EC Private Antitrust Enforcement: Decentralised Application of EC Competition Law by National Courts 9781472560216, 9781841137445

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Στην Τατια′να και τον Αλε′ξη

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FOREWORD I. The present book on EC Private Antitrust Enforcement is published timely. It is the first comprehensive monograph in English on EC law of private enforcement of EC competition law since the publication of Clifford Jones’s remarkable thesis in 1999. Assimakis Komninos addresses an aspect of EC competition law which is in a certain sense the last chapter of the process of modernisation of European antitrust law which started in the late 1990s. The preceding chapters are well known: first the reform of the interpretation of Article 81 with respect to vertical restraints; secondly, the revision of Regulation 17 and its replacement by Regulation 1/2003, abolishing the traditional notification requirement, eliminating the Commission’s monopoly power to exempt certain agreements and thereby decentralising the application of Article 81; thirdly, the reform of the Merger Regulation; and, finally, the ongoing debate about the interpretation of Article 82, in particular the notion of ‘abuse’. Although the reform of the application of Article 82 will continue over a couple of years (inter alia, because its results will have to be reviewed by the Court of Justice), it will not last forever. By comparison, the discussions about increased private enforcement of EC competition law will last much longer. Not because these discussions have started later. In fact, private enforcement is an issue that is as old as the early application and implementation of Articles 81 and 82. Since the decentralisation of the application of Article 81 and the publication of the Commission’s Green Paper, the debate has of course obtained a new quality, both in depth and in intensity. However, the main reasons for the likely persistence of the discussions about private enforcement are institutional. At least at this stage of the development of European integration, private enforcement does not lend itself to a single major legislative initiative undertaken at the level of the EU. For the foreseeable future, in the area of private enforcement, there will be no equivalent of Articles 81 and 82, of implementing Regulations such as Regulations 17 and 1/2003, or of the Merger Regulation. It is likely that the EU Commission will contribute to the increasing importance of private enforcement in the Member States through ideas, soft law and—perhaps—strictly limited punctual interventions in the form of proposals for directives or regulations. The Court of Justice will of course pursue carefully its jurisprudence in strengthening progressively the substantive and procedural rights of private parties; its jurisprudential contribution to the incremental growth of hard EC law relating to private enforcement will probably be greater than that which can be expected from the Community legislature. In the main, private enforcement will grow with the help of reforms of national law. Conceivably, these reforms will take place spontaneously, without being pushed by hard or soft law Community instruments. In other words, national law facilitating private enforcement may develop as much without pressure from Brussels as national competition law has developed over the last decades.

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viii Foreword II. At the basis lies the assumption that the powerful drive for increased private enforcement is not just one other aspect of the strong East–West current which has characterised EC competition law since the 1990s. There is no doubt that the review of the traditional interpretation of Articles 81 and 82 as well as the reform of the Merger Regulation is strongly influenced by concepts and insights developed over the last decades in the US. There is also no doubt that decentralisation, ie the institutional side of the modernisation process, has benefited from US experiences. European competition experts have always known—and been impressed by—the strength of private enforcement on the other side of the Atlantic; private enforcement in the US has largely compensated for the strong shifts in US public enforcement which have resulted from political changes in the US administration. But European observers are also mindful of the excesses of US private litigation culture: few (if any) would like to import these excesses into EC or Member States’ law. More important than the inspiration from the US example are in my view factors which are genuine to European developments and experiences, even if these developments and experiences are themselves the result of earlier US influences. The most important factor is the general conviction that the preservation of competition as a process is beneficial for the competitiveness of the European economy as a whole and of every Member State’s economy in particular. Though once limited to certain Member States, this conviction has now spread throughout the EU. It is the explanation of the emergence of a true competition culture and the spontaneous adoption of largely similar competition laws in all the Member States, without any push through hard or soft law approximation from Brussels. The growing interest in and appetite for private enforcement is thus a sign of the maturity of the competition law system in the EU. The second factor is the recognition that the overall enforcement of competition law will benefit from private enforcement. Private enforcement is perceived as a useful complement to public enforcement. Public enforcement has its natural limits: human resources available to competition authorities will always be short in supply when compared with demand. The Commission’s antitrust enforcers have had this painful experience first; national competition authorities have not escaped the same constraints. Empowering and inciting private actors to behave as ‘private attorneys general’ enhances the overall efficiency of a country’s competition law system, perceived—as noted before—as contributing to the well-being of the national economy and its citizens. Recognition of the limits of the action of public authorities is of course not specific to the area of competition law and enforcement. It is a characteristic of the attitudes towards the state and practically all its activities during recent decades, beginning with the policies pursued by President Reagan in the US and subsequently Prime Minister Thatcher in Europe. At the same time, general faith in the positive outcome of the normal play of market forces—and the activities of private agents—has grown. The pursuit of private interest is not seen as being in conflict with public interest. The positive attitude towards private enforcement is thus another aspect of the triumph of the liberal, free market philosophy. The author of the present monograph shares this view, though not in these precise terms. One of the ‘leitmotivs’ of his book is the emphasis on the independence of private enforcement with respect to public enforcement. Whatever the legal reasons for this position are,

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Foreword ix the theory of independence seems to us to presuppose implicitly a certain faith in the harmony—or at least compatibility—of the results of actions of agents of the state and of initiatives of private actors controlled of course by independent judges. In addition to the conviction that the efficient enforcement of competition law is a useful contribution to the well-being of the national economy and its citizens, a third element stimulates Member States to strengthen spontaneously private enforcement. This third element is pure national self-interest: from the point of view of a given Member State, it is economically and politically desirable to create a favourable legal environment which attracts private enforcement initiatives, not only from the Member State’s own economic actors, but also from those of other Member States. The reasons are simple: The US discovered a long time ago that legal services are an important part of the services industry. Private enforcement requires additional legal services; it stimulates their growth as much as that of the associated economic consultancy services. In addition, to become a ‘hub’ for the private enforcement of claims of actors operating outside the national borders, but within the European Union, enhances the impact and influence of a national legal system beyond the national borders. In a certain way, it contributes to the export of the national legal culture. Facilitating private enforcement is thus an obvious candidate for competition between legal systems. The present monograph demonstrates that this process of competition between Member States has clearly started. It is likely to continue. Contrary to other sectors of the economy, such as taxation, at least from the point of view of the complainants, it is not a race to the bottom, but rather a race to the top. The efforts of individual Member States to strengthen private enforcement within the European Union will have another advantage. These efforts will diminish the obvious temptation of European plaintiffs to try to pursue their claims in the US. Comity arguments against the adjudication of such claims by US courts according to US law will be more convincing if European plaintiffs can find appropriate redress within the EU than if such redress were practically excluded or minimal in scope. Will the strengthening of private enforcement through legislation enacted in individual Member States entail the risk that US litigation culture is introduced in Europe? At least at this point in time, the risk seems to be low. European traditions and convictions are hopefully strong enough to avoid the excesses of ‘ambulance chasing’—although the emergence of a certain type of aggressive ‘plaintiff bar’ is not at all excluded, if the wrong economic incentives were to be provided by inadvertent legislators or judges.

III. The risk of stimulating economically harmful private litigation could result not only from overshooting by legislators or judges. It could also be a consequence of administrators, ie the activities of competition authorities. European competition authorities are used to the traditional European concept of public enforcement of competition law through more or less independent competition agencies. For these authorities and their officials active and vibrant private enforcement will be a novelty. It is therefore normal, at least at this moment in time, for the actions of these authorities not to be influenced by considerations related to the possible side effects of their activities. However, these activities can lead to major

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x Foreword private litigation activities even if, in the end, no definitive public action is taken or, if taken, is not upheld by the controlling courts. Competition agencies should therefore be wary that they are no longer alone, but that they operate in an environment in which any of their moves can and will increasingly give rise to private actions before national courts with possibly highly undesirable consequences. The emergence of efficient private enforcement is thus not mono-directional. It will change the existing equilibrium and may well invite competition authorities and courts to be more careful with respect to what economists call ‘false positives’, ie the overenforcement of competition law. Also in this respect, this evolution in the EU is likely to follow earlier experiences in the US.

IV. Decentralisation of the implementation of EC competition law through Regulation 1/2003 has shown great confidence in national courts. If the Commission had limited its proposal to share its traditional monopoly to exempt certain restrictive agreements only with national competition authorities, this would already have been a remarkable step. To abolish this monopoly altogether and to entrust the power of exemption also to national judges was clearly revolutionary. Stimulating further private enforcement of EC antitrust law is nothing but a logical consequence of the adoption of Regulation 1/2003: after all, the adjudication of private claims is the natural responsibility of judges and courts. Nevertheless, the push for private enforcement is a renewed sign of confidence in the judiciary, at least with regard to ‘standalone’ private action, i.e. action other than litigation that simply follows a public enforcement decision. The ongoing review of the interpretation of substantive EC competitive law, giving ever greater relevance to the evaluation of the economic effects will be a challenge for judges. On the other hand, the growing consensus that the primary objective of EC competition law is consumer welfare, and not a cocktail of more or less competing political aims, will facilitate the tasks of courts.

V. The increased importance of economic analysis in the interpretation of substantive EC competition law has clearly affected the traditional position of lawyers in the public enforcement of EC competition law. Instead, the contribution of economists has grown in importance, in particular in the area of merger control. The same will apply progressively to the application of Article 82, provided the more effects-oriented interpretation of the notion of abuse is approved by the Courts in Luxembourg. The strengthening of private enforcement and its growing practical importance will deliver to lawyers at least part of the lost territory. Private enforcement requires knowledge and skills that are different from and additional to those which are necessary for applying substantive and procedural competition law in administrative and judicial procedures related to enforcement by competition authorities. It is even possible that increased private

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Foreword xi enforcement will create a new type of competition bar, ie lawyers who are specialised in private litigation before national courts. In any case, private enforcement of competition law is a challenge and an opportunity for lawyers. Compared to earlier periods in the evolution of EC competition law, this moment can be compared with the years which followed the adoption of the first EC Merger Regulation at the end of 1989, or the invigorated enforcement of the EC state aid rules in the early 1990s. In both cases, particularly young lawyers have found it rewarding to take an interest in these either totally new (mergers) or still legally underdeveloped (state aid) rules and issues. The same applies in my view to private enforcement of competition law today. With one important difference: As long as the EU maintains the existing system of judicial protection, private enforcement of EC competition law will have its centres of gravity in Member States; it will not be centralised in Brussels and in Luxembourg. In other words, private enforcement of EC competition law will be truly decentralised. The number of interested persons is therefore likely to be much greater than the relatively small group of mainly Brusselsbased lawyers who were interested in the earlier developments of EC competition law. If this analogy and my prognosis are correct, this book will be studied attentively by a large number of readers. In sum, it should have a brilliant future. Claus-Dieter Ehlermann Brussels, 1 September 2007

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INTRODUCTION Private antitrust enforcement has been a very familiar subject in the United States. This was not the case in Europe until recently. If a book on private enforcement of EC competition law had been published 15 years ago, few in Europe would have understood its title, and perhaps fewer might have read it. There are many reasons for the current interest in such a subject. These may be seen from two angles: from the Community law angle and from the competition law angle. From the first angle, one can mention as explanations the development of the decentralised application of Community law, the maturity of the relationship between Community and national law, the increased inroads made by the Community into private law and, as always, the Court of Justice’s determination to safeguard the effectiveness of Community law and ever increase Community citizens’ effective judicial protection and their access to a court, in particular to the juges communautaires de droit commun. From the competition law angle, we can mention the steady establishment in Europe of a competition culture, the acquisition of a sufficient degree of confidence by the European Commission as antitrust enforcer, the realisation of the need to enforce the competition rules effectively and to punish competition law infringements severely, the will to bring in more agents for the enforcement of the Treaty competition rules, such as national competition authorities and courts, and ultimately the inevitable decentralisation of competition law enforcement in today’s Europe of 27 Member States. These two angles to a great extent characterise this study. This is not a book just about private antitrust enforcement, but rather about private enforcement of the Community competition rules before the Community courts of full jurisdiction, the courts of the Member States. There is no ambition to examine private antitrust enforcement from an economic point of view. This task is left to more suitable people who have the right expertise. There is equally no exhaustive covering of the specific mechanics of the system of private actions in Europe from the point of view of both substance and procedure. Such a task would be possible only if our system of private enforcement were a centralised or federal one, with common substantive and procedural rules and common courts, in the sense of the US federal circuit courts. At its current stage of development, however, Community law relies to a great degree on national legal systems. For this reason, a complete analysis of the phenomenon of private antitrust enforcement in Europe would necessitate 27 books of this kind. In short, the aim is to examine private enforcement of the Treaty competition rules as a Community law phenomenon in its developmental perspective. The application of EC competition law by civil courts, though not particularly developed, has not been a recent phenomenon. Indeed, the very first preliminary reference made by a national court to Luxembourg under the old Article 177 EEC, which was, according to witnesses, an event that was duly celebrated with champagne in the Grand Duchy at that time, was a competition case where EC competition law arose in the context of private litigation.1 1 Case 13/61 Kledingverkoopbedrijf de Geus en Uitdenbogerd v Robert Bosch GmbH and Maatschappij tot voortzetting van de zaken der Firma Willem van Rijn [1962] ECR 45.

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xiv Introduction Of course, the mere application of the competition rules by national courts cannot be said to amount to a system of private antitrust enforcement. The very term ‘enforcement’ signifies an instrumental role for private actions in the sense of the private litigants themselves becoming actors in enhancing the overall efficiency and effectiveness of the competition enforcement system. It is only very recently that private antitrust enforcement has appeared for the first time as a real enforcement mechanism, and thus as a meaningful complement to public enforcement. The way was opened by the modernisation and decentralisation reforms in the years 1999 to 2004 that have produced a new enforcement system for the twenty-first century. But it has also come as a consequence of ground-breaking rulings by the Court of Justice, which has extended the scope of remedies available to individuals by Community law to cover also individual civil liability. Modernisation and the advent of Regulation 1/2003 did not themselves energise private enforcement but rather offered the appropriate impetus and overall conditions, in perfect harmony with the Court of Justice’s far-sighted rulings, for the matter to be addressed both at the Community and national levels. What in 1999 seemed distant and Utopian in 2008 appears a reality that private firms, public authorities and the legal profession will have to take seriously into account. The publication in December 2005 of the Green Paper on damages actions by the European Commission concludes a long period of reflection and announces a new stage of development for private antitrust enforcement that is currently difficult to predict. At the same time, there are spill-over effects in the Member States, and one can indeed even speak of regulatory competition (Wettbewerb der Wettbewerbsordnungen) among the national competition enforcement systems in the creation of an optimal national system of antitrust enforcement, with particular emphasis on the role of private actions. This race to the top can be seen, for example, between the UK, German and French legal systems, where there were recently important reforms and where the enhancement of private antitrust actions figures centrally. The book’s first chapter attempts a definition and delimitation of private enforcement. The advantages of private enforcement are examined and the relevance of EC competition law’s objectives is also addressed. A related issue is the interplay between the protection of the public and private interests. Then, a basic proposition is private enforcement’s complementarity with, but also complete independence of, public enforcement in the Community context. The emphasis on independence is explained because of the current trend in Commission and national competition authority thinking to introduce rules of primacy or dependence, whereby decisions of public enforcers become binding on civil courts. While there would be no problem in introducing special evidentiary rules in the presence of public enforcement decisions, and thus facilitating the bringing of private claims in deserving cases, the conferment of a positive binding effect is a serious error made in competition law enforcement fora that are staffed only by competition law specialists who may miss the broader principles of private law as well as the fundamental exigencies of Community law and its decentralised application. The second chapter examines the decentralised application of the Treaty competition rules by national courts in an institutional and developmental perspective. There is a first part on the old system of enforcement and the role of national courts, which may now seem obsolete, yet it would be impossible to examine the position of national courts under the new system of enforcement without a historical introduction. Then the passage to the new decentralised system is analysed in detail: The 1999 White Paper on modernisation, the legal exception system under Article 81(3) EC, the ensuing discussions and negotiations,

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Introduction xv and ultimately Regulation 1/2003 along with the Modernisation Package, not to forget the Court of Justice’s role, are all important items in today’s acquis. The chapter then examines the three pillars of the new system: the strengthening of the supremacy of Community over national competition law, the new institutional position of national courts, and the strengthening of the supremacy of Community over national proceedings. Peripherally, the role of national competition authorities is also addressed. Finally, the third chapter proceeds to examine the basic substantive and procedural aspects of EC private antitrust enforcement. It starts from an analysis of basic Community law principles that govern the enforcement of Community law by national courts. There is here a constitutional parameter: national courts adjudicate on rights granted directly by the Treaty to individuals who thus become agents for the Community interest. There is also a competition law effectiveness parameter: individuals can put into effect in private litigation rights that the competition rules provide for, thus becoming private attorneys general and increasing the efficiency of the whole system, while easing the burden on the public authorities which cannot be the sole enforcers. There is finally a judicial protection parameter: individuals can pursue rightful redress for wrongs committed. Again, private antitrust enforcement is seen throughout the third chapter primarily from the angle of Community law. It is an interesting development because it has offered a new paradigm for the decentralised application of Community law in general. The third chapter then makes a distinction between the substantive remedies available to litigants for violations of the Treaty competition rules, in particular the civil sanction of nullity, damages, injunctions, restitutionary and declaratory relief, and the procedural rules applicable. A basic proposition of this book is that de lege lata the substantive remedies themselves and their constitutive conditions are directly governed by Community law, while the more detailed executive-procedural rules are a matter of national law. Damages are of course the most important of these substantive remedies, and indeed most of the analysis is dedicated to them. An effort has been made throughout the book to refer to national developments, cases and authorities, at least in the majority of the 15 ‘old’ Member States. This reference is, however, by no means exhaustive, but rather aims to acquaint the reader with the common thrust of the Union’s basic legal systems and the way those systems interact with Community law in the decentralised application of EC competition law. An effort was also made to refer to some specific questions that arise in certain jurisdictions and that are not common to others. For example, specific reference has been made to the issues of ‘transient voidness’ and the in pari delicto principle in English law, to the protective scope theories in German law, and to the unique features of parens patriae civil actions instituted by the Minister of the Economy in French law. These ‘peculiarities’ are quite interesting and are a helpful reminder of the challenges of the decentralised civil enforcement of the Community competition rules ‘from Helsinki to Palermo’.2 2 This book does not deal with the application of the EC competition rules in the context of arbitration. Arbitration is of course the most usual forum or indeed the juge naturel of all significant international commercial contracts, so its importance cannot be ignored. Its exclusion, however, is a deliberate choice because the whole relationship between arbitration and EC competition law is quite specific and actually has a longer history in Europe than private enforcement itself, but also because, in the author’s view, arbitration cannot, strictly speaking, be said to amount to private enforcement. Arbitration is only a dispute resolution mechanism and arbitrators themselves are private judges whose task is to resolve a dispute that the parties have placed before them. They are not state organs and are not entrusted with the safeguarding of any public interest as such. Indeed, international arbitration lacks a ‘forum’, so it would not really make sense to speak of any specific public interest to be safeguarded by an international arbitral tribunal.

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xvi Introduction The law is stated as of 1 January 2008. The opinions expressed here do not represent the views of anybody other than the author. In all respects the usual disclaimer applies.

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ABBREVIATIONS AC AG AG

All.ER Am J Comp L Antitrust Bull Antitrust LJ ATF AWD BB BC Int’l Comp LRev BER Berkeley J Int’l L BYU JPub.L CA CAT CCAT CDE ChD CLJ CMLR CMLRev Columbia JEL Com Ct Comp LJ CompLRev Contr & Impr Contr & Impr (Eur) Contr Conc Consomm CPR CYELS D. Dir Com Dir Comm Int Dir Pubbl Comp Eur Dir Un Eur Droits EBLR

Appeal Cases Advocate-General Die Aktiengesellschaft, Zeitschrift für das gesamte Aktienwesen, für deutsches, europäisches und internationales Unternehmens- und Kapitalmarktrecht All England Law Reports American Journal of Comparative Law The Antitrust Bulletin Antitrust Law Journal Arrêts du Tribunal Fédéral Suisse Außenwirtschaftsdienst des Betriebs-Beraters Der Betriebs-Berater Boston College International and Comparative Law Review Block Exemption Regulation(s) Berkeley Journal of International Law Bringham Young University Journal of Public Law Court of Appeal (England) Competition Appeal Tribunal (UK) Competition Commission Appeal Tribunal (UK) Cahiers de Droit Européen Chancery Division (England) Cambridge Law Journal Common Market Law Reports Common Market Law Review Columbia Journal of European Law Commercial Court of the Queen’s Bench Division (England) Competition Law Journal Competition Law Review Contratto e Impresa Contratto e Impresa, Europa Contrats-Concurrence-Consommation Civil Procedure Rules Cambridge Yearbook of European Legal Studies Recueil Dalloz Diritto Comunitario e degli Scambi Internazionali Diritto del Commercio Internazionale Diritto Pubblico Comparato ed Europeo Il Diritto dell’Unione Europea Droits, Revue Française de Théorie Juridique European Business Law Review

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xxii Abbreviations EBOR EC ECC ECJ ECJ ECLR ECR Edin LRev EEA EEC EIPR ELF ELRev EPL ERPL ECN ECSC EU EUI EuLR Eur & Dir Priv EuR Euro CL EuZW EWCA Civ EWHC EWHC Comm EWS Fordham Int’l LJ Giurispr Comm Giust Civ GJ GP GRUR GRUR Int IBA ICCLR IJEL ILPr Intereconomics Int’l Lis Int TLR IR

European Business Organization Law Review European Community; Treaty Establishing the European Community European Commercial Cases European Competition Journal European Court of Justice European Competition Law Review European Court Reports The Edinburgh Law Review European Economic Area European Economic Community; Treaty Establishing the European Economic Community European Intellectual Property Review The European Legal Forum, Forum Iuris Communis Europae European Law Review European Public Law European Review of Private Law European Competition Network Treaty Establishing the European Coal and Steel Community European Union European University Institute European Law Reports Europa e Diritto Privato Europarecht European Current Law Europäisches Zeitschrift für Wirtschaftsrecht England and Wales Court of Appeal (Civil) England and Wales High Court England and Wales High Court (Commercial Court) Europäisches Wirtschafts und Steuerrecht, Betriebs-Berater für Europarecht Fordham International Law Journal Giurisprudenza Commerciale Giustizia Civile, Rivista Mensile di Giurisprudenza Gaseta Jurídica de la Unión Europea y de la Competencia Gazette du Palais Gewerblicher Rechtsschutz und Urheberrecht Gewerblicher Rechtsschutz und Urheberrecht, Internationaler Teil International Bar Association International Company and Commercial Law Review Irish Journal of European Law International Litigation Procedure Intereconomics, Review of European Economic Policy Il Corriere Giuridico, Supplemento di Documentazione e Discussione sul Diritto Giudiziario Transnazionale International Trade Law and Regulation Irish Law Reports

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Abbreviations xxiii JBL JBl JCB JCP JDI (Clunet) JdT JdT (Eur) JPIL JuS JZ LIEI LIDC LS Merc Conc Reg Minn LRev MLR NCA(s) Neth Int’l LR New Eng LRev NILQ NJ NJW NVwZ NwJ Int’l L & Bus OJLS QB RabelsZ RAE / LEA RDAI / IBLJ RDUE Rev Conc Consomm Rev Esp Der Eur RHDE RHDI Riv Dir Comm Riv Dir Eur Riv Dir Ind Riv Dir Int Priv Proc Riv It Dir Pubbl Com RIW RLC RMC RTDComm RTDE TEU

Journal of Business Law Juristische Blätter Jurisprudence Commerciale de Belgique La Semaine Juridique, Jurisclasseur Périodique, Edition Générale Journal du Droit International (Clunet) Journal des Tribunaux, Hebdomadaire Judiciaire Journal des Tribunaux, Droit Européen Journal of Private International Law Juristische Schulung Juristen Zeitung Legal Issues of European Integration Ligue Internationale du Droit de la Concurrence Legal Studies Mercato, Concorrenza, Regole Minnesota Law Review Modern Law Review National Competition Authority(ies) Netherlands International Law Review New England Law Review Northern Ireland Legal Quarterly Nederlandse Jurisprudentie Neue Juristische Wochenschrift Neue Zeitschrift für Verwaltungsrecht, vereinigt mit Verwaltungsrechtsprechung Northwestern Journal of International Law and Business Oxford Journal of Legal Studies Queen’s Bench Division (England) Rabels Zeitschrift für Ausländisches und Internationales Privatrecht Revue des Affaires Européennes / Law and European Affairs Revue de Droit des Affaires Internationales/International Business Law Journal Revue du Droit de l’Union Européenne Revue de la Concurrence et de la Consommation, Droit et Marchés Revista Española de Derecho Europeo Revue Hellénique de Droit Européen Revue Hellénique de Droit International Rivista di Diritto Commerciale Rivista di Diritto Europeo Rivista di Diritto Industriale Rivista di Diritto Internazionale Privato e Processuale Rivista Italiana di Diritto Pubblico Comunitario Recht der Internationalen Wirtschaft Revue Lamy de la Concurrence, Droit-Economie-Régulation Revue du Marché Commun et de l’Union Européenne Revue Trimestrielle de Droit Commercial et de Droit Economique Revue Trimestrielle de Droit Européen Treaty on European Union

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xxiv Abbreviations Tul Eur Civ LForum UfR UKHL UNCITRAL Vand J Transnat’l L WBl Wisc Int’l LJ WRP WuW YEEL YEL YPIL ZEuP ZfRV ZHR ZSR/RDS ZVgl R Wiss ZWeR ZZPInt

Tulane European & Civil Law Forum Ugeskrift for Retsvæsen United Kingdom House of Lords United Nations Commission on International Trade Law Vanderbilt Journal of Transnational Law Wirtschaftsrechtliche Blätter, Zeitschrift für österreiches und europäisches Wirtschaftsrecht Wisconsin International Law Journal Wettbewerb in Recht und Praxis Wirtschaft und Wettbewerb Yearbook of European Environmental Law Yearbook of European Law Yearbook of Private International Law Zeitschrift für Europäisches Privatrecht Zeitschrift für Rechtsvergleichung, Internationales Privatrecht und Europarecht Zeitschrift für das gesamte Handelsrecht und Wirtschaftsrecht Zeitschrift für schweizerisches Recht / Revue de Droit Suisse Zeitschrift für die vergleichende Rechtswissenschaft Zeitschrift für Wettbewerbsrecht Zeitschrift für Zivilprozeßrecht International

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TABLE OF CASES E UROPEAN C OURTS Court of Justice of the European Communities Case 13/61 Kledingverkoopbedrijf de Geus en Uitdenbogerd v Robert Bosch GmbH and Maatschappij tot voortzetting van de zaken der Firma Willem van Rijn [1962] ECR 45................................................................................................... xiii, 4, 29, 37 Case 26/62 NV Algemene Transport- en Expeditie Onderneming Van Gend & Loos v Nederlandse Administratie der Belastigen [1963] ECR 1 ........................................... 10, 49 Cases 56/64 and 58/64 Etablissements Consten SàRL and Grundig-Vergkaufs-GmbH v Commission [1965] ECR 299 ............................................................................................ 60 Case 56/65 Société La Technique Minière (LTM) v Maschinenbau Ulm GmbH (MBU) [1966] ECR 235............................................................................. 64, 150, 157, 248 Case 14/68 Walt Wilhelm et al v Bundeskartellamt [1969] ECR 1 ................. 66–67, 70, 74–5 Case 10/69 SA Portelange v SA Smith Corona Marchant International et al [1969] ECR 309 ............................................................................................................................151 Case 43/69 Brauerei A Bilger Söhne GmbH v Heinrich Jehle and Marta Jehle [1970] ECR 127...............................................................................................................................28 Case 48/69 Imperial Chemical Industries Ltd v Commission (Dyestuffs) [1972] ECR 619 ........................................................................................................................... 240 Case 9/70 Franz Grad v Finanzamt Traunstein [1970] ECR 825 ......................................... 90 Case 6/72 Europemballage Corporation and Continental Can Company Inc v Commission Case 22/71 Béguelin Import Co v SAGL Import Export [1971] ECR 949 ........................................................................................................................... 151 [1972] ECR 215...................................................................................................................... 38 Case 48/72 Brasserie de Haecht v Oscar Wilkin and Marie Janssen (II) [1973] ECR 77................................................................................................ 29, 135, 151–2 Case 127/73 Belgische Radio en Televisie (BRT) v SV SABAM and NV Fonior [1974] ECR 51 .............................................................................. 5, 10, 26, 28, 72, 145, 193 Case 43/75 Gabrielle Defrenne v Société Anonyme Belge de Navigation Aérienne (Sabena) [1976] ECR 455 ............................................................................................... 177 Case 63/75 SA Fonderies Roubaix Wattrelos v Société Nouvelle des Fonderies A Roux and Société des Fonderies JOT [1976] ECR 111 ....................................................... 33 Case 21/76 Handelskwekerij GJ Bier BV v Mines de potasse d’Alsace SA [1976] ECR 1735 ......................................................................................................................... 251 Case 33/76 Rewe-Zentralfinanz eG and Rewe-Zentral AG v Landwirtschaftskammer für das Saarland [1976] ECR 1989 .................................................................. 147, 164, 172 Case 45/76 Comet BV v Produkschap voor Siergewassen [1976] ECR 2043 ....... 147, 164, 172 Case 47/76 Alexis de Norre and Martine de Norre, née de Clercq v NV Brouwerij Concordia [1977] ECR 65 .................................................................................................. 31

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xxvi Table of Cases Case 28/77 Tepea BV v Commission [1978] ECR 1391 ..................................................... 158 Case 59/77 Etablissements A de Bloos SPRL v Société en Commandite par Actions Bouyer [1977] ECR 2359 ................................................................................................... 33 Case 177/78 Pigs and Bacon Commission v McCarren and Company Limited [1979] ECR 2161 ..........................................................................................................................198 Case 230/78 SpA Eridania-Zuccherifici nazionali and SpA Società Italiana per l’Industria degli Zuccheri v Minister of Agriculture and Forestry et al [1979] ECR 2749 ................... 92 Joined Cases 253/78 and 1/79 to 3/79 Procureur de la République v Giry and Guerlain et al [1980] ECR 2327 ................................................................................................. 31, 69 Case 22/79 Greenwich Film Production v Société des Auteurs, Compositeurs et Editeurs de Musique (SACEM) and Société des Editions Labrador [1979] ECR 3275 ......... 158, 160 Case 61/79 Amministrazione delle Finanze dello Stato v Denkavit Italiana Srl [1980] ECR 1205...........................................................................................................................146 Case 68/79 Hans Just I/S v Danish Ministry for Fiscal Affairs [1980] ECR 501 ................ 201 Case 130/79 Express Dairy Foods Ltd v Intervention Board for Agricultural Produce [1980] ECR 1887.............................................................................................................. 147 Case 792/79 Camera Care Ltd v Commission [1980] ECR 119 ......................................... 217 Case 31/80 NV L’Oréal and SA L’Oréal v PVBA ‘De Nieuwe AMCK’ [1980] ECR 3775 .................................................................................................................................... 34 Case 58/80 Dansk Supermarked A/S v A/S Imerco [1981] ECR 181 .................................. 177 Case 66/80 SpA International Chemical Corporation v Amministrazione delle Finanze dello Stato [1981] ECR 1191............................................................................................ 125 Case 126/80 Maria Salonia v Giorgio Poidomani et al [1981] ECR 1563 ............................ 64 Case 158/80 Rewe-Handelsgesellschaft Nord mbH and Rewe-Markt Steffen v Hauptzollamt Kiel (Butter-buying Cruises) [1981] ECR 1805 .................................. 164–5 Joined Cases 212/80 to 217/80 Amministrazione delle Finanze dello Stato v Srl Meridionale Industria Salumi et al and Ditta Italo Orlandi & Figlio and Ditta Vincenzo Divella v Amministrazione delle Finanze dello Stato [1981] ECR 2735 ......... 154 Case 102/81 Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co KG [1982] ECR 1095 ............................................................................................... 94 Case 283/81 CILFIT v Ministero della Sanità [1982] ECR 3415 ........................................ 126 Joined Cases 43/82 and 63/82 Vereniging ter Bevordering van het Vlaamse Boekwezen (VBVB) and Vereniging ter Bevordering van de Belangen des Boekhandels (VBBB) v Commission [1984] ECR 19............................................................................................... 67 Case 199/82 Amministrazione delle Finanze dello Stato v San Giorgio [1983] ECR 3595...........................................................................................................147, 200, 226 Joined Cases 228/82 and 229/82 Ford of Europe Incorporated and Ford-Werke Aktiengesellschaft v Commission [1984] ECR 1129 ........................................................ 216 Case 319/82 Société de Vente de Ciments et Bétons de l’Est SA v Kerpen & Kerpen GmbH & Co KG [1983] ECR 4173 ................................................................................. 155 Case 14/83 Sabine von Colson and Elisabeth Kamann v Land Nordhein-Westfalen [1984] ECR 1891 ............................................................................................................. 165 Joined Cases 142/84 and 156/84 British-American Tobacco Company Ltd and RJ Reynolds Industries Inc v Commission [1987] ECR 4487.................................................. 37 Joined Cases 209/84 to 214/84 Criminal Proceedings against Lucas Asjes et al [1986] ECR 1425............................................................................................................................ 37

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Table of Cases xxvii Case 45/85 Verband der Sachversicherer eV v Commission [1987] ECR 405 ....................... 67 Joined Cases 89/85, 104/85, 114/85, 116/85 to 117/85 and 125/85 to 129/85 A Ahlström Osakeyhtiö et al v Commission (Woodpulp I) [1988] ECR 5193 ........... 240, 242 Case 314/85 Foto-Frost v Hauptzollamt Lübeck-Ost [1987] ECR 4199...................... 113, 125 Joined Cases 331/85, 376/85 and 378/85 SA Les Fils de Jules Bianco and J Girard Fils SA v Directeur Général des Douanes et Droits Indirects [1988] ECR 1099 .................... 201 Case 66/86 Ahmed Saeed Flugreisen and Silver Line Reisebüro GmbH v Zentrale zur Bekämpfung unlauteren Wettbeverbs eV [1989] ECR 803 ................................................ 37 Case 145/86 Horst Ludwig Martin Hoffmann v Adelheid Krieg [1988] ECR 645 ...... 134, 258 Case 53/87 Consorzio Italiano della Componentistica di Ricambio per Autoveicoli and Maxicar v Régie Nationale des Usines Renault SA [1988] ECR 6039 ............................ 258 Case 189/87 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co et al [1988] ECR 5565 ..................................................................................................... 251 Case C–2/88 Imm Criminal Proceedings against JJ Zwartveld et al [1990] ECR 3365 and 4405. .............................................................................................................................94 Case 103/88 Fratelli Costanzo SpA v Comune di Milano [1989] ECR 1839 ........................ 76 Joined Cases 143/88 and C–92/89 Zuckerfabrik Süderdithmarschen AG v Hauptzollamt Itzehoe and Zuckerfabrik Soest GmbH v Hauptzollamt Paderborn [1991] ECR I–415 .................................................................................................... 120, 148 Case C–177/88 Elisabeth Johanna Pacifica Dekker v Stichting Vormingscentrum voor Jong Volwassenen (VJV-Centrum) Plus [1990] ECR I–3941 ......................................... 165 Case C–220/88 Dumez France SA and Tracoba SARL v Hessische Landesbank et al [1990] ECR I–49 ............................................................................................................. 251 Case C–106/89 Marleasing SA v La Comercial Internacional de Alimentacion SA [1990] ECR I–4135 ......................................................................................................... 179 Case C–213/89 Regina v Secretary of State for Transport, ex parte Factortame Ltd et al (I) [1990] ECR I–2433 ........................................................... 80, 133, 148–9, 165, 218 Case C–234/89 Stergios Delimitis v Henninger Bräu AG [1991] ECR I–935 .......................................................... 28, 30–1, 45, 49, 91, 94, 112–14, 135, 163 Case C–300/89 Commission v Council (Titanium Dioxide) [1991] ECR I–2867 ............. 181 Joined Cases C–6/90 and C–9/90 Andrea Francovich et al v Italy [1991] ECR I–5357 ........................................................... 108, 182, 148–9, 166, 169, 171–3, 178–9, 209 Case C–41/90 Klaus Höfner and Fritz Elser v Macrotron GmbH [1991] ECR I–1979......... 64 Joined Cases C–87/90, C–88/90 and C–89/90 Verholen et al v Sociale Verzekeringsbank Amsterdam [1991] ECR I–3757 ...................................................................................... 222 Case C–172/91 Volker Sonntag v Hans Waidmann, Elisabeth Waidmann and Stefan Waidmann [1993] ECR I–1963 ...................................................................................... 250 Joined Cases C–241/91 P and C–242/91 P Radio Telefis Eireann (RTE) and Independent Television Publications Ltd (ITP) v Commission [1995] ECR I–743 .............................. 113 Case C–271/91 Helen Marshall v Southampton and South West Hampshire Area Health Authority (II) [1993] ECR I–4367 ...................................................................... 165 Case C–60/92 Otto BV v Postbank NV [1993] ECR I–5683 ................................................. 98 Case C–128/92 HJ Banks & Co Ltd v British Coal Corporation [1994] ECR I–1209 .......................................................................................... 116, 166–7, 171, 209 Case C–188/92 TWD Textilwerke Deggendorf GmbH v Germany [1994] ECR I–833 ...... 125 Case C–250/92 Gøttrup-Klim ea Grovvareforeninger v Dansk Landbrugs Grovvareselskab AmbA [1994] ECR I–5641................................................................................................. 28

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xxviii Table of Cases Case C–360/92 P The Publishers Association v Commission [1995] ECR I–23.................... 67 Case C–376/92 Metro-SB-Großmärkte GmbH & Co KG v Cartier SA [1994] ECR I–15 ............................................................................................................................ 69 Joined Cases C–46/93 and C–48/93 Brasserie du Pêcheur SA v Germany and Regina v Secretary of State for Transport, ex parte Factortame Ltd et al (III) [1996] ECR I–1029 ........................ 148, 165–7, 171, 173, 176, 182, 195, 198, 209–10, 213 Case C–68/93 Fiona Shevill et al v Presse Alliance SA [1995] ECR I–415 ......................... 252 Case C–70/93 Bayerische Motorenwerke AG v ALD Auto-Leasing D GmbH [1995] ECR I–3439. ........................................................................................................................68 Case C–9/93 IHT Internationale Heiztechnik GmbH and Uwe Danziger v Ideal-Standard GmbH and Wabco Standard GmbH [1994] ECR I–2789 .............................................. 158 Case C–266/93 Bundeskartellamt v Volkswagen and VAG Leasing [1995] ECR I–3477................................................................................................................................. 69 Case C–312/93 Peterbroeck, Van Campenhout et Cie SCS v Belgium [1995] ECR I–4599 ...................................................................................................................... 223, 237 Joined Cases C–319/93, C–40/94 and C–224/94 Hendrik Evert Dijkstra et al v Friesland (Frico Domo) Coöperatie et al [1995] ECR I–4471. .................................. 97, 114 Case C–364/93 Antonio Marinari v Lloyds Bank plc and Zubaidi Trading Company [1995] ECR I–2719 ......................................................................................................... 251 Case C–415/93 Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman, Royal Club Liégeois SA v Jean-Marc Bosman et al and Union des Associations Européennes de Football (UEFA) v Jean-Marc Bosman [1995] ECR I–4921 ................ 177 Joined Cases C–427/93, C–429/93 and C–436/93 Bristol-Myers Squibb et al v Paranova A/S [1996] ECR I–3457 .................................................................................. 227 Joined Cases C–430/93 and C–431/93 Jeroen van Schijndel and Johannes Nicolaas Cornelis van Veen v Stichting Pensioenfonds voor Fysiotherapeuten [1995] ECR I–4705 ............................................................................................... 71, 223, 225, 237 Case C–5/94 Regina v Ministry of Agriculture, Fisheries and Food ex parte Hedley Lomas (Ireland) Ltd [1996] ECR I–2553......................................................................... 195 Case C–18/94 Barbara Hopkins et al v National Power plc and Powergen plc [1996] ECR I–2281 ...................................................................................................................... 116 Joined Cases C–178/94 to C–179/94 and C–188/94 to C–190/94 Dillenkofer et al v Germany [1996] ECR I–4845 ......................................................................................... 209 Case C–194/94 CIA Security International SA v Signalson SA and Securitel SPRL [1996] ECR I–2201 .................................................................................................... 75, 179 Case C–72/95 Aannemersbedrijft PK Kraaijeveld BV v Gedeputeerde Staten van Zuid-Holland [1996] ECR I–5403 .................................................................................. 224 Case C–78/95 Bernardus Hendrikman and Maria Feyen v Magenta Druck & Verlag GmbH [1996] ECR I–4943 .............................................................................................. 134 Case C–91/95 Roger Tremblay, Harry Kestenberg and Syndicat des Exploitants de Lieux de Loisirs (SELL) v Commission [1996] ECR I–5547........................................................ 46 Case C–188/95 Fantask A/S et al v Industriministeriet (Erhvervsministeriet) [1997] ECR I–6783. ..................................................................................................................... 173 Joined Cases C–192/95 to C–218/95 Sté Comateb et al v Directeur Général des Douanes et Droits Indirects [1997] ECR I–165 ...................................................................... 173, 200 Case C–242/95 GT-Link A/S v De Danske Statsbaner [1997] ECR I–4349 ............................................................................................. 165, 176, 193, 227

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Table of Cases xxix Case C–261/95 Rosalba Palmisani v Istituto Nazionale della Previdenza Sociale (INPS) [1997] ECR I–4025 .......................................................................................................... 147 Case C–282/95 P Guérin Automobiles v Commission [1996] ECR I–1503 ............... 165, 193 Joined Cases C–215/96 and C–216/96 Carlo Bagnasco et al v Banca Popolare di Novara Scarl and Cassa di Risparmio di Genova e Imperia SpA [1999] ECR I–135 .......................................................................................................................... 64 Case C–343/96 Dilexport Srl v Amministrazione delle Finanze dello Stato [1999] ECR I–579 ........................................................................................................................226 Case C–367/96 Alexandros Kefalas et al v Elliniko Dimosio and Organismos Oikonomikis Anasygkrotisis Epicheiriseon [1998] ECR I–2843 ..................................... 198 Joined Cases C–369/96 and C–376/96 Criminal Proceedings against Jean-Claude Arblade et al [1999] ECR I–8453 .................................................................................... 241 Case C–119/97 P UFEX (ex SFEI) et al v Commission [1999] ECR I–1341 ...................... 229 Case C–126/97 Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I–3055. .........................................................................149–50, 224–5, 237–8, 241, 257 Case C–269/97 Commission v Council [2000] ECR I–2257 ............................................. 181 Case C–373/97 Dionisios Diamantis v Elliniko Dimosio and Organismos Ikonomikis Anasinkrotisis Epikhiriseon AE [2000] ECR I–1705 ....................................................... 198 Case C–7/98 Dieter Krombach v André Bamberski [2000] ECR I–1935 ............................ 134 Case C–38/98 SA Régie Nationale des Usines Renault v Maxicar SpA and Orazio Formento [2000] ECR I–2973.................................................................................. 134, 258 Joined Cases C–174/98 and C–189/98 The Netherlands and Gerard van der Wal v Commission [2000] ECR I–1 ..................................................................................... 95, 106 Case C–195/98 Österreichischer Gewerkschaftsbund and Gewerkschaft öffentlicher Dienst v Austria [2000] ECR I–10497 ............................................................................ 234 Joined Cases C–240/98 to C–244/98 Océano Grupo Editorial SA v Rocío Murciano Quintero and Salvat Editores SA v José M Sanchez Alcón Prades et al [2000] ECR I–4941 ..................................................................................................................... 154 Case C–281/98 Roman Angonese v Cassa di Risparmio di Bolzano SpA [2000] ECR I–4139 ......................................................................................................................177 Case C–344/98 Masterfoods Ltd v HB Ice Cream Ltd [2000] ECR I–11369 ................................................................... 16, 29, 36, 78, 97, 112–15, 116–8, 120–4, 126–30, 132, 135, 137–9, 229 Case C–381/98 Ingmar GB Ltd v Eaton Leonard Technologies Inc [2000] ECR I–9305 ......................................................................................................... 239, 248–9 Joined Cases C–397/98 and C–410/98 Metallgesellschaft Ltd, Hoechst AG and Hoechst UK Ltd v Commissioners of Inland Revenue and HM Attorney General [2001] ECR I–1727 ......................................................................................... 173, 242, 248 Case C–110/99 Emsland Stärke GmbH v Hauptzollamt Hamburg-Jonas [2000] ECR I–11569 ....................................................................................................................199 Joined Cases C–238/99, C–244/99, C–245/99, C–247/99, C–250/99 to C–252/99 and C–254/99 Limburgse Vinyl Maatschappij NV (LVM) et al v Commission [2002] ECR I–8375 ......................................................................................................... 197 Case C–340/99 TNT Traco SpA v Poste Italiane SpA et al [2001] ECR I–4109 ................ 227 Case C–453/99 Courage Ltd v Bernard Crehan [2001] ECR I–6297........ 11, 14, 122, 149–51 162–74, 175, 176–90, 192–5, 197–8, 203, 220, 224–5, 244, 247–8, 250 254

