more interesting because the General Court found that the Commission had not even established restrictive effects of the agreement concerned, which is also contested by the Commission in its appeal.

These are thus certainly interesting cases to follow this year, alongside with the Lundbeck cases [21], where it is as well in question if the concerned patent settlements qualify as per-object-infringements.

This brings me to the end of this keynote address. To finish, let me just say this: The Court has been shaping EU competition law since the very beginning of its judicial activity and, as today’s developments show, there is no shortage of new questions awaiting to be resolved. Nevertheless, it appears to me that the evolutions I have just outlined share a common leitmotiv: They show how new questions in complex legal and economic settings can be resolved on the basis of the well-established concepts and principles of EU competition law. I am convinced that these concepts and principles give the Court a solid base for coping with new questions brought about by new legal and economic developments.

I thank you very much for your attention and wish you interesting discussions and stimulating exchanges during the course of this webinar!

Footnotes

[1Judgment of 13 July 2006, Manfredi and Others (C-295/04 to C-298/04, EU:C:2006:461, para. 60 and 61); see also judgment of 20 September 2001, Courage and Crehan (C-453/99, EU:C:2001:465, para. 25 and 26); judgment of 6 November 2012, Otis and Others (C-199/11, EU:C:2012:684, para. 41 and 43) and judgment of 5 June 2014, Kone and Others (C-557/12, EU:C:2014:1317, para. 24).

[2See my opinions in Kone and Others (C-557/12, EU:C:2014:45, para. 24), and in Otis Gesellschaft and Others (C-435/18, EU:C:2019:651, para. 44 et seq.).

[3Judgment of 14 March 2019, Skanska Industrial Solutions and Others (C-724/17, EU:C:2019:204, para. 28 et seq.); see, also, Opinion of Advocate General Wahl in Skanska Industrial Solutions and Others (C-724/17, EU:C:2019:100, para. 55 et seq.).

[4Case C-882/19, Sumal.

[5Judgment of 5 June 2014, Kone and Others (C-557/12, EU:C:2014:1317).

[6Judgment of 13 July 2006, Manfredi and Others (C-295/04 to C-298/04, EU:C:2006:461, para. 95 and 96).

[7Judgment of 12 December 2019, Otis Gesellschaft and Others (C-435/18, EU:C:2019:1069, para. 23 et seq.); see, also, my opinion in Otis Gesellschaft and Others (C-435/18, EU:C:2019:651, para. 47 et seq.).

[8OGH, judgment of 21 October 2020, 9 Ob 86/19s.

[9Case C-819/19, Stichting Cartel Compensation, Equilib Netherlands BV v Koninklijke Luchtvaart Maatschappij NV and Others.

[10Case C-588/20, Daimler.

[11Case C-267/20, AB Volvo and DAF TRUCKS N.V. v RM.

[12Judgments of 30 June 1966, LTM (56/65, EU:C:1966:38, p. 236); of 4 June 2009, T-Mobile Netherlands and Others (C-8/08, EU:C:2009:343, paragraph 29); of 11 September 2014, CB v Commission (C-67/13 P, EU:C:2014:2204, paragraphs 49 to 51 and the case-law cited), and of 16 July 2015, ING Pensii (C-172/14, EU:C:2015:484, paragraphs 29 to 31); see, also, my Opinion in T-Mobile Netherlands and Others (C-8/08, EU:C:2009:110, points 42 et seq. and the case-law cited).

[13Case C-228/18, Budapest Bank and Others (EU:C:2020:265).

[14Case C-307/18, Generics (UK) and Others (EU:C:2020:52).

[15Opinion of Advocate General Bobek in Budapest Bank and Others (C-228/18, EU:C:2019:678, points 41 to 49, specifically point 48) (emphasis in the original).

[16See judgment of 26 November 2015, Maxima Latvija (C-345/14, EU:C:2015:784, paragraphs 18 to 23); see, also, to that effect, Opinion of Advocate General Bobek in Budapest Bank and Others (C-228/18, EU:C:2019:678, point 40 et seq.).

[17See, to that effect, judgment of 11 September 2014, CB v Commission (C-67/13 P, EU:C:2014:2204, paragraph 74 et seq.), and of 26 November 2015, Maxima Latvija (C-345/14, EU:C:2015:784, paragraphs 22 to 24); see, also, to that effect, Opinion of Advocate General Bobek in Budapest Bank and Others (C-228/18, EU:C:2019:678, points 50 and 78 et seq.), and my opinion in Generics (UK) and Others (C-307/18, EU:C:2020:28, para. 157 et seq.).

[18Judgment of 30 January 2020, Generics (UK) and Others (C-307/18, EU:C:2020:52, points 108-110).

[19See Commission Decision C(2014) 4955 final of 9 July 2014 relating to a proceeding under Articles 101 and 102 TFEU (Case AT.39612 — Perindopril (Servier)). That decision gave rise to the following judgments of the General Court, currently under appeal: of 12 December 2018, Biogaran v Commission (T-677/14, EU:T:2018:910; Case C-207/19 P, pending); Teva UK and Others v Commission (T-679/14, not published, EU:T:2018:919; Case C-198/19 P, pending); Lupin v Commission (T-680/14, not published, EU:T:2018:908; Case C-144/19 P, pending); Mylan Laboratories and Mylan v Commission (T-682/14, not published, EU:T:2018:907; Case C-197/19 P, pending); Krka v Commission (T-684/14, not published, EU:T:2018:918; Case C-151/19 P, pending); Servier and Others v Commission (T-691/14, EU:T:2018:922; Cases C-176/19 P and C-201/19 P, pending); Niche Generics v Commission (T-701/14, not published, EU:T:2018:921; Case C-164/19 P, pending); and Unichem Laboratories v Commission (T-705/14, not published, EU:T:2018:915; Case C-166/19 P, pending).

[20Judgments of the General Court, currently under appeal, of 12 December 2018, Krka v Commission (T-684/14, not published, EU:T:2018:918; Case C-151/19 P, pending), and Servier and Others v Commission (T-691/14, EU:T:2018:922; Cases C-176/19 P and C-201/19 P, pending).

[21See Commission Decision C(2013) 3803 final of 19 June 2013 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.39226 — Lundbeck); that decision was the subject of the judgments of the General Court of 8 September 2016, currently under appeal, in Sun Pharmaceutical Industries and Ranbaxy (UK) v Commission (T-460/13, not published, EU:T:2016:453; Case C-586/16 P pending); Arrow Group and Arrow Generics v Commission (T-467/13, not published, EU:T:2016:450; Case C-601/16 P pending); Generics (UK) v Commission (T-469/13, not published, EU:T:2016:454; Case C-588/16 P pending); Merck v Commission (T-470/13, not published, EU:T:2016:452; Case C-614/16 P pending); Xellia Pharmaceuticals and Alpharma v Commission (T-471/13, not published, EU:T:2016:460; Case C-611/16 P pending); and Lundbeck v Commission (T-472/13, EU:T:2016:449; Case C-591/16 P pending); see, also, my opinion in Lundbeck v Commission (C-591/16 P, EU:C:2020:428).

PDF Version

Author

  • European Court of Justice (Luxembourg)

Quotation

Juliane Kokott, 2nd Concurrences Cartels Workshop: An advanced seminar on substantive and procedural EU developments - Opening Keynote Speech (Webinar - Jan. 20th, 2021), February 2021, Concurrences N° 1-2021, Art. N° 98888, www.concurrences.com

Visites 238

All reviews