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xxx Table of Cases Case C–472/99 Clean Car Autoservice GmbH v Stadt Wien and Austria [2001] ECR I–9687 ..................................................................................................................... 235 Case C–62/00 Marks & Spencer plc v Commissioners of Customs & Excise [2002] ECR I–6325 .......................................................................................................................173 Case C–129/00 Commission v Italy [2003] ECR I–14637 .............................. 103, 136, 200–1 Case C–253/00 Antonio Muñoz y Cia SA and Superior Fruiticola SA v Frumar Ltd and Redbridge Produce Marketing Ltd [2002] ECR I–7289 ....................................... 177–8 Case C–453/00 Kühne & Heitz NV v Productschap voor Pluimvee en Eieren [2004] ECR I–837 ...........................................................................................................25, 131, 133 Case C–473/00 Cofidis SA v Jean-Louis Fredout [2002] ECR I–10875 ............................. 154 Case C–147/01 Weber’s Wine World Handels-GmbH et al v Abgabenberufungskommission Wien [2003] ECR I–11365 ................................ 173, 200–1 Case C–63/01 Samuel Sidney Evans v The Secretary of State for the Environment, Transport and the Regions and The Motor Insurers’ Bureau [2003] ECR I–14447 ....... 237 Case C–198/01 CIF Consorzio Industrie Fiammiferi v Autorità Garante della Concorrenza e del Mercato [2003] ECR I–8055 ................................................................ 76 Case C–211/01 Commission v Council [2003] ECR I–8913 .............................................. 181 Case C–224/01 Gerhard Köbler v Austria [2003] ECR I–10239.......................... 26, 103, 108, 130–1, 196, 198 Joined Cases C–264/01, C–306/01, C–354/01 and C–355/01 AOK Bundesverband et al v Ichthyol-Gesellschaft Cordes et al [2004] ECR I–2493 ..................................... 218–9 Case C–276/01 Proceedings against Joachim Steffensen [2003] ECR I–3735 .................... 227 Case C–359/01 P British Sugar plc v Commission [2004] ECR I–4933 ................................ 64 Case C–418/01 IMS Health GmbH & Co OHG v NDC Health GmbH & Co KG [2004] ECR I–5039 .......................................................................................................... 124 Case C–481/01 P(R) NDC Health Corporation and NDC Health GmbH & Co KG v IMS Health Inc [2001] ECR I–3401 ................................................................... 14 Case C–116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I–14693 ........................... 255 Case C–159/02 Gregory Paul Turner v Felix Fareed Ismail Grovit et al [2004] ECR I–3565 ......................................................................................................................255 Case C–201/02 The Queen ex parte Delena Wells v Secretary of State for Transport, Local Government and the Regions [2004] ECR I–723 ................................................... 147 Case C–281/02 Andrew Owusu v NB Jackson, trading as ‘Villa Holidays Bal-Inn Villas’ et al [2005] ECR I–1383 ...................................................................................... 255 Case C–70/03 Commission v Spain [2004] ECR I–7999 .................................................... 240 Case C–105/03 Criminal proceedings against Maria Pupino [2005] ECR I-5285 ............. 120 Case C–173/03 Traghetti del Mediterraneo SpA v Italy [2006] ECR I–5177 .................... 196 Joined Cases C–346/03 and C–529/03 Giuseppe Atzeni et al v Regione autonoma della Sardegna [2006] ECR I–1875.................................................................................. 125 Case C–402/03 Skov Æg v Bilka Lavprisvarehus A/S and Bilka Lavprisvarehus A/S v Jette Mikkelsen and Michael Due Nielsen [2006] ECR I–199 ........................................ 205 Case C–425/03 Provvidenza Regio v AXA Assicurazioni SpA, Order of 19 October 2004, unpublished ....................................................................................... 174 Joined Cases C–438/03, C–439/03, C–509/03 and C–2/04 Antonio Cannito et al v Fondiaria Assicurazioni SpA et al, Order [2004] ECR I–1605 ...................................... 174 Joined Cases C–453/03, C–11/04, C–12/04 and C–194/04 The Queen ex parte ABNA Ltd et al v Secretary of State for Health and Food Standards Agency, Fratelli Martini

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Table of Cases xxxi & C SpA et al v Ministero delle Politiche Agricole e Forestali et al, and Nederlandse Vereniging Diervoederindustrie (Nevedi) v Productschap Diervoeder [2005] ECR I–10423 .................................................................................................................... 126 Case C–461/03 Gaston Schul Douane-expediteur BV v Minister van Landbouw, Natuur en Voedselkwaliteit [2005] ECR I–10513 ........................................................... 126 Case C–539/03 Roche Nederland BV et al v Frederick Primus and Milton Goldenberg [2006] ECR I–6535 ......................................................................................................... 253 Joined Cases C–94/04 and C–202/04 Federico Cipolla v Rosaria Fazari (née Portolese) and Stefano Macrino and Claudia Capodarte v Roberto Meloni [2006] ECR I–11421 .......................................................................................................... 63 Case C–125/04 Guy Denuit and Betty Cordenier v Transorient—Mosaïque Voyages and Culture SA [2005] ECR I–923 .................................................................................... 94 Case C–127/04 Declan O’Byrne v Sanofi Pasteur MSD Ltd and Sanofi Pasteur SA [2006] ECR I–1313 ......................................................................................................... 205 Case C–234/04 Rosmarie Kapferer v Schlank & Schick GmbH [2006] ECR I–2585.......... 133 Case C–255/04 Commission v France [2006] ECR I–5251 ........................................ 176, 237 Joined Cases C–295/04 to C–298/04 Vincenzo Manfredi et al v Lloyd Adriatico Assicurazioni SpA et al [2006] ECR I–6619 ................................... 151–2, 154, 174–6, 182, 192–3, 195, 209–10, 213–4, 220, 224–5, 238, 241, 244, 247–8, 250 Joined Cases C–392/04 and C–422/04 i-21 Germany GmbH and Arcor AG & Co KG v Germany [2006] ECR I–8559 ........................................................................... 133 Case C–526/04 Laboratoires Boiron SA v Union de recouvrement des cotisations de sécurité sociale et d’allocations familiales (Urssaf) de Lyon [2006] ECR I–7529 ....... 227 Case C–103/05 Reisch Montage AG v Kiesel Baumaschinen Handels GmbH [2006] ECR I–6827. ......................................................................................................... 253 Case C–119/05 Ministero dell’Industria, del Commercio e dell’Artigianato v Lucchini SpA, Judgment of 18 July 2007, not yet reported........................................ 133–4 Joined Cases C–222/05 to C–2225/05 J van der Weerd et al v Minister van Landbouw, Natuur en Voedselkwaliteit, Judgment of 7 June 2007, not yet reported ..................... 154 Case C–238/05 ASNEF-EQUIFAX, Servicios de Información sobre Solvencia y Crédito, SL and Administración del Estado v Asociación de Usuarios de Servicios Bancarios (AUSBANC) [2006] ECR I–11125 ....................................................... 73, 224–5 Joined Cases C–376/05 and C–377/05 A Brünsteiner GmbH and Autohaus Hilgert GmbH v Bayerische Motorenwerke AG (BMW) [2006] ECR I–11383 ............................. 53 Case C–421/05 City Motors Groep NV v Citroën Belux NV [2007] ECR I–659 ............... 175 Case C–432/05 Unibet (London) Ltd and Unibet (International) Ltd v Justitiekanslern [2007] ECR I–2271 ................................................................................ 164 Case C–438/05 The International Transport Workers’ Federation and The Finnish Seamen’s Union v Viking Line ABP and OÜ Viking Line Eesti, Judgment of 11 December 2007, not yet reported ...................................................................... 172, 203

Court of First Instance of the European Communities Case T–51/89 Tetra Pak Rausing SA v Commission [1990] ECR II–309 ............................. 26 Case T–66/89 Publishers Association v Commission [1992] ECR-II–1995........................... 67

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xxxii Table of Cases Case T–69/89 Radio Telefis Eireann (RTE) v Commission [1991] ECR II–485................. 113 Case T–76/89 Independent Television Publications Ltd (ITP) v Commission [1991] ECR II–575........................................................................................................................113 Case T–24/90 Automec Srl v Commission (II) [1992] ECR II–2223 ....................... 12, 36, 45, 94, 163, 165, 172, 216–7 Case T–34/92 Fiatagri and New Holland Ford v Commission [1994] ECR II–905...... 60, 241 Case T–12/93 Comité Central d’Entreprise de la Société Anonyme Vittel et al v Commission [1995] ECR II–1247 ................................................................................... 193 Case T–575/93 Casper Koelman v Commission [1996] ECR II–1 ................................ 36, 125 Case T–243/94 British Steel plc v Commission [1997] ECR II–1887 ................................. 223 Joined Cases T–305/94, T–306/94, T–307/94, T–313/94 to T–316/94, T–318/94, T–325/94, T–328/94, T–329/94 and T–335/94 Limburgse Vinyl Maatschappij NV et al v Commission [1999] ECR II–931 .................................................................... 197 Case T–353/94 R Postbank NV v Commission, Order [1994] ECR II–1141...................... 100 Case T–395/94 Atlantic Container Line AB et al v Commission [2002] ECR II–875 .............................................................................................................. 172, 240 Case T–77/95 Syndicat Français de l’Express International et al vCommission [1997] ECR II–1 ...............................................................................................................229 Case T–102/96 Gencor v Commission [1999] ECR II–753 .......................................... 38, 240 Joined Cases T–185/96, T–189/96 and T–190/96 Riviera Auto Service Etablisssements Dalmasso SA et al v Commission [1999] ECR II–93 ...................................................... 155 Joined Cases T–125/97 and T–127/97 The Coca-Cola Company and Coca-Cola Enterprises Inc v Commission [2000] ECR II–1733......................................................... 121 Case T–241/97 Stork Amsterdam BV v Commission [2000] ECR II–309 ............................ 34 Case T–65/98 Van den Bergh Foods Ltd v Commission[2003] ECR II–4653 ............... 51, 127 Case T–89/98 National Association of Licensed Opencast Operators (NALOO) v Commission [2001] ECR II–515...................................................................................... 116 Case T–128/98 Aéroports de Paris v Commission [2000] ECR II–3929 ............................ 241 Case T–112/99 Métropole Télévision (M6) et al v Commission [2001] ECR II–2459 ................................................................................................................. 44, 60 Case T–131/99 Michael Hamilton Shaw and Timothy John Falla v Commission [2002] ECR II–2023................................................................................................... 49, 152 Case T–168/01 GlaxoSmithKline Services Unlimited v Commission [2006] ECR II-2969 ............................................................................................................... 51, 206 Case T–184/01 R IMS Health Inc v Commission, Order [2002] ECR II–3193 .................... 13 Joined Cases T–236/01, T–239/01, T–244/01 to T–246/01, T–251/01 and T–252/01 Tokai Carbon Co Ltd et al v Commission [2004] ECR II–1181 ....................... 22 Joined Cases T–213/01 and T–214/01 Österreichische Postsparkasse AG and Bank für Arbeit und Wirtschaft AG v Commission [2006] ECR II–1601 ................................ 206 Case T–289/01 Der Grüne Punkt–Duales System Deutschland GmbH v Commission, Judgment of 24 May 2007, not yet reported ......................................................... 124, 130 Joined Cases T–22/02 and T–23/02 Sumitomo Chemical Co Ltd and Sumika Fine Chemicals Co Ltd v Commission [2005] ECR II–4065.............................................. 15, 229 Case T–59/02 Archer Daniels Midland Co v Commission [2006] ECR II-3627 ........................................................................................................................ 22, 194 Case T–28/02 First Data Corp, FDR Ltd and First Data Merchant Services Corp v Commission [2005] ECR II-4119 ................................................................................... 116

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Table of Cases xxxiii Case T–237/02 Technische Glaswerke Ilmenau GmbH v Commission, Judgment of 14 December 2006, not yet reported .............................................................................. 111 Joined Cases T–259/02 to T–264/02 and T–271/02 Raiffeisen Zentralbank Österreich AG et al v Commission, Judgment of 14 December 2006, not yet reported ................. 206 Case T–2/03 Verein für Konsumenteninformation v Commission [2005] ECR II–1121..................................................................................................................... 111 Joined Cases T–27/03, T–46/03, T–58/03, T–79/03, T–80/03, T–97/03 and T–98/03 SP Spa et al v Commission, Judgment of 25 October 2007, not yet reported ..................................................................................................................... 154 Case T–328/03 O2 (Germany) GmbH & Co OHG v Commission [2006] ECR II–1231 ................................................................................................................. 44, 59 Case T–36/04 Association de la presse internationale a.s.b.l. (API) v Commission, Judgment of 12 September 2007, not yet reported. ....................................................... 111 Case T-201/04 Microsoft Corp v Commission, Judgment of 17 September 2007, not yet reported._ .............................................................................................................. 60 Case T–339/04 France Télécom SA v Commission, Judgment of 8 March 2007, not yet reported.. ....................................................................................................47, 76, 78 Joined Cases T–391/03 and T–70/04 Yves Franchet and Daniel Byk v Commission [2006] ECR II–2023......................................................................................................... 111 Case T–458/04 Au Lys de France SA v Commission, Judgment of 3 July 2007, not yet reported. ...........................................................................................................10, 36 Case T–170/06 Alrosa Company Ltd v Commission, Judgment of 11 July 2007, not yet reported ..........................................................................................................62, 139

EFTA Court Case E–7/01 Hegelstad Eiendomsselskap Arvid B Hegelstad et al v Hydro Texaco AS, Advisory Opinion [2002] Report of the EFTA Court 312 ............................................ 156

Austria OGH, 23 May 1996, 6 Ob 691/95, Bierbezugsvertrag ........................................................ 154

Belgium Cour d’Appel, Brussels, 28 September 2004, Eddy Lodiso v La SPRLU MONDE, available at: http://ec.europa.eu/comm/competition/antitrust/national_courts/ index_en.html ............................................................................................................ 95, 120 Cour d’Appel, Brussels, 23 June 2005, Laurent Emond v Brasserie Haacht, available at: http://ec.europa.eu/comm/competition/antitrust/national_courts/ index_en.html ............................................................................................................ 95, 152 Cour d’Appel, Brussels, 10 November 2005, Wallonie Expo (WEX) v La Chambre Syndicale des constructeurs d’automobile et de motocycles de Belgique and Fédération belge des industries de l’automobile et du cycle réunies (FEBIAC), available at

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xxxiv Table of Cases http://ec.europa.eu/comm/competition/antitrust/national_courts/ index_en.html .................................................................................................................... 96 Cour d’Appel, Brussels, 29 September 2006, EB v BCC, case n° 2006 AR 2592 ................. 96 Tribunal de première instance (Com), Brussels, 30 June 1967, NV Canoy Herfkens Steenfabrieken v Poncelet [1967] JCB 277 ...................................................................... 154 Tribunal de première instance (Civ), Brussels, 15 October 1975, Preflex SA v Lipski (1976) 91 JdT 493.................................................................................................. 130

Denmark Supreme Court, Judgment of 20 April 2005, GT Linien A/S v DSB and Scandlines A/S [2005] UfR 2171 H ................................................................................................... 189 Copenhagen Maritime and Commercial Court, Judgment of 3 October 2002, EKKO v Brandt Group Norden et al (EKKO I) [2004] UfR 2600 S ............................... 189 Copenhagen Maritime and Commercial Court, Judgment of 15 October 2004, EKKO v Electrolux v Home Products Denmark et al (EKKO II) [2005] UfR 388 S.......................................................................................................................... 189

France Cass civ, 16 March 1999, Pordea v Sté Times Newspapers Ltd (1999) 126 JDI (Clunet) 773 .................................................................................................................... 258 Cass com, 10 July 1989, Bodson v PFRL [1989] BullCiv IV no 216 .................................. 218 Cass com, 1 July 2003, SA Sapod Audic v SA Eco Emballages (2004) 14(1) Contr Conc Consomm 24............................................................................................................. 30 Cass com, 7 July 2004, Ministre de l’Economie et Syndicat des détaillants spécialistes du disque et al v Société Carrefour France [2004-1] Concurrences 68............................. 105 Cass com, 14 December 2004, Pharma Lab v Glaxosmithkline GSK and Pfizer, LawLex200400003494JBJ .................................................................................................. 81 Cass com, 6 December 2005, Société Usines Merger v Société Giat Industries, [2006] JCP G, no 1054....................................................................................................... 72 CA Paris, 16 January 1989, SA Technisom France v SARL Serap Ameublement et al [1990] D no 106 ............................................................................................................... 105 CA Paris, 9 December 1992, Sté Michel Swiss v Sté Montagne Diffusion, Juris-Data no 023825 ............................................................................................................................35 CA Paris, 17 March 1998, Syndicat Pharmaciens de l’Aveyron, Juris-Data no 1998-020429 ............................................................................................................... 129 CA Paris, 30 September 1998, Mors ................................................................................... 187 CA Paris, 26 June 2002, SA Pharma-Lab, BOCCRF no 8, 11-7-2003 ................................. 81 CA Paris, 28 June 2002, SARL P Streiff Motorsport v Sté Speedy France SAS, [2003] JCP G no 48 ......................................................................................................... 195 CA Versailles, 24 June 2004, SA Verimedia v SA Mediametrie et al, no 02/07434............ 189 Trib Com Nanterre, 11 May 2006, Arkopharma v Roche SA and Hoffmann La Roche SA, no RG 2004F02643 ................................................................................ 195, 199 Trib Com Paris, 22 October 1996, SA Automobiles Peugeot v Sté Ecosystem ... 187, 195, 208

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Table of Cases xxxv Trib Com Paris, 26 January 2007, Sté Laboratoires Juva Production and Sté Laboratoires Juva Santé— SED v SAS Roche and Sté Roche Vitamins Europe Ltd., no RG 2003048044 ................................................................................................. 199 Conseil de la concurrence, Decision 91-MC-01 of 5 March 1991 ................................... 156 Conseil de la concurrence, Decision 01-D-73 of 6 November 2001 ................................ 156 Conseil de la concurrence, Decision 06-D-65 of 30 November 2005 ............................... 235 Conseil de la concurrence, Opinion no 05-A-20 of 9 November 2005 ....................... 96, 98

Germany BGH, 23.10.79, KZR 21/78, BMW-Importe (1980) 30 WuW 191 ............................. 191, 251 BGH, 16.9.93, (1993) 46 NJW 3269 ................................................................................... 258 BGH, 9.2.94, KZR 2/93, Pronuptia II (1994) 44 WuW 547 .............................................. 158 BGH, 12.5.98, KZR 23/96, City Parfümerie Jürgen Rathjen GmbH v Deutsche Lancôme GmbH (1998) 53 BB 2332 ............................................................................... 216 BGH, 27.2.2003, (2003) 56 NJW 2020 ................................................................................ 243 OLG Düsseldorf, 16.6.98, U (Kart) 15/97, British Telecommunications plc and VIAG Interkom GmbH & Co v Deutsche Telekom AG and ATLAS Deutschland (1998) 48 WuW 713................................................................................................... 32, 187 OLG Düsseldorf, 3.5.2006, VI-W (Kart) 6/06, Zementkartell (2006) 56 WuW 913........... 19 OLG Köln, 21.2.2001, 28 O (Kart) 409/99, Zytostatika (2002) 52 WuW 390................... 192 LG Dortmund, 1.4.2004, 13 O 55/02 (Kart), Vitaminpreise (2004) 54 WuW 1182 ......... 189 LG Düsseldorf, 31.7.2002, 12 O 415/98, Lüneburger Quick-Service (2003) 53 WuW 71....................................................................................................................... 241 LG Mainz, 15.1.2004, 12 HK O 56/02 (Kart), Vitaminpreise (2004) 54 WuW 1179........ 189 LG Mannheim, 11.7.2003, 7 O 326/02, Vitaminkartell (2004) 106 GRUR 182 ................ 189

Greece Areios Pagos no 17/1999 (2000) 6 Koinodikion 69 ............................................................ 212 Areios Pagos no 1260/2002 (2003) 51 Nomiko Vima 1020 ............................................... 212 Efeteio Athens no 1572/2006 (2006) 12 Dikaio Epicheiriseon kai Etairion 760 ............... 226 Polymeles Protodikeio Athens no 13118/1995 (1996) 47 Epitheorisi Emporikou Dikaiou 183 ..................................................................................................................... 154 Monomeles Protodikeio Athens no 18743/1992. Eirinodikeio Thessaloniki no 722/1983 (1984) 4 RHDE 187 ........................................... 219 Dioikitiko Efeteio Athens no 68/2002 (2002) 22 RHDE 978. Dioikitiko Protodikeio Athens no 3254/1991 ...................................................................... 73 Greek Competition Committee, Decision no 53/1987 (Blythe Colours II)......................... 73 Greek Competition Committee, Decision no 63/1988 (K Voreopoulos) ............................ 73 Greek Competition Committee, Decision no 75/1989 (Toyota I) ..................................... 73 Greek Competition Committee, Decision no 45/1996 (Lacoste) ........................................ 73 Greek Competition Committee, Decision no 288/IV/2005 (HYUNDAI) ................... 155–6

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xxxvi Table of Cases Ireland Donovan et al v Electricity Supply Board [1997] 3 IR 573 .................................................. 195 Masterfoods v HB Ice Cream [1992] 3 CMLR 830 ...................................................... 113, 127 Patrick Dunlea & Sons v Nissan (Ireland) Ltd [1992] ECC 169 ........................................ 217

Italy Corte di Cassazione no 8887, 30.6.2001 ............................................................................... 67 Corte di Cassazione no 17475, 9,12.2002, Soc Axa Assicurazioni v Isvap and Larato (2003) 9 Danno e Responsabilità 390................................................................... 189 Corte di Cassazione no 2207, 4.2.2005, Compagnia Assicuratrice Unipol SpA v Ricciarelli (2005) 11 Danno e Responsabilità 495 ........................................................... 189 Corte di Cassazione no 2305,15.12.2006, Fondiaria Società Assicuratrice Industtriale (SAI) v Nigriello ........................................................................................... 211 Corte di Cassazione no 1183, 19.1.2007, Judy Parrott v Fimez SpA ................................. 212 Corte d’Appello, Milan, 24.12.96, Telsystem v SIP-Telecom (1997) 2 Danno e Responsabilità 602 ............................................................................................................ 187 Giudice di Pace, Bitonto, 21.5.2007, Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA ..............................................................................................................190

Luxembourg Cour d’appel, Luxembourg, 31.3.2007, no 31955, Tango SA et al v Entreprise des Postes et Télécommunications............................................................................................... 5

Netherlands Gerechtshof’s-Hertogenbosch, 18.1.1977, Heidemij v Bronbemaling [1977] NJ 463 ...... 215 Rechtbank Amsterdam, 14.5.75, Wilkes v. Theal and Watts.............................................. 187 Rechtbank Rotterdam, 7.3.2007, LJN: BA0926 ................................................................. 238 Pres. Rechtbank Amsterdam, 5.4.1979, Van Gelderen Import BV v Impressum Nederland BV [1981] NJ 129 .......................................................................................... 217 Pres. Rechtbank Amsterdam, 23.7.98, Wij Special Media v VNU ....................................... 96 Pres. Rechtbank Utrecht, 11.2.92, FNK/SCK .................................................................... 218

Spain Tribunal Supremo (Sala de lo Civil), 30.12.93, RJ 1993/9902, CAMPSA ............................. 5 Tribunal Supremo (Sala de lo Civil), 2.6.2000, no 540/2000, CC v Distribuidora Industrial SA......................................................................................................................... 5 Audiencia Provincial de Madrid (secc no 28), 25.5.2006, Conduit Europe SA v Telefónica de España SAU ................................................................................................ 189

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Table of Cases xxxvii Audiencia Provincial de Girona (secc no 1), 10.6.2004, Clau SA v Cepsa Estaciones de Servicio SA ....................................................................................................................... 155 Juzgado de Primera Instancia no 4 de Madrid, 7.6.2005, no 125/2005, Antena 3 TV v LNFP................................................................................................................................. 189 Juzgado de lo Mercantil no 5 de Madrid, 11.11.2005, no 36/2005, Conduit Europe SA v Telefónica de España SAU.................................................................................... 5, 189

Sweden Swedish Supreme Court, 1-3-07, Bornhols Trafikken A/S ............................................. 96, 99 Luftfartsverket ...................................................................................................................... 219

Switzerland Tribunal Fédéral, G SA v V SpA (1992) 118 II ATF 193, [1996] ECC 1 .......................... 249

United Kingdom American Cyanamid Co v Ethicon [1975] AC 396 (HL) .................................................... 215 An Bord Bainne Co-operative Ltd (Irish Dairy Board) v Milk Marketing Board [1984] 1 CMLR 519 (QB), on appeal [1984] 2 CMLR 584 (CA) ......................... 170, 187 Arkin v Borchard Lines Ltd et al (IV) [2003] EWHC 687 (QB) ................................ 209, 211 Attheraces Ltd and Anr v The British Horseracing Board & Anr [2005] EWHC 3015 (ChD) ..................................................................................................................... 226 Barrett et al v Innterpreneur Pub Co (GL) Ltd. et al [2000] ECC 106 (ChD) .................... 152 BCL Old Co Ltd DFL Old Co Ltd and PFF Old Co Ltd v Aventis SA, Rhodia Ltd, F Hoffmann-La Roche AG and Roche Products Ltd, Case No. 1028/5/7/04, Preliminary Judgment of 28 January 2005 and Consent Order of 24 November 2005 (CAT)........ 188 Bim Kemi AB v Blackburn Chemicals Ltd [2004] EWHC Comm 166 (QB) .................... 222 Blackburn Chemicals Ltd v Bim Kemi AB [2004] EWCA Civ 1490 (CA) .......................... 119 Bourgoin SA v Ministry of Agriculture, Fisheries and Food [1985] 3 All.ER 585 (QB), on appeal [1986] 1 CMLR 287 (CA) .............................................................................. 170 British Leyland v Wyatt [1979] 3 CMLR 79 ......................................................................... 17 Chiron Corp v Murex Diagnostic [1994] 1 CMLR 410 (CA).............................................. 150 Crehan v Inntrepreneur Pub Co et al [2003] EWHC 1510; [2003] EuLR 663 (ChD) ....... 122 Crehan v Inntrepreneur Pub Co CPC [2004] EWCA Civ 637; [2004] EuLR 693 (CA)..................................................................................................................22–4, 192 Cutsforth v Mansfield Inns [1986] All.ER 577 (QB) .......................................................... 217 Passmore v Morland plc et al [1999] 1 CMLR 1129; [1999] EuLR 501 (CA) .................... 152 Deans Foods Limited v Roche Products Limited, F Hoffmann-La Roche AG and Aventis SA, Case No. 1029/5/7/04, CAT Consent Order of 11 February 2005 (CAT).............. 188 Devenish Nutrition Ltd et al v Sanofi-Aventis SA (France) et al [2007] EWHC 2394 (ChD). ....................................................................................................................... 22 Easyjet v British Airways [1998] EuLR 350 (QB) ............................................................... 226

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xxxviii Table of Cases Emerson Electric Co et al v Morgan Crucible Company plc et al, Case No. 1077/5/7/07 (CAT) ........................................................................................................................184, 189 English Welsh & Scottish Railway Ltd v E.ON UK plc [2007] EWHC 599 (QB) .............. 160 ET Plus SA & Ors v Welter & Ors [2005] EWHC 2115 (QB) ............................................ 252 Garden Cottage Foods Ltd v Milk Marketing Board [1983] 2 All.ER 770 (HL) ................................................................................................................. 170, 215, 217 Gibbs Mew plc v Gemmell [1998] EuLR 588 (CA) ............................................................. 169 Panayiotou (George Michael) et al v Sony Music Entertainment (UK) Limited [1994] ECC 395 (ChD) ................................................................................................... 226 Hasselblad v Orbison [1985] QB 475; [1984] 3 CMLR 679 (CA) .............................. 104, 122 Healthcare at Home Ltd v Genzyme Ltd, Case No. 1060/5/7/06, [2006] CAT 29...... 188, 218 Hewlett-Packard v Expansys [2005] EWHC 1495 (ChD)................................................... 150 Holleran v Daniel Thwaites plc [1989] 2 CMLR 917 (ChD) ............................................. 217 Iberian UK v BPB Industries plc [1996] 2 CMLR 601 (ChD)............................... 17, 122, 229 ICI v Berk Pharmaceuticals [1981] 2 CMLR 75 .................................................................. 150 Inntrepreneur Estates Ltd v Mason [1993] 2 CMLR 293............................................... 35, 156 Inntrepreneur Pub Company (CPC) et al v Crehan [2006] UKHL 38 (HL) ...................... 123 ME Burgess et al v W Austin & Sons (Stevenage) Ltd and Harwood Park Crematorium Ltd, Case No 1088/5/7/07, currently pending (CAT) ............................. 189 Merson v Rover Group Ltd, 22 May 1992, unreported ......................................................... 17 MTV Europe v BMG Records (UK) Ltd et al [1997] EuLR 100 (CA)............. 29, 31, 112, 122 Napp Pharmaceutical Holdings Ltd v DGFT [2002] ECC 177 (CCAT) ........................... 226 Provimi Ltd v Aventis Animal Nutrition SA et al [2003] ECC 353 (QB) ............. 188, 252–3 Ransburg-Gema AG v Electrostatic Plant Systems Ltd [1989] 2 CMLR 712 (Pat Ct). ....... 150 Shearson Lehman Hutton Inc v Maclaine Watson & Co [1989] 3 CMLR 429 (QB) ......... 226 Sportswear SpA and Four Marketing Ltd v Stonestyle Ltd [2006] EWCA Civ 380 (CA)........................................................................................................................... 150 The Consumers Association v JJB Sports plc, Case No. 1078/7/9/07 (CAT) ............... 185, 189 W Maronier v B Larmer [2002] ILPr. 39 (CA) ................................................................... 258

USA Associated General Contractors of California v California State Council of Carpenters, 459 US 519 (1983) .......................................................................................................... 207 Associated Industries of New York State, Inc v Ickes, 134 F 2d 694 (2d Cir 1943) .................. 9 Atlantic Richfield Co v USA Petroleum Co, 495 US 328 (1990) ......................................... 207 Bell Atlantic Corp et al v Twombly et al, 550 US __ (2007) ............................................... 226 Blue Shield of Virginia v McCready, 457 US 465 (1982)..................................................... 192 Brunswick Corp v Pueblo Bowl-O-Mat, Inc, 429 US 477 (1977) ....................................... 207 Cargill Inc v Monfort of Colorado Inc 479 US 104 (1986) .................................................. 207 Chevron USA v National Resources Defense Council, 467 US 837 (1984)............................ 16 Den Norske Stats Oljeselskap AS v Heeremac vof et al, 241 F 3d 420 (5th Cir 2001) ........ 253 Empagran SA et al v F Hoffmann La Roche, Ltd et al, 315 F 3d 338 (DC Cir 2003) ......... 253 F Hoffmann La Roche, Ltd et al v Empagran SA et al, 542 US 1 (2004) ............................. 253 Hanover Shoe v United Shoe Machines Corp, 392 US 481 (1968) ......................... 199, 201–2 Illinois Brick Co v Illinois, 431 US 720 (1977) .................................................................... 202

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Table of Cases xxxix In Re Vitamins Antitrust Litigation, Misc No 99-197 (DDC, 23 Jan 2002)....................... 101 In Re Vitamins Antitrust Litigation, Misc No 99-197 (DDC, 30 Sept 2002) ..................... 101 In Re Methionine Antitrust Litigation, No C-99-3491-CRB (NDCal, 29 July 2002) ........ 101 In Re Microsoft Corp, MBD No 06-10061-MLW................................................................ 102 Intel Corp v Advanced Micro Devices, Inc, 542 US 241 (2004) ........................................... 102 Krugman v Christie’s International plc, 284 F 3d 384 (2d Cir 2002) ................................. 253 Turicentro SA et al v American Airlines Inc et al, 303 F 3d 293 (3rd Cir 2002) ................. 253 United Phosphorus Ltd et al v Angus Chemical Company et al, 322 F 3d 942 (7th Cir 2003) .................................................................................................................. 253 United States v Topco Associates Inc, 405 US 596 (1972) ................................................... 190

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LEGISLATION, RESOURCES AND OFFICIAL DOCUMENTS E UROPEAN U NION

Treaties Treaty on the European Union (TEU) ................................................................................ 47 Treaty Establishing the European Community (EC Treaty – Treaty of Rome) .................................... vii–viii, xiv, 25, 27–33, 49, 51, 62, 69,–70, 84, 93, 136, 142, 149–56, 162, 168, 179–180, 182–83, 190, 219, 255, 257–58 Treaty Establishing a Constitution for Europe .................................................................. 149 Treaty of Amsterdam .................................................................................................... 42, 113 Treaty Establishing the European Coal and Steel Community (ECSC Treaty) . 51, 116, 166 Treaty of Lisbon ...........................................................................................................149, 190

Regulations Reg 17 of 6 February 1962—First Regulation Implementing Articles 85 and 86 of the Treaty [1962] JO L13/204. .................. vii, 4–5, 25, 27–9, 31–4, 37, 39, 46, 54, 61, 79, 162 Reg 1612/1968 of 15 October 1968 on Freedom of Movement for Workers within the Community [1968] JO L257/2 ....................................................................................... 177 Reg 2988/1974 of 26 November 1974 Concerning Limitation Periods in Proceedings and the Enforcement of Sanctions under the Rules of the European Economic Community Relating to Transport and Competition [1974] OJ L319/1 . .................. 229 Reg 4087/1988 of 30 November 1988 on the Application of Article 85(3) of the Treaty to Categories of Franchise Agreements [1988] OJ 359/46. ................................. 68 Reg 4064/1989 of 21 December 1989 on the Control of Concentrations between Undertakings [1989] OJ L395/1, Corrigendum [1990] OJ L257/14, as amended by Council Regulation 1310/1997 of 30 June 1997 [1997] OJ L180/1, Corrigendum [1998] OJ L40/17. ................................................................................. 36–7 Reg 240/1996 of 31 January 1996 on the Application of Article 85(1) of the Treaty to Certain Categories of Technology Transfer Agreements [1996] OJ L31/2. ............. 36, 69 Reg 1215/1999 of 10 June 1999 Amending Regulation 19/65/EEC on the Application of Article 81(3) of the Treaty to Certain Categories of Agreements and Concerted Practices [1999] OJ L148/1 .............................................................................................. 33 Reg 2790/1999 of 22 December 1999 on the Application of Article 81(3) of the Treaty to Categories of Vertical Agreements and Concerted Practices [1999] OJ L336/21. ........................................................................................... 33–4, 68–9, 75, 156

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xlii Legislation, Resources and Official Documents Reg 1346/2000 of 29 May 2000 on Insolvency Proceedings [2000] OJ L nbmj160/1. .... 144 Reg 1347/2000 of 29 May 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters and in Matters of Parental Responsibility for Children of both Spouses [2000] OJ L160/19. .............................................................. 144 Reg 2658/2000 of 29 November 2000 on the Application of Article 81(3) of the Treaty to Categories of Specialisation Agreements [2000] OJ L304/7. .................... 34, 69 Reg 2659/2000 of 29 November 2000 on the Application of Article 81(3) of the Treaty to Categories of Research and Development Agreements [2000] OJ L304/3. ......... 34, 69 Reg 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters [2001] OJ L12/1. ............................................................................. 135–6, 144, 250–1, 253–6, 259 Reg 1049/2001 of 30 May 2001 Regarding Public Access to European Parliament, Council and Commission Documents [2001] OJ L145/43. ............... 100–1, 110–11, 112 Reg 1206/2001 of 28 May 2001 on Cooperation between the Courts of the Member States in the Taking of Evidence in Civil and Commercial Matters [2001] OJ L174/1. ......................................................................................................................... 93 Reg 1400/2002 of 31 July 2002 on the Application of Article 81(3) of the Treaty to Categories of Vertical Agreements and Concerted Practices in the Motor Vehicle Sector [2002] OJ L203/30. ................................................................... 34, 104, 156 Reg 1/2003 of 16 December 2002 on the Implementation of the Rules on Competition Laid down in Articles 81 and 82 of the Treaty [2003] OJ L1/1. ............................................ vii, x, xiv, xv, 2–3, 15, 19–20, 28, 37, 42–3, 45, 53–5, 59–62, 65–6, 69–72, 73, 75–80, 82–3, 85, 87–9, 91–3, 95–6, 98–9, 102–7, 109–10, 112–15, 118, 119–20, 125–7, 129, 131–2, 137–139, 141, 146, 151, 153, 160, 164, 178, 188, 194, 217, 224, 228–9, 231, 251 Reg 358/2003 of 27 February 2003 on the Application of Article 81(3) of the Treaty to Certain Categories of Agreements, Decisions and Concerted Practices in the Insurance Sector [2003] OJ L53/8. ............................................................................. 34, 69 Reg 2201/2003 of 27 November 2003 Concerning Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters and the Matters of Parental Responsibility, Repealing Regulation 1347/2000 [2003] OJ L338/1. ............ 144 Reg 139/2004 of 20 January 2004 on the Control of Concentrations between Undertakings (the EC Merger Regulation) [2004] OJ L24/1. .................................... 36–9 Reg 772/2004 of 7 April 2004 on the Application of Article 81(3) of the Treaty to Categories of Technology Transfer Agreements [2004] OJ L123/11. ................ 34, 156 Reg 805/2004 of 21 April 2004 Creating a European Enforcement Order for Uncontested Claims [2004] OJ L143/15. ............................................................... 144, 256 Reg 2006/2004 of 27 October 2004 on Cooperation between National Authorities Responsible for the Enforcement of Consumer Protection Laws (the Regulation on Consumer Protection Cooperation) [2004] OJ L364/1. ........................................... 93 Reg 861/2007 of 11 July 2007 Establishing a European Small Claims Procedure [2007] OJ L199/1 ............................................................................................................ 234 Reg 864/2007 of 11 July 2007 on the Law Applicable to Non-contractual Obligations (‘Rome II’) [2007] OJ L199/40 .............................................. 213, 242, 245–7 Reg 1393/2007 of 13 November 2007 on the Service in the Member States of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Service of Documents) [2007] OJ L324/79. ................................................................. 144

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Legislation, Resources and Official Documents xliii

Regulation Proposals Commission Proposal for a Council Regulation on the Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty and Amending Regulations (EEC) No 1017/68, (EEC) No 2988/74, (EEC) No 4056/86 and (EEC) No 3975/87 (‘Regulation Implementing Articles 81 and 82 of the Treaty’), COM(2000)582 final, [2000] OJ C365E/284. .................................................................. 59 Commission Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Non-contractual Obligations (‘Rome II’), COM(2003) 427 final ........................................................................................................................... 212 Commission Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Contractual Obligations (‘Rome I’), COM(2005)650 final .................................................................................................................................. 242 Commission Amended Proposal for a European Parliament and Council Regulation on the Law Applicable to Non-contractual Obligations (‘Rome II’), COM(2006) 83 final. .......................................................................................... 212–14, 242, 245–7, 249

Directives Dir 84/450/EEC of 10 September 1984 Relating to the Approximation of the Laws, Regulations and Administrative Provisions of the Member States Concerning Misleading Advertising,[1984] OJ L250/17 ................................................................... 231 Dir 85/374/EEC of 25 July 1985 on the Approximation of the Laws, Regulations and Administrative Provisions of the Member States Concerning Liability for Defective Products [1985] OJ L210/29 ......................................................... 143, 197, 205 Dir 85/577/EEC of 20 December 1985 to Protect the Consumer in Respect of Contracts Negotiated Away from Business Premises [1985] OJ L372/31. .................. 143 Dir 86/653/EEC of 18 December 1986 on the Co-ordination of the Laws of the Member States Relating to Self-employed Commercial Agents [1986] OJ L382/17 ....................................................................................................... 239, 242, 248 Dir 89/665/EEC of 21 December 1989 on the Coordination of the Laws, Regulations and Administrative Provisions Relating to the Application of Review Procedures to the Award of Public Supply and Public Works Contracts [1989] OJ L395/33, Corrigendum [1990] OJ L34/30. .................................................................................... 143 Dir 92/13/EEC of 25 February 1992 Coordinating the Laws, Regulations and Administrative Provisions Relating to the Application of Community Rules on the Procurement Procedures of Entities Operating in the Water, Energy, Transport and Telecommunications Sectors [1992] OJ L76/14. ................................. 143 Dir 93/13/EEC of 5 April 1993 on Unfair Terms in Consumer Contracts [1993] OJ L95/29. ............................................................................................................... 143, 240 Dir 97/55/EC of 6 October 1997 Amending Directive 84/450/EEC Concerning Misleading Advertising so as to Include Comparative Advertising [1997] OJ L290/18 .............................................................................................................. 143, 231 Dir 97/80 of 15 December 1997 on the Burden of Proof in Cases of Discrimination Based on Sex [1998] OJ L14/6. ............................................................................... 143, 231

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xliv Legislation, Resources and Official Documents Dir 98/27 of 19 May 1998 on Injunctions for the Protection of Consumers’ Interests [1998] OJ L166/51. .................................................................................. 143, 218 Dir 1999/44/EC of 25 May 1999 on Certain Aspects of the Sale of Consumer Goods and Associated Guarantees [1999] OJ L171/12. ................................................ 143 Dir 2000/31/EC of 8 June 2000 on Certain Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market (‘Directive on Electronic Commerce’) [2000] OJ L178/1. ........................................................ 93, 143 Dir 2000/35 of 29 June 2000 on Combating Late Payment in Commercial Transactions [2000] OJ L200/35. ........................................................................... 143, 213 Dir 2000/43/EC of 29 June 2000 Implementing the Principle of Equal Treatment between Persons irrespective of Racial or Ethnic Origin [2000] OJ L180/22. ............. 143 Dir 2000/78/EC of 27 November 2000 Establishing a General Framework for Equal Treatment in Employment and Occupation [2000] OJ L303/16. ..................... 143 Dir 2002/8/EC of 27 January 2003 to Improve Access to Justice in Cross-border Disputes by Establishing Minimum Common Rules Relating to Legal Aid for Such Disputes [2003] OJ L26/41. ........................................................................... 144, 236 Dir 2002/73/EC of 23 September 2002 Amending Council Directive 76/207/EEC on the Implementation of the Principle of Equal Treatment for Men and Women as Regards Access to Employment, Vocational Training and Promotion, and Working Conditions [2002] OJ L269/15. ...................................................................... 143 Dir 2003/35/EC of 26 May 2003 Providing for Public Participation in Respect of the Drawing up of Certain Plans and Programmes Relating to the Environment and Amending with Regard to Public Participation and Access to Justice Council Directives 85/337/EEC and 96/61/EC [2003] OJ L156/17. ........................................... 143 Dir 2004/35/EC of 21 April 2004 on Environmental Liability with Regard to the Prevention and Remedying of Environmental Damage [2004] OJ L143/56. .............. 143 Dir 2004/48/EC of 29 April 2004 on the Enforcement of Intellectual Property Rights [2004] OJ L157/45, Corrigendum [2004] OJ L195/16. ......................... 143, 208, 231, 234 Dir 2004/113/EC of 13 December 2004 Implementing the Principle of Equal Treatment between Men and Women in the Access to and Supply of Goods and Services [2004] OJ L373/37...................................................................................... 143 Dir 2005/29/EC of 11 May 2005 Concerning Unfair Business-to-consumer Commercial Practices in the Internal Market and Amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) [2005] OJ L149/22. .......... 143 Dir 2006/54/EC of 5 July 2006 on the Implementation of the Principle of Equal Opportunities and Equal Treatment of Men and Women in Matters of Employment and Occupation (Recast) [2006] OJ L204/23................................................................. 143

Directive Proposals Commission Proposal for a Dir Amending Council Dirs 89/665/EEC and 92/13/EEC with Regard to Improving the Effectiveness of Review Procedures Concerning the Award of Public Contracts, COM(2006)195 final ........................................................ 143

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Decisions Commission Dec 82/628/EEC of 18 August 1982 (Distribution system of Ford Werke AG–interim measure) [1982] OJ L256/20 ..................................................................... 216 Commission Dec 85/202/EEC of 19 December 1984 (Wood pulp) [1985] OJ L85/1. ..... 89 Commission Dec 96/547/EC of 17 July 1996 (Phoenix/Global One) [1996] OJ L239/57. ....................................................................................................................... 32 Commission Dec 98/531/EC of 11 March 1998 (Van den Bergh Foods Ltd.) [1998] OJ L246/1. ........................................................................................... 113, 128, 144 Commission Dec 1999/60/EC of 21 October 1998 (Pre-Insulated Pipe Cartel) [1999] OJ L24/1. ............................................................................................................... 22 Commission Dec 99/230/EC of 24 February 1999 (Whitbread) [1999] OJ L88/26. ................................................................................................................... 122–3 Commission Dec 1999/473/EC of 16 June 1999 (Bass) [1999] OJ L186/1. ..................... 122 Commission Dec 99/474/EC of 16 June 1999 (Scottish and Newcastle) [1999] OJ L186/28. ..................................................................................................................... 122 Commission Dec 99/687/EC of 8 September 1999 (Nederlandse Vereniging van Banken et al) [1999] OJ L271/28. .................................................................................... 64 Council Dec 2001/470/EC of 28 May 2001 Establishing a European Judicial Network in Civil and Commercial Matters [2001] OJ L174/25. .................................. 144 Commission Dec 2002/759/EC of 5 December 2001 (Luxembourg Brewers) [2002] OJ L253/21 .......................................................................................................... 242 Commission Dec 2003/675/EC of 30 October 2002 (PO Video Games, PO Nintendo Distribution and Omega-Nintendo) [2003] OJ L255/33. ............................. 23 Commission Dec 2004/207/EC of 16 July 2003 (T-Mobile Deutschland/O2 Germany: Network Sharing Rahmenvertrag) [2004] OJ L75/32. .................................. 59 Commission Dec 2005/480/EC of 30 April 2004 (Compagnie Maritime Belge SA) [2005] OJ L171/28. ......................................................................................................... 119 Commission Dec of 24 June 2004 (PO/Barême d’honoraires de l’Ordre des Architectes belges) .......................................................................................................... 120 Commission Dec 2005/396/EC of 19 January 2005 (Joint selling of the media rights to the German Bundesliga) [2005] OJ L134/46. ................................................... 62 Council Framework Dec 2005/214/JHA of 24 February 2005 on the Application of the Principle of Mutual Recognition to Financial Penalties [2005] OJ L76/16. ............ 93 Commission Dec of 15 June 2005 (AstraZeneca) ............................................................. 194 Commission Dec of 25 August 2005 (Case COMP/M.3687-Johnson & Johnson/Guidant). .......................................................................................................... 231

Other EU Documents (Papers, Notices, Guidelines, Communications) Assemblée parlementaire européenne, Documents de Séance 1961–1962, Rapport Deringer, 7 septembre 1961, Document 57. .................................................................. 163 Commission Européenne, La réparation des conséquences dommageables d’une violation des articles 85 et 86 du Traité instituant la CEE, Série Concurrence No. 1 (Brussels, 1966).......................................................................................................163

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xlvi Legislation, Resources and Official Documents Commission des Communautés européennes, Le principe de subsidiarité, Communication de la Commission au Conseil et au Parlement européen, SEC(92) 1990final ............................................................................................................................ 46 Green Paper on Vertical Restraints in EU Competition Policy, COM(96)721, January 1997 ................................................................................................................ 35, 40 Commission Notice on Cooperation between National Courts and the Commission in Applying Articles 85 and 86 of the EEC Treaty [1993] OJ C39/6. ..................... 12, 163 Commission Notice on Cooperation between National Competition Authorities and the Commission in Handling Cases Falling within the Scope of Articles 85 or 86 of the EC Treaty [1997] OJ C313/3 ........................................................................ 45 Commission White Paper of 28 April 1999 on Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty, COM(1999)101 final, [1999] OJ C132/1. ................................................................................................. 39–42, 48 Commission Notice— Guidelines on Vertical Restraints [2000] OJ C291/1 .................... 33 Commission Notice—Guidelines on the Applicability of Article 81 of the EC Treaty to Horizontal Cooperation Agreements [2001] OJ C3/2 .................................... 57 Commission Communication of 11 July 2001 to the Council and the European Parliament on European Contract Law, COM(2001)398 final [2001] OJ C255/1. ....................................................................................................................... 144 Commission Green Paper on European Union Consumer Protection, COM(2001)531 final. ...................................................................................................... 144 Commission Notice on Agreements of Minor Importance Which Do not Appreciably Restrict Competition under Article 81(1) of the Treaty Establishing the European Community (de minimis) [2001] OJ C368/13. .............................................................. 57 Commission Evaluation Report on the Transfer of Technology Block exemption Regulation no 240/96, Doc. COMP/REG.240/96 (2002), available at http://ec.europa.eu/comm/competition/antitrust/technology_transfer/en.pdf). ......... 36 Joint Statement of the Council and the Commission on the Functioning of the Network of Competition Authorities, Doc. 15435/02 ADD 1 of 10 Dec 2002, available at http://register.consilium.eu.int/pdf/en/02/st15/15435-a1en2.pdf. ............. 79 Communication from the Commission to the European Parliament and the Council, A More Coherent European Contract Law, An Action Plan [2003] OJ C63/1. ......................................................................................................................... 144 Commission Notice on Co-operation within the Network of Competition Authorities [2004] OJ C101/43. .............................................................................. 60, 164 Commission Notice on the Co-operation between the Commission and the Courts of the EU Member States in the Application of Articles 81 and 82 EC [2004] OJ C101/54. ..................................................................................................... 12, 60 Commission Notice on Informal Guidance Relating to Novel Questions Concerning Articles 81 and 82 of the EC Treaty that Arise in Individual Cases (Guidance Letters) [2004] OJ C101/78. ............................................................................................. 60 Commission Notice on the Handling of Complaints by the Commission under Articles 81 and 82 of the EC Treaty [2004] OJ C101/65. .......................................... 12, 60 Commission Notice—Guidelines on the Effect on Trade Concept Contained in Articles 81 and 82 of the Treaty [2004] OJ C101/81. ...................................... 60, 65, 96 Commission Notice—Guidelines on the Application of Article 81(3) of the Treaty [2004] OJ C101/97. ............................................................................................... 60

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Legislation, Resources and Official Documents xlvii Commission MEMO/04/217, Commitment Decisions (Article 9 of Council Regulation 1/2003 Providing for a Modernised Framework for Antitrust Scrutiny of Company Behaviour), Frequently Asked Questions and Answers, 17 September 2004. ................................................................................................... 89, 138 Commission MEMO/05/489, European Commission Green Paper on Damages for Breach of EC Treaty Antitrut Rules - Frequently Asked Questions and Answers, 20 December 2005 ................................................................................................................. ............................................................................................................................ 1, 18, 180–1 Commission MEMO/06/357, Competition: Commission Proposes Changes to the Leniency Notice–Frequently Asked Questions, 29 September 2006 ....................... 21 Commission MEMO/07/544, Competition: Commission Action against Cartels–Questions and Answers, 5 December 2007 ................................................ 21, 230 Commission Green Paper on Damages Actions for Breach of the EC Antitrust Rules, COM(2005)672 final. ...................................... 11, 15, 18, 21, 214, 231, 233–4, 236 Commission Staff Working Paper, Annex to the Green Paper on Damages Actions for Breach of the EC Antitrust Rules, SEC(2005)1732. ............ 11, 201, 204, 206, 209–11, 215, 219, 231, 234, 238, 246 Commission DG Competition Discussion Paper on the Application of Article 82 of the Treaty to Exclusionary Abuses, Brussels, December 2005. .................................. 13 Commission Interpretative Communication on the Community Law Applicable to Contract Awards not or not Fully Subject to the Provisions of the Public Procurement Directives [2006] OJ C179/2. .................................................................. 143 Commission Notice on Immunity from Fines and Reduction of Fines in Cartel Cases [2006] OJ C298/17. .......................................... 20, 21, 42, 100–102, 110, 111 Commission Green Paper on the Review of the Consumer Acquis, COM(2006)744 final. ............................................................................................. 144, 236 Opinion INT/306 of the European Economic and Social Committee on the Green Paper – Damages Actions for Breach of the EC Antitrust Rules COM(2005) 672 final, Brussels, 26 October 2006 .........................................................180 European Parliament Resolution of 25 April 2007 on the Green Paper on Damages Actions for Breach of the EC Antitrust Rules (2006/2207(INI)). ................ 180 Draft Commission Notice on the Conduct of Settlement Proceedings in View of the Adoption of Decisions Pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in Cartel Cases, [2007] OJ C255/51. ............................... 100

Reports on Competition Policy Commission IVth Report on Competition Policy— 1974 (Brussels/Luxembourg, 1975). ................................................................................................................................. 68 Commission Xth Report on Competition Policy— 1980 (Brussels/Luxembourg, 1981). ............................................................................................................................... 130 Commission XIIIth Report on Competition Policy—1983 (Brussels, 1984) ....................... 163 Commission XXIXth Report on Competition Policy—1999 (Brussels/Luxembourg, 2000). ........................................................................................................................... 34, 94 Commission XXXth Report on Competition Policy—2000 (Brussels/Luxembourg, 2001). ................................................................................................................................. 94

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xlviii Legislation, Resources and Official Documents Commission XXXIst Report on Competition Policy—2001 (Brussels/Luxembourg, 2002). ................................................................................................................................. 60 Commission XXXIVth Report on Competition Policy—2004 (Brussels/Luxembourg, 2005). ............................................................................................................... 3, 95, 99, 141 Commission XXXVth Report on Competition Policy—2005 (Brussels/Luxembourg, 2006). ..................................................................................................................... 11, 18, 99 Commission XXXVIth Report on Competition Policy—2006 (Brussels/Luxembourg, 2007)........................................................................................................................... 99, 104 Commission Staff Working Document, Annex to the Report on Competition Policy 2006, SEC(2007)860. ........................................................................................................ 99

N ATIONAL Austria Civil Code (ABGB) ............................................................................................................. 186 Code of Civil Procedure ....................................................................................................... 16 Unfair Competition Act (UWG) ........................................................................................ 215

Belgium Act of 1971 on Commercial Practices ................................................................................ 215 Act of 1991 on the Protection of Economic Competition (Loi sur la Protection de la Concurrence Economique) ................................................................................................. 45 Arrêté Royal of 25 April 2004 ................................................................................................ 92 Civil Code ............................................................................................................................ 186 Code Judiciaire ..................................................................................................................... 222

Denmark Competition Act No. 384 of 1997 ........................................................................................ 66 Administration of Justice Consolidated Act no. 1001 of 2006 ......................................... 222

Finland Competition Restrictions Act of 1992 ............................................................... 162, 192, 195 Compensation Act of 1974 ................................................................................................. 186

France Code Civil ..................................................................................................................... 155, 186 Code de Commerce ............................................. 8, 98, 100, 105, 158, 163, 191, 215, 219, 228

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Legislation, Resources and Official Documents xlix Conseil de la concurrence, Avis du 21 septembre 2006 relatif à l’introduction de l’action de groupe en matière de pratiques anticoncurrentielles ...................................... 235

Germany Act against Restraints of Competition 1998 (GWB) ............................ 19, 96, 103, 105, 118, 162, 186, 192, 208, 215, 216, 240, 244 Civil Code (BGB) ................................................................................................ 155, 159, 192 Code of Civil Procedure (ZPO) ........................................................................................... 96 Monopolkommission, Sondergutachten von 30-10-01 gemäß § 44 Abs. 1 Satz 4 GWB, Folgeprobleme der europäischen Kartellverfahrensreform, available at http://www.monopolkommission.de/sg_32/text_s32_d.pdf. ..................................... 161 Bundeskartellamt, Private Kartellrechtsdurchsetzung: Stand, Probleme, Perspektiven, Diskussionspapier für die Sitzung des Arbeitskreises Kartellrecht am 26. September 2005, available at http://www.bundeskartellamt.de/wDeutsch/download/pdf/ Diskussionsbeitraege/05_Proftag.pdf. .................................................................... 172, 212

Greece Civil Code ............................................................................................ 155, 159, 186, 215, 219 Code of Civil Procedure L. 703/1977 on the Control of Monopolies and Oligopolies and the Protection of Free Competition ............................................................................ 73, 96, 103, 118, 240 Greek Competition Committee, Press Release of 24 October 2005 on the Availability of Interim Measures Greek Competition Committee, Opinion 8/III/2003 of 30 June 2003 ............................ 155

Ireland Competition Act 2002 ................................................................................. 162, 213, 215, 220

Italy Civil Code .................................................................................................................... 186, 215 Code of Civil Procedure ....................................................................................................... 97 Legge 10 ottobre 1990, n. 287 (Competition Act) ......................................................... 66, 163 Legge 31 maggio 1995, n. 218 Legge 18 giugno 1998, n. 192 ............................................................................................... 160 Legge 23 dicembre 2000, n. 388 (‘Legge finanziaria 2001’) ................................................. 237 Disegno di Legge n. 1817 (‘Legge finanziaria 2008’) .......................................................... 235

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l Legislation, Resources and Official Documents Netherlands Civil Code ............................................................................................................................ 186 1997 Competition Act .......................................................................................................... 45

Portugal Civil Code ............................................................................................................................ 186

Spain Civil Code .................................................................................................................... 155, 186 Competition Act 16/1989 ..................................................................................................... 96 Competition Act 15/2007 ..................................................................................................... 96

Sweden 1993 Competition Act ................................................................................... 98, 107, 162, 195 2002 Group Proceedings Act .............................................................................................. 234

Switzerland Federal Act on Cartels and Other Restraints of Competition of 1995 ............................. 162 Federal Act on Private International Law of 1987 ..................................................... 241, 243

United Kingdom Competition Act 1998 ..................................................... 18, 19, 66, 96, 118, 183–5, 226, 234 Enterprise Act 2002 ....................................................................................... 15, 19, 71, 184–5 Civil Procedure Rules (CPR) 1998, SI 1998/3132 ............................................................. 185 CPR Practice Direction—Competition Law—Claims Relating to the Application of Articles 81 and 82 of the EC Treaty and Chapters I and II of Part I of the Competition Act 1998 ............................................................................................ 103, 124 CPR Practice Direction 30—Transfer CPR Practice Direction 52—Appeals ................................................................................ 103 CPR Practice Direction 19b—Group Litigation Specified Body (Consumer Claims) Order 2005, SI 2005/2365 ....................................... 185 Competition Appeal Tribunal Rules 2003, SI 2003/1372 ............................................. 184–5 Department of Trade and Industry, Productivity in the UK: Enterprise and the Productivity Challenge (June 2001) ................................................................................ 184 Department of Trade and Industry, Productivity and Enterprise, A World Class Competition Regime (July 2001) ..................................................................................... 184

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Legislation, Resources and Official Documents li Department of Trade and Industry, Modernisation—A Consultation on the Government’s Proposals for Giving Effect to Regulation 1/2003 and for Re-alignment of the Competition Act 1998 (April 2003). ........................................................................ 55 OFT Guidance 442, Modernisation, Understanding Competition Law (December 2004). ............................................................................................................. 71 OFT Discussion Paper, Private Actions in Competition Law: Effective Redress for Consumers and Business (April 2007) ....................................................... 185, 204, 236 OFT Recommendations, Private Actions in Competition Law: Effective Redress for Consumers and Business (November 2007). ................................................ 21, 186, 235–6

United States Antitrust Criminal Penalty Enhancement and Reform Act 2004 ...................................... 20 Class Action Fairness Act 2005 ........................................................................................... 233 Clayton Act 1914 ......................................................................... 162, 214, 230, 233, 236, 238 Sherman Act 1890 ............................................................................................................... 162 Federal Rules of Civil Procedure ........................................................................................ 101 Antitrust Modernization Commission, Report and Recommendations (April 2007), available at http://www.amc.gov/report_recommendation/toc.htm. .......................... 161

E UROPEAN

AND

I NTERNATIONAL C ONVENTIONS

1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, Consolidated Version [1998] OJ C27/1 .................... 250 1980 Rome Convention on the Law Applicable to Contractual Obligations, Consolidated Version [2005] OJ C334/1. ...................................................... 242–3, 246–7 Report on the Convention on the Law Applicable to Contractual Obligations by Mario Giuliano, Professor, University of Milan and Paul Lagarde, Professor, University of Paris I [1980] OJ C282/1 .......................................................................... 241 2005 Hague Convention on Choice of Court Agreements, available at http://www.hcch.net. .............................................................................................. 250, 254

O THER UNCTAD Model Law on Competition ............................................................................. 163

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1 EC Private Antitrust Enforcement I. A DELIMITATION OF EC PRIVATE ANTITRUST ENFORCEMENT: DEFINITIONS AND MODALITIES

(a) Definition A definition of private enforcement is called for at the outset. If private enforcement were to be given a rather broad meaning, ie if it meant enforcement of the EC antitrust rules through the initiative or intervention of private parties, then one could argue that such definition seemed to cover cases of private parties acting also as complainants to competition enforcement agencies. This has been termed ‘privately triggered public enforcement’.1 Indeed, if the criterion is so general, the conclusion is that there is already a developed system of private enforcement at the central level of EC competition law enforcement, ie at the Commission level. Complainants in EC competition cases, as a result more of the Community Courts’ jurisprudence than of EC legislation, enjoy a rather elaborately defined legal status and are also accepted as players in antitrust enforcement. However, this is not how private antitrust enforcement should be conceived. Therefore, that concept can be further delimited: any private parties involved in the enforcement of antitrust rules must act as litigants in litigation against the perceived offenders. However, even so, such delimitation would not avoid including cases where private parties participate in on-going litigation, which takes place primarily between an administrative authority and a defendant. In such cases private parties may join such litigation as interveners, if they can prove a legitimate interest. This could be the case at the Community level, eg a third party intervention at the level of the Community Courts,2 or at the national level depending on national procedural rules, eg a third party intervention in review proceedings following a decision of a national antitrust authority. Such intervention cannot make this litigation private antitrust enforcement. The characteristic element of the latter is that it leads to some sort of civil sanction against the offender: damages, restitution, injunctions, nullity of a contractual relationship, non-invocability of certain claims, based for example on contract or on unfair competition law.3 Therefore, the mere intervention of a 1 See Jacobs and Deisenhofer, ‘Procedural Aspects of the Effective Private Enforcement of EC Competition Rules: A Community Perspective’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 197; Komninos, ‘Introduction’ in ibid, at p xxiii. 2 Art 40(2) ECJ Statute. 3 The European Commission appears now to accept these forms of civil litigation as ‘private enforcement’, although it has so far concentrated only on energising damages actions. See Commission MEMO/05/489, European Commission Green Paper on Damages for Breach of EC Treaty Antitrust Rules—Frequently Asked Questions, 20 Dec 2005, accompanying the Green Paper on damages actions, under the heading ‘What does the Green Paper deal with?’.

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2 EC Private Antitrust Enforcement private party in public enforcement litigation does not turn the latter into private enforcement litigation, although such intervention may be beneficial to the effectiveness of public enforcement (eg because of the pooling of public and private resources in the detection of a cartel). Then, one should not forget that even such intervention in public enforcement cases may be relevant for private enforcement, when the latter follows in time and relies on the former, if, eg, facts established in public enforcement litigation are used by the parties in subsequent civil litigation. As a consequence, private enforcement is defined more appropriately by reference to litigation, in which private parties advance independent civil claims or counterclaims based on the EC competition provisions. Such a definition would basically cover civil litigation, but it would be broad enough to encompass third party civil claims attached to civil and/or administrative public enforcement proceedings. This is not affected by the fact that a national antitrust authority, or, indeed, the EC Commission, may intervene as amicus curiae in civil proceedings between private parties. The litigation in such cases will basically retain the characteristics of private enforcement, but with some additional elements of public enforcement. We should note that the Commission has never proceeded in such categorisations either with regard to private antitrust enforcement as such or with regard to the role of courts. This may create some confusion, since national courts may be assigned different roles in the Member States (sometimes difficult to distinguish) and there are, indeed, various instances in which the proceedings even before a national civil court cannot be said to constitute ‘private enforcement’.4

(b) The Modalities of EC Private Antitrust Enforcement (i) Sword—Shield Litigation In order to proceed to the specifics of private antitrust enforcement one must also first examine the modalities of the application of EC competition law by civil courts. A first differentiation can be made between shield and sword litigation. EC competition law may be pleaded in civil litigation as a shield. This may be so in contractual liability cases, where the plaintiff claims specific performance of the contract or alleges its breach by the defendant and claims damages, while the latter raises the nullity of the contract or of parts thereof.5 4 See Council Reg 1/2003 of 16 Dec 2002 on the Implementation of the Rules on Competition Laid down in Articles 81 and 82 of the Treaty [2003] OJ L1/1, Rec 21, where reference is made to ‘courts of the Member States that apply Articles 81 and 82 of the Treaty, whether applying these rules in lawsuits between private parties, acting as public enforcers or as review courts’, and para 2 of the Notice on cooperation between the Commission and national courts (below n 59), using similar terminology. This insistence on the organic rather than on the functional criterion has been criticised as confusing, since it fails to distinguish among the different functions of courts (see L Idot, Droit communautaire de la concurrence, Le nouveau système communautaire de mise en œuvre des articles 81 et 82 CE (Paris/Brussels, 2004) 80; Blaise and Idot, ‘Chronique concurrence (1er janvier 2002–31 mars 2003): Règlement 1/2003 du 16 décembre 2002’ (2003) 39 RTDE 287, at 331; Idot, ‘2004: L’an 1 du nouveau droit de la concurrence?’ [2004-1] Europe 3, at 4; Schurmans, ‘Le rôle du juge dans la mise en œuvre du droit européen de la concurrence’ in Nihoul (ed), La décentralisation de l’application du droit de la concurrence, Un rôle accru pour le practicien? (Brussels/Louvain-la-Neuve, 2004) 93. On another occasion, we have stressed that the terms ‘authority’ and ‘court’ used in the new Reg 1/2003 (eg Arts 5, 6, 15, 35) should be treated independently of the terms ‘court’ or ‘tribunal’ used in Art 234 EC: Komninos, ‘Article 234 EC and National Competition Authorities in the Era of Decentralisation’ (2004) 29 ELRev 106, at 112. 5 In reality the situation will be a bit more complicated, since the plaintiff will most likely counter-plead the compensating qualities of the agreement that make it lawful under Art 81(3) EC.

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Definitions and Modalities 3 Another instance is unfair competition actions against ‘free riders’, when EC competition law is pleaded in defence. These kinds of civil litigation (‘shield litigation’) cannot directly account for active private enforcement of competition law, although litigation tactics may in certain circumstances elevate shield litigation to a very powerful and pro-active instrument in competition law enforcement.6 Thus, prospective plaintiffs, instead of bringing an action themselves against a monopolist that excludes them from the market through foreclosure, may decide to encourage the monopolist’s contracting parties to breach their contracts and agree to support and indemnify them in any action brought by the monopolist. In this case the competition provisions will be pleaded as a defence by the defendants, though in essence the whole mechanism will have been instigated by a third party in a pro-active way. Cases where competition law, in particular Article 81(2) EC, has been raised as a shield by defendants before national courts have been numerous. Their contribution towards the development of a more effective system of private enforcement varies from very significant to minimal.7 In most cases the competition rules are not invoked by the victim of a restraint but by participants therein. They are pleaded not because and whenever competition is endangered, but only incidentally. In addition, they are often applied when competition has already been harmed and the compensatory and deterrent function of such litigation is minimal.8 From a private enforcement perspective, cases, where competition law is pleaded as a sword, are doubtless more significant.9 Usually a party puts forward a claim for injunction, damages, restitution or interim measures that is intended to compensate and/or to put an end to the harm caused by the infringement of the EC competition rules.10 While injunctions (usually of an interlocutory nature) have been granted quite often by EU Member States’ courts, damages awards have been rare in Europe as opposed to the US. Yet, damages claims are thought of as the most important limb of private antitrust enforcement.

(ii) A titre principal—à titre incident Litigation A second differentiation can be made between litigation, where EC competition law constitutes the main or the subsidiary issue (à titre principal and à titre incident). This categorisation found favour quite early in theory and practice, although, as we argue, it is not successful and, indeed, has lately been abandoned. EC competition law is applied as the main or principal issue of the dispute (à titre principal) usually before specialised courts (competition tribunals) that are entrusted with the application of national and Community competition rules in a given EU Member State,11 or before ordinary—administrative or 6 The Commission considers such cases as falling into ‘private enforcement’. See Commission XXXIVth Report on Competition Policy—2004 (Brussels/Luxembourg, 2005) para 114, which refers to the national judgments that were communicated by Member States pursuant to Art 15(2) of Reg 1/2003 (above, n 4): ‘The overwhelming majority of those judgments (29) resulted from private enforcement action, in most cases aimed at the annulment of an agreement on the ground of its incompatibility with the EU competition rules’. 7 See Basedow, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 32. 8 See Jacobs and Deisenhofer, above n 1, 190. 9 See also Baudenbacher, ‘Panel Discussion: Administrative Antitrust Authorities: Adjudicative and Investigatory Functions’, in Hawk (ed), International Antitrust Law and Policy 2002, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2003) 441; Basedow, ‘Die Durchsetzung des Kartellrechts im Zivilverfahren’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Zwölftes St. Galler Internationales Kartellrechtsforum 2005 (Basle/Geneva/Munich, 2006) 354. 10 Another possibility is filing an action for a declaration of the nullity of an anti-competitive agreement (action en nullité). This type of actions is rare in practice. 11 Such is, eg, the case of the UK (CAT—Competition Appeal Tribunal).

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4 EC Private Antitrust Enforcement civil—courts exercising judicial review over decisions of national competition authorities.12 However, EC competition law may be the main issue even of civil proceedings before an ordinary civil court.13 Thus, in legal systems recognising the possibility of declaratory actions,14 the main issue of the litigation is the applicability or non-applicability of the competition provisions, and not the civil consequences thereof. These declaratory actions may, indeed, be preferred on occasions by market players, if the latter intend to use only the courts’ substantive law findings that enjoy res judicata effect, instead of pursuing civil sanctions. Such may be an action by a distributor against two suppliers when the former requests the court to declare the illegality of a market-sharing arrangement between the latter, in view of its violation of Article 81 EC. Secondly, the EC competition rules may constitute a subsidiary or preliminary issue in civil proceedings before a civil court. This is so in the vast majority of cases. Thus, where competition law is pleaded as a shield, in order for a civil court to examine the validity or nullity of an agreement and its legal consequences (main issue), it has to deal with the preliminary issue of whether the prohibition of Article 81 EC applies to the agreement in question.15 The same is true when competition law is pleaded as a sword, in damages claims or claims for an injunction, pursuant to an antitrust violation. The liability for damages and the right to the injunction will be the main issue in the proceedings, whereas the actual violation of Article 81 or 82 EC will be the preliminary issue.16 In the past, a part of the theory and of the Community and national jurisprudence had adopted a distinction between competition authorities enforcing EC competition law à titre principal and civil courts adjudicating à titre incident. This distinction was first implied by the Court of Justice in the Bosch case.17 The competence of national civil courts to apply the EC competition rules as a preliminary issue was, according to the Court, a consequence of the direct effect of Articles 81 (except for its third paragraph) and 82 EC. On the other hand, the competence of competition authorities or courts to apply these rules as a main issue derived from Article 84 EC in conjunction with Article 9 of Regulation 17.18 The distinction between the application of the competition rules à titre principal and à titre incident has been criticised as not practical, and has now been abandoned by a substantial part of the literature,19 though 12 Eg in Greece and Italy judicial review of the national competition authorities’ decisions has been entrusted to the administrative courts, while in France and Germany judicial review is exceptionally exercised by civil courts. 13 See Ioannou, ‘The National Judge and Community Competition Law’ (1984) 4 RHDE 423 (in Greek) 431. 14 In some continental legal systems civil actions are classified, based on the form of judicial relief sought, into actions for performance, declaratory and constitutive actions. The first, which are the most common, require the defendant specifically to perform an obligation or to pay money. The second are more limited in scope and seek an authoritative affirmation by the court of the existence or non-existence of a legal relationship. Constitutive actions, on their part, do not confine themselves to the determination of a legal situation, but also create, modify, abolish or otherwise vary a legal relationship. See eg Kerameus, ‘Civil Procedure in Greece’ (1976) 2 South LRev 175; also in Kerameus (ed), Studia Iuridica I (Thessaloniki, 1980) 221. Of these three types of actions only the first and the second are relevant to EC competition law disputes. Constitutive actions could have been a theoretical possibility only if Art 81(3) EC exemption decisions under the previous authorisation system had been entrusted to civil courts. Such a system of ‘judicial authorisation’ has never, however, been proposed or introduced in Europe. 15 See Ioannou, above n 13, 432; Favre, ‘Le droit communautaire de la concurrence devant les juridictions nationales: l’expérience française’ in Pérez van Kappel (ed), Decentralised Application of EC Competition Law: National Experience and Reform (Cologne, 2001) 78. 16 See Ioannou, above n 13, 432. 17 Bosch, above n 1 (introduction), at 51–2. 18 See Ioannou, above n 13, 432. 19 See eg ibid, 444. See also the very early views of Deringer, ‘The Distribution of Powers in the Enforcement of the Rules of Competition under the Rome Treaty’ (1963–1964) 1 CMLRev 30, at 38, who makes no distinction between main and subsidiary issues.

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Definitions and Modalities 5 some authors still occasionally use it.20 It is noteworthy that this distinction has created problems for some national courts, which have misinterpreted it. This has been the case in Spain, where the Supreme Court in its unfortunate CAMPSA judgment of 1993 essentially denied the direct effect of Articles 81 and 82 EC, unless these provisions had already been applied à titre principal by the European Commission or the Spanish authorities.21 Indeed, the Court of Justice quickly rejected such a distinction. As early as in BRT v SABAM the Court distinguished between national courts, where the EC competition issue arises in disputes governed by private law, and courts ‘especially entrusted with the task of applying domestic legislation on competition or that of ensuring the legality of that application by the administrative authorities’.22 Only the latter were affected by the letter and spirit of Article 9(3) of Regulation 17 of 1962.23 It is interesting to note that the Court did not adopt the approach of Advocate General Mayras, who had distinguished between courts dealing with EC competition law as a subsidiary or preliminary issue (à titre incident), and those where the competition rules make up the main issue (à titre principal).24

20 See eg Herbert, ‘Rapports entre les procédures devant la Commission des CE et les juridictions nationales’ (1993) 42 Riv Dir Ind I-461, at I-463; Gustafsson, ‘Some Legal Implications Facing the Realisation of the Commission White Paper on Modernisation of EC Antitrust Procedure and the Role of National Courts in a PostWhite Paper Era’ (2000) 27(2) LIEI 159, at 160, n 6; C Gavalda and G Parleani, Droit des affaires de l’Union européenne (Paris, 2002) 275; Scuffi, ‘Le sezioni specializzatte di diritto industriale per cooperazione comunitaria ed applicazione decentrata delle regole di concorrenza’ [2003] Il Diritto Industriale 213, at 218, n 21 and ‘I riflessi ordinamentali ed organizzativi del regolamento comunitario n. 1/2003 sulla concorrenza’ (2004) 21 Il Corriere Giuridico 123, at 213, n 1. 21 Tribunal Supremo (Sala de lo Civil), 30 Dec 1993, RJ 1993/9902, CAMPSA. On this judgment and on the erroneous—if not curious—application of the main–subsidiary issue dichotomy see Navarro Varona and Rating, ‘Spain’ in Behrens (ed), EC Competition Rules in National Courts, Vol. V, Spain, Portugal and Greece (BadenBaden, 2000) 67 ff. It should be mentioned that this judgment represented one of the most flagrant violations of Community law by a national Supreme Court and has been considered by commentators as one of the paradigm cases, in which the Commission should have sued a Member State for violation of EC law on behalf of one of its organs (see eg Tridimas, ‘Knocking on Heaven’s Door: Fragmentation, Efficiency and Defiance in the Preliminary Reference Procedure’ (2003) 40 CMLRev 9). The situation was remedied by a 2000 judgment of the same court (Tribunal Supremo (Sala de lo Civil), 2 June 2000, no 540/2000, CC v Distribuidora Industrial SA). Very recently the Madrid Commercial Court clearly applied Art 82 EC à titre principal and found that the Spanish company Telefónica had to pay damages for abusing its dominant position (Juzgado de lo Mercantil no 5 de Madrid, 11 Nov 2005, no 36/2005, Conduit Europe SA v Telefónica de España SAU, confirmed in Audiencia Provincial de Madrid (secc no 28), 25 May 2006, Conduit Europe SA v Telefónica de España SAU, with references to ECJ jurisprudence on the direct effect of Arts 81 and 82 EC). The erroneous approach that was described above has also been followed under some national laws. See eg Efeteio Patras no 18/2002 (2004) 55 Epitheorisi Emporikou Dikaiou 432, with critical comments by Koutsoukis (2004) 55 Epitheorisi Emporikou Dikaiou 434, where the Greek court denied the possibility for Greek civil courts to apply the national competition provisions before the Greek competition authority had pronounced thereupon. See also Cour d’appel, Luxembourg, 31.3.2007, no 31955, Tango SA et al v Entreprise des Postes et Télécommunications, reported by Partsch and Wellens, Oct 2007, Vol II, e-Competitions, available at www.concurrences.fr, where the Luxembourg court reached a similar conclusion with regard to Luxembourg competition law. 22 Case 127/73 Belgische Radio en Televisie (BRT) v SV SABAM and NV Fonior (I) [1974] ECR 51, paras 14, 15, 19. 23 The text of that provision provides that ‘as long as the Commission has not initiated any procedure under Articles 2, 3 or 6, the authorities of the Member States shall remain competent to apply Article [81(1)] and Article [82] in accordance with Article [84] of the Treaty’. 24 BRT v SABAM (I), above n 22, AG’s Opinion, at 74–7. The AG used the terms ‘direct’ and ‘indirect’ application of the Treaty competition rules by national courts, in order to refer to the titre principal– incident distinction. The Court instead made no such distinction and referred merely in a general manner to the ‘competence of [national] courts to apply the provisions of Community law’ (ibid, para 15). For a first attempt to understand the titre principal–incident distinction from a common law point of view see Forrester, ‘Complement or Overlap? Jurisdiction of National and Community Bodies in Competition Matters after SABAM’ (1974) 11 CMLRev 171, at 177.

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6 EC Private Antitrust Enforcement

(iii) Administrative-Public Enforcement—Civil-Private Litigation More appropriate, therefore, appears to be our initial distinction between administrative or public and civil or private enforcement of EC competition law.25 Administrative enforcement is undertaken by specifically entrusted authorities or courts of the Member States (and naturally by the Commission) which enforce these rules in their capacity as public enforcers, address their decisions to private individuals, usually to corporate entities or undertakings, and have the power to impose upon the latter administrative sanctions (such as fines and periodic penalty payments), structural remedies (again coupled with fines or other penalties), and other measures or constrains, as available in national procedural law. The common features of administrative-public enforcement are the verticality of the dispute, which remains one between the state and private individuals, and the administrative nature of the sanctions imposed. Civil or private enforcement of the competition rules, on the other hand, takes place horizontally as between individuals in the framework of a civil process, in which the litigants advance independent civil claims or counterclaims based on the EC competition provisions. In addition, the sanctions imposed are of a private nature and essentially function as remedies for the victim of the anti-competitive conduct. This notwithstanding the fact that a specific remedy may not only aim at compensating or protecting the victim but also at ‘punishing’ the perpetrator of the anti-competitive act, as is the case with punitive damages which, in any case, are awarded to the former. Of course, remedies in the context of private enforcement also reflexively serve the public interest in maintaining effective competition in the market. It is encouraging that the above clear distinction is recognised by the recent Commission Green Paper on damages actions. Indeed, the Green Paper distinguishes public from private enforcement on the basis of remedial outcomes and sanctions, ie fines as opposed to civil damages.26

(iv) Stand-alone—Follow-on Litigation A final categorisation that is, indeed, of great practical importance and that also refers to the relationship between private and public enforcement, is between ‘stand-alone’ and ‘followon’ civil antitrust claims. The typical stand-alone case involves a third party suing for damages against the perpetrators of an anti-competitive act, while there has been no interference yet by a public authority, in which case the plaintiff will have the sometimes dire task of proving that there has been an infringement of the competition rules. Raising a competition law point by way 25 See in this sense van Gerven, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/ Portland, 2003) 20. See also generally M Negri, Giurisdizione e amministrazione nella tutela della concorrenza (Turin, 2006) 32–50. 26 See para 3 of the Commission Staff Working Paper accompanying the Green Paper (both below n 55): ‘[p]rivate enforcement and public enforcement are the two pillars of enforcement of EC antitrust rules. Private enforcement differs from public enforcement, whereby the public authorities (the Commission at EU level and the national competition authorities at the Member State level) investigate suspected violations of competition law and can impose certain measures and sanctions such as fines on infringing undertakings. Fines are paid into the public budget and the activities of the public enforcer are paid for by the state. Private enforcement actions are paid for by the individual bringing the action, and that individual can recoup the money paid out as part of the award of compensation if the action is successful.’

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The Relevance of the Objectives of EC Competition Law 7 of defence or counterclaim to a breach of contract or intellectual property or an unfair competition law action again qualifies as stand-alone litigation, if there has been no intervention of a public authority. In this case, again the party that raises the competition law problem will have to prove the infringement. A follow-on civil action, on the other hand, takes place when there is already an infringement decision by a public authority that condemns particular anti-competitive conduct.27 While, in principle, private enforcement remains independent of public enforcement, it may well be that the existence of a public decision eases the burden imposed on the plaintiff to prove the infringement or is considered binding as to its findings. This is stipulated expressly by some national competition laws, notably by UK and German law, or it may be a judicial rule in the nature of an estoppel or abuse of process that serves the principle of procedural economy. There are, however, legal systems where the existence of an infringement decision by a public authority does not confer any benefit upon the follow-on civil plaintiff, other than a psychological one. The Commission’s Green Paper on damages actions aims at considering whether this needs to be changed, so that infringement decisions taken by a public authority in Europe can be made binding as to the finding of the infringement on all follow-on civil proceedings, thus substantially improving the position of plaintiffs.28

II. PUBLIC AND PRIVATE ANTITRUST ENFORCEMENT AND THE OBJECTIVES OF EC COMPETITION LAW

(a) Enforcement Objectives The pairing of public and private enforcement of legal rules is not unique to the antitrust laws. It certainly predates those laws and expresses more fundamental ideas about the relationship between the state and private individuals and their respective roles in the implementation of the law as such. From a purely competition law perspective, antitrust enforcement pursues three systematically different, yet substantively interconnected, objectives.29 The first one is injunctive, ie to bring the infringement of the law to an end, which may entail not only negative measures, in the sense of an order to abstain from the delinquent conduct, but also positive ones to ensure that that conduct ceases in the future. The second objective is restorative or compensatory, ie to remedy the injury caused by the anti-competitive conduct. The third is punitive,30 ie to punish the perpetrator of the illegal acts in question and also to deter him and others from future transgressions. Ideally, these three basic objectives can be pursued inside an enforcement system that combines both public and private elements. 27 A civil action brought following another civil action that was successful cannot, however, be seen as a followon action, since there was no public authority decision with erga omnes declaratory effect. The successful action would have led basically to a judgment with res judicata effect limited to the specific litigants and to the specific object of the dispute. Of course, if the two cases are similar, it may be that the burden on the plaintiff to prove an infringement in the second action is practically—if not psychologically—slightly lighter. 28 On the Commission’s Green Paper see below n 55. 29 See C Harding and J Joshua, Regulating Cartels in Europe, A Study of Legal Control of Economic Delinquency (Oxford, 2003) 229 ff. 30 The term ‘punitive’ is used here in its generic sense and does not necessarily correspond to criminal law.

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8 EC Private Antitrust Enforcement Private actions, in particular, may well—directly or indirectly—pursue all three objectives. The injunctive objective is served by cease and desist orders and negative or positive injunctions ordered by the civil courts, and may, indeed, go further than public enforcement. For example, it may be easier to obtain a preliminary injunction from a national judge than from the European Commission, while the latter, unlike the former, cannot issue orders imposing positive measures on undertakings in Article 81 EC cases.31 Private enforcement primarily serves the restorative-compensatory objective, while the role of public enforcement here can only be minimal.32 Private actions ensure compensation for those harmed by anti-competitive conduct. Finally, as for the punitive objective, while public enforcement is undoubtedly predominant, here again private actions may nevertheless supplement the retributive and deterrent effect of the public sanctions by attaching punitive elements to the civil nature of the remedies sought.33 This is the case in legal systems that provide for punitive antitrust damages.

(b) Advantages of Private Antitrust Enforcement and its Complementarity with Public Enforcement It is sometimes said, especially by public enforcement officials, that private enforcement cannot as such make a substantial contribution to the effectiveness of competition law enforcement.34 In addition, it has been observed that private enforcement of laws in gen31

See below 3.II.(c). It is not correct, however, to exclude any role for public enforcement in this area. There are cases where the public agency enforcing the competition rules may take into account the injury to specific victims of an anticompetitive practice and impose on the perpetrator the obligation to compensate those persons. Indeed, the public agency may pursue this informally, for example through an informal settlement. In addition, some competition regimes also provide for a role for the public authority in claiming damages, acting on behalf of the victims. This is the eg case in French law (Art L442-6 Code de commerce). For a proposal to confer powers on antitrust authorities to award civil damages to victims of anti-competitive behaviour see Igartua Arregui, ‘Should the Competition Authorities Be Authorized to Intervene in Competition-related Problems, when they Are Handled in Court? If so, what Should Form the Basis of their Powers of Intervention? National Report from Spain’, LIDC Questions 2001/2002, available at www.ligue.org, at 5. 33 On the deterrent effect of damages awards see eg Mestmäcker, ‘The EC Commission’s Modernization of Competition Policy: A Challenge to the Community’s Constitutional Order’ (2000) 1 EBOR 401, at 422; A Jones and B Sufrin, EC Competition Law, Text, Cases, and Materials (Oxford, 2008) 1309; Erämetsä, ‘Finnland’ in Behrens (ed), EC Competition Rules in National Courts, Vol. VI, Denmark, Sweden, Finland and Austria (BadenBaden, 2001) 214. It should again be stressed that the term ‘punitive’ in this context is used in its generic sense, so the punitive element in damages awards does not make them criminal in nature. US treble damages awards have always been considered civil, not only inside but also outside the US. On the question of the characterisation of such awards see further Zekoll and Rahlf, ‘US-amerikanische Antitrust-Treble-Damages-Urteile und deutscher ordre public’ (1999) 54 JZ 384, at 384–5. 34 See eg C Harding, European Community Investigations and Sanctions, The Supranational Control of Business Delinquency (Leicester/London/New York, 1993) 116; Paulweber, ‘The End of a Success Story?: The European Commission’s White Paper on the Modernisation of the European Competition Law: A Comparative Study about the Role of the Notification of Restrictive Practices within the European Competition and the American Antitrust Law’ (2000) 23(2) World Competition 3, at 45; Wils, ‘Should Private Antitrust Enforcement Be Encouraged in Europe?’ (2003) 26 World Competition 473; Wolf, ‘European Political Integration, Comparative Law and Private Enforcement of Competition Law’ in Einhorn (ed), Spontaneous Order, Organization and the Law, Roads to a European Civil Society, Liber Amicorum Ernst-Joachim Mestmäcker (Baden-Baden/The Hague, 2003) 421–4; Fingleton, ‘De-monopolising Ireland’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2003, What Is an Abuse of a Dominant Position? (Oxford/Portland, 2006) 60–1; Möschel, ‘Behördliche oder privatrechtliche Durchsetzung des Kartellrechts?’ (2007) 60 WuW 483. For an earlier view, doubtful of the strengths of private antitrust enforcement, see Jacobs, ‘Civil Enforcement of EEC Antitrust Law’ in Michigan Law Review Association, The Art of Governance, Festschrift zu Ehren von Eric Stein (Baden-Baden, 1987) 230 ff. The former AG apparently, however, no longer views private antitrust enforcement negatively. 32

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The Relevance of the Objectives of EC Competition Law 9 eral is a particular characteristic of US law, because in the US there are no specialised agencies to the same extent as in Europe, and thus private enforcement tends to compensate for this lack of statutory control. In contrast, if there are statutory agencies entrusted with the enforcement of the law, there will be no need to grant equal powers to consumers.35 Notwithstanding these views, the majority view of the antitrust scholarship argues that the ideal antitrust enforcement model should combine both public and private elements.36 Each of the two systems aims at different aspects of the same phenomenon; they are complementary and both are necessary for the effectiveness of competition law enforcement.37 The advantages of private antitrust enforcement have long been stressed in the United States, where studies estimate its ratio to public antitrust suits at between 10 to 1 and 20 to 1.38 The primary function of the private action is clearly compensatory.39 The victims of anti-competitive practices can make up for their losses only before a civil court and public enforcement cannot have any direct bearing there.40 At the same time, however, private action, apart from its compensatory function, furthers the overall deterrent effect of the law. Thus, economic agents themselves become instrumental in implementing the regulatory policy on competition41 and the general level of compliance with the law is raised.42 Indeed, the private litigant in US antitrust has been considered a ‘private attorneygeneral’.43 To give an example from recent competition law enforcement, Hoffmann-La Roche, a leading pharmaceutical company, recently reported that out of total costs paid 35 See Micklitz, ‘Transborder Law Enforcement—Does it Exist?’ in Weatherill and Bernitz (eds), The Regulation of Unfair Commercial Practices under EC Directive 2005/29, New Rules and New Techniques (Oxford/Portland, 2007) 252, with further references. 36 See various references below. 37 See Norberg, ‘Competition Policy of the European Commission: In the Interest of Consumers?’, Speech delivered at Leuven (20 June 2003), available at http://ec.europa.eu/comm/competition/speeches, at 28; Behrens, ‘Comments on Josef Drexl: Choosing between Supranational and International Law Principles of Enforcement’ in Drexl (ed), The Future of Transnational Antitrust—From Comparative to Common Competition Law (Berne/The Hague/London/New York, 2003) 344–5; Waller, ‘Towards a Constructive Public–Private Partnership to Enforce Competition Law’ (2006) 29 World Competition 367; Negri, above n 25, at 43; Collins, ‘What Are the Problems with EC Antitrust Damage Actions in Europe? Does the Private Pillar Require Reinforcement?’, Background Paper presented at the Joint IBA and European Commission Conference on Cartel Enforcement and Antitrust Damage Actions in Europe (Brussels, 7–9 Mar 2007) 2. 38 See CA Jones, Private Enforcement of Antitrust Law in the EU, UK and USA (Oxford, 1999). 39 See indicatively C Jones, ‘Private Enforcement in the US—Nostradamus Strikes Again: A Premature US Perspective on the EU’s Green Paper on Private Enforcement’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Zwölftes St. Galler Internationales Kartellrechtsforum 2005 (Basle/Geneva/Munich, 2006) 375; Basedow, ‘Introduction’ in Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, 2007), 2. 40 It might, however, make sense for the victim of anti-competitive conduct to seize the public enforcer in cases where he seeks injunctive relief. 41 See Canivet, ‘The Responsibility of the Judiciary in the Implementation of Competition Policy’ in OECD Committee on Competition Law and Policy, Judicial Enforcement of Competition Law (Paris, 1997) 21; Jenny, ‘Un économiste à la Cour’ [2005–1] Concurrences 5, at 8. 42 See KL Ritter and DW Braun, European Competition Law: A Practitioner’s Guide (The Hague, 2004) 1171; Diemer, ‘The Green Paper on Damages Actions for Breach of the EC Antitrust Rules’ (2006) 27 ECLR 309, 311. See also Böge and Ost, ‘Up and Running, or Is it? Private Enforcement—The Situation in Germany and Policy Perspectives’ (2006) 27 ECLR 197, who also stress that civil antitrust proceedings contribute to further developing antitrust law. Compare Wood, ‘The Courts and Private Antitrust Actions’ in Hawk (ed), Annual Proceedings of the Fordham Corporate Law Institute, International Antitrust Law and Policy 2002 (New York, 2003) 409, who makes the following points on US private antitrust enforcement: ‘[p]rivate enforcement has done one thing for the United States that no one can gainsay: it has immunized the United States from the common complaint heard elsewhere that the competition laws look good on paper, but they are ignored or underenforced in practice. When aggrieved parties have the power literally to take the law into their own hands, in the sense of presenting a claim to a tribunal with the power to redress it, they have no one but themselves to blame if they do not do so.’ 43 Per J Jerome Franck in Associated Industries of New York State, Inc v Ickes, 134 F 2d 694, 704 (2d Cir 1943).

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10 EC Private Antitrust Enforcement because of its participation in the global vitamins cartel, 2/7 was for fines imposed by public authorities and 5/7 for civil damages (most of them treble damage class actions resolved by settlement). The amount paid in public fines represented 23.7 per cent and in civil damages 59.6 per cent of the operating profit of the company’s vitamins division during the period from 1989 to 1999. The company was clearly more impressed by the civil than by the criminal/administrative side of competition law enforcement.44 A further advantage is that the weaknesses of public enforcement, most notably the ‘enforcement gap’ generated by the perceived inability of public enforcement to deal with all attention-worthy cases, are counter-balanced.45 Another advantage may be that a mixed public–private system of antitrust enforcement may lead to a more balanced way of enforcing the competition rules, thus avoiding the more intervention-oriented approach of a system where public agencies are the exclusive enforcers.46 From a Community competition law perspective, however, there are additional arguments in favour of a system of antitrust enforcement that combines strong elements of private enforcement. First of all, the civil action in Europe constitutes the only complete means (complaints apart) for private parties and individuals to exercise the rights guaranteed by the Treaty competition provisions, which form part of the Community’s economic constitution.47 Pursuant to the Court of Justice’s long-standing case law, Articles 81 and 82 EC enjoy direct effect and grant individuals actionable rights, which national courts must protect.48 This by itself is a sufficient reason to explain why the rationale for private enforcement does not recede even when there are specialised agencies entrusted with the enforcement of the law.49 Secondly, when citizens pursue their Community rights in the national courts, apart from serving their personal interests, they also indirectly act in the Community interest and become ‘the principal “guardians” of the legal integrity of Community law within Europe’.50 The exercise of those rights thus becomes a question of 44 See Maier, ‘Aspects of Sanctional Practice: Criminal Sanctions/The Vitamin Cartel’, Paper presented at the XIV St Gallen International Competition Law Forum (St Gallen, 10–11 May 2007). 45 On the general advantages of private antitrust enforcement see eg Collins and Sunshine, ‘Is Private Enforcement Effective Antitrust Policy?’ in Slot and McDonnell (eds), Procedure and Enforcement in EC and US Competition Law, Proceedings of the Leiden Europa Instituut Seminar on User-friendly Competition Law (London, 1993) 50–2; Roach and Trebilcock, ‘Private Enforcement of Competition Laws’ (1996) 34 Osgoode Hall Law Review 461, at 471 ff; Yeoung, ‘Private Enforcement of Competition Law’ in McCrudden (ed), Regulation and Deregulation, Policy and Practice in the Utilities and Financial Services Industries (Oxford, 1999) 40–3. See also Commission MEMO/05/489, above n 3, under the heading ‘What in the Commission’s view are the advantages of private actions for damages?’. 46 See Kovacic, ‘Private Participation in the Enforcement of Public Competition Laws’ in Andenas, Hutchings and Marsden (eds), Current Competition Law (London, 2004), ii, 176, who hypothesises that an expansion of private rights in Europe might lead to a less interventionist approach in Europe with the result that the EU abuse of dominance doctrine might converge more with the US doctrine of monopolisation. The same author in a speech on 14 Mar 2007 at the EU Competition Committee of the American Chamber of Commerce in Brussels attributed the less interventionist approach of US antitrust law as regards unilateral behaviour to the fact that, as a response to private actions, the US courts have raised the liability bar to prevent unmeritorious triple damages claims. 47 See also C Jones, ‘Private Antitrust Enforcement in Europe: A Policy Analysis and Reality Check’ (2004) 27 World Competition 13, at 14–16. 48 BRT v SABAM (I), above n 22, para 16; Case T–458/04 Au Lys de France SA v Commission, Judgment of 3 July 2007, not yet reported, para 70. 49 See 1.II.(b) above on the criticisms of private enforcement. 50 See JHH Weiler, The Constitution of Europe, ‘Do the New Clothes have an Emperor?’ and Other Essays on European Integration (Cambridge, 1999) 20. See Case 26/62 NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Nederlandse Administratie der Belastigen [1963] ECR 1, at 13: ‘[t]he vigilance of individuals concerned to protect their rights amounts to an effective supervision in addition to the supervision entrusted by Articles [226] and [227] to the diligence of the Commission and of the Member States’.

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The Relevance of the Objectives of EC Competition Law 11 general Community law conferring its benefits closer to the citizen.51 This constitutional element of private EC antitrust enforcement means that the conditions and limitations of private actions in the US cannot be uncritically transcribed into the European context without encroaching on individual Community rights.52 The European Commission recently embarked upon an ambitious project to further private antitrust enforcement in Europe. In this task it has received the full support of the European Court of Justice, which in 2001 delivered a landmark ruling in Courage v Crehan that set the basis for a system of individual civil liability for breach of the EC competition rules.53 According to former Commissioner Monti, in a system combining private and public enforcement, victims of anti-competitive practices, including consumers, must have the opportunity to avail themselves of effective remedies in the form of decentralised private enforcement, so as to protect their rights and obtain compensatory damages for losses suffered.54 His successor, Commissioner Kroes, pursued the project enthusiastically, and this led to the publication of a Green Paper in December 2005.55 It is interesting to note that the Commission not only refers to the compensatory qualities of damages awards, but also stresses their contribution to the deterrent effect of the competition rules.56 Such references echo the ‘private attorney-general’ function of the private litigant in US antitrust.

(c) The Relevance of the Goals of EC Competition Law: Between Public and Private Interest The question of the relationship and balance between public and private antitrust enforcement in Europe must also be seen in the context of the more substantive question of the goals

51 See Commission Press Release IP/05/1634, Competition: Commission Launches Consultations on Facilitating Damages Claims for Breaches of EU Competition Law, 20 Dec 2005; Commissioner Kroes, ‘Delivering Lisbon: The Role of Competition Policy’, Speech delivered at the European Liberal Democrat City Forum (London, 14 Sept 2005), available at http://ec.europa.eu/comm/competition/speeches, at 5, explicitly referring to the enhancement of private enforcement in terms of bringing the benefits of the Commission’s fight against competition offences ‘closer to the citizen’. 52 See eg Jones, above n 38, at 186, who refers to the US limitations on the class of prospective plaintiffs. Compensation of victims of anti-competitive practices cannot be as easily ignored in Europe as in the US. 53 Case C–453/99 Courage Ltd v Bernard Crehan [2001] ECR I–6297. On this ruling see Komninos, ‘New Prospects for Private Enforcement of EC Competition Law: Courage v. Crehan and the Community Right in Damages’ (2002) 39 CMLRev 447. 54 See former Commissioner Monti, ‘Opening Speech: Effective Private Enforcement of EC Antitrust Law’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 3 ff, ‘Private Litigation as a Key Complement to Public Enforcement of Competition Rules and the First Conclusions on the Implementation of the New Merger Regulation’, Speech delivered at the IBA 8th Annual Competition Conference (Fiesole, 17 Sept 2004), available at http://ec.europa.eu/ comm/competition/speeches, at 2 and ‘A Reformed Competition Policy: Achievements and Challenges for the Future’, Speech delivered at the Centre for European Reform (Brussels, 28 Oct 2004), available at http://ec.europa. eu/comm/competition/speeches, at 4. 55 Commission Green Paper on Damages Actions for Breach of the EC Antitrust Rules, COM(2005)672 final. The Green Paper is accompanied by a Staff Working Paper which sets out the various options more discursively: Commission Staff Working Paper, Annex to the Green Paper on Damages Actions for Breach of the EC Antitrust Rules, SEC(2005)1732. 56 See Commission XXXVth Report on Competition Policy—2005 (Brussels/Luxembourg, 2006), para 31: ‘[n]ot only do actions for damages allow victims of infringements of EC antitrust law to obtain compensation, they also create an additional incentive for undertakings to respect the EC antitrust rules’.

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12 EC Private Antitrust Enforcement of EC competition law: is the goal the public interest in safeguarding effective competition in the common market or the private interest in protecting one’s economic freedom?57 There is a widespread misunderstanding as to the interests protected by competition law in the contexts of public and private enforcement. Thus, some authors distinguish between public enforcement, which pursues the public interest of protecting the competition norms through administrative or criminal sanctions, and private enforcement, which pursues the private interest of the protection of competitors and consumers through civil ‘sanctions’, most notably civil claims for damages.58 The European Commission has also at times followed a similar approach, with statements which seem to ignore the instrumental character of civil claims. Indeed, the Commission has been reproached for insisting on distinguishing between public authorities, whose acts are guided by the public interest, and national courts, which decide disputes pertaining to the private interest.59 Such a distinction does not do justice to the role of civil courts when they enforce competition law in the context of private disputes between economic operators. Of course, it is true that courts will basically adjudicate inter partes based on facts and law as pleaded and proven in the adversarial process. It is also true that courts, unlike public authorities, do not enjoy an authority’s broad investigatory powers and, in any event, lack the power to investigate non-parties to the litigation or the industry as a whole.60 On the other hand, courts do in fact have to 57 On the bearing of private enforcement on the goals of antitrust, in the context of Greek competition law, see eg VG Hatzopoulos, The Essential Facilities Doctrine in EU and Greek Competition Law (Athens/Komotini, 2002) (in Greek) 165 ff. For an Italian point of view on the same issue see Toffoletto, ‘Il risarcimento del danno’ in Toffoletto and Toffoletti (eds), Antitrust: le sanzioni (Milan, 1996) 123–4. 58 See eg Braakman, ‘The Application of the Modernised Rules Implementing Articles 81 and 82 EC Treaty in Injunction Proceedings: Problems and Possible Solutions’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 161; Harding and Joshua, above n 29, at 239; Rodger, ‘The Big Chill for National Courts: Reflections on Market Foreclosure and Freezer Exclusivity under Article 81’ (2004) 11 IJEL 77, at 107. Compare also Shaw, ‘Decentralization and Law Enforcement in EC Competition Law’ (1995) 15 LS 128, at 158–9: ‘[p]rivate actions will generally be favoured where competition is seen primarily as a private, market-based matter, with competition policy being correspondingly limited in scope. They will tend to be discouraged where competition policy implies the existence of some element of public interest in the maintenance of a particular type of trading structure’. 59 See Mestmäcker, above n 33, at 423 and ‘The Modernisation of EC Antitrust Policy: Constitutional Challenge or Administrative Convenience?’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 233–4. See in this regard some Commission references to the role of national civil actions: Commission Draft Notice on the Application of Articles 85 and 86 of the EEC Treaty by National Courts [1992] 4 CMLR 524, para 10 (‘The Commission’s primary duty, as a political institution, is to safeguard the general interest of the Community . . . The national courts, by contrast, are called upon primarily to protect the legitimate private interests of all those seeking redress’—interestingly this text of the 1991 Draft Notice was not included in the 1993 Notice: Commission Notice on Cooperation between National Courts and the Commission in Applying Articles 85 and 86 of the EEC Treaty [1993] OJ C39/6); Explanatory Memorandum of the September 2000 Regulation proposal (cited n 202 (ch 2) below), at 5 (‘unlike national authorities or the Commission, which act in the public interest, the function of national courts is to protect the rights of individuals’); Commission Notice on the Co-operation between the Commission and the Courts of the EU Member States in the Application of Articles 81 and 82 EC [2004] OJ C101/54, para 4 (‘where a natural or legal person asks the national court to safeguard his individual rights, national courts play a specific role in the enforcement of Articles 81 and 82 EC, which is different from the enforcement in the public interest by the Commission or by national competition authorities’); Commission Notice on the Handling of Complaints by the Commission under Articles 81 and 82 of the EC Treaty [2004] OJ C101/65, para 27 (similar language). See also former Commissioner Monti, ‘Opening Statement: The Modernisation of EC Antitrust Policy’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/ Portland, 2001) 6. To be fair to the Commission, these are statements that echo judicial pronouncements, though not of the ECJ; compare in this regard Case T–24/90 Automec Srl v Commission (II) [1992] ECR II–2223, para 85: ‘unlike the civil courts, whose task is to safeguard the individual rights of private persons in their relations inter se, an administrative authority must act in the public interest’. Commission officials have also made the distinction between public and private interest on numerous occasions. 60 See Rodger, above n 58, at 107.

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The Relevance of the Objectives of EC Competition Law 13 consider economic public policy in their judgments when the dispute in question has a wider impact on the market. In this sense, private interest plays a complementary role to the public interest.61 Thus, the courts, although they decide disputes inter partes,62 cannot simply confine themselves to considering the interests of the litigants, but must also have regard to the general interests of economic policy. This explains why courts in some jurisdictions must raise the competition law question even ex proprio motu and may not allow an anti-competitive agreement to be performed, even if the parties have not raised the issue of its legality.63 Likewise, the possibility for public competition authorities in the EC and in some national competition systems to intervene and submit observations in the course of civil proceedings is partly due to the public policy/interest nature of this kind of competition law-related litigation.64 Finally, laws that attach a punitive element to civil claims for damages, as is the case of US antitrust, precisely prove that there is something more at stake than just the pursuit of private interest. The instrumental role of private antitrust enforcement must not, however, be confused with the objectives of competition policy as such. The dominant and more correct view is that EC competition law aims at conditions of effective competition (protecting the institution of competition—Institutionsschutztheorie),65 whereas economic freedom (protection of private rights—Individualschutztheorie) is but a reflexive subsidiary aim of protecting competition.66 Protection of private rights cannot by itself set in motion the 61 See Bourgeois, ‘EC Competition Law and Member State Courts’ in Hawk (ed), Antitrust in a Global Economy 1993, Annual Proceedings of the Fordham Corporate Law Institute (New York/Deventer, 1994) 485–6; C Lucas de Leyssac and G Parleani, Droit du marché (Paris, 2002) 971. 62 See the view of Jones, above n 38, at 80: ‘[i]n a private antitrust action, national courts are deciding the particular dispute between private parties. They are not deciding subtle questions of economic policy on a Community-wide basis’. 63 See Canivet, above n 41, at 24. On the ex officio application of EC competition law by national courts see 3.III.(b) below. 64 See Rincazaux, ‘Les autorités de la concurrence doivent-elles être autorisées à intervenir dans les procédures relatives à des problèmes de concurrence, plus particulièrement lorsqu’elles sont menées devant les juridictions ordinaires? Dans l’affirmative, quel devrait être le fondement de leur pouvoir d’intervention? Rapport international’, LIDC Questions 2001/2002, available at www.ligue.org, at 1. 65 In a brochure for the general public, the Commission refers to the goals of competition policy in the following terms: ‘[t]he Community’s competition policy pursues a precise goal, which is to defend and develop effective competition in the common market. Competition is a basic mechanism of the market economy involving supply (producers, traders) and demand (intermediate customers, consumers). Suppliers offer goods or services on the market in an endeavour to meet demand. Demand seeks the best ratio between quality and price for the products it requires. The most efficient response emerges as a result of a contest between suppliers’: European Commission, Competition Policy in Europe and the Citizen (Luxembourg, 2000) 7 (emphasis in the original). For a more succinct definition of the objective of Art 81(1) EC see also para 13 of the Commission’s Notice on Art 81(3) EC (below n 208 (ch 2)): ‘the objective . . . is to protect competition on the market as a means of enhancing consumer welfare and of ensuring an efficient allocation of resources’. See also para 4 of the DG-COMP Discussion Paper on Application of Article 82 of the Treaty to Exclusionary Abuses, Brussels, December 2005: ‘the objective of Article 82 is the protection of competition on the market as a means of enhancing consumer welfare and of ensuring an efficient allocation of resources. Effective competition brings benefits to consumers, such as low prices, high quality products, a wide selection of goods and services, and innovation’. On the aims of EC competition law see eg R Whish, Competition Law (London, 2003) ch 1; O Odudu, The Boundaries of EC Competition Law, The Scope of Article 81 (Oxford, 2006) 10–21. 66 See eg Säcker and Jaecks, in Hirsch, Montag and Säcker (eds), Münchener Kommentar zum Europäischen und Deutschen Wettbewerbsrecht (Kartellrecht), Vol. I, Europäisches Wettbewerbsrecht (Munich, 2007), 733; KT Yannakopoulos, The Protection of Free Competition in the Performance of Administrative Contracts (Athens/Komotini, 2006) (in Greek) 46–7, 64–5. Compare also the ‘dialogue’ between the Presidents of the CFI and ECJ in the IMS Health interim measures cases. In Case T–184/01 R IMS Health Inc v Commission [2001] ECR II–3193, para 145, the President of the CFI stressed that the primary purpose of Art 82 EC was ‘to prevent the distortion of competition, and especially to safeguard the interests of consumers, rather than to protect the

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14 EC Private Antitrust Enforcement mechanisms for the protection of free competition, since the law, as it stands, is indifferent to harm caused to a specific person unless that harm is the consequence of a certain practice the object or effect of which is the distortion/prevention/restriction of effective competition in the market. The law therefore does not require that a specific agreement or concerted practice should actually cause harm to a person in order to prohibit it; it is sufficient if the object of the agreement or practice is to restrict competition in the public interest sense. Equally, an agreement or practice may cause harm to certain persons but still not be considered anti-competitive, because it may not appreciably affect competition in the market (de minimis). The existence of private actions and, in particular, the availability of damages to the victim of anti-competitive practices is perfectly consistent with the public interest that is inherent in competition norms, notwithstanding the confusion in some authors, who see the private interest, which is the dominant motivation in a private action, as at variance with the public interest pursued by the competition norms.67 The Court of Justice has recognised that private antitrust actions strengthen the working of the Community competition rules and discourage practices that are liable to restrict or distort competition, thus making a significant contribution to maintaining effective competition in the Community.68 In other words, this is a case where the private interest contributes to the safeguarding of the public interest, so no antinomy should exist. Thus, private actions do not alter the substance of EC competition law, which is the protection of the public interest, as that is expressed in the goal of maintaining effective competition in the market. Even if we suppose that in a given case a civil litigant’s private interest may not be compatible with the public interest, as may be the case, for example, if inefficient competitors allege the ‘anti-competitive nature’ of certain practices that in reality enhance effective competition, such a private action would fail, because the alleged harm would not have been caused by conduct prohibited or illegal under Articles 81 and 82 EC. Consequently the private interest can never contradict the public interest. Hence the complementarity and the ‘private attorney-general’ function of the civil litigant. position of particular competitors’. On appeal, in Case C–481/01 P(R) NDC Health Corporation and NDC Health GmbH & Co KG v IMS Health Inc [2001] ECR I–3401, para 84, the President of the ECJ held that such statements could not be accepted without reservation, since they ‘could be understood as excluding protection of the interests of competing undertakings from the aim pursued by Article 82 EC, even though such interests cannot be separated from the maintenance of an effective competition structure’. See further Temple Lang, ‘European Community Competition Policy—How Far Does It Benefit Consumers?’ (2004) 18 Boletín Latinoamericano de competencia 128, available at http://ec.europa.eu/comm/competition/publications/blc/index.html, at 130. The combined purpose approach is also accepted under national competition laws. Under Greek competition law, eg, the prevailing view is that both effective competition in the market and economic freedom are protected (see T Liakopoulos, Industrial Property (Athens, 2000) (in Greek) 15, 494–8). 67 See eg in the framework of Greek competition law the rather extreme position of Schinas, ‘The Greek Experience of the Protection of Free Competition: Basic Directions’ in Schinas (ed), Protection of Free Competition, The Practice of EPA/EA (Athens/Komotini, 1992) (in Greek) 28 ff. The author, a former chairman of the Greek Competition Committee, excludes the possibility of private actions because of the public interest character of competition legislation, which is considered a lex specialis with regard to the Greek law of non-contractual liability. A similar position has been held in Spain by Alonso Soto, again a former public antitrust enforcer, who argues forcefully for the application of EC and national competition law exclusively by the competition authorities. This position may explain the longstanding and irritating failure of Spanish courts to comply with the direct effect of Arts 81 and 82 EC before national civil courts (see 1.I.(b).(ii) above). See further Creus and Fernández Vicién, ‘Rapport espagnol’ in XVIII congrès FIDE (Stockholm, 3–6 juin 1998), Vol. II, Application nationale du droit européen de la concurrence (Stockholm, 1999) 96 ff. See also for a similar view held by Portuguese courts, though now apparently superseded, Ruiz, ‘Rapport portugais’ in ibid, at 238. 68 Courage, above n 53, para 27.

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The Independence of Private Antitrust Enforcement 15 In sum, an effective system of private enforcement does not alter the basic goal of the competition rules, which is to safeguard the public interest in maintaining free and undistorted competition, and should by no means be thought of as antagonistic to the public enforcement model. Ideally the two models can work to complement each other.69 The Commission has finally realised this by speaking of the two limbs of antitrust enforcement as complementary and serving the same aim, ‘to create and sustain a competitive economy’,70 and by also stressing the public interest element in private actions for damages.71

III. THE INDEPENDENCE OF PRIVATE ANTITRUST ENFORCEMENT

(a) Independence as Principle Notwithstanding their substantive complementarity, private and public enforcement remain institutionally independent of each other.72 The independence of the two models means that in principle there is no hierarchical relationship as between the former and the latter, or between the public authority and the ‘private attorney-general’. Introducing a rule of primacy would be problematic because of the principles of separation of powers73 and judicial independence, and also because it would undermine the role of courts as enforcers of equal standing. Besides, the very nature of the Community means that there is no rigid 69 See eg Rec 7 to Reg 1/2003: ‘[t]he role of the national courts here complements that of the competition authorities of the Member States’. Such complementary function was advocated by the majority of the participants in the 2001 Florence EU Competition Law Workshop that dealt with private enforcement. See individual contributions and discussions in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003); also Goyder, ‘Providing Support for National Judges in Dealing with Competition Cases’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 576–7; Jalabert-Doury, Nouvel and Le Marec, ‘Politiques de concurrence’ [2006] RDAI/IBLJ 803, at 804. See 3.II.(b).(ix) below on the UK model introduced by the 2002 Enterprise Act. 70 See Green Paper, above n 55, in sect 1.1: ‘[t]he antitrust rules in Articles 81 and 82 of the Treaty are enforced both by public and private enforcement. Both forms are part of a common enforcement system and serve the same aims: to deter anti-competitive practices forbidden by antitrust law and to protect firms and consumers from these practices and any damages caused by them. Private as well as public enforcement of antitrust law is an important tool to create and sustain a competitive economy.’ See also the intervention by Emil Paulis at the ERA Conference on Private Enforcement in EC Competition Law: The Green Paper on Damages Actions (Brussels, 9 Mar 2006), recognising the ‘public role’ of national courts. 71 See Commission Staff Working Paper, above n 55, para 52: ‘[t]he right of private parties to bring an action for damages must be seen as being in the public interest’. See also Joined Cases T–22/02 and T–23/02 Sumitomo Chemical Co Ltd and Sumika Fine Chemicals Co Ltd v Commission [2005] ECR II–4065, para 128, where the Commission pleaded that ‘the existence of remedies for civil damages may also fulfil a public interest, in so far as they are likely to dissuade infringement of the competition rules’. 72 See further Komninos, ‘Public and Private Antitrust Enforcement in Europe: Complement? Overlap?’ (2006) 3(1) Competition Law Review 5. 73 On the principle of separation of powers as between the Commission and national courts see Paulis, ‘Coherent Application of EC Competition Rules in a System of Parallel Competences’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 419–22, who holds that this principle does not apply to the relationship between the Community legal order and national legal orders. See, however, the approach by Judge Edward, who contradicts this: Edward, ‘Panel Three Discussion: Courts and Judges’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 485. The former view does not do justice to the integrated nature of the Community legal order. Separation of powers obviously becomes a problem only for legal systems that entrust public enforcement decision-making to administrative authorities. When decision-making rests with the courts, as in Ireland or in the US, there is no problem of principle at stake.

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16 EC Private Antitrust Enforcement principle of hierarchy as between the Community (direct and centralised Community administration and judges) and the national organs when the latter apply Community law (indirect and decentralised Community administration and judges). Indeed, the very term dédoublement fonctionnel used to refer to the Community law functions of national organs implies the absence of any strict hierarchical relationship.74 In the US primacy of public over private antitrust enforcement and deference to the public enforcer has never been accepted by US courts as a valid principle.75 Nevertheless, this remains a question in Europe because of the unique features of Community law. Thus, the fact that the Court of Justice appears to have entrusted the Commission with a certain primacy over national proceedings and courts does not contradict our analysis here.76 This ‘primacy’ is not one of the Commission, as competition authority, over civil courts, but rather of the Commission, as supranational Community organ, over national courts.77 This principle is sometimes missed by public enforcement officials, who tend to take an expansive view of the ambit of public enforcement.78 Such paternalistic attitudes ought to be resisted, however, not just because they blur the two distinct limbs of antitrust enforcement, but more importantly because they demotivate market players from assuming their role as private attorneys-general, thus prejudicing the overall deterrent effect of private action. They may also estrange national judges, who may not wish to get too much involved in an area in which they will always be under the scrutiny or dominance of administrators. A comparative analysis of national competition laws confirms the independence of private enforcement vis-à-vis public enforcement.79 Although a pre-existing decision by an 74 See XA Yataganas, Citizens before Community Law, The System of Legal Protection in the On-going Economic and Political Integration (Athens/Komotini, 1994) (in Greek) 200–2. On the theory of dédoublement fonctionnel see 2.I.(a) below. 75 See C Jones, ‘A New Dawn for Private Competition Law Remedies in Europe? Reflections from the US’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 99. Compare in this context the so-called ‘Chevron doctrine’ under US law, according to which courts often defer to specialised administrative agencies (Chevron USA v Natural Resources Defense Council, 467 US 837 (1984)). This doctrine has however not been applied in the area of antitrust law and, in any event, courts are allowed to overrule the agencies if need be. 76 Case C–344/98 Masterfoods Ltd v HB Ice Cream Ltd [2000] ECR I–11369. 77 In the pertinent part we argue that in reality Masterfoods establishes no primacy of the Commission over national courts, but rather imposes duties on the latter to apply Community law in a consistent way under the final control of the ECJ through the Art 234 EC procedure. See also Paulis and Gauer, ‘La réforme des règles d’application des articles 81 et 82 du Traité’ (2003) 11 JdT (Eur) 65, at 69; contra Kjølbye (2002) 39 CMLRev 175, at 181, who seems to be seeing Masterfoods as establishing the primacy of the Commission over national court proceedings. 78 Compare the language used by former Commissioner Monti to describe the amicus curiae mechanism: ‘[t]hese means of interactions are intended to allow the Commission . . . to draw courts’ attention to important issues relating to the application of EU antitrust rules and contribute to the coherence of their rulings’: see Monti, ‘EU Competition Policy after May 2004’, Speech delivered at the Fordham Annual Conference on International Antitrust Law and Policy (New York, 24 Oct 2003), available at http://ec.europa.eu/comm/competition/speeches, at 5, emphasis added). Certainly such statements are not in conformity with the independence of private enforcement. 79 See generally Negri, above n 25, at 55 ff. On the Austrian legal system see eg Eilmansberger and Thyri, ‘Austria’ in Cahill (ed), The Modernisation of EU Competition Law Enforcement in the European Union, FIDE 2004 National Reports (Cambridge, 2004) 51. According to these authors, it is doubtful whether a civil court could suspend proceedings until the Austrian Cartel Court issues a decision. This would probably not qualify as a ‘prejudicial preliminary question of law’ under s 190 of the Austrian Code of Civil Procedure. The same is accepted in Italian law: see Lamandini, ‘Il diritto industriale 10 anni dopo: Il punto su . . . il diritto antitrust: Le restrizioni della concorrenza innanzi ai giudici civili italiani’ [2002] Il Diritto Industriale 373, at 377; Negri, above n 25, at 121–30. On French law see Idot, ‘France’ in Cahill, above, at 179–80; Riffault-Silk, ‘Modernisation of EU Competition Policy—One Year on: The View of National Courts’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Zwölftes St. Galler Internationales Kartellrechtsforum 2005 (Basle/Geneva/Munich, 2006) 154; Jalabert-Doury, Nouvel and Le Marec, above n 69, 805; Claudel, ‘La processualisation du droit de la

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The Independence of Private Antitrust Enforcement 17 administrative authority may of course be used by the courts and litigants to establish and prove certain facts, in particular in case of follow-on civil actions, such a decision does not normally acquire the status of binding authority, though it can certainly be persuasive authority.80 The principle of independence is also not affected by the possible deference paid on occasion by civil courts to competition authorities’ decisions.81 Again, such an attitude does not indicate the primacy of public over private enforcement, or of administrative over civil proceedings, but may simply reflect the principle of economy in legal proceedings, which may make it inappropriate to repeat parts of the procedure before a civil generalist court, if a specialist authority or court has already dealt with the same facts.82

(b) The Commission Green Paper and National Competition Laws on the Independence of Private Enforcement The Commission’s recent Green Paper is somewhat unclear as to the relationship between private and public enforcement. On the one hand, the Commission clearly sees private concurrence’ in Canivet (ed), La modernisation du droit de la concurrence (Paris, 2006) 304 ff, speaking of ‘total organic independence’. Compare also Wesseling, ‘Divergences in “Harmonised” Laws: A View from Abroad’ in Rodger and MacCulloch (eds), The UK Competition Act, A New Era for UK Competition Law (Oxford/Portland, 2000) 255, who, with regard to the power to order preliminary measures in Dutch law, stresses the fact that there is a fully parallel competence between the Dutch Competition Authority and Dutch civil courts. See also the national reports and their replies to question 3.5 in Cahill, above. 80 See eg Hempel, ‘Private Follow-on-Klagen im Kartellrecht’ (2005) 55 WuW 137, at 140–1, with regard to the state of affairs in Germany before the latest amendments of the Competition Act (on these amendments see 3.II.(b).(ix) below). 81 See eg, with reference to Italian law, Scuffi, ‘Lo stato dei rapporti tra procedimenti amministrativi e giudici civili antitrust’ (1999) 48 Rivista di Diritto Industriale I-273, at I-277; Nyssens and Pecchioli, ‘Il regolamento n. 1/2003 CE: Verso una decentralizzazione ed una privatizzazione del diritto della concorrenza’ (2003) 8 Dir Un Eur 357, at 384–5; Scuffi, ‘Il contributo del giudice ordinario all’evoluzione del diritto antitrust: La giurisprudenza delle corti di appello e dei tribunali italiani dal 1992 al 2003’ (2003) 11 Concorrenza e Mercato 97, at 99 and ‘Established Principles and New Perspectives in the Italian Antitrust Case Law’ in Raffaelli (ed), Antitrust between EC Law and National Law, Treviso 16–17 May 2002 (Brussels/Milan, 2003) 277–8, clearly distinguishing the question of autonomy and independence of private enforcement from the question of the occasional de facto deference paid to decisions of the Italian competition authority by civil courts. 82 With regard to the UK see Marsden and Smith, ‘United Kingdom’ in Cahill, above n 79, speaking of a certain precedence of public over private enforcement ‘as a matter of practicality’. A good example is Iberian UK v BPB Industries plc [1996] 2 CMLR 601 (ChD) where the English High Court held that if parties have disputed an issue before the Commission and have had a reasonable opportunity to challenge the Commission’s decision, they are estopped from pleading that issue anew and contradicting the Commission’s view in civil proceedings. However, the court at the same time rejected the plaintiff’s argument that, formally speaking, a Commission decision is binding as a matter of issue estoppel, because the Commission proceedings are administrative in nature and cannot thus produce issue estoppel under English law (at 616–7). See further Goyder, ‘Reliance on Commission Decisions in National Courts’ in Andenas and Jacobs (eds), European Community Law in the English Courts (Oxford, 1998) 179 ff; Laddie, ‘Community Competition Law in English Courts’ in ibid, at 176; Peretz, ‘Should Competition Authorities Be Authorized to Intervene in National Competition Proceedings, Especially in the Courts? If They Should, then in what Circumstances and to What Extent Should this Be the Case? National Report from the United Kingdom’, LIDC Questions 2001/2002, available at www.ligue.org, at 6. See also British Leyland v Wyatt [1979] 3 CMLR 79, where the High Court treated an unappealed Commission decision as having the same effect as a judgment by the ECJ; contrast Merson v Rover Group Ltd., 22 May 1992, not reported, cited in the Iberian case, where the court came to the conclusion that it was not bound by the outcome of European competition proceedings. This whole issue has now been revisited in England by the Crehan line of cases. Some national competition laws also contain provisions with the aim of avoiding such duplication of proceedings. Thus, under Art 18 of the Greek L703/1977, the judgments of the administrative courts that review Competition Committee decisions have the force of erga omnes res judicata before the civil courts. The judgments of the latter, on the other hand, enjoy res judicata effect only inter partes and do not bind the Competition Committee.

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18 EC Private Antitrust Enforcement enforcement as in principle independent,83 so that potential plaintiffs do not need to wait for a condemnation of anti-competitive conduct in a public enforcement action before seising civil courts. The Commission has made clear that it is ‘keen to see increased private enforcement of the full range of competition infringements under EC law and not just additional enforcement in cases already dealt with by the public authorities (so called “follow-on actions”)’.84 In other words, the aim of the Green Paper is also to facilitate ‘stand-alone’ actions in cases which public enforcement agencies could not or did not wish to deal with. This certainly shows that, at least as a matter of principle, private enforcement is seen as independent of public enforcement.85 On the other hand, however, the Green Paper aims at introducing a binding effect or a rebuttable presumption of illegality for infringement decisions of competition authorities of the EU Member States. Thus, the finding of a competition law infringement will either bind civil courts or reverse the burden of proof as to the existence of illegal behaviour, ie anti-competitive conduct.86 In those cases, the main task of the civil courts will be to decide whether the plaintiffs have suffered harm and to award damages. However, while these proposals create an initial impression of public enforcement ‘primacy’, in reality they are merely meant as an incentive to encourage follow-on civil actions by making it easier for the victims of anti-competitive practices to rely on findings by the competition authorities, rather than having to prove a competition law infringement anew. These proposals do not aspire to give decisions by public enforcement agencies binding effect over all kinds of parallel civil proceedings. Thus, it is not proposed that findings of national competition authorities should have a bearing on civil litigation when, for example, the litigants raise the nullity of a contract or when the parties seek a remedy other than damages. If the binding effect of national authorities’ decisions were to be extended to such cases, then one could indeed speak of a principle of primacy of public over private antitrust enforcement. In such a case the courts would be deprived of the chance to apply and decide the substantive competition law norms, therefore the aim of involving civil judges in antitrust enforcement in Europe would be seriously impaired. The same can be said of those national competition laws that have recently been amended with the aim of facilitating follow-on civil actions for damages by conferring binding effect on final decisions by public authorities declaring that there has been an infringement of competition law. Thus, section 58A of the UK Competition Act 1998, as subsequently amended, confers binding effect on decisions of the Office of Fair Trading (OFT) and the Competition Appeal Tribunal (CAT) on appeal from the OFT, but this provision clearly specifies that it ‘applies to proceedings before the court in which damages or

83 See eg Commissioner Kroes, ‘More Private Antitrust Enforcement through Better Access to Damages: An Invitation for an Open Debate’, Opening Speech at the Conference ‘Private Enforcement in EC Competition law: The Green Paper on Damages Actions’ (Brussels, 9 Mar 2006), available at http://ec.europa.eu/comm/ competition/speeches, at 4: ‘[p]rivate actions should not be dependent on public enforcement. We need a system that allows private actions to stand on their own two feet’. See also para 3 of the Commission Staff Working Paper which refers to private and public enforcement as ‘the two pillars of enforcement of EC antitrust rules’, thus viewing both as of an equal footing. 84 Commission MEMO/05/489, above n 3, under the heading ‘What types of infringement does the Commission think private damage actions should enforce?’. 85 Compare XXXVth Report on Competition Policy—2005, above n 56, para 31, which stresses that actions for damages should be ‘an autonomous means of enforcement’. See also De Smijter, Stropp and Woods, ‘Green Paper on Damages Actions for Breach of the EC Antitrust Rules’ [2006–1] EC Competition Policy Newsletter 1. 86 Green Paper, above n 55, Question C, Option 8.

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The Independence of Private Antitrust Enforcement 19 any other sum of money is claimed in respect of an infringement’.87 In other words, the UK Act does not provide for a general principle of law that makes findings by the public authority binding on all kinds of civil proceedings. What section 58A of the UK Act really refers to is follow-on civil actions for damages, and the aim is to facilitate such actions from an evidentiary point of view.88 This does not mean that such binding effect extends to concurrent civil proceedings, in which, for example, the nullity of an agreement arises in the context of claims based on contract. Similarly, section 33(4) of the recently amended German Competition Act (7. GWBNovelle), which goes even further in conferring binding effect on all Commission, Bundeskartellamt and even other Member States’ national competition authorities’ decisions,89 is confined to follow-on civil litigation, basically aimed at facilitating damages claims against convicted infringers.90 Indeed, a German court has recently confirmed that this provision does not entail a duty for civil courts to stay proceedings and await the adoption of a contemplated infringement decision by a competition authority or the decision becoming final. Instead, the civil court has power to adjudicate on the merits, since it enjoys parallel competence to deal with an action for damages based on the competition law violation concerned. The German court, after distinguishing the spirit of section 33(4) GWB, which is to facilitate follow-on claims, specifically stressed that the administrative proceedings leading to fines in principle have no priority or primacy over concurrent civil proceedings.91 This ruling is fully compatible with the principle of independence of private enforcement.

(c) Practical Problems in the Interrelationship between Public and Private Enforcement: Settlements, Leniency, Amount of Fines and Damages (i) Settlements The principle of independence of private antitrust enforcement has many serious practical consequences. Courts are not bound in the least by the administrative practice of antitrust 87 This is clearer if one reads para 87 of the Explanatory Notes to the Enterprise Act 2002, available at www.legislation.hmso.gov.uk/acts/en2002/2002en40.htm: ‘[s]ection 20: Findings of infringements. Subsection (1) inserts a new section 58A in CA 1998. The new section provides that certain decisions of the OFT or the CAT regarding an infringement of competition law are to bind the courts for the purpose of a subsequent claim for damages’ (emphasis added). This rule applies to OFT or CAT decisions that have established an infringement of UK or EC competition law. See also s 47A of the Competition Act 1998, as subsequently amended, which extends the binding effect of infringement findings to decisions of the European Commission but is applicable to follow-on claims for damages only brought before the CAT. See further 3.II.(b).(ix) below. 88 See Rodger, ‘Private Enforcement and the Enterprise Act: An Exemplary System of Awarding Damages?’ (2003) 24 ECLR 103, at 108–9. 89 Apparently, this is also the case in Czech law. Note that the binding effect is conferred on prior infringement decisions only if the parties in the follow-on civil litigation were the addressees of those decisions and were thus fully heard. See Hempel, above n 80, at 144. 90 See Hempel, ‘Privater Rechtsschutz im deutschen Kartellrecht nach der 7. GWB-Novelle’ (2004) 54 WuW 362, at 371; Moch, ‘Private Kartellrechtsdurchsetzung—Stand, Probleme, Perspektiven’ (2006) 56 WuW 39, at 41. For a critical comment see Meyer, ‘Die Bindung der Zivilgerichte an Entscheidungen im Kartellverwaltungsrechtsweg— Der neue § 33 IV GWB auf dem Prüfstand’ (2006) 108 GRUR 27, at 29, who rightly argues that the German legislator may have gone much further than Art 16(1) of Reg 1/2003, above n 4, though not bound to do so by Community law. It must be noted that the explanatory memorandum of the German government that accompanies the latest amendment of the German Competition Act appears to be circumspect with regard to the scope of this new provision. Thus, the binding effect of foreign competition authorities’ decisions is confined to those authorities’ findings with regard to their national territories: see Meyer, at 32. 91 OLG Düsseldorf, 3 May 2006, VI-W (Kart) 6/06, Zementkartell (2006) 56 WuW 913.

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20 EC Private Antitrust Enforcement authorities with regard to their discretion as to whether or not to settle a case or offer certain companies immunity with a view to obtaining useful information in their pursuit of a cartel. Thus, a possible decision by the Commission or national competition authorities to accept commitments by companies, instead of proceeding to a finding of infringement, and to close the administrative proceedings by rendering the commitments binding on those companies does not bind national civil courts as to the applicability or non-applicability of Articles 81 and 82 EC, and the courts remain free to decide whether or not there has been an infringement of Community competition law.92

(ii) Leniency Equally, national civil courts are not bound by administrative leniency schemes.93 Immunity from administrative fines is totally unconnected with civil litigation claims. The recent de-trebling of antitrust damages for corporate amnesty applicants in the US does not call the above principle into question, because de-trebling will take place only if the amnesty beneficiary assists the plaintiff in his private action. Thus, the 2004 Antitrust Criminal Penalty Enhancement and Reform Act only limits the damages recoverable from a corporate amnesty applicant to the harm actually inflicted by the applicant’s conduct, ie to single and not treble damages, if that person also co-operates with private plaintiffs in their damages actions against the remaining cartel members. An appropriate level of cooperation as defined by the Act involves: (a) providing a full account of all facts relevant to the civil action; (b) furnishing all documents relevant to the civil action; and (c) making oneself available for interviews, depositions and testimonies in connection with the civil action.94 This shows that the US rule which governs the interface between the US leniency policy and private enforcement is not one-sided, but rather aims at protecting the effectiveness of both elements. In Europe, the rather under-developed state of private enforcement was not considered to deter companies from applying for leniency, so until very recently no case had been made for imposing limitations on private actions in leniency applications.95 The Green Paper for the first time attempts to address this question and moves in the US direction. The policy options considered include the non-discoverability of leniency applications96 and the possibility of lessening the civil liability of a leniency applicant. 92 Art 9 of and Rec 13 to Reg 1/2003, above n 4. See 2.III.(d).(iv).e below. National courts cannot undermine the effectiveness of the Commission commitments decision or interfere with the exercise of the Commission’s discretion in that decision, though they can choose to proceed to their own analysis of the overall legality or illegality of the practice in question, thus leading to a judgment with inter partes res judicata effect, while the Commission’s commitments remains binding erga omnes. 93 In the EU see now Commission Notice on Immunity from Fines and Reduction of Fines in Cartel Cases [2006] OJ C298/17. 94 S 213(b) of the Act. The new Act also limits the recovery of damages from amnesty applicants to damages attributable to the defendant, ie it eliminates joint and several liability for successful amnesty applicants. For critical comments see Yon [2004–1] Concurrences 102, at 106–7. 95 See further Idot, ‘Une question d’actualité en droit de la concurrence: Programmes de clémence et internationalisation’ in Droit et actualité, Etudes offertes à Jacques Béguin (Paris, 2005) 378–9; Prieto and Roda, ‘Quelles évolutions pour la clémence dans l’Union européenne?’ [2005–3] Concurrences 12, at 14. On the EC state of affairs see also former Commissioner Monti, ‘Priorities for EU Competition Policy’ in Hellenic Competition Committee (ed), EU Competition Law and Policy, Developments and Priorities, Athens Conference, April 19th 2002 (Athens, 2002) 12. 96 See 2.III.(c).(iv) below on this question.

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The Independence of Private Antitrust Enforcement 21 The particular question of reducing the civil liability of successful leniency applicants is quite complex and goes to the core of the relationship between public and private enforcement. The Green Paper on damages examines two options. One would be to grant a successful leniency applicant the option to claim a rebate on any damages claim facing him, in return for helping claimants bring damages claims against all cartel members.97 The claims against the other infringers, jointly and severally liable for the entire harm, would remain unchanged.98 Another option would be to remove joint and several liability for the successful immunity applicant and limit his liability to the share of the harm corresponding to his share in the cartelised market.99 As with the US case, we see that the EC proposals do not call into question the independence of private enforcement, but rather aim at ensuring that the effectiveness of the Leniency Notice is not compromised. Victims of anti-competitive practices will still be compensated fully: indeed, if the first option of the Green Paper is preferred, they will be better off, as the leniency beneficiary will be under a duty to assist plaintiffs to bring a damages claim against the other cartel members. Besides, leniency can be quite beneficial for potential plaintiffs. First, they become aware of the cartel infringement, secondly, the facts are established during the administrative proceedings, thirdly, courts or plaintiffs themselves can ask for documentary evidence in the hands of the public enforcer in order to establish the liability and/or the damage, and, fourthly, a final public decision, depending on the applicable rules, may have a binding effect on the follow-on civil proceedings or may constitute prima facie evidence of the cartel violation.100

(iii) Fines and Damages Finally, the imposition of an administrative fine by the Commission or a national competition authority on an undertaking has in principle no significance in a civil trial centred on the same facts and undertakings.101 In other words, the non bis in idem principle does

97

Option 29 of the Green Paper, above n 55. If there was a system of double damages for horizontal cartels, this rebate would de-double the award for the immunity applicant, thus restoring single damages as the content of the claim which he faces. 99 Option 30 of the Green Paper, above n 55. See also para 9.9 of the recent OFT Recommendations, Private Actions in Competition Law: Effective Redress for Consumers and Business (November 2007), where the OFT proposes that a power be conferred on the UK Secretary of State to provide that immunity recipients are not jointy and severally liable with the other wrongdoers and their liability is limited to the specific harm they caused. The OFT, interestingly, proposes that this power could be exercised on the advice of the OFT. 100 We do not touch here upon the question whether the enhancement of private actions as such will weaken the leniency policy of the Commission. Our response to arguments made in this direction is that it is difficult to subjugate effective redress of victims of competition law violations to exigencies of administrative efficiency. In any event, however, such arguments are misplaced, since the US experience shows that the immunity programme has been a huge success in a country where private antitrust actions flourish to the point of excess. 101 See Commission MEMO/06/357, Competition: Commission Proposes Changes to the Leniency Notice— Frequently Asked Questions, 29 Sept 2006, under the heading ‘What impact would the changes to the Leniency Notice have on actions for damages?’: ‘[e]ven though the Commission has fined participants to a cartel, damages may be awarded without these being reduced on account of the Commission fine’. Curiously enough, the Commission does not refer to the converse situation, ie whether it would be prepared to take into account in its fines possible damages awards. See also Commission MEMO/07/544, Competition: Commission Action against Cartels—Questions and Answers, 5 Dec 2007, under the heading ‘What action is open to consumers and companies who feel that they have been victims of such illegal agreements?’: ‘[f]ines imposed by the Commission are different from the damages awarded by national courts. While action for damages before a court can also have a certain deterrent effect, its main purpose is to compensate victims of anti-competitive behaviour or to secure compensation for damage suffered’. 98

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22 EC Private Antitrust Enforcement not apply as between administrative and private enforcement, since the two proceedings have totally different objectives and functions.102 Conversely, private damages awards that precede administrative (public) proceedings, in principle, have no bearing on the possible fines. In Tokai Carbon, an addressee of a Commission cartel decision argued that the Commission had failed to consider as an extenuating circumstance the fact that it had concluded civil law settlements in the US and Canada. The CFI rejected the argument because the settlements in question had no impact on the infringement committed in the EEA.103 According to the CFI, this may mean that civil damages awards in the EU may be an appropriate extenuating circumstance in the imposition of administrative fines. Such an approach should be resisted, however, and should be limited only to exceptional circumstances of settlements or of compensatory sums paid of the perpetrators’ own motion both of which are of course desirable. Indeed, recently, in Archer Daniels Midland, the CFI seems to have made a more general point about the independence of compensatory damages awards. It makes, in particular, a distinction between punitive and compensatory damages.104 Thus, US treble damages awards, according to the CFI, do not amount to an extenuating circumstance that the Commission should take into account, since they merely constitute a sanction that is only the consequence of the proceedings brought in the United States, is unrelated to the perpetrator and to the European facts and cannot in any event call in question the fact or gravity of the infringement.105 With regard to compensatory damages, these, in the CFI’s view, clearly do not pursue the same objectives as fines imposed by the Commission, since the former merely seek to compensate the victims of the anti-competitive behaviour whilst the latter seek to sanction an infringement of competition law in the Community.106 The Court’s reliance on the punitive element of exemplary/punitive damages implies that if the punitive damages have been awarded by courts in the EU and refer to European facts, they may have to be taken into account by the Commission as extenuating circumstances. In our view, it is not always easy to discern the objective of an award of damages, and the difference between the punitive and the compensatory element may not always be obvious. Instead, the Court should have stressed the different function of civil from publicadministrative proceedings. It is interesting that the Commission has taken into account compensatory damages awards as extenuating circumstances for the imposition of administrative fines in one case.107 102 See Temple Lang, ‘EEC Competition Actions in Member States’ Courts—Claims for Damages, Declarations and Injunctions for Breach of Community Antitrust Law’ in Hawk (ed), Antitrust and Trade Policies of the European Economic Community 1983, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1984) 265; Jones and Sharpston, ‘Beyond Delimitis: Pluralism, Illusions, and Narrow Constructionism in Community Antitrust Litigation’ (1996–97) 3 Columbia JEL 85, at 91. See, however, the recent judgment of the English High Court in Devenish Nutrition Ltd et al v Sanofi-Aventis SA (France) et al [2007] EWHC 2394 (ChD), where the court decided, as a preliminary issue, that the non bis in idem principle precludes an award of exemplary damages in a case in which the defendants have already been fined or even in which the defendants have not been fined as a result of a successful immunity application under the Leniency Notice. 103 Joined Cases T–236/01, T–239/01, T–244/01 to T–246/01, T–251/01 and T–252/01 Tokai Carbon Co Ltd et al v Commission [2004] ECR II–1181, para 348. 104 Case T–59/02 Archer Daniels Midland Co v Commission [2006] ECR II–3627, paras 349–355. 105 Ibid, para. 350. 106 Ibid, para. 351. 107 Commission Dec 1999/60/EC of 21 Oct 1998 (Pre-Insulated Pipe Cartel) [1999] OJ L24/1, para 172, where the Commission took into account as an ‘extenuating circumstance’, justifying the considerable reduction of a fine, the payment of substantial damages by one of the addressees of the Commission Decision to a victim of the anti-competitive conduct. This case has been criticised by S Mail-Fouilleul, Les sanctions de la violation du droit communautaire de la concurrence (Paris, 2002) 482, n 3016. In another case, the Commission reduced the

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The Independence of Private Antitrust Enforcement 23

administrative fine imposed on an undertaking because the latter offered and paid extra-judicially substantial financial compensations to third parties identified in the Statement of Objections as victims: Commission Dec 2003/675/EC of 30 Oct 2002 (PO Video Games, PO Nintendo Distribution and Omega-Nintendo) [2003] OJ L255/33, paras 440–441. See further van Haasteren and Peña Castellot, ‘Commission Fines Nintendo and Seven of its European Distributors for Colluding to Prevent Parallel Trade in Nintendo Products’ [2003–1] EC Competition Policy Newsletter 50, at 53. The Commission’s approach in this case has not been criticised, perhaps because it took into account not damages awarded by final judgment but rather extrajudicial compensation, a fact of undeniable relevance for the degree of culpability of a company, and thus for its fine.

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2 The Institutional Law Aspects of the Application of EC Competition Law by National Courts I. THE OLD ADMINISTRATIVE AUTHORISATION AND NOTIFICATION SYSTEM

(a) The ‘Foundational’ Public Enforcement System The past 40 years of competition law enforcement, based on the old Regulation 17,1 were characterised by a centralised model where the Commission enjoyed a de facto, and in some instances, notably the granting of individual exemptions under Article 81(3) EC, a de jure enforcement monopoly, while the role of the national legal systems (with one or two notable exceptions) and courts was marginal. It is true that the Treaty of Rome, while recognising in Article 85 EC the Commission’s role in ensuring ‘the application of the principles laid down in Articles 81 and 82’, did not dictate such a degree of centralisation.2 Indeed, the degree of centralisation created by Regulation 17 departed from the Community standard, according to which Community law is to be enforced primarily by national administrative authorities (administration communautaire indirecte)3 and by national courts (juges communautaires de droit commun).4 However, when Regulation 17 was enacted, centralisation was a conscious 1 Council Reg 17 of 6 February 1962—First Regulation Implementing Articles 85 and 86 of the Treaty [1962] JO L13/204. 2 See DJ Gerber, Law and Competition in Twentieth Century Europe: Protecting Prometheus (Oxford, 1998) 349 and 386; Ehlermann, ‘The Modernization of EC Antitrust Policy: A Legal and Cultural Revolution’, (2000) 37 CMLRev 537, at 538–40. 3 See Gerber and Cassinis, ‘The “Modernisation” of European Community Competition Law: Achieving Consistency in Enforcement—Parts I + II’ (2006) 27 ECLR 10 and 51, at 10. On this Community transformation of national administrative authorities see in general Dubey, ‘Administration indirecte et fédéralisme d’exécution en Europe’ (2003) 39 CDE 87, at 87 ff. See also Temple Lang, ‘The Duties of National Authorities under Community Constitutional Law’ (1998) 23 ELRev 109; Kakouris, ‘Special Administrative Courts of the Member States and the Court of the European Communities’ in Kakouris (ed), Perspectives, Droit Communautaire Européen, Théorie Générale du Droit, Domaine Méta-juridique (Athens/Komotini, 1998) 513; Chiti, ‘L’organismo di diritto pubblico e la nozione comunitaria di pubblica amministrazione’ in Annuario 1999–2000 dell’Associazione italiana dei professori di diritto amministrativo (Milan, 2001) 37–8; VI Karageorgou, Administrative Procedure under the Influence of European Integration (Athens/Thessaloniki, 2005) (in Greek), 14; Sydow, ‘Europäisierte Verwaltungsverfahren’ (2005) 45 JuS 97, 97. See also Case C–453/00 Kühne & Heitz NV v Productschap voor Pluimvee en Eieren [2004] ECR I–837, para 20: ‘it is for all the authorities of the Member States to ensure observance of the rules of Community law within the sphere of their competence’. 4 See inter alia Ehlermann, ‘Ein Plädoyer für die dezentrale Kontrolle der Anwendung des Gemeinschaftsrechts durch die Mitgliedstaaten’ in Capotorti, Ehlermann et al (eds), Du Droit International au Droit de l’Intégration, Liber Amicorum Pierre Pescatore (Baden-Baden, 1987) 217 ff; O Dubos, Les juridictions nationales, juge communautaire, Contribution à l’étude des transformations de la fonction juridictionnelle dans les Etats-membres de l’Union européenne

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26 Institutional Law Aspects choice with a view to constructing a European competition law enforcement system.5 The centralised system of enforcement performed in a sense a ‘pedagogical’ function.6 Throughout the long ensuing period, therefore, the Commission was the basic public enforcement authority for EC competition law purposes.7 National competition authorities started to enter the field only recently, and sometimes reluctantly, since at least with regard to Article 81 EC their hands were tied by their inability to apply Article 81(3) EC and to grant individual exemptions to restrictive agreements. In addition, most national authorities were only recently empowered by national law to apply Articles 81 and 82 EC. National courts, on the other hand, did have concurrent jurisdiction to enforce Articles 81(1) and 82 EC, since these provisions were recognised as (horizontally) directly effective by the Court of Justice,8 but under the exemption monopoly they could not grant individual exemptions. Nevertheless, during the past 40 years the role of national courts in EC competition enforcement has not been particularly strong and private enforcement in Europe is certainly far less developed than in the US.9 This is because the whole institutional system of antitrust enforcement in Europe has been fundamentally different because of the overwhelmingly central role of public enforcement. The foundational model of EC compe-

(Paris, 2001). On this dédoublement fonctionnel as to national authorities and courts see in general R Lecourt, L’Europe des juges (Brussels, 1976) 8–9; PV Pavlopoulos, Guarantees of the Judicial Protection in European Community Law (Athens/Komotini, 1993) (in Greek) 69; D Simon, Le système juridique communautaire (Paris, 2001) 163–4, 167; Anagnostopoulou-Yiannakou, ‘The National Judge as a Factor of the Community Justice’ in Frangakis (ed), The Court of Justice of the European Communities after 50 Years of Operation (Athens/Komotini, 2004) (in Greek) 74; Radermacher, ‘Gemeinschaftsrechtliche Staatshaftung für höchstrichterliche Entscheidungen’ (2004) 23 NVwZ 1415, at 1416; Canivet, ‘Les réseaux de juges au sein del’Union européenne: Raisons, nécessités et réalisations’ in Idot and Poillot-Peruzzetto (eds), Internormativité et réseaux d’autorités, L’ordre communautaire et les nouvelles formes de relations (Toulouse, 24 Octobre 2003), Petites Affiches, 5 Oct 2004, No 199, 45, at 46. See Case T–51/89 Tetra Pak Rausing SA v Commission [1990] ECR II–309, para 42: ‘when applying Article 86 [now 82] . . . the national courts are acting as Community courts of general jurisdiction’. Compare, however, AG Léger’s Opinion in Case C–224/01 Gerhard Köbler v Austria [2003] ECR I–10239, para 66, who sees the dédoublement fonctionnel more symbolically than literally: ‘[t]hat expression must not be understood literally, but symbolically: where a national court is called upon to apply Community law, it is in its capacity as an organ of a Member State, and not as a Community organ, as a result of dual functions’. 5 See Gerber, above n 2. See also the comprehensive historical exposé made by Tesauro, ‘Some Reflections on the Commission’s White Paper on the Modernisation of EC Antitrust Policy’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 259 ff. 6 See Tesauro, ‘Modernisation and Decentralisation of EC Competition Law’ in Rivas and Horspool (eds), Modernisation and Decentralisation of EC Competition Law (The Hague/London/Boston, 2000) 1–3; Pons, ‘Nouveaux enjeux et réformes de la politique européenne de la concurrence’, Petites Affiches, 5 Nov 2001, No 220, 21, at 25. 7 See Venit, ‘Slouching towards Bethlehem: The Rule of Reason and Notification in EEC Antitrust Law’ (1987) 10 BC Int’l Comp LRev 17, at 19; Reynolds, ‘From Co-operation to Integration: The Relationship between National and European Competition Law through Judicial Review’ in O’Keeffe and Bavasso (eds), Liber Amicorum in Honour of Lord Slynn of Hadley, Vol. I, Judicial Review in European Union Law (The Hague/London/Boston, 2000) 570–1, speaking of the Commission as ‘the privileged forum for competition disputes’. On the initial view of EC competition law as Brussels-based see the groundbreaking article by Forrester and Norall, ‘The Laicization of Community Law: Self-help and the Rule of Reason: How Competition Law Is and Could Be Applied’ (1984) 21 CMLRev 11, at 41 ff. The authors had argued for a more active role of national courts in competition enforcement, notwithstanding the then Commission monopoly to grant exemptions. A system of co-operation between the Commission and national courts should ensure consistency and would limit the risk of conflicts. On the centrality of DG IV in competition law enforcement in Europe from a political science point of view see Wilks and McGowan, ‘Competition Policy in the European Union: Creating a Federal Agency?’ in Doern and Wilks (eds), Comparative Competition Policy, National Institutions in a Global Market (Oxford, 1996) 245 ff. 8 According to the European Courts’ case law Arts 81(1) and 82 EC enjoy direct effect and grant individuals actionable rights which national courts must protect (BRT v SABAM (I), above n 22 (ch 1), para 16). 9 See Jones and Sharpston, above n 102 (ch 1), at 87.

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The Old Administrative Authorisation and Notification System 27 tition law centres on administrative decision-making.10 In the words of Former Advocate General Tesauro the administrative enforcement model in Europe ‘is proving to be very effective and to some extent an alternative to judicial enforcement. While the protection of private complainants is not the objective of the administrative intervention, the outcome of an antitrust case conducted by the competition authority can be largely equivalent to a judge ruling.’11 To these one should add the fact that administrative authorities and certainly the Commission have extensive investigatory powers and the procedure before them entails no costs for a complainant.12 This unprecedented success and the dominant enforcement role acquired by the Commission started to be more of a burden for it in the last two decades and soon it became obvious that the high degree of centralisation of the 1960s was no longer appropriate for the twenty-first century. As a result, the Commission was now prepared to relinquish some of its powers through the adoption of a modernised enforcement model that is decentralised and also relies heavily upon national courts and competition authorities.13

(b) Competence of Civil Courts to Apply Articles 81(1), (2) and 82 EC During the first years of EC competition law enforcement the direct effect of the Treaty competition provisions and the competence of national (civil) courts to apply the latter were not taken for granted. The centralised administrative model introduced by Regulation 17 certainly did not help in that respect. It was essentially the Court of Justice that affirmed in a line of judgments the direct effect of these provisions and the competence of national courts to apply Articles 81 and 82 EC, though not the third paragraph of the former which, under the administrative authorisation system of Regulation 17, was reserved to the Commission’s sole jurisdiction.14 Thus, the Court interpreted Article 9(3) of Regulation 17 in such a way that national courts dealing with private law disputes were not to be considered as ‘authorities of the Member States’ in the sense of being devoid of their jurisdiction to apply Articles 81(1) and 82 EC, when the Commission initiated administrative proceedings. This jurisdiction of national courts resulted from the direct effect of those provisions and could not be limited

10 See Gerber, above n 2, at 386. According to that author ‘the lack of private suits for enforcement in Community courts and their rarity in Member State courts means that the Commission makes most decisions regarding objectives to be pursued, conduct to be challenged, resources to be used and the arguments to be employed in justifying decisions’. See also in this direction Ehlermann, above n 2, at 553; Capelli, ‘La riforma della disciplina della concorrenza nell’Unione Europea: Impatto sul sistema giudiziario italiano’ [2000] Il Diritto dell’Economia 561, at 566; Birk, ‘Die Konkurrentenklage im EG-Wettbewerbsrecht’ (2003) 14 EWS 159, at 159–60; DG Goyder, EC Competition Law (Oxford, 2003) 460. 11 Tesauro, ‘Private Enforcement of EC Antitrust Rules in Italy: The Procedural Issues’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001, Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 278. 12 See also Jacobs, ‘Panel Discussion: EEC Enforcement Policy and Practice’ (1985) 54 Antitrust LJ 611, at 618 ff; Venit, above n 7, at 19; B Beauchesne, La protection juridique des entreprises en droit communautaire de la concurrence (Paris, 1993) 42. 13 In explaining the modernisation initiative of the Commission, former Commissioner Monti stressed the particularly negative consequences of the Commission’s being virtually the sole enforcer of Community competition law in an enlarged Union. See Monti, above n 59 (ch 1), at 5. 14 Art 9(1) of Reg. 17, above n 1.

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28 Institutional Law Aspects by Regulation 17.15 However, the Court progressively curtailed the powers of national courts when the latter applied Articles 81(1) and 82 EC in parallel with the European Commission.16 While national courts could continue their proceedings and rule on the agreement or the conduct at issue if the latter manifestly did or did not fall within the prohibitions of Articles 81(1) and 82 EC, their competence seemed weaker in cases of doubt.17 Initially, the Court of Justice ‘invited’ national courts to suspend their proceedings, in order to avoid an eventual conflict with the Commission’s decision. While it is true that at this point, ie so long as the Commission had not yet reached its decision, the national court was not, strictly speaking, under a Community law duty to suspend,18 nevertheless, the Court of Justice gradually used more stringent language, thus, in essence leading to results comparable to those pertaining to a duty to stay proceedings.19 This was so in order to avoid conflicting decisions, which would be against the principle of legal certainty.20 Usually 15 BRT v SABAM (I), above n 22 (ch 1), paras 12–20, overruling Case 43/69 Brauerei A Bilger Söhne GmbH v Heinrich Jehle and Marta Jehle [1970] ECR 127, para 9. See further C Grynfogel, Droit communautaire de la concurrence (Paris, 1997) 52; J Schapira, G Le Tallec, J-B Blaise and L Idot, Droit européen des affaires, Vol. I (Paris, 1999), 334–5. This case law has not lost all its value under the new system of enforcement, since the provision of Art 9(3) of Reg. 17 is retained in Art 11(6) of the new Reg 1/2003, above n 4 (ch 1). Whether national civil (and criminal) courts were excluded from the language of Art 9(3) of Reg 17 was not always clear. See eg PK Mailänder, Zuständigkeit und Entscheidungsfreiheit nationaler Gerichte im EWG-Kartellrecht (Baden-Baden, 1965) 23 ff. The Court in BRT v SABAM (I) distinguished between national courts, where the EC competition issue arose in disputes governed by private law, and courts ‘especially entrusted with the task of applying domestic legislation on competition or that of ensuring the legality of that application by the administrative authorities’ (paras 14, 15, 19). Only the latter were affected by the letter and spirit of Art 9(3) of Reg 17, according to the Court. 16 Under the previous system of enforcement, parallel proceedings in this sense refer to a case pending simultaneously before a civil court and before the Commission, when the latter has been seised through either an application for negative clearance or a complaint, or had initiated ex officio proceedings. If there were no proceedings pending before the Commission, the national court was unfettered in its competence to apply Arts 81(1),(2) and 82 EC. 17 Case C–234/89 Stergios Delimitis v Henninger Bräu AG [1991] ECR I–935, paras 50–52. Compare also the exact letter of the Court’s judgment in Case C–250/92 Gøttrup-Klim ea Grovvareforeninger v Dansk Landbrugs Grovvareselskab AmbA [1994] ECR I–5641, para 58: ‘[i]f the conditions for application of Article 85(1) [now 81(1)] are clearly not satisfied so that there is scarcely any risk of the Commission taking a different decision, the national court may continue the proceedings and rule on the agreement in issue’ (emphasis added). However, the ECJ’s case law indicates that while the competence of national courts remained unfettered only if the conduct in question seemed manifestly legal or illegal pursuant to Art 81(1) or 82 EC, a stay of proceedings was ‘invited’ even in case of slight doubt. See, in this sense, Korah, ‘The Judgment in Delimitis: A Milestone Towards a realistic Assessment of the Effects of an Agreement—Or a Damp Squib?’ (1993) 8 Tul Eur Civ LForum 17, at 44. 18 See Jones and Sharpston, above n 102 (ch 1), at 96, stressing that there is no ‘unconditional obligation to stay national court proceedings while waiting for the Commission to act’. According to these authors, ‘the national court, in the performance of its duty to decide the case, is entitled to formulate a considered, discretionary judgment about what the Commission is likely to do’. 19 Compare BRT v SABAM (I), above n 22, para 21: ‘[the] court may, if it considers it necessary for reasons of legal certainty, stay the proceedings’; and Delimitis, above n 17, paras 47 and 52 in fine: ‘[a]ccount should here be taken of the risk of national courts taking decisions which conflict with those taken or envisaged by the Commission in the implementation of Articles 85(1) [now 81(1)] and 86 [now 82], and also of Article 85(3) [now 81(3)]. Such conflicting decisions would be contrary to the general principle of legal certainty and must, therefore, be avoided when national courts give decisions on agreements or practices which may subsequently be the subject of a decision by the Commission. . . . A stay of proceedings or the adoption of interim measures should . . . be envisaged where there is a risk of conflicting decisions in the context of the application of Articles 85(1) and 86 [now 81(1) and 82]’ (emphasis added). On the early less absolutist language of the Court in this context see Meade, ‘Decentralisation in the Implementation of EEC Competition Law—A Challenge for the Lawyers’ (1986) 37 NILQ 101, at 105; Merola, ‘La cooperazione tra giudici nazionali e Commissione nell’applicazione delle norme comunitarie antitrust’ (1993) 116 Il Foro Italiano IV-418, at 421–2. 20 On legal certainty in this context see Basedow, ‘Rechtssicherheit im europäischen Wirtschaftsrecht—Ein allgemeiner Rechtsgrundsatz im Lichte der wettbewerbsrechtlichen Rechtsprechung’ (1996) 4 ZEuP 570, at 582.

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The Old Administrative Authorisation and Notification System 29 national courts have proved ready to suspend their proceedings in expectation of a Commission decision. In England such a stay of proceedings may take place at any stage of the Commission proceedings, while the court may sometimes prefer not to suspend and proceed to preparatory steps for the eventual trial for so long as these steps do not prejudge the Commission’s decision.21 In the recent Masterfoods case, the Court went even further in subjecting national courts to a fully-fledged duty, based on Article 10 EC, not to take decisions ‘running counter to’ decisions of the Commission, where the Commission had already reached such a decision on the case in question.22

(c) Competence of Civil Courts to Apply Article 81(3) EC Contrary to Article 81(1) EC, which had been recognised as directly effective, under the notification and prior authorisation system the Commission had exclusive competence for Article 81(3) EC. Its exemption monopoly was introduced by Article 9(1) of Regulation 17. Notification of restrictive agreements to the Commission, while not obligatory, secured full immunity from administrative fines. The European Court of Justice had also initially conferred provisional civil validity on all agreements notified to the Commission,23 but later it limited provisional validity only to so-called ‘old’ agreements, ie agreements in existence before Regulation 17 came into force.24 This split in competences, ie between the concurrent competence of the Commission and national courts to apply the first paragraph of Article 81 EC and the exclusive competence of the Commission to apply its third paragraph created a rather complicated state of affairs in which the national courts were essentially blocked by the Commission exemption monopoly. The role of national courts was less problematic and their tasks were evident, in cases where the Commission had already decided whether or not an agreement fulfilled the conditions of Article 81(3) EC, thus respectively granting or denying an individual exemption. If the agreement in question had been granted an individual exemption of constitutive nature, the national court was bound by that exemption, which was incorporated into an erga omnes Community formal legal act that bound the court fully.25 If the Commission had considered that the agreement could not be saved by Article 81(3) EC, the national 21 See MTV Europe v BMG Records (UK) Ltd et al [1997] EuLR 100. See further on the attitude of English courts with references to case law Cutting, ‘Competition Law in the United Kingdom’ in Vogelaar, Stuyck and Reeken (eds), Competition Law in the EU, its Member States and Switzerland, Vol. II, United Kingdom, Ireland, Germany, Austria, Finland, Sweden, Denmark and Greece (The Hague/Deventer, 2002) 32–3. 22 Among other commentaries see in particular Malferrari, ‘Neues zur Kompetenzverteilung zwischen Kommission und nationaler Gerichtsbarkeit auf dem Gebiet des Wettbewerbs und zum Verhältnis zwischen der Nichtigkeitsklage und dem Vorabentscheidungsverfahren: Anmerkungen zum Urteil des EuGH in der Rechtssache Masterfoods’ (2001) 36 EuR 605, at 608–10; Kjølbye (2002) 39 CMLRev 175, at 177 ff; Bornkamm, ‘Die Masterfoods-Entscheidung des EuGH: Bindung der Zivilgerichte an Kommissionsentscheidungen—Lehren für das neue Kartellverfahren?’ (2003) 1 ZWeR 73. 23 The ECJ did so in Bosch, above n 1 (introduction). 24 Case 48/72 Brasserie de Haecht v Oscar Wilkin and Marie Janssen (II) [1973] ECR 77. 25 See further Herbert, above n 20 (ch 1), at I-468; A Lang, ‘Giudice nazionale e Commissione delle Comunità europee: Coesistenza di competenze in materia di concorrenza e strumenti di coordinamento’ (1996) 32 Riv Dir Int Priv Proc 239, at 246; M Tavassi and M Scuffi, Diritto processuale antitrust, Tutela giurisdizionale della concorrenza (Milan, 1998) 49; CS Kerse, EC Antitrust Procedure (London, 1998) 20; Kamann and Horstkotte, ‘Kommission versus nationale Gerichte—Kooperation oder Konfrontation im Kartellverfahren: Das MasterfoodsUrteil des EuGH im Licht der geplanten Kartellverfahrensverordnung’ (2001) 51 WuW 458, at 460.

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30 Institutional Law Aspects court under Delimitis (and ultimately Masterfoods) would be bound not to contradict the Commission. This duty derived not only from the Commission exemption monopoly but also from Articles 10 and 85 EC and from the general principle of legal certainty. There was a view, aiming at giving the courts a free hand and, thus, at increasing the possibilities of private enforcement, according to which a court should be able to depart from the terms of an individual exemption if the underlying circumstances had changed.26 A variation of that view is that at least the courts should be able to review the conduct of an undertaking following an exemption.27 However, such views neglected the binding and constitutive nature of the Community act in question and the exclusive competence of the Commission to produce, amend and revoke an exemption.28 Therefore, even if circumstances had changed, the issue could only be raised before the Commission, the national court having no other choice but to enforce the exemption or to seise the Court of Justice through an Article 234 EC reference.29 Article 9(1) of Regulation 17 became more of a problem, when the Commission had not yet reached a conclusion with regard to Article 81(3) EC. This meant that the only likely solution, the suspension of national proceedings, would leave the agreement in question in a ‘twilight zone between validity and nullity’ until the Commission’s decision.30 However, in Delimitis31—and even earlier—it had been accepted that the Commission monopoly should not stand in the way of national courts, if it was clear that Article 81(3) EC could not save the agreement in question. Thus, national courts could apply that provision negatively, though not positively.32 In other words, they could not grant an individual exemption themselves, but they could conclude that an exemption was unlikely, thus considering the agreement in question null under Article 81(2) EC. Problems could theoretically arise if the Commission were subsequently to take the opposite view and exempt the agreement. In such a case there would be a conflict between a court judgment and the Commission’s exemption decision. According to one view, if the national judgment was final and no longer subject to appeal, thus constituting res judicata, the parties benefiting from the exemption could institute new proceedings, for example for restitution of damages paid.33 The national court had the same unfettered powers, if the agreement had not been notified to the Commission or if the notification had been withdrawn, since no exemption 26

See Jones and Sharpston, above n 102 (ch 1), at 102–4. See Vaughan, ‘EC Competition Law in National Proceedings’ in Slynn and Pappas (eds), Procedural Aspects of EC Competition Law (Maastricht, 1995) 30. It is not entirely clear whether that author’s view is only that a national court could review compliance with an exemption granted or whether the court could even ‘withdraw’ the benefit of an exemption. 28 See in this sense PM Taylor, EC and UK Competition Law and Compliance: A Practical Guide (London, 1999) 267. Compare also the Commission’s Article-by-article Explanatory Memorandum of the Sept 2000 Reg proposal, under Art 10, above n 202. 29 The national court could seise the ECJ with a preliminary reference if it had doubts as to the legality and validity of the exemption Decision. See Beneyto, ‘Transforming Competition Law through Subsidiarity?’ (1994) V(1) Collected Courses of the Academy of European Law 267, at 294. 30 See Venit, ‘Brave New World: The Modernization and Decentralization of Enforcement under Articles 81 and 82 of the EC Treaty’ (2003) 40 CMLRev 545, at 554. 31 Delimitis, above n 17, paras 50 ff. 32 Of course, the national court could take the view that Art 81(1) EC did not apply in the first place and, thus, decide the case accordingly. See for an example Cass com, 1 July 2003, SA Sapod Audic v SA Eco Emballages (2004) 14(1) Contr Conc Consomm 24. 33 See Marenco, ‘The Uneasy Enforcement of Article 85 EEC as between Community and National Levels’ in Hawk (ed), Antitrust in a Global Economy 1993, Annual Proceedings of the Fordham Corporate Law Institute (New York/Deventer, 1994) 619–20. According to that author, the res judicata principle in this case could not pre-empt the precedence due to EC law. On this question see further 2.III.(d).(iv) below. 27

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The Old Administrative Authorisation and Notification System 31 could be granted in the absence of notification (unless Article 4(2) of Regulation 17 applied). Therefore, in the case of the withdrawal of the notification the full competence of the courts to decide a case on the basis of Article 81(1) and (2) EC was restored.34 If the agreement infringed Article 81(1) EC and had not been notified, the national judge had no other option but to declare the agreement void. This was an unsatisfactory and unjust characteristic of the old system of enforcement.35 Naturally, the parties could always notify the agreement after the beginning of the national proceedings. However, in such a case the eventual exemption would be effective from the date of notification, which meant that the national court could consider the agreement void up to that date and draw civil consequences from that nullity in that period.36 If the agreement came to be notified to and exempted by the Commission following the national court’s judgment, then two conflicting decisions would be in existence and the national judgment would still enjoy res judicata effect. But this was a purely theoretical hypothesis, since the party relying upon Article 81(3) EC would most likely have rushed to notify the agreement before the end of the civil proceedings in order to seise the Commission and thus ‘block’ the national proceedings. On the other hand, where the national judge was of the opinion that, in the light of the Commission’s rules and decision-making practices, the agreement was likely to be the subject of an exemption decision, he should stay the proceedings and/or adopt interim measures pursuant to his national procedural law.37 The Court’s elliptical pronouncement on this point seemed to leave no other space to the national court for the direct or indirect positive application of Article 81(3) EC.38 34 See eg the rejection of two complaints by the Commission in the Inntrepreneur saga, where it was thought that following the withdrawal by Inntrepreneur of the notification of its standard leases, there was no longer a Commission interest in dealing with the complaints, since the full competence of UK courts to decide the cases was restored. See further van Erps, ‘The “Old” Inntrepreneur Standard UK Pub Leases’ [1998–2] EC Competition Policy Newsletter 51. 35 See Idot and van de Walle de Ghelcke, ‘Le besoin de sécurité juridique: Notifications et exemptions’ (2001) 37 CDE 160, at 185; DT Keeling, Intellectual Property Rights in EU Law, Vol. I, Free Movement and Competition Law (Oxford, 2003) 301. 36 Compare, eg, the facts of MTV Europe, above n 21. See also Jones and Sharpston, above n 102 (ch 1), at 101; Mail-Fouilleul, above n 107 (ch 1), at 30–1. 37 Delimitis, above n 17, para 52. Again it is our submission that the language of that para seemed to go further than a mere option for the national court to stay proceedings. See contra Jones and Sharpston, above n 102 (ch 1), at 98, arguing that national courts should be extremely reluctant to stay proceedings unless they took the view that an exemption was probable, rather than merely possible. According to these authors, this should be the case in particular when an Art 81 EC case combined elements of Art 82 EC and national law elements, which are not subject to the Commission’s exclusive powers. 38 The Commission had followed a more liberal approach in its submissions in Case 47/76 Alexis de Norre and Martine de Norre, née de Clercq v NV Brouwerij Concordia [1977] ECR 65, at 85 and 89, though the Court did not adjudicate on this. The Commission had accepted even the possibility of a positive application of Art 81(3) EC by national courts, recognising that a national judgment upholding the validity of an agreement did not amount to the granting of an exemption in the sense of Art 81(3) EC, since the judgment would not have erga omnes effects and would not be binding on it. See Faull and Weiler, ‘Conflicts of Resolution in European Competition Law’ (1978) 3 ELRev 116, at 133. See also the Commission’s submissions in Joined Cases 253/78 and 1/79 to 3/79 Procureur de la République v Giry and Guerlain et al [1980] ECR 2327, at 2345. The Commission returned to this view in a draft Notice on cooperation with national courts that was distributed informally in 1990. According to this text, an agreement the validity of which was adjudicated before national courts and which had received a comfort letter from the Commission would enjoy a ‘relative validity’ as between the parties (see further Beneyto, above n 29, at 297–8). In addition, see Kon, ‘Article 85, Para. 3: A Case for Application by National Courts’ (1982) 19 CMLRev 541, at 547 ff; Steindorff, ‘Article 85, Para. 3: No Case for Application by National Courts’ (1983) 20 CMLRev 125; Greaves, ‘Concurrent Jurisdiction in EEC Competition Law: When Should a National Court Stay Proceedings?’ (1987) 8 ECLR 256, at 258; Gastinel, ‘Plaidoyer pour la reconnaissance de l’effet direct à l’article 85, paragraphe 3, du Traité de Rome’ [1996] D 53, at 55. The Delimitis judgment put an end to this debate and accepted the possibility only of a negative application of that provision by courts. See, however, VC Korah, Cases

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32 Institutional Law Aspects Finally, under the old system, national courts could control whether any likely conditions accompanying the exemption had been fulfilled by the addressee of the exemption.39 If they had not, then the courts could draw the appropriate conclusions.40 This meant that the exemption would be considered not valid; thus, the agreement in question would no longer be exempted and would fall under the nullity of Article 81(2) EC. National courts would then be able to draw civil consequences therefrom.41 Notwithstanding these possibilities for national courts, it is true that their competences had been severely impaired as a result of the Commission’s exemption monopoly, and, thus, by implication any talk of the development of a more efficient system of private antitrust enforcement in Europe had proved wishful thinking.42 The problematic state of affairs that the Commission exemption monopoly had created with regard to national courts had, indeed, led some authors to the view that this exclusive competence, based on secondary law, that is, on Article 9(1) of Regulation 17, was incompatible with the direct effect of Article 81 of the Treaty. Therefore, this specific provision of Regulation 17 should have been considered invalid.43 Besides, the provision in Article 4(2) of Regulation 17 which excluded certain agreements from the obligation to notify, has had a rather limited impact on the competence of national courts. In any case, this provision did not mean that a limited system of legal exception was recognised, but only that the Commission exemption, whether or not following a voluntary

and Materials on EC Competition Law (Oxford, 1997) 161–2, who alludes to the possibility of indirect positive application of Art 81(3) EC by courts enforcing a restrictive agreement that would be likely to receive an exemption. According to that author the problem, rather, was the need under Art 10 EC to avoid possibly conflicting decisions, a risk that in this case would not exist, since the Commission would in any case grant an individual exemption. See also in this direction L Ortiz Blanco, European Community Competition Procedure (Oxford, 1996) 24–5; U Caspar, Wettbewerbliche Gesamtwürdingung von Vereinbarungen im Rahmen von Art. 81 Abs. 1 EGV (Cologne/Berlin/Bonn/Munich, 2001) 234, n 14. 39 National courts, however, could not control the fulfillment of obligations. The latter could only be monitored by the Commission, and the only sanction attached to their breach was of an administrative nature: the Commission could impose a fine pursuant to Art 15(2)(b) of Reg 17 or it could revoke or amend the exemption Dec in accordance with Art 8(3)(b) of Reg 17. See further on this—now obsolete—distinction M Smith, Competition Law—Enforcement and Procedure (London/Edinburgh/Dublin, 2001) 149. 40 See Jones and Sharpston, above n 102 (ch 1), at 103–4. 41 This happened in the Global One case in Germany, where the exemption (Commission Dec 96/547/EC of 17 July 1996 (Phoenix/Global One) [1996] OJ L239/57, para 74 and Art 1) was subject to a suspensive condition that was not fullfilled. When the parties prematurely enforced their agreement, the national court awarded damages as a result of the ensuing breach of Art 81(1) EC (OLG Düsseldorf, 16 June 1998, British Telecommunications plc and VIAG Interkom GmbH & Co v Deutsche Telekom AG and ATLAS Deutschland (1998) 48 WuW 713). 42 See Cooke, ‘Centralised Subsidiarity: The Reform of Competition Law Enforcement’ (2001) 10 IJEL 4, at 5. 43 See eg Ioannou, above n 13 (ch 1), at 434, 446, 451; Siragusa, ‘Future Competition Law—Working Paper V’ in Ehlermann and Laudati (eds), European Competition Law Annual 1997: The Objectives of Competition Policy (Oxford, 1998) 551, n 24. See in this context the preliminary reference to the ECJ made by the Kammergericht Berlin in 1997 (Case C–34/97 RWE Energie Aktiengesellschaft and Stadt Nordhorn v Bundeskartellamt [1997] OJ C94/7), regarding the compatibility with the Treaty of Art 9 of Reg 17. The argument was that this provision could be incompatible with the ‘indivisible whole’ of Art 81 EC, since national competition authorities and national courts could apply Art 81(1) but not Art 81(3) EC. The case however, never reached the stage of hearing, because it was withdrawn by the German court and, as a result, was removed from the ECJ’s register. See further Ehlermann, ‘Cooperation Between Competition Authorities within the European Union’ in Raffaelli (ed), Antitrust Between EC Law and National Law, Treviso 15–16 May 1997 (Brussels/Milan, 1998) 477–81; Wolf, ‘Entwicklungstendenzen im Verhältnis des nationalen zum europäischen Wettbewerbsrecht’ in Schwerpunkte des Kartellrechts 1997, Referate des 25. FIW-Seminars (Cologne/Berlin/Bonn/Munich, 1998) 3 ff; Miram, ‘Die dezentrale Anwendung durch das Bundeskartellamt: Länderbericht Deutschland’ in Pérez van Kappel (ed), Decentralised Application of EC Competition Law: National Experience and Reform (Cologne, 2001) 19–20.

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The Old Administrative Authorisation and Notification System 33 notification,44 applied to those agreements from the date of their entry into force, and not from that of their notification. Regulation 1215/1999 extended the scope of application of Article 4(2) of Regulation 17, thus making it possible for vertical agreements to be exempted retroactively, without the need for precautionary notification.45 This means that if a restrictive agreement became an issue in pending civil litigation, companies could notify it at any time to the Commission, which could then exempt these retroactively from the date of their entry into force. A problem might arise if the agreement was not notified on time to the Commission or if the Commission had not exempted it ex officio before the end of the civil proceedings. In such a case the national court would have no other option but to declare the restrictive clauses void. In any event, this amendment went in the right direction from the point of view of eliminating bureaucracy, but had no particular positive consequences for private antitrust enforcement, in the sense that national courts still lacked competence to apply Article 81(3) EC.

(d) The Case of Block Exemptions The competence of the national judge was resurrected if an agreement subject to Article 81(1) EC was, nevertheless, exempted through a block exemption regulation. Thus, national courts did have the power to establish whether an agreement fell within a directly applicable block exemption regulation and the duty to safeguard the rights deriving therefrom.46 Under the old system of enforcement, if an agreement was caught by Article 81(1) EC and did not benefit from a block exemption, it might still be saved through an individual exemption under Article 81(3) EC; but it should have been or, at worst, be notified to the Commission.47 If no individual exemption was possible, the court could only declare it null.48 While until recently the Commission produced its block exemption regulations following a legalistic approach, using, apart from black lists, also white lists of clauses which should be inserted by the parties into their contracts in order to benefit from the exemption, this severely criticised practice has now been reversed.49 Starting with the vertical restraints block exemption regulation50 the Commission is now using a more economic approach based on market shares and on the economic power of the parties, rather than on the legal content of 44 There has never been a Commission decision exempting an unnotified agreement on the basis of Art 4(2) of Reg 17. See KL Ritter, DW Braun and F Rawlinson, European Competition Law: A Practitioner’s Guide (The Hague/London/Boston, 2000) 819, n 133. 45 Commission Notice —Guidelines on Vertical Restraints [2000] OJ C291/1, paras 63–65. 46 Case 63/75 SA Fonderies Roubaix Wattrelos v Société Nouvelle des Fonderies A Roux and Société des Fonderies JOT [1976] ECR 111, para 11; Case 59/77 Etablissements A de Bloos SPRL v Société en Commandite par Actions Bouyer, [1977] ECR 2359, para 17; Delimitis, above n 17, para 46. 47 Unless the amended Art 4(2) of Reg 17 applied, again with the limitations described above. 48 See 2.I.(c) above. 49 For criticism see among others Venit, above n 7, at 36–7. 50 Commission Reg 2790/1999 of 22 Dec 1999 on the Application of Art 81(3) of the Treaty to Categories of Vertical Agreements and Concerted Practices [1999] OJ L336/21. This Reg replaced the exclusive distribution, exclusive purchasing and franchising agreements old block exemptions. It is wider in effect but it does not apply to vertical agreements falling within the scope of the technology transfers block exemption reg. Whether one or the other reg applies may sometimes be a fine issue, depending more on the economic context of the contractual framework than on the contract itself. See further Subiotto and Amato, ‘Preliminary Analysis of the Commission’s Reform Concerning Vertical Restraints’ (2000) 23(2) World Competition 5, at 10, n 26.

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34 Institutional Law Aspects their agreements. These ‘new generation’ block exemption regulations,51 and, in particular the fact that they employ market shares, confer new responsibilities on the national judges, who now have to define the market and to determine the position therein of an undertaking.52 This new responsibility, by itself, may, indeed in a sense hinder private enforcement, since a further obstacle adds to the already existing ones with regard to the judge’s nonprivileged position in the application of competition law.53 However, the new economic analysis is something that the Commission, national competition authorities and national courts will have to get accustomed to. Moreover, the more critical and economics-averse situations that entail the withdrawal of a block exemption have always remained the prerogative of the Commission and, after the entry into force of the new system of enforcement, that of national competition authorities.54

(e) The Case of Comfort Letters One very familiar figure of the previous administrative authorisation system was the so-called comfort letter, which constituted the Commission’s early response to the heavy burden resulting from the notification of thousands of agreements, which made it impossible to issue formal exemption or prohibition decisions. These administrative letters indicated whether the Commission took a positive or negative view of a notified agreement, but strictly speaking they could not bind national courts. This was certainly a serious weakness, which was criticised by practitioners as a fundamental flaw in the administrative authorisation system and its enforcement by the Commission. Although comfort letters were non-binding as a result of the fact that they lay outside the scope of Regulation 1755 and were usually not published, they nevertheless used to offer all the substantive qualities of a negative clearance or an individual exemption decision. According to the Court of Justice, a comfort letter did not bind a national court, but could be taken into account as a factual element.56 This statement, however, requires some 51 These are currently the following: Commission Reg 2658/2000 of 29 Nov 2000 on the Application of Art 81(3) of the Treaty to Categories of Specialisation Agreements [2000] OJ L304/7; Commission Reg 2659/2000 of 29 Nov 2000 on the Application of Art 81(3) of the Treaty to Categories of Research and Development Agreements [2000] OJ L304/3; Commission Reg 1400/2002 of 31 July 2002 on the Application of Art 81(3) of the Treaty to Categories of Vertical Agreements and Concerted Practices in the Motor Vehicle Sector [2002] OJ L203/30; Commission Reg 358/2003 of 27 Feb 2003 on the Application of Art 81(3) of the Treaty to Certain Categories of Agreements, Decisions and Concerted Practices in the Insurance Sector [2003] OJ L53/8; Commission Reg 772/2004 of 7 Apr 2004 on the Application of Art 81(3) of the Treaty to Categories of Technology Transfer Agreements [2004] OJ L123/11. 52 See Lesguillons, ‘Retrait du bénéfice de l’application du règlement d’exemption restrictions verticales par les autorités compétentes des Etats-membres’ [1999] RDAI/IBLJ 509, at 517 and ‘Comment vont s’organiser les décisions de retrait d’exemption?’ (1999) 4 Contr & Impr (Eur) 592, at 602. 53 See, however, Vogelaar, ‘Modernisation of EC Competition Law, Economy and Horizontal Cooperation between Undertakings’ (2002) 37 Intereconomics 19, at 22. It is noteworthy that some of the opponents of modernisation and of the decentralisation of EC competition law enforcement to the level of courts rely exactly upon the new economic approach of the new generation regulations, notices and guidelines, in order to stress the courts’ inability to deal with such technical issues. 54 See 2.III.(c).(i).c below. Even under the old system national competition authorities could withdraw the benefit of Reg 2790/1999, above n 50, in case of vertical agreements. 55 See D Waelbroeck, ‘New Forms of Settlement of Antitrust Cases and Procedural Safeguards: Is Regulation 17 Falling into Abeyance?’ (1986) 11 ELRev 268, at 275. 56 Case 31/80 NV L’Oréal and SA L’Oréal v PVBA ‘De Nieuwe AMCK’ [1980] ECR 3775, para 11; Case T–241/97 Stork Amsterdam BV v Commission [2000] ECR II–309, para 84. Compare also European Commission, XXIXth Report on Competition Policy—1999 (Brussels/Luxembourg, 2000), para 25. See, however, VC Korah and D O’Sullivan, Distribution Agreements under the EC Competition Rules (Oxford/Portland, 2002) 74, who suggest that

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The Old Administrative Authorisation and Notification System 35 further exploration. While a comfort letter resembling a negative clearance could be taken into account in a meaningful way by the national courts,57 the same was not true for comfort letters resembling an individual exemption, ie administrative letters, where the Commission stated that the agreement in question seemed to fall within Article 81(1) EC, yet it was likely that it would be exempted under Article 81(3) EC. In this specific case it was not evident how a national court could take into account such a statement, since it was deprived of the competence to apply Article 81(3) EC positively, either directly or indirectly.58 The only meaningful way out of this conundrum would have been for the national court to stay proceedings, in order for the parties to seise the Commission anew and request a formal individual exemption decision.59 Apart from these cases and contrary to formal individual exemption decisions, the national courts were always free to depart from the terms of a comfort letter if the underlying circumstances had changed. In general, national courts, though not formally bound, have in the majority of cases paid deference to Commission comfort letters,60 although occasionally there have been instances where national courts did not take into account comfort letters or encountered difficulties in ascertaining their exact meaning and impact on the facts of the case.61 As with comfort letters, national courts could not be bound by the non-opposition of the Commission to a notified agreement under the opposition procedure of some of the older generation block exemption regulations, and most recently of the previous one on the Delimitis principles on the obligation of national courts to avoid conflicting decisions may mean that Commission comfort letters were binding on the former. However, this statement is contradicted by the post-Delimitis case law of the ECJ that confirmed the earlier rulings on the non-binding nature of such administrative letters. 57 See Ritter, ‘Automec II: Ein Beitrag des Gerichtshofs zur Subsidiarität?’ in Schwerpunkte des Kartellrechts 1991/92, Verwaltungs- und Rechtsprechungspraxis, Referate des 20. FIW-Seminars 1992 und der 11. Brüsseler Informationstagung 1992 (Cologne/Berlin/Bonn/Munich, 1993) 19. 58 See above on the similar discussion with regard to the national courts’ competence to apply Art 81(3) EC in a negative or positive way. No problem arose with regard to ‘discomfort letters’ that stated that Art 81(3) EC would probably not save the agreement in question. The judge would in such cases negatively apply Art 81(3) EC and declare the agreement’s nullity. 59 See in this sense Siragusa, ‘Notifications of Agreements in the EEC—To Notify or not to Notify’ in Hawk (ed), United States and Common Market Antitrust Policies 1986, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1987) 260; Ritter, above n 57, at 19; Bourgeois, above n 61 (ch 1), at 491; Bechtold, ‘Die Durchsetzung europäischen Kartellrechts durch die Zivilgerichte’ (1996) 160 ZHR 660, at 667; Hiljemark, ‘Enforcement of EC Competition Law in National Courts—The Perspective of Judicial Protection’ (1997) 17 YEL 1, at 115; A Jones and B Sufrin, EC Competition Law, Text, Cases, and Materials (Oxford, 2001) 966; G Tritton, R Davis, M Edenborough, J Graham, S Malynicz and A Roughton, Intellectual Property in Europe (London, 2002) 890, 932; Korah and O’Sullivan, above n 56, at 75. However, the authors, who accept the possibility for national courts positively to apply Art 81(3) EC in an indirect way and to enforce a restrictive agreement that would be likely to receive an exemption, accept that the judge should proceed in a similar way in case of a comfort letter. See eg Caspar, above n 38, at 234, n 14. 60 See Idot and van de Walle de Ghelcke, above n 35, at 181; Favre, above n 15 (ch 1), at 80, with references to cases where French courts have treated comfort letters as presumptions of conformity or non-conformity with Community competition law. For a French example see CA Paris, 9 Dec 1992, Sté Michel Swiss v Sté Montagne Diffusion, Juris-Data no 023825, with a comment by Idot [1993–2] Europe 14. The Commission has also stated that there have not been any decisions by a national authority or court going against a comfort letter (see Commission Green Paper on Vertical Restraints in EU Competition Policy, COM(96)721, Jan 1997, para 190). 61 See eg Inntrepreneur Estates Ltd v Mason [1993] 2 CMLR 293 (QB). In that case the English court ignored the comfort letter that stated that the notified agreement appeared to fulfill the requirements for an individual exemption, to which the Commission would soon proceed. The court noted that it could, nevertheless, not grant such an individual exemption, since this fell under the Commission’s exclusive competence. Instead, it opted for closing the discussion by arguing that the defendants had a real prospect of succeeding in their contention that part of the agreement was void under Art 81(2) EC. See further Stevens, ‘The “Comfort Letter”: Old Problems, New Developments’ (1994) 15 ECLR 81, at 86, and for other examples Mail-Fouilleul, above n 107 (ch 1), at 53, n 334.

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36 Institutional Law Aspects technology transfers.62 Such non-opposition of the Commission might have had the function of an exemption, but it lay outside the procedural framework of Regulation 17, and, therefore, resembled the comfort letter.63 In such cases the national court could check whether the agreement in question fell under Regulation 240/1996 and whether it had been duly notified. It could even decide on the legality of clauses that could not be exempted under Articles 1 and 2 of that Regulation and that were not mentioned in the ‘black list’ of Article 3, notwithstanding the fact that the Commission had not rejected such notified clauses under the opposition procedure. On the other hand, if the Commission rejected the specific clauses, then such decision of the Commission would have been a prohibition decision and, thus, national courts would be bound not to contradict it.64 Finally, national courts were and are still not bound by a Commission decision not to investigate a complaint. Indeed, the Commission sometimes decides not to go through the complaint exactly because the same facts are before a national court.65 A decision rejecting a complaint has the same legal status as a comfort letter and does not bind the national courts, which, however, may take into account the assessments of the Commission made in those decisions as facts.66 On the other hand, if the Commission, as a result of the complaint, reaches a formal decision as to the applicability or non-applicability of an antitrust prohibition, then again, following Masterfoods, such decision should not be contradicted by the national courts.

(f) Competence of Civil Courts in Merger Cases? While at first sight the enforcement of competition law in mergers appears to fall under the exclusive competence of the Commission or of the national competition authorities based on the ‘one-stop shop’ principle, one cannot rule out that a merger may also be examined by a national court.67 Since the exclusive competence of the administrative authorities is based on Council Regulation 139/2004,68 the direct effect of Articles 81 and 82 EC cannot be set aside by secondary legislation. 62 Art. 4 of Commission Reg 240/1996 of 31 Jan 1996 on the Application of Art 85(1) of the Treaty to Certain Categories of Technology Transfer Agreements [1996] OJ L31/2. The Commission had recognised that the opposition procedure had not been a success in practice (see para 90 of the 2002 Commission Evaluation Report on the Transfer of Technology Block exemption Regulation no 240/96, Doc. COMP/REG.240/96, available at http://ec.europa.eu/comm/competition/antitrust/technology_transfer/en.pdf). 63 See Siragusa, above n 59, at 264 ff; D Anagnostopoulou and E Kleftodimou, Know-how Licensing Contracts in Community Law (Athens/Komotini, 1992) (in Greek) 165–6; Beneyto, above n 29, at 294. 64 See above. If an agreement had been notified to the Commission under the non-opposition procedure of Reg 240/1996, above n 62, and the relevant period in which the Commission had to act had not yet expired, then the national court should have considered staying proceedings until the expiry of that period. See Tritton et al, above n 59, at 935. 65 Thus, in Automec (II) the complaint to the Commission had been made while there was a civil case on appeal pending before the Italian courts (above n 59 (ch 1), paras 3, 4, 9, 13, 94). See recently Au Lys de France, above n 48 (ch 1), para 85. 66 Case T–575/93 Casper Koelman v Commission [1996] ECR II–1, paras 41–43, commented on by Idot [1996–3] Europe 9, at 9–10. 67 For the view that the old Merger Reg (Council Reg 4064/1989 of 21 December 1989 on the Control of Concentrations between Undertakings [1989] OJ L395/1, Corrigendum [1990] OJ L257/14) had not affected the direct effect of Arts 81 and 82 EC see eg G Rounis, Competition or Cooperation? The Limits of Firms’ Activity within the Community Area (Athens/Komotini, 1992) (in Greek) 252 ff; R Lane, EC Competition Law (Dorchester, 2000) 273–4. 68 Council Reg 139/2004 of 20 Jan 2004 on the Control of Concentrations between Undertakings (the EC Merger Reg) [2004] OJ L24/1, repealing Council Reg 4064/1989 of 21 Dec 1989 on the Control of Concentrations between Undertakings [1989] OJ L395/1, Corrigendum [1990] OJ L257/14, as had been amended by Reg 1310/1997 [1997] OJ L180/1, Corrigendum [1998] OJ L40/17.

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The Old Administrative Authorisation and Notification System 37 According to the case law of the Court of Justice, national courts are competent to apply Articles 81 and 82 EC, even if there is no procedural regulation dealing with their implementation. In such a case the legal basis for the application of these provisions will be Articles 84 and 85 EC. The Court has, however, made a distinction between Article 81 and Article 82 EC.69 The former provision is different from the latter because it contains a prohibition and an exception rule, if we accept the correct view that Article 83 EC left it to the Community legislator to decide on which system of competition enforcement to opt for, ie for administrative authorisation or for legal exception.70 Article 81(1) EC became directly effective only as a result of the adoption of the implementing legislation of Regulation 17, which had adopted the administrative prior authorisation system. Then Regulation 1/2003 de facto extended this direct effect to the third paragraph of that provision by adopting the legal exception system. However both the old and the new Merger Regulations expressly disapply the implementing Regulations to concentrations as defined therein.71 This means that, on the one hand, Community dimension mergers fall exclusively within the Commission’s competence under the Merger Regulation, and there can be no role whatsoever for national courts, because simply the Commission will have applied that Regulation and not Article 81 EC.72 On the other hand, national courts will be able to apply Article 81 EC to nonCommunity dimension mergers, as far as these produce inter-state trade effects in the sense of Article 81(1) EC.73 The question arises whether it must first be necessary for a national competition authority to have already made a decision applying that provision to the concentration in question, or whether the national court can directly apply Article 81 EC as a whole. In our view, since Article 21(1) of the new Merger Regulation provides that it will be the only set of rules generally applicable to mergers without making a distinction as to Community or non-Community dimension ones,74 it means that the implementing regulations do not apply to any concentration whatsoever. This resuscitates the enforcement procedures of Articles 84 and 85 EC, as far as sub-threshold mergers are concerned, which means that it will be necessary for a national competition authority to have already applied Article 81 EC to a non-Community merger on the basis of Article 84 EC, before a national court can apply the former provision to the facts of the case in question.75 Though theoretically possible, in practical terms, this means that there is no competence of national courts to examine mergers under Article 81(1) EC.

69 On Art 81 EC see Case 13/61 Bosch [1962] ECR 45, at 51–2, and Joined Cases 209/84 to 214/84 Criminal proceedings against Lucas Asjes et al [1986] ECR 1425, paras 58–69. On Art 82 EC see Case 66/86 Ahmed Saeed Flugreisen and Silver Line Reisebüro GmbH v Zentrale zur Bekämpfung unlauteren Wettbeverbs eV [1989] ECR 803, paras 32–33. 70 See 2.II.(c).(iii) below on this fundamental question. 71 See Art 22(1) of Reg 4064/1989 disapplying Reg 17 and Art 21(1) of Reg 139/2004 disapplying Reg 1/2003. 72 If the Commission had applied Art 81 EC then, according to the Bosch principles, the competence of national courts to apply that provision and the Commission’s hypothetical Decision would have been ‘resurrected’. 73 Note the difference between the two criteria, ie the Community dimension of the Merger Reg and the interstate trade effect of Arts 81 and 82 EC. For the possibility of applying Art 81 EC to a merger see Joined Cases 142/84 and 156/84 British-American Tobacco Company Ltd and RJ Reynolds Industries Inc v Commission [1987] ECR 4487, paras 36–39, where the Court confirmed that this provision might apply to the acquisition by one undertaking of a minority shareholding in another. 74 Art. 21(1) of Reg 139/2004, above n 68, refers to the Art 3 definition of a ‘concentration’. 75 See the interesting and far-reaching views of Lane, above n 67, at 274. See further Basedow, ‘Gemeinschaftsrechtliche Grenzen der Ministererlaubnis in der Fusionskontrolle: Zum Verhältnis des § 42 GWB zu den Art. 81 und 82 EG’ (2003) 14 EuZW 44, at 49–50.

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38 Institutional Law Aspects Article 82 EC, on the other hand, has always been considered fully directly applicable by national courts, since it is not subject to any conditions and is not capable of exemption by means of a balancing of interests. This cannot be affected by secondary Community legislation, such as the Merger Regulation.76 The application of that provision to mergers was recognised in the Court’s Continental Can ruling,77 where it was accepted that the Treaty applied to structural abuses through a merger, ‘if an undertaking in a dominant position strengthens its position in such a way that the degree of dominance reached substantially fetters competition, i.e. that only undertakings remain in the market whose behaviour depends on the dominant one’.78 Therefore, Article 82 EC continues being applicable by national courts to concentrations that may fall thereunder.79 National courts may, in addition, deal with the civil consequences of the prohibition of a merger. Likewise, they may deal with the civil consequences of a merger that has been put into effect without having been notified to the Commission or before having been declared compatible with the common market by a Commission decision. According to Article 7(1) of the Merger Regulation such transactions must be suspended until the Commission either clears the merger pursuant to Article 6(1)(b), 8(1) or 8(2), or fails to take a decision within the deadlines prescribed by Article 10. If during this period the concentration goes on, then the validity of all relevant agreements that pertain to the merger will be conditional upon the prohibition or clearance of the merger by the Commission. In the first of these two hypotheses these contracts will be null. The nullity involved and other civil consequences will be governed by national law.80 The breach of a condition to which an authorisation decision is subject is similar to the situation above.81 76 See with respect to Art 82 EC, Esteva Mosso, Ryan, Albaeck and Tierno Centella, ‘Article 82’ in Faull and Nikpay (eds), The EC Law of Competition (Oxford, 2007) 395, n 328; R O’Donoghue and JA Padilla, The Law and Economics of Article 82 EC (Oxford/Portland, 2006) 40. 77 Case 6/72 Europemballage Corporation and Continental Can Company Inc v Commission [1972] ECR 215, paras 20–26. 78 However, Art 82 EC cannot apply to situations where a merger creates—and not just strengthens—a dominant position: Case T–102/96 Gencor v Commission [1999] ECR II–753, para 155. 79 See Bourgeois and Langeheine, ‘Jurisdictional Issues: EEC Merger Regulation—Member State Laws and Articles 85–86’ in Hawk (ed), International Mergers and Joint Ventures 1990, Annual Proceedings of the Fordham Corporate Law Institute (New York/London, 1991) 607; Bernini, ‘Jurisdictional Issues: EEC Merger Regulation— Member State Laws and Articles 85–86’ in Hawk (ed), International Mergers and Joint Ventures 1990, Annual Proceedings of the Fordham Corporate Law Institute (New York/London, 1991) 623–4; Elland, ‘The Merger Control Regulation and its Effect on National Merger Controls and the Residual Application of Articles 85 and 86’ (1991) 12 ECLR 19, at 26–7; O’Donoghue and Padilla, above n 76, at 41. 80 See Liakopoulos, above n 66 (ch 1), at 576; Ritter and Braun, above n 42 (ch 1), at 674; Bos and Struijlaart, ‘The Netherlands’ in Maitland-Walker (ed), Competition Laws of Europe (London, 2003) 336, n 1. Compare the Global One case in Germany: OLG Düsseldorf, 16 June 1998, British Telecommunications, above n 41. In that case the national court awarded damages for breach of Art 81(1) EC, because parties had enforced their agreement before the conditions in the Commission exemption had been fulfilled. 81 Though not the breach of an obligation, which has only consequences of an administrative nature. The legal consequences of the breach or non-fulfilment of obligations and conditions differ, although in the early stages of EC merger control the distinction was not very clear and the two instruments were used alternatively. Conditions usually refer to measures contained in commitments that structurally change the market (structural remedies), whereas obligations refer to implementing measures that aim at fulfilling the commitments relevant to behavioural remedies. Where the undertakings concerned commit a breach of an obligation attached to the compatibility decision fines and periodic penalties can be imposed (Arts 14(2)(d) and 15(1)(c) of Reg 139/2004, above n 68) and the Commission, if the breach is serious, may revoke its decision (Arts 6(3)(b) and 8(6)(b) of Reg 139/2004). In the case of the breach of an obligation attached to a first phase clearance decision the Commission may alternatively order the commencement of the second phase (Art 6(4) of Reg 139/2004). If, on the other hand, the commitment has been transformed into a condition for the clearance of the merger, any breach of this condition means that the authorisation decision will no longer be valid, thus, the merger will be considered prohibited ab initio. Heavy fines may also be imposed: if a condition is breached or not fullfilled and, as a result, the merger

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Modernisation and the Passage to a Legal Exception System 39

II. THE ADVENT OF MODERNISATION AND THE PASSAGE TO A LEGAL EXCEPTION SYSTEM

(a) The 1999 White Paper and the Reasons that Lay behind it At the end of April 1999, the Commission embarked on its most important policy change in EC competition law enforcement for the last 40 years by publishing its White Paper on the modernisation of the EC competition law procedural framework.82 This was the first episode in a saga that was certain to lead to a ‘legal and cultural revolution’ in EC antitrust law.83 The White Paper set out to propose a system of antitrust enforcement in the EU for the twenty-first century, thus marking the end of the ‘venerable’ Regulation 17,84 which, as has rightly been pointed out, had existed for so long that it was almost impossible to imagine any other state of affairs.85 The basic parameters of this proposed system were the authorisation decision becomes void, then the prohibition of Art 7(1) of Reg 139/2004 takes effect and the merged undertakings can be fined under Art 14(2)(b) for having put into effect a concentration in breach of Art 7(1). Alternatively, the Commission may by decision require (a) the undertakings or assets brought together to be separated or (b) the cessation of joint control or (c) any other action appropriate in order to restore conditions of effective competition (Art 8(4) of Reg 139/2004). 82 Commission White Paper of 28 April 1999 on Modernisation of the Rules Implementing Articles 85 and 86 of the EC Treaty, Commission Programme No 99/027, COM(1999)101 final [1999] OJ C132/1. 83 See Ehlermann, above n 2, at 537 ff; Nivarra, ‘Il “libro bianco sulla modernizzazione delle norme per l’applicazione degli articoli 85 e 86 del Trattato CE”: Quale futuro per il diritto europeo della concorrenza?’ (2000) 3 Eur & Dir Priv 1001, at 1009; former Commissioner Monti, ‘The EU Gets New Competition Powers for the 21st Century’ in Competition Policy Newsletter, Special Edition 2004, 1. For a retrospective see also Venit, above n 30, at 545 ff; Bloom, ‘The Great Reformer: Mario Monti’s Legacy in Article 81 and Cartel Policy’ (2005) 1 Competition Policy International 55, at 56 ff, and for an insider’s story, Norberg, ‘Making a Virtue out of Necessity and at the Same Time Strengthening European Competition Law Enforcement: How the White Paper on the Modernisation Reform Came About’ in Monti, Prinz Nikolaus von und zu Liechtenstein et al (eds), Economic Law and Justice in Times of Globalisation, Festschrift for Carl Baudenbacher (Baden-Baden/Vienna/Berne, 2007), 523 ff. There has been an abundant literature that dealt with most aspects of modernisation. Among others see in particular the contributions by various authors in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001), as well as those in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000), and in Rivas and Horspool (eds), Modernisation and Decentralisation of EC Competition Law (The Hague/London/Boston, 2000). See also Bellis, ‘Le “Livre blanc” sur la modernisation des règles d’application des articles 81 et 82 du Traité CE: Un pas décisif vers le démantèlement d’un particularisme européen’ (2000) 8 JdT (Eur) 129; Paulweber, above n 34 (ch 1), at 3 ff; Weyer, ‘Nach der Reform: Gestaltung der Wettbewerbspolitik durch die Kommission?: Zur Anwendung des Art. 81 EGV durch Kommission, nationale Gerichte und EuGH in einem System der gesetzlichen Ausnahme’ (2000) 164 ZHR 611; Ghezzi, ‘Il Libro Bianco della Commissione sulla modernizzazione del diritto della concorrenza comunitario’ (2000) 8 Concorrenza e Mercato 175. 84 The Commission had always been reluctant to consider amending Reg 17, because it feared opening a ‘Pandora’s Box’. The basic fear was that the Council might be tempted to weaken the Commission’s ability to enforce the antitrust laws through uninvited amendments. See eg McCullough, ‘The Continuing Search for Greater Certainty: Suggestions for Improving US and EEC Antitrust Clearance Procedures’ (1984) 6 Nw J Int’l L & Bus 803, at 886; former Director General A Schaub, ‘Panel-Diskussion zum Weissbuch der Kommission über die Modernisierung der Vorschriften zur Anwendung der Art. 81 und 82 EG’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Siebentes St. Galler Internationales Kartellrechtsforum 2005 (Basle/Geneva/Munich, 2000) 216. For a retrospective analysis of Reg 17 from a historical perspective see Hambloch, ‘Die Entstehung der Verordnung 17 von 1962 im Rahmen der EWGWettbewerbspolitik’ (2002) 37 EuR 877. 85 See Doherty, ‘Community Exemptions in National Law’ (1994) 15 ECLR 315. See also the views of the then Director General Claus-Dieter Ehlermann, ‘Developments in Community Competition Law Procedures’ [1994–1] EC Competition Policy Newsletter 2, who stressed: ‘Regulation No 17 contains all the basic procedural rules for Community competition policy. If and when it is revised, it will only be revised once for the foreseeable

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40 Institutional Law Aspects abolition of notification and exemption procedures, and the decentralisation of EC competition enforcement by making Article 81(3) EC directly applicable by national competition authorities and national courts. Such decentralisation would extend the possible enforcers of EC competition law, while relieving the Commission of most of the bureaucracy involved in the current system and allowing it to concentrate on the most serious infringements of Articles 81 and 82 EC.86 The Commission’s modernisation plans startled observers of competition law enforcement in Europe, since until very recently it had adamantly defended its Article 81(3) EC exemption monopoly, and had praised the benefits of the exemption monopoly and notification system as late as in 1995 and 1996. Four years before the publication of the White Paper the then Commissioner Van Miert had argued that the conditions were not yet ripe for the elimination of the notification system; national competition authorities had not yet acquired sufficient experience, national competition laws were not sufficiently harmonised, and national ‘exemption decisions’ would have to be horizontally recognised throughout Europe, which was politically difficult.87 While, the notification and administrative authorisation system produced serious discontent,88 especially because it stood in the way of a more economics-based approach, particularly in the vertical agreements area,89 the conventional wisdom until 1999 was that the Commission would not really take the initiative to abandon that system. In fact the Commission seems to have started internally to debate the possibility of introducing a legal exception in 1997, immediately after the publication of the Green Paper on vertical agreements and its lukewarm reception by most commentators.90

future’. He took the view that the time for a general amendment of Reg 17 had not yet come. See further Ehlermann, ‘Ist die Verornung Nr. 17 noch zeitgemäß?’ (1993) 43 WuW 997 and ‘Community Competition Law Procedures’ in Slynn and Pappas (eds), Procedural Aspects of EC Competition Law (Maastricht, 1995) 10. 86 See eg Rocca, ‘L’Europa della concorrenza di fronte alle sfide del nuovo millennio: Le riforme necessarie in materia antitrust’ in Raffaelli (ed), Antitrust between EC Law and National Law, Treviso 13–14 May 1999 (Brussels/Milan, 2000) 49. 87 See van Miert, ‘Sviluppi e prospettive dell’applicazione decentrata del diritto della concorrenza europeo’ in Autorità garante della concorrenza e del mercato (ed), La tutela della concorrenza: Regole, istituzioni e rapporti internazionali (Rome, 1995) 141 ff. Compare also the Commission’s Green Paper on Vertical Restraints in EU Competition Policy, COM(96)721, Jan 1997, para 28: ‘[t]he notification system has been successful in providing the Commission with information about the many types of vertical arrangements. It provided the basic material for the Commission to decide on the need for and scope of block exemptions. These block exemptions provide basic legal certainty for the vast bulk of vertical agreements in the EU as well as the advantages of a one-stop-shop. Comfort letters have successfully dealt with any mass problem for cases not already covered by block exemptions.’ It is also interesting to read para 185 of the Green Paper: ‘[t]he notification system provides the Commission with a steady source of information about transactions, including vertical agreements. A substantial portion of the Commission’s decisions are triggered by notifications. This indicates that many contractual provisions deserving careful scrutiny have been brought to the Commission’s attention through notifications. They also provide the basic material for the Commission to determine the necessity and scope of block exemptions.’ 88 See eg Siragusa, ‘Rethinking Article 85: Problems and Challenges in the Design and Enforcement of the EC Competition Rules’ in Hawk (ed), International Antitrust Law and Policy 1997, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1998) 273 ff. 89 See eg Whish, ‘Panel Three Discussion: Future Competition Law’ in Ehlermann and Laudati (eds), European Competition Law Annual 1997: The Objectives of Competition Policy (Oxford, 1998) 461. 90 See Norberg, above n 83, at 524, according to whom the first meeting of the ‘Modernisation Group’ within the then DG-IV took place on 28 January 1997. The 1997 Florence workshop gave the first indications that ‘Brussels was up to something new’. See, in particular, A Schaub, ‘Panel Three Discussion: Future Competition Law’ in Ehlermann and Laudati (eds), European Competition Law Annual 1997: The Objectives of Competition Policy (Oxford, 1998) 474; Faull, ‘Panel Three Discussion: Future Competition Law’ in Ehlermann and Laudati (eds), European Competition Law Annual 1997: The Objectives of Competition Policy (Oxford, 1998) 488.

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Modernisation and the Passage to a Legal Exception System 41 Indeed, the treatment of vertical agreements under a more economics-based approach is inextricably connected with the modernisation drive.91 This problem had always been particularly representative of the EC competition law system’s cardinal weakness, the bifurcation between the first and third paragraphs of Article 81 EC. The broad way in which the Commission applied Article 81(1) EC to every agreement that restricted commercial freedom, and the legalistic approach it followed when applying both the first and the third paragraphs of Article 81 EC, were seen as—intentionally or unintentionally—inherent features of the ancien régime. While the theory of ordoliberalism offers a partial explanation, it was also commonplace to explain the very broad interpretation of competition restrictions under Article 81(1) EC in terms of the Commission’s exemption monopoly. According to this line of thinking, the Commission’s central role in EC competition enforcement, coupled with its monopoly of enforcing Article 81(3) EC, and the need for uniform application of Article 81 EC in all Member States required that a broad interpretation be given to the first paragraph of Article 81 EC, thus ensuring that the decision as to whether a given restriction was to be accepted was taken in a uniform manner by the Commission.92 This explains the Commission’s hesitations over the introduction of a more economic approach or a ‘rule of reason’ in Article 81(1) EC (as opposed to Article 81(3)), since the ‘rule of reason’ would have led to an indirect transfer of competences from the Commission to national competition authorities and courts.93 It was also feared that this might lead to the re-nationalisation of competition enforcement in Europe, since agreements benefiting from a ‘rule of reason’ would be granted a negative clearance under Article 81(1) rather than an exemption under Article 81(3) EC, thus inviting the application of stricter national competition law.94 It seems the Commission thought that the passage from a legalistic to a more economic approach necessitated a radical overhaul of the procedural rules, moving from notification and exemption to a system of legal exception and self-assessment. It should be stressed that the objective of modernisation was not merely to decentralise the enforcement of Article 81(3) EC as such to national competition authorities (NCAs) or courts, in the sense that these would authorise restrictive agreements as the Commission had previously done. The reforms went much further: they abolish the authorisation system altogether, thus making Article 81 EC a unitary norm, applicable as a whole by the same enforcer or in the same forum. The decision to adopt a more radical approach, instead of 91 See also in this direction Gentile, ‘La svolta di inizio millennio del diritto comunitario della concorrenza: Il nuovo approccio economico, la semplificazione delle norme, la cooperazione internazionale e la modifica del Regolamento 17/62’ (2000) 5 Contr & Impr (Eur) 557, 574; I Lianos, La transformation du droit de la cpncurrence par le recours à l’analyse économique (Athens/Brussels, 2007), 727–8. It is not by chance that former Director General Ehlermann was already in 1995 considering the possibility of decentralising the application of Art 81(3) EC with reference to vertical agreements not only to NCAs but also to national courts: see Ehlermann, ‘Il dibattito sulla sussidiarietà nel diritto della concorrenza’ in Autorità garante della concorrenza e del mercato (ed), La tutela della concorrenza: Regole, istituzioni e rapporti internazionali (Rome, 1995) 19. 92 See eg van Houtte, ‘A Standard of Reason in EEC Antitrust Law: Some Comments on the Application of Parts 1 and 3 of Article 85’ (1982–1983) 4 Nw J Int’l L & Bus 497, at 509; McCullough, above n 84, at 892; M Waelbroeck, ‘Antitrust Analysis under Article 85(1) and Article 85(3)’ in Hawk (ed), North American and Common Market Antitrust and Trade Laws 1987, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1988) 693, 696; Todino, ‘Le norme comunitarie di concorrenza nei poteri dell’Autorità garante della concorrenza e del mercato’ (1998) 12 Dir Comm Int 751 at 753; Verouden, ‘Vertical Agreements and Article 81(3) EC: The Evolving Role of Economic Analysis’ (2003) 71 Antitrust LJ 525, at 532 ff. 93 See eg IE Soufleros, Franchising Contracts in Greek Law and in Community Competition Law (Athens/Komotini, 1989) (in Greek), 232 ff; D’Attorre, ‘Una “ragionevole” concorrenza: Il ruolo della ‘rule of reason’ dopo la riforma del diritto antitrust comunitario’ (2004) 31 Giurispr Comm I-80, I-92 ff. 94 See Soufleros, above n 93, at 234–5. Negative clearances were of a merely declaratory nature and had not been interpreted to constitute ‘positive measures’ in the Walt Wilhem sense. See 2.III.(a).(ii) below.

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42 Institutional Law Aspects merely decentralising the administrative authorisation system to NCA level, may also be the result of the problems posed by the principle of territoriality governing the effects of national authorities’ decisions. It was considered not feasible politically to establish a system which would give Europe-wide effect to exemptions granted nationally, so the only option was to abolish the administrative authorisation system altogether.95 In addition, the Commission was hesitant to decentralise such an important tool of competition policymaking as the individual exemption decision, since that might lead to NCAs following erratic approaches, thus leading to a re-nationalisation of competition law enforcement. It was therefore felt better to abolish the exemption system altogether. Another parameter that may explain the Commission’s rather sudden change of heart is ‘institutional-political’. During the years preceding the publication of the White Paper, the Commission and the then DG-IV in particular had to deal with a serious threat, namely the German-sponsored proposal to establish a European Cartel Office independent of the Commission.96 It is true that the proposal failed in the course of the negotiations leading to the Treaty of Amsterdam, but meanwhile it had aroused defensive sentiments in Brussels. From this perspective, the White Paper and the modernisation initiative can be seen as an attempt by the Commission to regain the initiative and continue playing the guiding role in competition law developments in Europe.

(b) Modernisation and Decentralisation between Substance and Procedure The projected reforms were known as the modernisation of EC competition law. At this point, some caution is called for; it is more correct to speak of the modernisation of EC competition enforcement, rather than law. Indeed, it was not the direct aim of the White Paper or of Regulation 1/2003 to affect substantive competition law as such. Furthermore, if reference is made to the modernisation of EC competition law as a whole, then it is clear that the reform of the old Regulation 17 is only a part of a much more ambitious agenda which has been pursued ever since the Commission published its Green Paper on vertical restraints, followed by the vertical agreements block exemption Regulation. The Commission has also published other ‘new generation’ block exemptions, following a more economic approach and using market shares, a new de minimis Notice, a reformed Leniency Notice and Guidelines on horizontal, vertical and technology transfer restraints. Last but not least, the Council recently adopted a new Merger Regulation, following the publication by the Commission of a Green Paper. Admittedly, however, substance and procedure have been intermingled in EC competition law from the outset, with the result that procedural matters have a direct bearing

95 See Paulis, ‘Panel Three Discussion: Decentralisation of Enforcement of Community Law’ in Ehlermann and Laudati (eds), European Competition Law Annual 1996 (The Hague/Boston/London, 1997) 100, speaking before the White Paper, but certainly indicating that the Commission was slowly starting to think about adopting the system of legal exception. 96 On this, now obsolete, debate see Ehlermann, ‘Reflections on a European Cartel Office’ (1995) 32 CMLRev 471 and ‘Decision Making at the Centre—Working Paper II’ in Ehlermann and Laudati (eds), European Competition Law Annual 1996 (The Hague/Boston/London, 1997) 36 ff; Auteri, ‘Il dibattito su una Autorità antitrust europea’, Carbone and Munari, ‘Commissione Europa o Autorità indipendente per l’applicazione delle norme comunitarie antitrust?’, Moavero Milanesi, ‘Spunti intorno all’idea di un’autorità indipendente comunitaria per la tutela della concorrenza’, and Rocca, ‘Concorrenza: Ipotesi di creazione di un’autorità comunitaria indipendente’, all (1997) 2 Contr & Impr (Eur) at 518, 533, 543 and 549 respectively.

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Modernisation and the Passage to a Legal Exception System 43 on substance and vice versa.97 As described above, one of the main reasons for the Commission’s broad reading of Article 81(1) EC was precisely its exemption monopoly under Article 81(3) EC. By the same token, abolishing the notification and prior authorisation system would possibly also have a certain impact on the substance of EC competition law. The first signs are that the area of that impact may well be the substantive relationship between the first and third paragraphs of Article 81 EC. With Article 81 EC being enforced as a unitary norm by Community and national enforcers alike, one might argue that any debate as to the bifurcation of antitrust analysis under the first and third paragraphs of Article 81 EC would have only theoretical importance. It might even be submitted that it will no longer matter if Article 81(1) EC is interpreted in such a way that it catches almost all agreements restricting economic freedom without any economic analysis at all, since such an analysis of pro- and anti-competitive effects will follow immediately under Article 81(3) EC, which will now be applied by the same enforcer and in the same forum.98 Alternatively, Article 81(1) might be applied in such a way as to take all efficiencies and other pro-competitive qualities of an otherwise restrictive agreement into account already at this stage, thus rendering Article 81(3) EC superfluous.99 Such a simplistic approach, however, ought to be resisted. One question of the utmost practical importance is the burden of proof: while in Article 81(1) EC it is borne by the Commission, in Article 81(3) EC it is borne by the undertakings.100 If Article 81(1) were to be given an unqualified meaning, the burden of proof would fall entirely on the parties to the agreement, which would have to prove its pro-competitive effect and its other economic countervailing qualities. On the other hand, if almost all balancing were to take place in Article 81(1) EC, the Commission would be inappropriately burdened. Thus the current division between the two paragraphs reflects a fine balance and apportionment of the burden of proof which it would be unwise to tilt. In addition, as rightly pointed out, the Treaty itself requires a two-stage reasoning under the two paragraphs.101 More importantly, if Article 81(1) EC is given too broad a meaning and all economic analysis is conducted only under Article 81(3) EC, there is a risk that the 97 See eg Gerber, above n 2, at 334 ff; García Cachafeiro, ‘El giro norteamericano del derecho antitrust comunitario: El artículo 1 de la Sherman Act’ (2005) 256 Revista de Derecho Mercantil 597, at 603. 98 This seems to be the position of VC Korah, An Introductory Guide to EC Competition Law and Practice (Oxford/Portland, 2000) 189, 361; Gavalda and Parleani, above n 20 (ch 1), at 333–4, 359; A Albors-Llorens, EC Competition Law and Policy (Cullompton/Portland, 2002) 72; Korah and O’Sullivan, above n 56, at 120; Gyselen, ‘The Substantive Legality Test under Article 81–3 EC Treaty—Revisited in Light of the Commission’s Modernization Initiative’ in von Bogdandy, Mavroidis and Mény (eds), European Integration and International Co-ordination, Studies in Transnational Economic Law in Honour of Claus-Dieter Ehlermann (The Hague/London/New York, 2002) 197; Goyder, above n 10, at 94–5; Venit, above n 30, at 577; G van Gerven, ‘The Application of Article 81 in the New Europe’ in Hawk (ed), Annual Proceedings of the Fordham Corporate Law Institute, International Antitrust Law and Policy 2003 (New York, 2004) 426. See also Alexiadis and Sullivan, ‘Vertical Restraints: New Directions in EU Policy’ in The European Antitrust Review 2004, Global Competition Review Special Report (London, 2003) 69. It is interesting to note that the legal exception system in French competition law resulted in a certain attenuation of the prohibition-exemption dichotomy, with the equivalent of Art 81(3) EC being rarely applied or invoked, while the French competition authority has followed a more global approach based on the rule of reason. 99 See Toffoletti, ‘Riforma del diritto antitrust comunitario: Giudizio di esenzione e diritti dei singoli’ (2002) 29 Giurispr Comm I-417, at I-430. 100 See now Art 2 of Reg 1/2003, above n 4 (ch 1). See also Odudu, above n 65 (ch 1), at 178. 101 See Idot, ‘A French Point of View on the Radical Decentralisation of the Implementation of Article 81(1) and (3)’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 336.

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44 Institutional Law Aspects objective and the function of Article 81 EC as a whole will be compromised,102 since potentially idle agreements, which would have escaped the application of Article 81(1) EC if a narrower meaning were adopted, might not satisfy the two positive and two negative cumulative conditions of Article 81(3) EC, and end up being prohibited.103 While Article 81(3) EC corresponds in large measure to the US ‘rule of reason’, it is a not very flexible norm. It does not allow for a full benefit (aggregate welfare) but only for a consumer surplus analysis whereby at least some part of the cost savings must be passed on to the consumers. Thus the effect of the second negative requirement for an agreement not to eliminate competition is that an agreement which creates a monopoly will be prohibited even if the monopoly is socially desirable, because it leads to efficiencies (productive efficiency).104 It should therefore not be ruled out that certain agreements which promote competition or efficiency may escape Article 81(1) EC altogether under a reasonableness test, thus being spared the more inflexible competition analysis of Article 81(3) EC. The reform should therefore not affect the analysis mechanism under Article 81 EC. Perhaps having the modernisation discussions then taking place in mind, the Court of First Instance gave an important ruling in 2001 that clarified the distinction between the first and third paragraphs of Article 81 EC. In Métropole Télévision, the CFI, though admitting that an economics-based approach is to a certain degree called for under Article 81(1) EC, took the view that the balancing of pro-competitive and anti-competitive effects, along with the full examination of the economic efficiencies accruing from an agreement, should take place only under Article 81(3) EC, as the only provision that could accommodate a ‘rule of reason’ test.105 The CFI admitted that Article 81(1) EC was not an inflexible rule, and in fact the Court of Justice’s case law has long made it clear that an agreement must be examined in its legal and economic context, which already entails the need for a certain degree of economic analysis at that stage.106 However, according to the CFI, this economic analysis should be seen more in the context of ‘reasonableness’ rather than as a fully-fledged balancing of pro- and anti-competitive effects.107 That balancing, together with the full examination of the economic efficiencies accruing from an agreement, takes place only in the third 102 Compare the more balanced approach of Whish, above n 65 (ch 1), at 107, who, while admitting that a determination that an agreement falls under Art 81(1) EC no longer has the serious procedural consequences it had before, still it is imperative to apply Art 81(1) EC with intellectual rigour. 103 See Wesseling, ‘The Commission White Paper on Modernisation of EC Antitrust Law: Unspoken Consequences and Incomplete Treatment of Alternative Options’ (1999) 20 ECLR 420, at 423; DN Tzouganatos, Exclusive and Selective Distribution Agreements in Free and Unfair Competition Law (Athens, 2001) (in Greek) 171–2. See also Verouden, above n 92, at 573, who refers particularly to vertical agreements, which normally lead to at least some efficiency benefits. 104 See further on this Gifford and Kudrle, ‘European Union Competition Law and Policy: How Much Latitude for Convergence with the United States?’ (2003) 48 Antitrust Bull 727, at 772 ff. For the same question under Art 82 EC see Allan, ‘Article 82: A Commentary on DG Competition’s Discussion Paper’ (2006) 2 Competition Policy International 82; Mertikopoulou, ‘DG Competition’s Discussion Paper on the Application of Article 82 EC to Exclusionary Abuses: The Proposed Economic Reform from a Legal Point of View’ (2007) 28 ECLR 241, at 243. 105 Case T–112/99 Métropole Télévision (M6) et al v Commission [2001] ECR II–2459, paras 72–77. Compare also Case T–328/03 O2 (Germany) GmbH & Co OHG v Commission [2006] ECR II–1231, para 69. See generally Lianos, above n 91, 617 ff, in particular at 700 ff. Some commentators had argued long ago that Art 81(1) EC in any case could not accommodate a rule of reason approach. See eg Whish and Sufrin, ‘Article 85 and the Rule of Reason’ (1987) 7 YEL 1, at 23. 106 Also falling under the Art 81(1) EC assessment of agreements is the application of the ancillary restraints concept, which covers restrictions of competition that are directly related, necessary and proportionate to the implementation of a main non-restrictive transaction (see paras 28–29 of the Commission’s Notice on Art 81(3) EC, below n208). On the Art 81(1) EC case law see in general Korah and O’Sullivan, above n 56, at 80 ff; Lianos, above n 91, at 673 ff. 107 See also Whish, above n 65 (ch 1), at 127.

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Modernisation and the Passage to a Legal Exception System 45 paragraph of Article 81 EC. This lends full support to the Commission’s objectives, especially in view of the abolition of the Commission exemption monopoly, and this approach was indeed followed in the Commission Notice on Article 81(3) EC, which is one of the soft law instruments accompanying the new enforcement regulation.108

(c) The ‘Legal and Cultural Revolution’ of the 1999 White Paper Decentralisation of Community competition law enforcement did not start with the Commission’s recent modernisation initiative. The Commission had already published two Notices in the 1990s, one on cooperation with national courts in 1993109 and another on cooperation with national competition authorities in 1997,110 which indicated an intention to move from centralised to decentralised enforcement of the Treaty competition rules. Such decentralisation gradually became possible, because the raison d’être of centralisation, the uniform application of EC competition law in the common market, was no longer an imperative objective for the Community and for the Commission in particular.111 Member States’ adoption of competition laws, most of which replicate the Treaty rules,112 the

108 Compare in this respect para 57 of the White Paper, above n 82, and para 11 of the recent Notice on Art 81(3) EC, below n 208, which are in full accord with the CFI’s position. See further Vogelaar, above n 53, at 21; D Hildebrand, Economic Analyses of Vertical Agreements—A Self-Assessment (The Hague, 2005) 25, 45–47. On the question whether Art 81(3) EC would allow the taking into account of non-competition concerns based on the public interest see Komninos, ‘Resolution of Conflicts in the Integrated Article 81 EC’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2004, The Relationship Between Competition Law and the (Liberal) Professions (Oxford/Portland, 2006) 451 ff. 109 [1993] OJ C39/6. The Notice came in the aftermath of the Delimitis and Automec (II) judgments by the ECJ and the CFI respectively. See Ehlermann, ‘Anwendung des Gemeinschaftskartellrechts durch Behörden und Gerichte der Mitgliedstaaten’ in Randelzhofer, Scholz and Wilke (eds), Gedächtnisschrift für Eberhard Grabitz (Munich, 1995) 50–1. 110 Commission Notice on Cooperation between National Competition Authorities and the Commission in Handling Cases Falling within the Scope of Arts 85 or 86 of the EC Treaty [1997] OJ C313/3. That Notice was the result of a long process starting in 1993 with the creation of a Working Group composed of representatives of the Commission and of national competition authorities with the task of making proposals for the more effective application of Arts 81 and 82 EC by these authorities. The Working Group produced a report, known as the Dubois Report, which formed the basis of a draft Notice published at [1996] OJ C262/7. See further Gaeta, ‘La comunicazione sulla cooperazione tra la Commissione europea e le autorità antitrust nazionali’ (1998) 38 Riv Dir Eur 563, at 569 ff. 111 Or, at least less extreme measures—than absolute centralisation—were now thought to be suitable in order to attain this objective. 112 It is interesting to note that even before Reg 1/2003 came into force, some of these newly introduced national competition laws contained convergence clauses that made it clear that the application of national law should be compatible with the application of Community law by the Commission and by the European Courts. This is the case of s 60 of the UK Competition Act 1998 (see Middleton, ‘Harmonisation with Community Law: The Euro Clause’ in Rodger and MacCulloch (eds), The UK Competition Act, A New Era for UK Competition Law (Oxford/Portland, 2000)) and Art 1(4) of the Italian Competition Act (see Munari, ‘La legge 10 ottobre 1990 n. 287 e il diritto comunitario della concorrenza’ (1992) 8 Contr & Impr 602, at 625 ff). Compare now also s 23 of the newly amended German Competition Act (7. GWB Novelle). That significant regard should be given to the application of EC competition law is also stressed in the Explanatory Memorandum preceding the Greek Competition Act (L 703/1977) and in the parliamentary debates leading to the adoption of the old Belgian Act of 1991 on the Protection of Economic Competition (see Platteau, ‘Competition Law in Belgium’ in Vogelaar, Stuyck and Reeken (eds), Competition Law in the EU, its Member States and Switzerland, Vol. I, EC, France, Spain, Portugal, Italy, The Netherlands, Belgium and Switzerland (The Hague/Deventer, 2000) 499). Reference is also made to the Explanatory Memorandum to the Dutch Competition Act of 1997, which assumes that Dutch competition law should be neither stricter nor more lenient than the EC competition rules (see van Reeken and Noë, ‘Competition Law in The Netherlands’ in ibid, at 429).

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46 Institutional Law Aspects attainment of a satisfactory degree of ‘competition culture’ in Europe113 and an increasing sensitivity with regard to the principle of subsidiarity, all help to explain this shift in the dominant approach. However, these instruments were meant to function under the previous system of enforcement, established by Regulation 17. (i) Is Subsidiarity Relevant? At this point an important clarification is needed. While many commentators view the decentralisation of EC competition law enforcement as a whole in light of the principle of subsidiarity,114 which is also a principle of primary Community law (Article 5(2) EC), we prefer to avoid speaking of subsidiarity in this context, for two main reasons. First, in its strictly legislative sense subsidiarity does not apply to the EC competition rules at all, since they concern a matter for which the Community has exclusive competence when the interstate trade effect criterion is satisfied.115 According to Advocate General Jacobs’s Opinion in Tremblay, ‘ where Community competition law is applied by national authorities it is clearly not a case of subsidiarity in the sense that the national authorities apply national law’.116 A second point to be made is that decentralisation is connected solely with ‘practicality and efficiency’, and thus its aim is rather different from that of subsidiarity.117 In addition, decentralisation as such implies a delegation of competences from the central Community to the national level. This means that the organ delegating its competences reserves the power to revoke them in appropriate cases.118 On the other hand, subsidiarity in the sense of Article 5(2) EC refers to the allocation of competences between Community and national organs, which is defined pursuant to criteria contained in that Treaty

113 On the attainment of a ‘competition culture’ in Europe, see eg Tesauro, ‘The Relationship between the European Commission and the Competition Authorities of the EC Member Countries’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Sechstes St. Galler Internationales Kartellrechtsforum 1999 (Basle/Geneva/Munich, 2000) 156; Tizzano, ‘Intervento’ in Autorità Garante della Concorrenza e del Mercato (ed), Concorrenza e autorità antitrust, Un bilancio a 10 anni dalla Legge, Atti del convegno Roma 9–10 ottobre 2000 (Rome, 2001) 209. 114 See eg Ritter, above n 57, at 17–18; Di Via, ‘L’applicazione del principio di sussidiarietà nel diritto della concorrenza italiano e comunitario’ (1996) 1 Contr & Impr (Eur) 71, at 76; Hinton, ‘European Community Competition Law, Subsidiarity, and the National Courts’ (1997) 11 BYU J Pub L 301, at 311–12; Savy, ‘La leale cooperazione nella disciplina antitrust e nel nuovo Regolamento CE n. 1/2003 del Consiglio’ (2003) 5 Dir Pubbl Comp Eur 913, at 914–15. 115 See eg Stuyck, ‘Competition Law in the EC and in the Member States’ in Due, Lutter and Schwarze (eds), Festschrift für Ulrich Everling (Baden-Baden, 1995), ii, 1515; Temple Lang, ‘Rapport général’ in XVIII congrès FIDE (Stockholm, 3–6 juin 1998), Vol. II, Application nationale du droit européen de la concurrence (Stockholm, 1999) 280; E Putman, Contentieux économique (Paris, 1998) 386; Idot in [2001–7/8] Rev Conc Consomm 24. Compare also Commission des Communautés européennes, Le principe de subsidiarité, Communication de la Commission au Conseil et au Parlement européen, SEC(92)1990 final, 7, which mentions competition policy as one of the Community’s exclusive competences that are not affected by the principle of subsidiarity. 116 Case C–91/95 Roger Tremblay, Harry Kestenberg and Syndicat des Exploitants de Lieux de Loisirs (SELL) v Commission [1996] ECR I–5547. The AG thought it ‘more appropriate to refer to decentralization rather than subsidiarity’, though he recognised that ‘in practice however the distinction may be less clear, since national authorities may be applying both Community and national competition rules’ (para 20 of the Opinion). 117 See Louis, ‘Ensuring Compliance and Implementation by Member States’ in Buxbaum, Hertig et al (eds), European Economic and Business Law, Legal and Economic Analyses on Integration and Harmonization (Berlin/New York, 1996) 49. 118 This is exactly the case under the new Reg, according to which (Art 11(6)) the Commission can always initiate proceedings, thus relieving NCAs of their competence. See 2.III.(b).(ii) below.

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Modernisation and the Passage to a Legal Exception System 47 provision itself and operates in an objective and automatic way without any ‘concession’ made by the one or the other organ.119 The term ‘subsidiarity’ can therefore be used only in a general and non-technical sense,120 and Commission references to that principle should be viewed only in that sense, although it is difficult to detect coherence in Commission officials’ views on this issue. Indeed, the Commission recently seems to have preferred to speak of ‘bringing the application of Community competition rules closer to citizens and undertakings’ (Bürgernähe).121 This objective is also enshrined in Article 1(2) TEU, which refers to decisions taken as closely as possible to the citizen.122 In that sense the aims of the decentralisation of EC competition enforcement are quite similar to those behind subsidiarity,123 although, technically speaking, Article 5(2) EC does not apply to EC competition law enforcement as such.124 Recently, however, the Court of First Instance has also referred to subsidiarity as a guiding principle behind Regulation 1/2003 and decentralisation of EC competition law enforcement.125 We 119 See Tizzano, ‘L’applicazione decentrata degli articoli 85 e 86 del Trattato CE in Italia’ in Autorità garante della concorrenza e del mercato (ed), La tutela della concorrenza: Regole, istituzioni e rapporti internazionali (Rome, 1995) 116; Orlandi, ‘Diritto della concorrenza e sussidiarietà: I termini di un equivoco’ in Quaderni della Scuola Europea, Vol. 2/99 (Milan, 2000) 27; Mavroidis and Neven, ‘The White Paper: A Whiter Shade of Pale of Interests, and Interests’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 208, 210–11. See also Rodger, ‘Interrelationship with Community Competition Law Enforcement’ in Rodger and MacCulloch (eds), The UK Competition Act, A New Era for UK Competition Law (Oxford/Portland, 2000) 68, who clearly distinguishes between decentralisation and subsidiarity and would have preferred a system based on subsidiarity that would have allowed for greater scope to national competition laws. 120 See Tizzano, above n 119, at 115; Canenbley, ‘Decentralisation of Enforcement of Community Law— Working Paper IV’ in Ehlermann and Laudati (eds), European Competition Law Annual 1996 (The Hague/Boston/London, 1997) 146; Kunzlik, ‘Globalization and Hybridization in Antitrust Enforcement: European “Borrowings” from the US Approach’ (2003) 48 Antitrust Bull 319, at 328–9; Mikroulea, ‘ “Subsidiarity” of Community Action: The Example of Competition Law’ in Community Law & Commercial Law, 16th Panhellenic Conference on Commercial Law (Athens, 2007) (in Greek) 221. See also Idot, ‘Les règles applicables aux entreprises’ (1998) 8 RAE/LEA 114, at 115, describing subsidiarity in this context as ‘administrative’; Ehlermann, ‘The Evolution in Relations between the EC Commission and National Antitrust Authorities’ in Antitrust fra diritto nazionale e diritto comunitario, Atti del II convegno di Treviso (5–6 Maggio 1995) (Milan, 1996) 58, distinuishing between ‘subsidiarity in the legislative process’ and ‘subsidiarity in the area of implementation’; Lucas de Leyssac and Parleani, above n 61, at 57, distinguishing between these two facets of ‘subsidiarity’. 121 See eg former Director General A Schaub, ‘Die Reform der Europäischen Wettbewerbspolitik’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Achtes St. Galler Internationales Kartellrechtsforum 2001 (Basle/Geneva/Munich, 2002) 7. See also Steindorff, ‘Aufgaben und Zuständigkeiten im europäischen Kartellverfahren’ (1998) 162 ZHR 290, at 297; Tizzano, above n 113, at 210. On the general principle of the close-to-the-citizen application of Community law (Bürgernähe) see eg Callies, ‘Europa als Wertgemeinschaft—Integration und Identität durch europäisches Verfassungsrecht?’ (2004) 59 JZ 1033, at 1035. 122 See Schröter in Schröter, Jakob and Mederer (eds), Kommentar zum Europäischen Wettbewerbsrecht (BadenBaden, 2003) 48. 123 See Tesauro, above n 113, at 160. 124 See also Bourgeois, ‘Enforcement of EC Competition Law by National Authorities: Square Pegs in Round Holes’ in Gormley (ed), Current and Future Perspectives on EC Competition Law, A Tribute to Professor M.R. Mok (London/The Hague/Boston, 1997) 93–5, who stresses that even if the principle of subsidiarity does not apply to EC competition law enforcement and the EC is not required to leave it to Member States to apply that law, notably to exempt restrictive agreements (still subject to the Commission monopoly at the time), this does not rule out that the EC may lawfully delegate the exercise of such powers to the Member States. This is exactly what the new decentralised system of enforcement entails. 125 Case T–339/04 France Télécom SA v Commission, Judgment of 8 Mar 2007, not yet reported, para 79: ‘[w]ith regard, first, to the allocation of competences between the Commission and national competition authorities, it must be noted that Regulation 1/2003 puts an end to the previous centralised system and organises, consistently with the principle of subsidiarity, a larger co-operation of national competition authorities, empowering them to that end to enforce Community competition law’ (our own translation from the French original).

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48 Institutional Law Aspects respectfully submit, however, that the Court’s references must be seen as not purely technical and certainly as obiter dicta. (ii) The Basic Revolutionary Elements of the 1999 White Paper After this excursus, some explanation should be given of the White Paper’s revolutionary qualities. These derive from its advocacy of what was previously unthinkable: passing from a system of administrative prior authorisation to one of legal exception.126 In an administrative authorisation system the basic prohibition on Article 81(1) EC can be lifted only by the act of a public authority which is constitutive in nature. In a legal exception system, on the other hand, the prohibition is applied to a specific agreement by virtue of the law itself, ie through the direct application of Article 81(3) EC, without the need for a prior administrative decision. In this case, a decision not to apply the prohibition is merely declaratory in nature. In other words, Article 81(3) EC would become a directly applicable provision. In consequence, agreements which fell under Article 81(1) EC but also fulfilled the conditions of Article 81(3) EC would be considered lawful and fully enforceable without the need for any prior authorisation, be it administrative or judicial. On the other hand, agreements falling under the first paragraph of Article 81 EC without fulfilling the conditions of the third paragraph of that provision, would be prohibited and void ab initio, again without the need for prior administrative or judicial intervention. (iii) The Compatibility of the New System with the Treaty The reform advocated by the White Paper gave rise to long, sometimes spirited but ultimately fruitful debates between competition lawyers in Europe and beyond. Most negative reactions, which came mainly from German commentators,127 centred on the proposed reform’s compatibility with the Treaty, the efficiency of the modernised system of enforcement, questions of legal security for undertakings, and the coherence of enforcement as between the Community and the national levels. With regard to the debate on compatibility, an initial argument against the reforms was that by referring to a ‘declaration’ that Article 81(1) EC did not apply, the letter of Article 81(3) EC presupposed the intervention of an administrative authority.128 A legal exception 126

See Ehlermann, above n 2, at 537 ff. See eg Mestmäcker, ‘Versuch einer kartellpolitischen Wende in der EU’ (1999) 10 EuZW 523; Deringer, ‘Stellungnahme zum Weißbuch der Europäischen Kommission über die Modernisierung der Vorschriften zur Anwendung der Art. 85 und 86 EG-Vertrag (Art. 81 und 82 EG)’ (2000) 11 EuZW 5; Möschel, ‘Systemwechsel im Europäischen Wettbewerbsrecht?’ (2000) 55 JZ 61 and ‘Guest Editorial: Change of Policy in European Competition Law?’ (2000) 37 CMLRev 495; Wissenschaftlicher Beirat beim Bundesministerium für Wirtschaft und Technologie, ‘Gutachten von 1-7-00 über die Reform der europäischen Kartellpolitik’ (2000) 50 WuW 1096; Fikentscher, ‘Das Unrecht einer Wettbewerbsbeschränkung: Kritik an Weißbuch und VO-Entwurf zu Art. 81, 82 EG-Vertrag’ (2001) 51 WuW 446. See also Lever, ‘The German Monopolies Commission’s Report on Problems Consequent upon the Reform of the European Cartel Procedures’ (2002) 23 ECLR 321. 128 See Mestmäcker, above n 127, at 525 ff; Wesseling, above n 103, at 425; Paulweber and Kögel, ‘Das europäische Wettbewerbsrecht am Schweideweg: Die Reformvorhaben der Kommission zur Modernisierung des europäischen Kartellverfahrensrechts in der Kritik’ (1999) 44 AG 500, at 506; Deringer, above n 127, at 6; Möschel, above n 127, at 62; Paulweber, above n 34 (ch 1), at 30; Wißmann, ‘Decentralised Enforcement of EC Competition Law and the New Policy on Cartels: The Commission White Paper of 28th of April 1999’ (2000) 23(2) World Competition 123, at 139; Mestmäcker, above n 59 (ch 1), at 229 ff; Stillfried and Stockenhuber, ‘Der Entwurf einer neuen Verfahrensverordnung zum EG-Kartellrecht’ (2001) 15 WBl 145, at 150; Meli, ‘Il progetto di modernizzazione del sistema di controllo delle intese anticoncorrenziali ed il ruolo del giudice ordinario’ (2002) 4 Eur & Dir Priv 117, at 121. 127

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Modernisation and the Passage to a Legal Exception System 49 system would therefore not be compatible with the Treaty of Rome. Opponents of the reform also stressed that Article 81(3) EC entails complex economic assessments, and therefore implies wide discretionary powers129 to which national courts in particular are not accustomed.130 This line of argument called into question the direct effect of Article 81(3) EC131 as being not clear, unambiguous or sufficiently unconditional, in order to meet the test of the Court of Justice’s case law.132 Another connected issue was the fate of block exemption regulations, which would continue to exist under the new system. However, according to opponents of the reform, block exemptions would not by their very nature be compatible with a legal exception system.133 At most these regulations would have the characteristics of ‘block negative clearances’ and be of a declaratory nature.134 Indeed, some authors go as far as to argue that block exemption regulations have no binding effect because of their declaratory nature, and also because they are secondary law whereas Article 81(3) EC under the legal exception 129

See Möschel, above n 127, ar 62; Odudu, ‘Article 81(3), Discretion and Direct Effect’ (2002) 23 ECLR 17,

at 21. 130 In this context reference has been made to ECJ judgments stressing this peculiarity of Art 81(3) EC. See eg Delimitis, above n 17, para 44: ‘[i]t is for the Commission to adopt, subject to review by the Court of First Instance and the Court of Justice, individual decisions in accordance with the procedural rules in force and to adopt exemption regulations. The performance of that task necessarily entails complex economic assessments, in particular in order to assess whether an agreement falls under Article [81(3)].’ See further Case T–131/99 Michael Hamilton Shaw and Timothy John Falla v Commission [2002] ECR II–2023, para 38. On the judges’ perceived inability to deal with such complicated issues see eg P Lässig, Dezentrale Anwendung des Europäischen Kartellrechts (Cologne/Berlin/ Bonn/Munich, 1997) 35; Topel, ‘Kohärenz der dezentralen Anwendung im System paralleler Kompetenzen’ in Conference on the Reform of European Competition Law in Freiburg i. B. (9 and 10 November 2000), available at http://ec.europa.eu/comm/competition/conferences/2000/freiburg, at 3 ff; Möschel, ‘Effizienter Wettbewerbsschutz in einer erweiterten Gemeinschaft durch Einbeziehung der nationalen Wettbewerbsbehörden und nationalen Gerichte?’ (2000) 51 WuW 147, at 148; Bovis, ‘Transforming the Application of EC Competition Laws: The Case of Decentralisation’ (2001) 12 EBLR 98, at 100; Pace, ‘La politica di decentramento del diritto antitrust CE come prinzipio organizzatore del regolamento 1/2003: Luci ed ombre del nuovo regolamento di applicazione degli artt. 81 e 82 TCE’ (2004) 14 Riv It Dir Pubbl Com 147, at 178 ff. See also Gustafsson, above n 20 (ch 1), at 175; Martinez Lage and Brokelmann, ‘Article 81(3) before National Courts: The CAMPSA Doctrine of the Spanish Supreme Court and Articles 84 and 85 Revisited’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 600, 608–12, supporting the rather extreme position of excluding civil courts from applying competition law altogether in the absence of a pre-existing decision of a competition authority. 131 Mestmäcker, above n 127, at 526; Wißmann, above n 128, at 140; Mestmäcker, above n 59 (ch 1), at 231; LF Pace, European Antitrust Law, Prohibitions, Merger Control and Procedures (Cheltenham, 2007) 311–22. Mestmäcker also argued that if Art 81(3) EC could not satisfy the conditions of direct effect, tying Art 81(1) to 81(3) EC—through the new reg—would deprive the former of the two provisions of direct effect (see Mestmäcker, above n 33 (ch 1), at 417; Paulweber, above n 34 (ch 1), at 32). See also Caspar, above n 38, at 247, according to whom the problem with the application of Art 81(3) EC by national courts is not its justiciability. Art 81(3) EC is justiciable. However, according to that view, civil courts are not an appropriate forum because of the policy character of this provision and of the balancing that it entails among competition and non-competition concerns. See, in particular, Odudu, above n 129, at 23. 132 Van Gend & Loos, above n 50 (ch 1), at 13. It is interesting to trace back the views of Deringer at the time when Reg 17 entered into force. That author was of the opinion that Art 81(3) of the Treaty is a discretionary provision and not a legal exception; therefore, a declaration based on this rule is a normative activity, belonging within the realm of administration and not that of courts. He goes on to say, however, that ‘even if the Commission had not been given exclusive jurisdiction [by means of Reg 17], the national courts could only apply Article [81(3)] if this power had been specifically conferred upon them’ (see Deringer, above n 19 (ch 1), at 34, n 4, emphasis added). 133 Mestmäcker, above n 127, at 526; Gentile, above n 91, at 607–8; Wißmann, above n 128, at 142. 134 See eg Müller-Tautphaeus, ‘Das Weissbuch der Kommission zur Modernisierung der Anwendungsregeln zu Art. 81, 82 EGV: Der Gegenwärtige Diskussionsstand’ (2000) 72 SZWR/RSDA 149, at 154; Bartosch, ‘Von der Freistellung zur Legalausnahme: Was geschieht mit der Rechtssicherheit?’ (2000) 50 WuW 462, at 467; Bechtold, ‘EG-Gruppenfreistellungsverordnungen: Eine Zwischenbilanz’ (2001) 12 EWS 49, at 54. See also Deringer, above n 127, at 7, who also questions the nature of the act of withdrawal by a public authority of the benefit of a block exemption. According to this author such an act can only be declaratory under a legal exception system.

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50 Institutional Law Aspects system necessitates no intermediary, and is thus itself applicable irrespective of the relevant block exemption regulation. A more serious argument against the reform’s compatibility with the Treaty was that because there would no longer be an a priori presumption that restrictive agreements were illegal pending a decision by an administrative authority or a court, the effectiveness of the prohibition principle followed by the Treaty with regard to agreements (as opposed to the abuse principle applicable to monopolies) would be impaired.135 Thus, it was argued that there would be a presumption that anti-competitive agreements were valid, which would resemble, if not amount to, the abuse system.136 In reply to this line of criticism, the majority of authors believe that the text of Article 81 EC is at least neutral, and thus capable of accommodating secondary legislation opting for the authorisation or the legal exception system.137 These authors point out that Article 81 EC was a compromise between a system of administrative authorisation, initially favoured by Germany, and the French-sponsored legal exception system.138 An argument in favour of the Treaty’s open-endedness can also be adduced from the text accompanying the word 135 In the prohibition system, adopted under Art 81 EC, the law prohibits the very existence of an agreement or concerted practice, while behaviour, as such, is in principle immaterial. On the other hand, in the abuse system adopted under Art 82 EC, it is not the existence of a dominant position as such, but only its abuse, that is prohibited. The prohibition system is generally acknowledged to be a more efficient system with regard to cartels. On the two systems see eg Frignani, ‘La messa in opera delle nuove norme antitrust comunitarie (il Regolamento 1/2003 e suoi riflessi nel diritto italiano)’ [2004] Il Diritto Industriale 457, at 458. To complete the picture, we should add that there are 4 models of regulation or non-regulation of economic activities: (a) the laissez-faire model, (b) the system of control of abuse, (c) the prohibition system, and (d) the state ownership model. See further I Brinker, Mißbrauchsaufsicht auf der Grundlage der Gruppenfreistellungsverordnungen, Die Bedeutung des Widerrufsrechts der EG-Kommission im Rahmen der Gruppenfreistellungsverordnungen nach Artikel 85 Absatz 3 EG-Vertrag, Dissertation, Ludwig-Maximilians-Universität München (Munich, 1994) 9. 136 See Mestmäcker, above n 127, at 528 and ‘Begrenzt abschreckend’, Kommentar (2000) 50(7–8) WuW and above n 128, at 411; Möschel, above n 127, at 66; Paulweber, above n 34 (ch 1), at 40–1; Wißmann, above n 128, at 140; Rittner, ‘Diskussionsbeitrag—Wandel des Europäischen Wettbewerbsrechts’ in Schwarze (ed), Europäisches Wettbewerbsrecht im Wandel (Baden-Baden, 2001) 44; Mestmäcker, above n 59 (ch 1), at 224–6; Schröter, above n 122, at 200. It should be noted that sometimes the criticism that EC competition law is moving towards an abuse system is also heard with regard to other broader reforms, such as the new policy on vertical restraints. According to this view, the fact that vertical agreements exceeding the market share thresholds which have not been notified or have been notified late still can be exempted ex tunc seems to be not enirely in conformity with the prohibition system. See further Paulweber and Kögel, above n 128, at 508; Bayreuther, ‘Die Reform der EG-Wettbewerbspolitik gegenüber vertikalen Wettbewerbsbeschränkungen’ (2000) 11 EWS 106, at 109; Fuchs, ‘Die Modernisierung des europäischen Kartellrechts im Bereich vertikaler Vereinbarungen’ in Schwintowski (ed), Entwicklungen im deutschen und europäischen Wirtschaftsrecht, Symposium zum 65. Geburtstag von Ulrich Immenga (Baden-Baden, 2001) 118. 137 That the modernisation proposals were compatible with the Treaty was the overall conclusion in the 5th Annual EC Competition Law and Policy Workshop, held at the Robert Schuman Centre of the European University Institute in Florence. This was also the point of view expressed in the interventions and contributions of all former and current judges of the Community Courts. See eg Tesauro, above n 5, at 262 ff. In addition, both Forrester and Marenco, who undertook to do research on the historical context of the drafting of Art 81 EC, concluded that the Treaty left open the choice between an authorisation and a legal exception system. See Forrester, ‘The Modernisation of EC Antitrust Policy: Compatibility, Efficiency, Legal Security’ and Marenco, ‘Does a Legal Exception System Require an Amendment of the Treaty?’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001), 75 ff and 145 ff respectively. 138 Wils, ‘Notification, Clearance and Exemption in EC Competition Law: An Economic Analysis’ (1999) 24 ELRev 139, at 155; Idot, ‘La révision du règlement 17/62 ou l’ouverture de la “boîte de Pandore” ’ [1999–8/9] Europe 3; R Wesseling, The Modernisation of EC Antitrust Law (Oxford/Portland, 2000) 20. On the compromise solution attained by Reg 17 see also Marenco, above n 33, at 626–7; Braun, ‘Deutschland’ in Behrens (ed), EC Competition Rules in National Courts, Vol. III, Germany (Baden-Baden, 1996) 417; Lane, above n 67, at 114; Appeldoorn, ‘Are the Proposed Changes Compatible with Article 81(3) EC?’ (2001) 22 ECLR 400, at 401; Schröter, above n 122, at 331; Goyder, above n 10, at 26; Whish, above n 65 (ch 1), at 247–8. Compare also Brinker, above n 135, at 33–8.

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Modernisation and the Passage to a Legal Exception System 51 ‘declare’ in Article 81(3) EC. While this verb may at first sight lend some weight to the view that the authorisation system is Treaty-based, it can be argued to the contrary that if the Treaty had intended this, it would also have specified the author of the authorisation, ie the Commission, rather than stopping there.139 The incompleteness should therefore be taken as meaning that the whole matter was left to secondary legislation.140 With regard to the economic complexity inherent in Article 81(3) EC, the counterargument is that this point is equally valid for Article 81(1) EC,141 as well as for Articles 82 and 86 EC.142 Competition law in general is characterised by complexity. The definition of the relevant market, the cumulative effect of networks of agreements and the appreciability of restraints on competition are all complicated fact-averse elements which require demanding treatment by judges.143 In particular, Article 82 EC is usually more difficult to apply than Article 81(3) EC.144 Other authors stress the parallels to be drawn from the directly effective free movement of goods rules of the Treaty (Articles 28 to 30 EC), which also involve complex issues and presuppose a balancing act.145 Indeed, the fears expressed with regard to judges’ ability or inability to apply Article 81(3) EC do not do them justice, since in their own legal traditions they deal constantly with complicated legal and economic policy-connected problems. Even accepting that there is something special or ‘different’ about the third as opposed to the first paragraph of Article 81 EC,146 there is still no compelling reason why courts cannot adjudicate on such ‘special’ issues.147 Furthermore, EC competition law should not be seen as an unconnected aliud with respect to general Community law. Unlike US antitrust or EU Member States’ national competition laws, the Community competition provisions are enshrined in the EC Treaty, thus enjoying constitutional status. Thus, interestingly enough, modernisation should be seen in the context of 139

As was the case with Art 65 ECSC. See Jones, above n 38 (ch 1), at 53; Ehlermann, above n 2, at 539; Marenco, ‘Le régime de l’exception légale et sa compatibilité avec le Traité’ (2001) 37 CDE 135, at 139; Calvo Caravaca and Canedo Arrillaga, ‘Libre competencia y decentralización’ (2003) 2(1) Rev Esp Der Eur 5, at 27, n 54. 141 Compare with regard to Art 81(1) EC Case T–65/98 Van den Bergh Foods Ltd v Commission [2003] ECR II–4653, para 80: ‘[j]udicial review of Commission measures involving an appraisal of complex economic matters must be limited to verifying whether the relevant rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or a misuse of powers.’ See also Case T–168/01 GlaxoSmithKline Services Unlimited v Commission [2006] ECR II–2969, para 57. 142 See Nehl, ‘Changes in Legislation: Constitutional Reform and the Role of the Administrator’ in The Modernisation of EC Competition Law: The Next Ten Years, CELS Occasional Paper, No 4 (Cambridge, 2000) 15; Whish and Sufrin, ‘Community Competition Law: Notification and Individual Exemption—Goodbye to All That’ in Hayton (ed), Law’s Future(s) (Oxford/Portland, 2000) 145; Gyselen, above n 98, at 183 ff; A Schaub, ‘Continued Focus on Reform: Recent Developments in EC Competition Policy’ in Hawk (ed), International Antitrust Law and Policy 2001, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2002) 45. 143 See Ritter and Braun, above n 42 (ch 1), at 278. 144 See eg Temple Lang, ‘Decentralised Application of Community Competition Law’ in Rivas and Horspool (eds), Modernisation and Decentralisation of EC Competition Law (The Hague/London/Boston, 2000) 24; Burrichter, ‘The Application of Article 81(3) by National Courts: Some Remarks from the Point of View of a Practitioner’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 539. 145 See eg Ehlermann, above n 2, at 558; Tesauro, above n 6, at 10; Whish and Sufrin, above n 142, at 145. 146 See the contributions of Cooke, ‘Changing Responsibilities and Relationships for Community and National Courts: The Implications of the White Paper’ and Whish, ‘National Courts and the White Paper: A Commentary’ in The Modernisation of EC Competition Law: The Next Ten Years, CELS Occasional Paper, No 4 (Cambridge, 2000) 62 and 75 respectively. 147 See eg A Schaub, ‘Das Europäische Kartellrecht im Jahr 2000’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Siebentes St. Galler Internationales Kartellrechtsforum 2000 (Basle/Geneva/Munich, 2000) 14; Müller-Tautphaeus, above n 134, at 155. 140

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52 Institutional Law Aspects general Community law, and should not be perceived as a revolution but rather as a return to the norm.148 Supporters of the reform stressed in addition that the margin of discretion the Commission enjoyed under Article 81(3) EC never meant that it had the power to refuse an exemption to an undertaking if all four conditions of Article 81(3) EC were fulfilled, or that it could grant an exemption if the four conditions were not met. On the contrary, undertakings had a right to have their agreements exempted if those conditions were fulfilled.149 It was also argued that the review of Article 81(3) EC Commission decisions exercised in practice by the Community Courts may not be as reserved as many suppose: indeed, it perhaps does not differ from the review of Commission decisions under Articles 81(1), 82 and 86(2) EC.150 Under the new system, block exemption regulations remain the backbone of EC competition policy-making.151 They are essentially acts that apply Article 81(3) EC to categories of agreements, thus ‘circumscribing a portion of the field where Article 81 is not applicable’.152 148 See Tesauro, above n 113, at 164; Ehlermann, above n 2, at 576–7; Tesauro, above n 5, at 263–4; A Schaub, ‘The Reform of Regulation 17/62: The Issues of Compatibility, Effective Enforcement and Legal Certainty’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 243–4; Fox, ‘Modernisation: Efficiency, Dynamic Efficiency, and the Diffusion of Competition Law’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 127–8; Paulis, above n 73 (ch 1), at 401–2; contra Martinez Lage and Brokelmann, above n 130, at 598–9. Compare the view of former AG van Gerven, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 19, who stresses that a Treaty provision that was not originally directly applicable can become so over time because of the precision given to it by subsequent case law. 149 See Schaub and Dohms, ‘Das Weißbuch der Europäischen Kommission über die Modernisierung der Vorschriften zur Anwendung der Artikel 81 und 82 EG-Vertrag: Die Reform der Verordnung Nr. 17’ (1999) 49 WuW 1055, at 1064; Marenco, above n 140, at 143; Schaub, above n 148, at 246; Wils, ‘The Modernisation of the Enforcement of Articles 81 and 82 EC: A Legal and Economic Analysis of the Commission’s Proposal for a New Council Regulation Replacing Regulation No. 17’ in Hawk (ed), International Antitrust Law and Policy 2000, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2001) 329; Hirsch, ‘Anwendung der Kartellverfahrensordnung (EG) Nr. 1/2003 durch nationale Gerichte’ (2003) 1 ZWeR 233, at 237–9. Interestingly enough, earlier statements of Commission officials seem to go in the opposite direction (see eg Paulis, ‘Decentralisation of Enforcement of Community Law—Working Paper VII’ in Ehlermann and Laudati (eds), European Competition Law Annual 1996 (The Hague/Boston/London, 1997) 201. 150 See Marenco, above n 137, at 165–7; Wils, above n 149, at 329–30; Gyselen, above n 98, at 191; Lianos, above n 91, at 756–8. See also Ehlermann and Atanasiu, ‘The Modernization of EC Antitrust Law: Consequences for the Future Role and Function of the EC Courts’ (2002) 23 ECLR 72, at 74–5, who stress that the passage to a system of legal exception will eliminate the Community Courts’ self-imposed limited control over Commission decisions applying Art 81(3) EC, to the extent that such a limit exists, and Art 81(3) enforcement will now be subject to a normal standard of judicial review. This point is now shared by Montag and Janssens, ‘Article 81(3) in the Context of Modernisation—A Lawyer’s View’ in Geradin (ed), Modernisation and Enlargement: Two Major Challenges for EC Competition Law (Antwerp/Oxford, 2004) 232. 151 See Bellis, above n 83, at 133. 152 Marenco, above n 137, at 173; Lenaerts, ‘Modernisation of the Application and Enforcement of European Competition Law: An Introductory Overview’ in Stuyck and Gilliams (eds), Modernisation of European Competition Law, The Commission’s Proposal for a New Regulation Implementing Articles 81 and 82 EC (Antwerp/Oxford/New York, 2002) 17. See also the arguments of the former Director General Schaub, above n 148, at 247, according to whom it is not incompatible with the Treaty to give a declaratory nature to individual applications of Art 81(3) EC, while maintaining a constitutive nature for block exemption regs, which are binding and directly applicable Community acts pursuant to Art 249 EC. On another occasion, the former Director General stressed that these block exemption regs should not be considered as legislation (Gesetzgebung), but rather as application of the law (Rechtsanwendung) (Schaub, above n 121, at 8). See also Paulis, ‘Latest Commission Thinking and Progress on the Modernisation of Regulation 17’ in European Competition Law: A New Role for the Member States, Congress Organized on 20th and 21st November 2000 by the European Association of Lawyers (Brussels, 2001) 28: ‘we think that block exemption Regulations are not legislative acts but law enforcement’. See, however, Cooke, ‘General Report’ in Cahill (ed), The Modernisation of EU Competition Law Enforcement in the European Union, FIDE 2004 National Reports (Cambridge, 2004) 630, referring to the Commission’s ‘legislative’

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Modernisation and the Passage to a Legal Exception System 53 They constitute hard law Community legal prescriptions, which guarantee legal certainty153 and the correct and consistent application of Article 81(3) EC by national authorities and courts, and thus reduce the risk that competition law enforcement in Europe will be renationalised.154 National courts will go on applying them155 and will not have the power to rule them invalid in the context of private litigation.156 As for the power to withdraw the benefit of the block exemption, this is reserved to the public authorities, since it entails the exercise of state prerogatives in the public interest.157 Finally, the argument that because the new system was based on ex post control, it would mean a de facto shift towards the abuse system was the result of a misunderstanding, since under no circumstances would there be a presumption that restrictive agreements were legal. On the contrary, although their overall legality or illegality in light of the whole of Article 81 EC would be examined ex post, it would operate ex tunc, rather than ex nunc, thus reinforcing the effectiveness of the prohibition principle.158 In any case, it is very likely that the Court of Justice will interpret Article 81 EC teleologically, and will accept the legality of the new Regulation and the legal exception system if it is ever called on to assess this question, notwithstanding the strict wording of the provision

function in proposing block exemption regulations; Wils, ‘Regulation 1/2003: A Reminder of the Main Issues’ in Geradin (ed), Modernisation and Enlargement: Two Major Challenges for EC Competition Law (Antwerp/Oxford, 2004) 36: ‘[b]lock exemption regulations are general legislative acts which circumscribe a portion of the field where Article 81 EC is not applicable’. See also Bruzzone and Saija, ‘Modernizzazione dei regolamenti di esenzione: I confini rispetto alla regolazione settoriale’ (2003) 8 Contr & Impr (Eur) 108, at 116, considering these regs of a declaratory and at the same time of a legislative nature. See also Baron, ‘Die Rechtsnatur der Gruppenfreistellungsverordnungen im System der Legalausnahme—ein Scheinproblem’ (2006) 56 WuW 358, who characterises the question of the block exemption regs’ legal nature under the legal exception system as a pseudo-problem of German making that is basically irrelevant. 153 See Schaub, above n 142, at 46; Saria in Liebscher, Flohr and Petsche (eds), Handbuch der EUGruppenfreistellungsverordnungen (Munich/Vienna, 2003) 52. 154 See Bruzzone and Saija, above n 152, at 117. These aims are of course also served through the many soft law instruments issued by the Commission. Compare also Stillfried and Stockenhuber, above n 128, at 151, who stress the advantages of standardisation, simplification and legal certainty with regard to block exemption regs under the legal exception system and see no problem in those regs having a declaratory nature. 155 See Jaeger, ‘Die möglichen Auswirkungen einer Reform des EG-Wettbewerbsrechts für die nationalen Gerichte’ (2000) 50 WuW 1062, at 1066. Naturally, national courts will now have to examine the compatibility with Art 81 EC in its entirety (including its third para) of agreements exceeding the market share thresholds of or otherwise falling outside the ambit of the new generation block exemption regs. See para 37 of AG Geelhoed’s Opinion in Joined Cases C–376/05 and C–377/05 A Brünsteiner GmbH and Autohaus Hilgert GmbH v Bayerische Motorenwerke AG (BMW) [2006] ECR I–11383. 156 See para 2 of the Commission Notice on Art 81(3) EC, below n 208. 157 See Idot, above n 4 (ch 1), at 19. According to Art 29 of Reg 1/2003, the Commission may withdraw the benefit of a block exemption when an agreement, decision or concerted practice covered by the exemption produces effects that are incompatible with Art 81(3) EC. NCAs have the same power when the effects pertain to all or part of the territory of a Member State that has the characteristics of a distinct geographic market. 158 See eg Deselaers and Obst, ‘Weißbuch zum Europäischen Kartellrecht—Rechtssicherheit ade?’ (2000) 11 EWS 41, at 43; Schütz, ‘Zur Änderung des Kartellverfahrens gemäß Artikel 81 EGV’ (2000) 50 WuW 686, at 689; Marenco, above n 137, at 147–8. See further Gallot, ‘Protection efficace de la concurrence dans une communauté élargie grâce à l’association des autorités de concurrence et des juridictions nationales’ in Conference on the Reform of European Competition Law in Freiburg i. B. (9 and 10 November 2000), available at http://ec.europa.eu/comm/ competition/conferences/2000/freiburg, at 5, who rightly observes that the absence of administrative authorisation in the US does not make the US system less efficient or less oriented towards the principle of prohibition. Compare also Norberg, above n 83, at 529, who observes that the notification system was sometimes manipulated by firms notifying questionable agreements in the hope that it would be some time before the Commission reacted, if at all, while at the same time the agreement in question was not subject to fines. A legal exception system would thus reinforce the prohibition system, since it would no longer be possible to manipulate the rules in the manner described above.

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54 Institutional Law Aspects or the legislative history of the old Regulation 17.159 The Court’s primary concern will be whether the Treaty objectives are served in an efficient manner and whether the new system provides for effective enforcement of the Treaty competition rules. (iv) Efficiency of Competition Law Enforcement under the New System The efficiency of the new system of enforcement as originally proposed in the White Paper also raised concerns. According to critics of the modernisation, the notification system provided a very useful mechanism through which undertakings furnished important market information to the Commission.160 Valuable information was also provided by the submissions from third parties when the Commission advertised its intention to grant an exemption.161 This would no longer be meaningful or possible when national courts applied Article 81(3) EC.162 In addition, it would no longer be possible for an agreement to be exempted subject to conditions and obligations imposed by an administrative authority. Under the new system of enforcement, national courts could not impose conditions or accept commitments in the area of Article 81(3) EC.163 A similar point was also made with regard to negotiated settlements between the Commission and the notifying parties, who may make an offer to the Commission to amend their agreements so as to be granted an exemption.164 Such a flexible mechanism would not fit in well with civil proceedings, which are governed by the party-initiative principle,165 and would run counter to the neutrality of the judges, whose task would be limited to declaring whether or not Article 81 EC applied to an agreement.166 The first of these two arguments by opponents of modernisation, while of some credit in the earlier days of competition law enforcement in Europe, is now not so persuasive. In the last four decades the Commission has acquired a substantial degree of market information, and continues to do so, via investigations into sectors of the economy and into types of agreements,167 as well as via the merger control system, rather than through the notification of usually unproblematic agreements.168 It is telling that up to the publication of the 159

See Whish and Sufrin, above n 142, at 143. See eg Deringer, above n 127, at 8; Wißmann, above n 128, at 149; Böge, ‘The Discussion on the Modernisation of EC Antitrust Policy: An Update on the Bundeskartellamt’s Point of View’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/ Portland, 2001) 68; Hossenfelder, ‘The Development of the Bundeskartellamt’s Position on the Modernisation Proposals of the Commission’ in European Competition Law: A New Role for the Member States, Congress Organized on 20th and 21st November 2000 by the European Association of Lawyers (Brussels, 2001) 36. 161 Art 19 of Reg 17. 162 See Power, ‘Representing Clients after the Modernisation of EC Competition Law’ (2003) 14 ICCLR 335, at 341. 163 See Vogelaar, above n 53, at 24; Lever, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 30; Mengozzi, ‘La giurisprudenza del Tribunale delle Comunità europee in materia di conorrenza e l’applicazione da parte dei giudici nazionali del regolamento del Consiglio n. 1/2003’ (2003) 8 Contr & Impr (Eur) 210, at 224. 164 See eg Wolf, ‘Comment on the White Paper on the Reform of EC Competition Law’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 309. 165 See Möschel, above n 127, at 65. 166 See Vogelaar, above n 53, at 25. 167 Art 17 of Reg 1/2003. The Commission had rarely used this instrument, although it recently decided to conduct such sector enquiries inter alia in the gas and electricity, financial services (business insurance and retail banking), and new media (3G) sectors. 168 See Ehlermann, above n 2, at 561–2; Schaub, above n 148, at 249. 160

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Modernisation and the Passage to a Legal Exception System 55 White Paper, in 35 years of antitrust enforcement, the Commission was informed of agreements justifying the taking of a prohibition decision in only nine cases.169 As for the criticism of the courts’ inability to take into account the remarks of third parties and to impose conditions or accept commitments when applying Article 81(3) EC, it is the outcome of confusion. Pronouncements by national courts on Article 81(3) EC will certainly not have the character of an ‘exemption’, a term hardly compatible with the new system. Instead, their judgments will apply Article 81 EC as a whole, will be of a declaratory and not a constitutive nature, and will only be binding inter partes.170 At the same time, the new system does not eliminate the possibility for the Commission or other public authorities to reach informal settlements or accept commitments,171 which attain the same objectives and are as effective as the imposition of conditions and obligations under the previous system. In sum, again, most commentators believed that the administrative authorisation system enforced by the Commission for the last 40 years had had its day,172 and that the main lines of the new system met the needs of modern efficient competition law enforcement.173 According to this view, notification of usually innocuous agreements was not cost-effective,174 and 169 See Rocca, ‘Livre blanc sur la modernisation des règles d’application des articles 81 et 82 du Traité’ [1999–3] EC Competition Policy Newsletter 1, at 2. 170 Thus, the criticism heard sometimes that it will no longer be possible for courts to hear third parties, while applying Art 81(3) EC, as the Commission was doing under the authorisation system (see Vogelaar, above n 53, at 25), is misplaced, since the courts will not be granting ‘individual exemptions’ of constitutive erga omnes effect. 171 Art 9 of Reg 1/2003. 172 On the systems of enforcement employed by the Commission in Arts 81, 82 EC and in the Merger Reg see the study by Wils, above n 138, at 139 ff, which was published shortly before the White Paper. The author explained that the Commission employed 3 systems, as provided for in secondary legislation: (a) ex post enforcement through deterrence in the absence of prescreening, applicable to Art 82 EC; (b) ex ante enforcement through prescreening as a substitute for ex post enforcement through deterrence, applicable to mergers; and (c) ex ante enforcement through prescreening as a complement to ex post enforecement through deterrence, applicable to Art 81 EC. According to that author, back in 1957 the then Art 85 was a novel provision for Europe; therefore, it was thought that only ex post enforcement through deterrence was unlikely to be effective, since undertakings were unaccustomed to the principle of cartel prohibition (though not to the principle of abuse of economic power, which had precedents in Germany in the pre-war period). Hence the prescreening elements that were introduced with the system of notification and administrative authorisation. However, in modern times, according to the author, ex ante enforcement through prescreening appears inefficient and unsuitable for Arts 81 and 82 EC (ibid, at 154). See also Idot, ‘La modernisation des règles européennes de concurrence: réforme, procédurale ou institutionnelle’ [2001–7/8] Rev Conc Consomm 7, at 8; Wils, above n 138, at 318–35; Pirrung, ‘EU Enlargement towards Cartel Paradise? An Economic Analysis of the Reform of European Competition Law’ (2004) 1 Erasmus Law and Economics Review 77, at 90. 173 See eg Pappalardo, ‘Les principales orientations actuelles de la politique communautaire en matière de concurrence’ (2000) 119 JdT 488, at 488; Bellamy, ‘The Modernisation of EC Antitrust Policy—Some Reflections: Don’t Throw the Baby out with the Bath Water’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 315; Vesterdorf, ‘PanelDiskussion zum Weissbuch der Kommission über die Modernisierung der Vorschriften zur Anwendung der Art. 81 und 82 EG’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Siebentes St. Galler Internationales Kartellrechtsforum 1999 (Basle/Geneva/Munich, 2000) 214; Schröter, ‘The Reform of EC Competition Policy’ in Chao, San et al (eds), International and Comparative Competition Laws and Policies (The Hague/London/New York, 2001) 161–2; Cot, ‘Les enjeux de la réforme: Le point de vue d’un juriste’ [2001–7/8] Rev Conc Consomm 13, at 14; Lucas de Leyssac and Parleani, above n 61, at 60–1; Terhechte, ‘Gastkommentar: Die Reform des europäischen Kartellrechts—am Ende eines langen Weges?’ (2004) 15(12) EuZW. Compare also the proposals for reform included by the late Dan Goyder in the 1998 edition of his EC Competition Law, which echoed the dissatisfaction with the old enforcement system: DG Goyder, EC Competition Law (Oxford, 1998) 600 ff. 174 According to the UK Department of Trade and Industry the cost for UK companies of notifying an agreement to the Commission was between £30,000 and £100,000 in 2002: Department of Trade and Industry, Modernisation—A Consultation on the Government’s Proposals for Giving Effect to Regulation 1/2003 and for Realignment of the Competition Act 1998 (London, Apr 2003) 86.

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56 Institutional Law Aspects created an excessive administrative workload175 and a reactive enforcement culture,176 and in any case the more repugnant anti-competitive agreements were never notified to the Commission.177 Indeed, the decentralisation of the application of the Treaty competition rules and the abolition of the notification system will certainly enable the Commission to focus on detecting and punishing the most serious infringements.178 (v) Consistency and Coherence of the New Enforcement System A third type of argument against the system of legal exception relates to the consistency and coherence of the new enforcement system, in view of the multiple enforcers and fora to which Article 81(3) EC is now opened up. According to opponents of the reform, the abolition of the Commission’s exemption monopoly meant that it would no longer be possible to exercise centralised control over the application of that sensitive provision, thus ‘inviting’ national courts and NCAs from 25 Member States, from ‘Palermo’ to ‘Helsinki’, to apply that rule inconsistently and incoherently, possibly taking into account erratic theories or simply serving their parochial national interests.179 That would lead to a renationalisation of EC competition law, or at least to forum shopping.180 Inconsistency fears were largely exaggerated by European commentators, while US commentators were on the whole more positive towards decentralisation and the multiplication of enforcers.181 Inconsistency of enforcement between the Commission, NCAs and national courts could also be seen not just negatively but to a certain extent as a sign of ‘healthy experimentation’.182 Another argument was that multiple enforcers had been a

175

See eg Siragusa, above n 88, at 280. See Kjølbye, ‘The New Commission Guidelines on the Application of Article 81(3): An Economic Approach to Article 81’ (2004) 25 ECLR 566, at 573, stressing that the Commission under the old system used to spend a considerable amount of time checking individual clauses in notified agreements. 177 See further Forrester, ‘Modernisation of EC Competition Law’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 185, who, interestingly, thinks that essentially the parties to agreements used the notification system merely as a tactical advantage in the event that the other contracting party chose to evade its contractual obligations by relying on EC competition law and arguing that the contract was void under Art 81(2) EC. See also A Schaub, ‘Modernisation of EC Competition Law: Reform of Regulation No. 17’, in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 144. 178 See Director General Lowe, ‘Facing New Challenges for EU Competition Policy’ in The European Antitrust Review 2004, Global Competition Review Special Report (London, 2003) 3; De Smijter and Kjølbye, ‘The Enforcement System under Regulation 1/2003’ in Faull and Nikpay (eds), The EC Law of Competition (Oxford, 2007) 90–1. 179 This concern was increasingly expressed by in-house regulatory lawyers in big enterprises that preferred a Brussels-based easily-monitored to a decentralised hard-to-monitor system of enforcement. See eg Becher, ‘Reform des Wettbewerbsrechts aus der Sicht der Industrie’ in Schwarze (ed), Europäisches Wettbewerbsrecht im Wandel (Baden-Baden, 2001) 39. 180 On the forum shopping fears see Calvo Caravaca and Canedo Arrillaga, above n 140, at 37. 181 See eg, even before the White Paper, Fox, ‘Panel One Discussion: Decision Making at the Centre’ in Ehlermann and Laudati (eds), European Competition Law Annual 1996 (The Hague/Boston/London, 1997) 8, stressing that the more enforcement is dispersed, the more likely it is that the best law would evolve from a larger set of enforcers and decision makers. On decentralisation and interjurisdictional competition see Kerber, ‘Interjurisdictional Competition within the European Union’ (2000) 23 Fordham Int’l LJ S217. 182 See Vance, ‘Judicial Application of Article 81(3): Are the Fears Justified?’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 621. See also in that sense Böge, ‘Die Erste Seite: Europäisches Kartellrecht: Modernisierung ja, aber nicht um jeden Preis’ (2001) 12(4) EWS; Venit, ‘Private Practice in the Wake of the Commission’s Modernization Program’ (2005) 32 LIEI 147, at 153. 176

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Modernisation and the Passage to a Legal Exception System 57 reality for quite a long time with regard to Articles 81(1) and 82 EC, and experience showed that on the whole the decentralised application of these provisions had worked well. National courts had proved to be up to the task, while the preliminary reference procedure before the Court of Justice and recent co-operation mechanisms with the Commission provided important safety checks. Indeed, the White Paper had advocated powerful preventive and corrective measures that would ensure consistent and coherent EC competition enforcement by NCAs and courts.183 Then, it was never proposed that the Commission’s leading role in the definition of EC competition policy would be in any respect affected.184 Indeed, with the benefit of hindsight, we can observe that the Commission’s role is strengthened after modernisation. The Commission is now the intellectual leader and supreme enforcer of the competition rules in Europe, and it is not an overstatement to say that it leads in the formation of ‘competition culture’. Of particular importance in this context is the mass of soft law instruments that the Commission has adopted and which have considerably shaped the system of competition law enforcement in Europe. It is clear that in this regard the national authorities merely respond to and follow the Commission’s initiatives. (vi) Legal Certainty in the New Enforcement System Another fear of opponents of the modernisation was that legal certainty would decrease in a system of legal exception, since undertakings would no longer be able to notify their agreements and seek an exemption or—at least—a comfort letter.185 Under the new system of enforcement they would have to evaluate the possibly anti-competitive nature of their agreement themselves and thus be in an insecure position, particularly when involved in significant transactions entailing a high volume of investment and commercial risks. Legal uncertainty would increase further as a result of the more economic approach favoured by the new block exemption regulations and other Commission soft law instruments, such as the de minimis Notice186 and the Guidelines on vertical restrictions and on horizontal cooperation agreements.187 The use of market power as a criterion for applying the prohibition of Article 81 EC made it more difficult for undertakings to assess the legality or otherwise of their agreements.188 These arguments were made especially with reference to the ability of national courts to deal with the new economic approach. Some authors stressed a certain

183

On these measures see 2.III.(b) and 2.III.(c) below. See A Schaub, ‘Wandel des Europäischen Wettbewerbsrechts’ in Schwarze (ed), Europäisches Wettbewerbsrecht im Wandel (Baden-Baden, 2001) 21. 185 See eg Paulweber, above n 34 (ch 1), at 37–8; Bartosch, ‘Von der Freistellung zur Legalausnahme: Der Vorschlag der EG-Kommission für eine “neue Verordnung Nr. 17” ’(2001) 12 EuZW 101, at 105. It is somewhat ironic that in this line of rejectionist arguments against the legal exception system, comfort letters finally found favour, when they had always been considered a failure of the previous system. 186 Commission Notice on Agreements of Minor Importance Which Do not Appreciably Restrict Competition under Art 81(1) of the Treaty Establishing the European Community (de minimis) [2001] OJ C368/13. 187 Commission Notice—Guidelines on the Applicability of Art 81 of the EC Treaty to Horizontal Cooperation Agreements [2001] OJ C3/2. 188 See Frignani, Gentile and Rossi, ‘La devolution dell’antitrust: Prime riflessioni intorno al ‘libro bianco’ sulla modernizzazione’ (2000) 2 Merc Conc Reg 171, at 188; Bishop, ‘Modernisation of the Rules Implementing Articles 81 and 82’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 57–60; Schröter, above n 122, at 200; Idot and van de Walle de Ghelcke, above n 35, at 169, speaking of insécurité généralisée. 184

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58 Institutional Law Aspects contradiction between the more economic approach and the opening up of competition law enforcement to national courts.189 On the legal certainty side of the debate, it is noteworthy that US commentators again expressed the view that this concern is a ‘European obsession’, since uncertainty is inherent in competition law, so long as per se rules of permission and prohibition are only an exception.190 A certain degree of uncertainty is therefore inevitable.191 However, the substantial and ever-increasing case law of the Commission and the European Courts and the publication of block exemption regulations, as well as more notices, communications and other soft law instruments, should provide a satisfactory degree of legal certainty.192 Besides, the old system was not really perfect from a certainty point of view. It too contained elements of self-assessment, and consequently of uncertainty, notwithstanding the notification mechanism. Thus, following the Haecht II ruling193 the notification of restrictive agreements did not amount to their provisional civil validity, and only very rarely did the Commission actually proceed to exemption decisions. If anything, in most cases it would perhaps issue a comfort letter, which did not carry the same degree of legal certainty. It therefore seems that, at least in that respect, the new system of enforcement will give firms more legal certainty, because owing to the abolition of the Commission’s exemption monopoly and the need for notification, it will no longer be possible to use the nullity sanction of Article 81(2) EC as a tactical weapon for competition law litigation.194 Firms will no longer be held hostage to the split between the first and the third paragraphs of Article 81 EC, with Damocles’s sword of the second paragraph over their heads,195 leaving them no option but to notify and thus submit ‘to a flawed system’, as some have put it.196 Under the new system all agreements will be perfectly enforceable unless held to be otherwise by a court, which will be able to give judgment by reference to all the elements of Article 81 EC. This will reduce spurious litigation on competition grounds, while the more important and serious cases which are bound to come before the courts will foster the awareness of the judiciary, the bar and firms themselves of the true competition problems.197 189 See Mestmäcker, above n 33 (ch 1), at 422, 425; Bishop, above n 188, at 62; Wesseling, ‘The Draft-regulation Modernising the Competition Rules: The Commission Is Married to One Idea’ (2001) 26 ELRev 357, at 362; Mestmäcker, above n 59 (ch 1), at 235; Vogelaar, above n 53, at 21–2. See also Bulst, ‘Private Antitrust Enforcement at a Roundabout’ (2006) 7 EBOR 725, at 729. 190 See Hawk and Denaeijer, ‘The Development of Articles 81 and 82 EC Treaty: Legal Certainty’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 130, 137, 140. 191 See Fox, ‘Panel One Discussion: Compatibility, Efficiency, Legal Security’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 24; Forrester, above n 137, at 102; Idot, ‘Les entreprises face à la suppression de l’autorisation préalable’ in Mourre (ed), Le nouveau droit communautaire de la concurrence, Les droits de la defense face aux pouvoirs de la Commission européenne (Paris, 2004) 139. According to Venit, above n 30, at 554–5, under the new regime, rigorous self-assessment possibly coupled with some informal consultation with the Commission should provide an adequate and less costly alternative to notification. 192 See von Bogdandy, ‘Legal Equality, Legal Certainty and Subsidiarity in Transnational Economic Law— Decentralized Application of Art. 81.3 EC and WTO Law: Why and why not’ in von Bogdandy, Mavroidis and Mény (eds), European Integration and International Co-ordination, Studies in Transnational Economic Law in Honour of Claus-Dieter Ehlermann (The Hague/London/New York, 2002) 20–1. 193 See 2.I.(b) above. 194 See in this respect Bishop, above n 188, at 57; Alexiadis and Sullivan, above n 98, at 70. 195 See Venit, above n 182, at 148, 151, speaking of the ‘procedural absurdity’ of this ex lege illegality. 196 See Brown, ‘Notification of Agreements to the EC Commission: Whether to Submit to a Flawed System’ (1992) 17 ELRev 323, in particular at 336 ff. 197 See in this context former Commissioner Monti, ‘Les réformes en cours en matière de concurrence: Mise en perspective’, Speech delivered at the Cercle fédéraliste européen, (Brussels, 22 Nov 2002), available at

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Modernisation and the Passage to a Legal Exception System 59 That the legal exception system will not reduce legal certainty for companies has recently been accepted by the Court of First Instance in its O2 judgment.198 In that case the Commission had considered that national roaming between network operators who were licensed to roll out and operate their own digital mobile networks restricted competition between those operators on its key parameters und thus fell under Article 81(1) EC. However, the Commission had granted an exemption pursuant to Article 81(3) EC.199 The Court annulled the Commission’s Decision on this finding and held that the Commission had not adequately proven that the agreement restricted competition, thus falling under Article 81(1) EC in the first place. The Commission, shortsightedly and contrary to its previous standard argument that the new system would not prejudice legal certainty, had argued in that case that the annulment of the contested provisions of the Decision would place O2 in a situation of legal uncertainty, in so far as a new decision on the notification could not be taken since the notification and exemption procedure of the old Regulation 17 no longer exists under Regulation 1/2003. The Court however rejected this argument and held: Possible partial annulment of the Decision, if it were justified, as the applicant requests, by the finding of unlawful conduct of the Commission at the date on which it adopted the Decision, in refusing to grant negative clearance to all the clauses notified, cannot prejudice the applicant’s legal certainty but reinforces it, provided that it follows from the grounds of such a judgment ordering annulment that the disputed clauses of the agreement relating to national roaming do not fall within the scope of the prohibition laid down in Article 81(1) EC.200

In other words, the Court clearly thought that the old exemption decisions were not the only vehicles of legal certainty and that an agreement’s lawfulness under a system of legal exception would offer an appropriate degree of legal certainty to companies.

(d) The New Regulation 1/2003 After substantial post-White Paper discussions (characterised as a ‘model of democracy’201) between the Commission and all interested parties (Member States, NCAs, businesses, lawyers, etc), the Commission adopted a formal proposal on 27 September 2000 and forwarded it to the Council.202 The basic system set out in the proposal followed the White http://ec.europa.eu/comm/competition/speeches, speaking of a ‘responsabilisation, par une plus grande liberté accordée à l’ensemble des protagonistes de la politique de concurrence’. 198 Above n 105. 199 Commission Dec 2004/207/EC of 16 July 2003 (T-Mobile Deutschland/O2 Germany: Network Sharing Rahmenvertrag) [2004] OJ L75/32. 200 O2, above n 105, para 49. 201 See Idot, ‘L’application des articles 81 et 82 CE: L’entrée dans le nouveau millénaire . . .’ [2000–12] Europe 3, at 4. 202 Commission Proposal for a Council Reg on the Implementation of the Rules on Competition Laid Down in Arts 81 and 82 of the Treaty and Amending Regs (EEC) 1017/68, (EEC) 2988/74, (EEC) 4056/86 and (EEC) 3975/87 (‘Reg Implementing Arts 81 and 82 of the Treaty’), COM(2000)582 final [2000] OJ C365E/284. On the Commission’s Reg proposal see eg Bechtold, ‘Modernisierung des EG-Wettbewerbsrechts: Der VerordnungsEntwurf der Kommission zur Umsetzung des Weißbuchs’ (2000) 55 BB 2425; Martinez Lage, ‘Editorial: ¿Próximo big bang en el derecho comunitario de la competencia?’ [2000] 11/12 GJ 3; Riley, ‘The Draft Competition Regulation’, Focus (2000) 12 Euro CL p xi; Arhel, ‘Modernisation des règles relatives aux ententes et abus de position dominante’, Petites Affiches, 4 Dec 2000, No 241, 7; Jalabert-Doury, ‘Concurrence européenne et internationale: Le projet de nouveau règlement d’application des articles 81 et 82 TCE’ [2001] RDAI/IBLJ 55; Gröning, ‘Die dezentrale Anwendung des EG-Kartellrechts gemäß dem Vorschlag der Kommission zur Ersetzung der VO 17/62’ (2001) 47 WRP 83; Bartosch, above n 185, at 101 ff; Eilmansberger, ‘Zum Vorschlag der Kommission für eine Reform des Kartellvollzugs’ (2001) 56 JZ 365.

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60 Institutional Law Aspects Paper, but it also contained provisions not spelled out there, the most important ones being Article 2, which provided that the burden of proving an infringement of Article 81(1) EC rested with the authority, while the defendant had the burden of proving the conditions of Article 81(3) EC,203 and Article 3 on exclusion of the application of national competition laws, which will be analysed in detail below.204 Many of the proposed regulation’s provisions were contested at Council level by some Member States, principally Germany, the centre of most negative reactions. However, as the general outlines of the proposed system were accepted rather warmly and as there was a wide consensus that the old system was no longer tenable, the proposal’s prospects of becoming law were good.205 Indeed, two years after the official Commission proposal, on 16 December 2002, the Council adopted the new ‘Regulation on the Implementation of the Rules on Competition Laid down in Articles 81 and 82 of the Treaty’, which became Regulation 1/2003.206 The new Regulation entered into force on 24 January 2003 and started to apply from 1 May 2004.207 It was accompanied by six Commission Notices making up the ‘Modernisation Package’, applicable from 1 May 2004.208 Since Regulation 1/2003 itself could not establish the details of how the new modernised and decentralised enforcement system would operate, the Notices were intended to fill this gap and offer national authorities and courts assistance in their new role as EC competition law enforcers. 203 With regard to public enforcement by the Commission, Art 2 did nothing more than codify the case law of the Community Courts. See eg Cases 56/64 and 58/64 Etablissements Consten SàRL and Grundig-Verkaufs-GmbH v Commission [1965] ECR 299, at 347; Case T–34/92 Fiatagri and New Holland Ford v Commission [1994] ECR II–905, para 99; Métropole Télévision, above n 105, paras 130–131. Because the White Paper had not addressed the question of the burden of proof in Art 81(1) and (3) EC, some commentators referred to the risk that modernisation might place the burden of proving the conditions of Art 81(3) EC on the Commission and on plaintiffs (see eg Mestmäcker, above n 59 (ch 1), at 233; Idot, above n 101, at 343; Kist and Tierno Centella, ‘Coherence and Efficiency in a Decentralised Enforcement of EC Competition Rules: Some Reflections on the White Paper on Modernisation’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 375). The Commission sought to assuage these fears in its Sept 2000 proposal with the inclusion of Art 2. See further Paulis and Gauer, above n 77 (ch 1), at 66. For a critical view of Art 2 see Rinaldi, ‘Il regolamento del Consiglio N. 1/2003: Un primo esame delle principali novità e dei punti aperti della riforma sull’applicazione delle regole comunitarie in tema di concorrenza’ (2003) 17 Dir Comm Int 143, at 148. According to this commentator the reversal of the burden of proof in Art 81(3) EC is not consistent with the philosophy of the new system and with the integrated nature of Art 81 EC. An intriguing issue is the burden of proof in Art 82 EC. While it would seem from the letter of Art 2 of Reg 1/2003 that the legal burden of proving all the conditions of Art 82 EC lies with the Commission, reason requires that the defendant should at least come forward with evidence proving those facts that are within his own sphere of influence and tend to exculpate him. This should apply to efficiency defences or defences based on objective justification. See Case T-201/04 Microsoft Corp v Commission, Judgment of 17 September 2007, not yet reported, para 688. 204 Another new—seemingly at least—provision was Art 7 on structural remedies. 205 For short descriptions of the long period between the Commission proposal of Sept 2000 and the final adoption of Reg 1/2003 see the Commission’s Annual Reports on Competition Policy for 2000, 2001 and 2002, in particular the one for 2001: Commission XXXIst Report on Competition Policy—2001 (Brussels/Luxembourg, 2002) 15–16. 206 [2003] OJ L1/1. On the main points where Reg 1/2003 departed from the original reg proposal of Sept 2000 see Pignataro, ‘La riforma del diritto comunitario della concorrenza: Il regolamento n. 1/2003 sull’applicazione degli articoli 81 e 82 del Trattato CE’ (2003) 8 Contr & Impr (Eur) 233, at 249–59. 207 Art 45 of Reg 1/2003. 208 Commission Notice on Cooperation within the Network of Competition Authorities [2004] OJ C101/43; Commission Notice on Cooperation between the Commission and the Courts of the EU Member States in the Application of Arts 81 and 82 EC [2004] OJ C101/54; Commission Notice on the Handling of Complaints by the Commission under Arts 81 and 82 of the EC Treaty [2004] OJ C101/65; Commission Notice on Informal Guidance Relating to Novel Questions Concerning Arts 81 and 82 of the EC Treaty that Arise in Individual Cases (Guidance Letters) [2004] OJ C101/78; Commission Notice—Guidelines on the Effect on Trade Concept Contained in Arts 81 and 82 of the Treaty [2004] OJ C101/81; Communication from the Commission—Notice— Guidelines on the Application of Art 81(3) of the Treaty [2004] OJ C101/97.

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Modernisation and the Passage to a Legal Exception System 61 They are essentially a ‘restatement’ of substantive and procedural EC competition law.209 Their flexibility and soft-law nature are perfectly adapted to the new system of selfassessment and the economics-based approach. They are not binding on national authorities and courts,210 but their persuasive value is such that they are already being treated as hard law.211 Indeed, they are frequently used as a source of inspiration for the application of national competition law.212 The shift in the enforcement system is stated in a celebrated manner in Article 1(2) of Regulation 1/2003 according to which ‘agreements, decisions and concerted practices caught by Article 81(1) of the Treaty which satisfy the conditions of Article 81(3) of the Treaty shall not be prohibited, no prior decision to that effect being required’. To make this more evident, Articles 5 and 6 of the new Regulation state that the competition authorities of the Member States and national courts will have the power to apply Articles 81 and 82 EC in individual cases. In sum, NCAs and national courts now have full competence to apply Articles 81 and 82 EC in their entirety, the only exception being the withdrawal of the benefit of a block exemption with erga omnes effect under Article 29 of Regulation 1/2003, where the Commission enjoys exclusive competence.213 Under the new system, the Commission has the power to adopt four kinds of decisions. It may: (a) order the termination of infringements with or without the imposition of fines (negative decisions),214 (b) order interim measures (a power which was formerly judicially created),215 (c) accept commitments and make them binding on third parties,216 and 209

With the exception of the Notice on Art 81(3) EC, all Notices apply equally to Art 82 EC. See further Pampel, ‘Rechtsnatur und Rechtswirkungen von Mitteilungen der Kommission im europäischen Wettbewerbsrecht’ (2005) 16 EuZW 11, at 12 and Rechtsnatur und Rechtswirkungen horizontaler und vertikaler Leitlinien im reformierten europäischen Wettbewerbsrecht (Baden-Baden, 2005) 98–9. It is not to be ruled out, however, that unjustified and unqualified departure from the Notices by a national court or authority may violate Art 10 EC, insofar as the Notices may make explicit what is implicit in hard law provisions of EC competition law, in Community Courts’ case law and in their effet utile. 211 This of course raises a question of legitimacy as to the Commission’s action. See further Forrester, ‘Modernisation: An Extension of the Powers of the Commission?’ in Geradin (ed), Modernisation and Enlargement: Two Major Challenges for EC Competition Law (Antwerp/Oxford, 2004) 87–9; Senden, ‘Soft Law and its Implications for Instititutional Balance in the EC’ (2005) 1(2) Utrecht Law Review 79, at 87 ff; M-T Marinos, Distribution of Cars in the European Union, Regulation 1400/2002/EC (Athens, 2005) (in Greek) 41. 212 See Parret, ‘Judicial Protection after Modernisation of Competition Law’ (2005) 32 LIEI 339, at 347. 213 On the role of national courts in such a case see 2.III.(c).(i).c below. 214 Art 7 of Reg 1/2003. 215 Art 8 of Reg 1/2003. 216 Art 9 of Reg 1/2003. The Commission may exercise this power when it intends to adopt a prohibition decision but refrains from doing so as a result of the commitments offered, if the commitments meet its concerns as expressed in its ‘preliminary assessment’, equivalent to a statement of objections. Interestingly enough, this new power of the Commission and NCAs applies to both Art 81 and 82 EC cases. For examples of this new procedure see Case COMP/37.214 Joint selling of the media rights to the German Bundesliga (proposed commitments published in [2004] OJ C229/13); Case COMP/38.173 The Football Association Premier League Limited (FAPL) (proposed commitments contained in an Art 19(3) of Reg 17 Notice, published at [2004] OJ C115/3, and subsequently amended); Case COMP/39.116 Coca-Cola (proposed commitments published in the Commission’s website on 19 Oct 2004); Case COMP/38.381 De Beers/ALROSA (proposed commitments published at [2005] OJ C136/32); Case COMP/38.348 Repsol CPP SA (proposed commitments published at [2004] OJ C258/7); Cases COMP/39.152 BUMA and COMP/39.151 SABAM (Santiago Agreement COMP/38.126) (proposed commitments published at [2005] OJ C200/11); Case COMP/37.749 Austrian Airlines/SAS cooperation agreement (proposed commitments published at [2005] OJ C233/18); Case COMP/38.681 Universal International Music BV/MCPS and others (The Cannes Extension Agreement) (proposed commitments published in the Commission’s website on 23 May 2006 and reported at [2006] OJ C122/2); Cases COMP/39.140 DaimlerChrysler, COMP/39.141 Fiat, COMP/39.142 Toyota, COMP/39.143 Opel (proposed commitments published at [2007] OJ C66/18, 21, 24, 27, 210

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62 Institutional Law Aspects (d) declare that the competition rules do not apply to particular conduct (positive decisions).217 The new Regulation also provides for extensive duties of cooperation between the Commission and NCAs and courts. These are further specified in notices and guidelines in the ‘Modernisation Package’.218 Regulation 1/2003 was hailed by most actors in EC competition enforcement as a breakthrough, since it ended the Commission’s monopoly on granting exemptions under Article 81(3) EC and it placed ‘national competition authorities and courts in the driving seat for much of competition law enforcement’,219 thus also lending more legitimacy to EC competition law.220 As already noted, the fundamental basis of the new system is that it abolishes the notification and authorisation system and decentralises antitrust enforcement to NCAs and courts. It thus leads to a certain ‘privatisation’ of competition policy enforcement, since the burdens and risks of the Treaty competition rules will fall entirely on companies and their legal advisers,221 who must now engage in rigorous self-assessment.222 That is bound to lead to ‘a new, “rights-based” common culture of competition in the Community’.223

respectively); Case COMP/38.698 CISAC (proposed commitments published in the Commission’s website on 12 June 2007 and reported at [2007] OJ C128/12). In the first 6 cases the Commission adopted formal Decs rendering legally binding the commitments concerned: Commission Dec 2005/396/EC of 19 Jan 2005 (Joint selling of the media rights to the German Bundesliga) [2005] OJ L134/46; Commission Dec of 22 Mar 2006 (Joint selling of the media rights to the FA Premier League); Commission Dec of 22 June 2005 (Coca-Cola); Commission Dec 2006/520/EC of 22 Feb 2006 (De Beers/ALROSA) [2006] OJ L205/24, annulled by the CFI in Case T–170/06 Alrosa Company Ltd v Commission, Judgment of 11 July 2007, not yet reported; Commission Dec of 12 Apr 2006 (Repsol CPP SA); Commission Dec of 4 Oct 2006 (Universal International Music BV/MCPS and others (The Cannes Extension Agreement)). In the other cases, with the exception of the BUMA and SABAM case which was closed, the Commission intended to proceed to a formal Dec after inviting interested third parties to submit their comments. On the bearing of these decisions on national proceedings see 2.III.(d).(iv).e below. See further Whish, ‘Commiment Decisions under Article 9 of the EC Modernisation Regulation: Some Unanswered Questions’ in Johansson, Wahl and Bernitz (eds), Liber Amicorum in Honour of Sven Norberg, A European for All Seasons (Brussels, 2006) 558 ff. There are commentators that have doubted whether such commitments decisions are compatible with the Treaty. According to this line of criticism, Art 83(2)(b) EC, on which Reg 1/2003 is based, speaks of ‘detailed rules for the application of Article 81(3)’, yet a commitments decision does not amount to ‘application’ of law, at least with regard to Art 81(3) EC. See eg Jaeger, above n 155, at 1069. This view, however, appears overly formalistic. Besides, Art 83(1) EC, which ‘speaks of appropriate regulations or directives to give effect to the principles set out in Articles 81 and 82’, is wide enough to cover such commitments decisions. 217 Art 10 of Reg 1/2003. Only the Commission is competent to take this last type of decision, and only when the Community public interest so requires. NCAs will not have the competence to take such decisions. The national courts are, of course, not precluded from applying Arts 81 and 82 in full in their jurisdiction, either negatively or positively. 218 See 2.III.(b) and 2.III.(c) below. 219 Thus, according to Melanie Johnson, Parliamentary Undersecretary of State for competition, consumers and markets, in Department of Trade and Industry, above n 174. 220 On the legitimacy brought about by the decentralised application of EC competition law by national authorities and courts see Maher, ‘Re-imagining the Story of European Competition Law’ (2000) 20 OJLS 155, at 159. 221 On the ‘privatisation’ of EC competition law enforcement already in the context of block exemption regs, where the Commission has in a sense ‘delegated’ its review power to companies’ in-house compliance departments, see Marsden, ‘Inducing Member State Enforcement of European Competition Law: A Competition Policy Approach to “Antitrust Federalism” ’ (1997) 18 ECLR 234, at 235. 222 See Mersing, ‘The Modernization of EC Competition Law—The Need for a Common Competition Culture’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 262; Venit, above n 30, at 546; Bechtlod, ‘Maßstäbe der “Selbstveranlagung” nach Art. 81 Abs. 3 EG’ Kommentar (2003) 53(4) WuW. See also Rey, ‘Les enjeux de la réforme: Le point de vue d’un économiste’ [2001–7/8]Rev Conc Consomm 11, at 12, speaking of ‘responsabilisation des entreprises’. 223 See Middleton, ‘Modernization of European Community Competition Law Enforcement for the Twentyfirst Century’ in Humanizing our Global Order, Essays in Honour of Ivan Head (Toronto, 2003) 125.

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The Pillars of the New System 63

III. THE PILLARS OF THE NEW DECENTRALISED SYSTEM OF EC COMPETITION LAW ENFORCEMENT: ‘CENTRALISED DECENTRALISATION’? The new decentralised system of enforcement had a profound effect on Member States’ laws and institutions. It has first succeeded in creating a level-playing field for competition law enforcement in Europe, favouring as much as possible the ‘one-stop shop’ principle, and has secondly created a legislative and enforcement model that is widely copied and followed nationally. We can thus speak of the formation of a common EU-wide system of competition law enforcement, which may not be of a strictly federal nature, yet has many federal elements. It is interesting to note that communitarisation and decentralisation, two aims that may at first glance seem antithetical, go hand-in-hand. Thus, the expansion in the application of EC competition law in Europe, or in other words the ‘communitarisation’ of competition law enforcement,224 has been characterised in recent years by a parallel and proportionate process of decentralisation. Conversely, decentralisation itself leads to more checks and balances which ensure consistency in the system. This is the rather paradoxical link between decentralisation itself and greater harmonisation, unification and, ultimately, communitarisation.225 The most striking features of the modernisation and decentralisation of competition law enforcement in Europe are the extended application of Community over national competition law and the strengthening of the ‘Community’ identity of national enforcement organs when they apply EC competition law. These are in a sense the fundamental pillars upon which the new system is based.

(a) Strengthening the Supremacy of Community over National Competition Law 224 On the communitarisation of competition law in Europe see Kjølbye, ‘Council Regulation 1/2003: The Modernisation Regulation—The Relationship between Community Competition Law and National Competition Laws in a Modernised World’, Paper presented at the IBA 7th Annual Competition Conference (Fiesole, 10–11 Oct 2003) 2: ‘[t]he aim of Regulation 1/2003 is to Communitarise competition law enforcement in the European Union and thereby create a common competition culture’. 225 See Gautron, ‘Subsidiarité ou néo-subsidiarité’ (1998) 8 RAE/LEA 3, at 6; Whish and Sufrin, above n 142, at 152; Tesauro, above n 113, at 156 and above n 5, at 260; Lucas de Leyssac and Parleani, above n 61, at 794; Idot, ‘Le règlement 1/2003: Vers une fédéralisation, une communautarisation, ou une renationalisation du droit de la concurrence?’ in Etudes en l’honneur de Jean-Claude Gautron, Les dynamiques du droit européen en début de siècle (Paris, 2004) 128 ff. Compare also the Opinion of AG Poiares Maduro in Joined Cases C–94/04 Federico Cipolla v Rosaria Fazari (née Portolese) and C–202/04, Stefano Macrino and Claudia Capodarte v Roberto Meloni [2006] ECR I–11421, para 28: ‘[t]he force awarded by the Court to judgments it has delivered in the past may be considered to derive from the need to secure the values of cohesion, uniformity and legal certainty inherent in any system of law. Those values are all the more important within the context of a decentralised system of applying the law such as that of the Community legal system.’ For a more general perspective compare the parallelism between integration and decentralisation drawn by Tizzano, above n 119, at 114 and above n 113, at 210. According to the latter author, the further integration advances the greater should the involvement of national authorities and courts be, so as to ensure democracy and participation and to guarantee the efficiency of the whole system. At the same time, the more such authorities and courts take part in realising the Community’s objectives and tasks, the more bound they are in their actions to respect the rules and goals of the system, in accordance with the fundamental principles of integration (supremacy, direct effect, effectiveness and non-discrimination).

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64 Institutional Law Aspects One specific issue which deserves attention is the applicability of EC competition law to the facts of a case and, more particularly, the relationship between that law and the national competition laws of the EU Member States. The new Regulation has placed this whole question on a different basis and the supremacy of EC over national competition law has now been strengthened. (i) The Confirmation of the Broad Nature of the Effect on Trade among Member States Community competition law is applicable if the anti-competitive practice in question has an actual or potential effect on trade between Member States, which is the jurisdictional boundary between Community and national competition law.226 The Court of Justice has in the past given a broad interpretation to this criterion, so as to bring as many practices as possible into the ambit of Community law.227 This broad interpretation furthers the Treaty’s basic aim of ensuring that competition in the internal market is not distorted (Article 3(1)(g) EC).228 Although the Court has occasionally followed a narrower meaning,229 the broad interpretation remains the norm.230 In the decentralised enforcement system a narrow interpretation of the effect on interstate trade would run counter to one of the most prominent aims of the reform, which is to involve as many enforcers as possible in EC competition law enforcement.231 It would also lead to re-nationalisation of competition law enforcement in Europe.232 As already stressed, the communitarisation of competition law enforcement is inherently connected with a parallel and proportionate process of decentralisation, and conversely decentralisation 226 See Kirchner, ‘Verhältnis zwischen deutschem Kartellrecht und europäischem Wettbewerbsrecht— Zuständigkeiten, Konflikte, Reformkonzepte’ in Schwerpunkte des Kartellrechts 2001, Referate des XXIX. FIWSeminars (Cologne/Berlin/Bonn/Munich, 2002) 3, who rightly stresses that the inter-state trade effect criterion is not based on a clear legal notion, but rather on an economic-legal one. 227 Case 56/65 Société La Technique Minière (LTM) v Maschinenbau Ulm GmbH (MBU) [1966] ECR 235; Case 126/80 Maria Salonia v Giorgio Poidomani et al [1981] ECR 1563; Case C–41/90 Klaus Höfner and Fritz Elser v Macrotron GmbH [1991] ECR I–1979. See generally Lianos, above n 91, 246 ff. 228 See eg Ellger, ‘Das Verhältnis der Wettbewerbsregeln des EG-V zu den Gesetzen gegen Wettbewerbsbeschränkungen in den Mitgliedstaaten der Europäischen Gemeinschaft: Vom Vorrangprinzip zur Exklusivitätsregeln’ in Basedow, Drobnig et al (eds), Aufbruch nach Europa, 75 Jahre Max-Planck-Institut für Privatrecht (Tübingen, 2001) 269. 229 Joined Cases C–215/96 and C–216/96 Carlo Bagnasco et al v Banca Popolare di Novara Scarl and Cassa di Risparmio di Genova e Imperia SpA [1999] ECR I–135. 230 The ECJ has recently restated its traditional view that agreements relating to the marketing of products in only one Member State are still capable of affecting inter-state trade. See Case C–359/01 P British Sugar plc v Commission [2004] ECR I–4933, paras 27–28. 231 This appears to have escaped the Commission’s attention in its Dutch Banking Association Dec that was delivered after the publication of the White Paper and which followed Bagnasco (Commission Dec 1999/687/EC of 8 Sept 1999 (Nederlandse Vereniging van Banken (1991 GSA agreement), Nederlandse Postorderbond, Verenigde Nederlandse Uitgeversbedrijven and Nederlandse Organisatie van Tijdschriften Uitgevers/Nederlandse Christelijke Radio Vereniging) [1999] OJ L271/28). In that respect the view of a Commission official that the scope of application of Arts 81 and 82 EC should not be narrowed and that a wide interpretation of the effect on inter-state trade should continue to be adopted, is in the right direction (see Paulis, ‘Panel Two Discussion: Coherence’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 284 and above n 73 (ch 1), at 404). If we also take into account the doubts expressed by former AG Tesauro about Bagnasco (Tesauro, ‘Panel Two Discussion: Coherence’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 300), then we wonder whether this ruling continues to be good law in the new system of enforcement. On Bagnasco and the modernisation see also Venit, ‘The Decentralised Application of Article 81: Italian Banks, Cohabitation, Private Enforcement and Other Issues Raised by the White Paper’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001), at 465–71.

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The Pillars of the New System 65 requires a certain communitarisation of laws and institutions.233 That is why proposals to substitute, by means of legislation or judicial interpretation, a ‘Community interest’ criterion for the inter-state trade effect criterion, should be rejected.234 These proposals lead to confusion between a substantive criterion (inter-state trade effect) that determines the applicability of Community or national law, and a procedural-administrative one that determines whether the anti-competitive practice will be dealt with, under Community competition law, by the Commission or national authorities. In the latter case the enforcer may vary but the law applicable to the practice in question remains Community competition law. In any event, while these views may have been reasonable under the old centralised enforcement system, they are inconsistent with the decentralised model of Regulation 1/2003, which clearly presupposes the use of the above two criteria for different purposes. In particular, the Community interest criterion will be widely used in the demarcation of competences and allocation of cases between the Commission and NCAs. This becomes more apparent in the Commission Notice on co-operation within the European Competition Network (ECN).235 Indeed, in its recent Notice on the effect on trade between Member States,236 the Commission seems to follow the traditional liberal interpretation. The Notice lists the three elements to be addressed when considering whether trade between Member States may be affected. First, the concept of ‘trade between Member States’ implies that there must be an impact on the flow of goods and services or other forms of economic activity, involving at least two Member States. Secondly, the notion ‘may affect’ implies that it must be possible to foresee with a sufficient degree of probability that the agreement or practice may have an influence (direct or indirect, actual or potential) on the pattern of trade between Member States. Thirdly, the notion of ‘effect’ incorporates a quantitative criterion, so effects must be of a certain magnitude for EC law to apply. The Notice attempts to tackle the question of the appreciability of effect by employing two presumptions, one negative and one positive, which rely on quite low thresholds, thus extending the scope of Community competition law.237 According to the negative presumption, for an agreement to be presumed not to affect inter-state trade appreciably the aggregate market share of the parties on any relevant market within the Community must

232 See M Drahos, Convergence of Competition Laws and Policies in the European Community, Germany, Austria, and the Netherlands (The Hague/London/Boston, 2001) 433. 233 See n 225 above. 234 See Wesseling, ‘The Commission Notices on Decentralisation of EC Antitrust Law: In for a Penny, Not for a Pound’ (1997) 18 ECLR 94, at 96; Rodger and Wylie, ‘Taking the Community Interest Line: Decentralisation and Subsidiarity in Competition Law Enforcement’ (1997) 18 ECLR 485, at 490; Wißmann, above n 128, at 126; Wesseling, above n 189, at 366–7. 235 Compare also the pertinent use of the ‘Community public interest’ in Art 10 of Reg 1/2003, according to which the Commission will have exclusive competence, to the exclusion of NCAs, to adopt ‘inapplicability’ decisions. On the distinction between ‘inter-state trade effect’ and ‘Community interest’ see also A Schaub, ‘EC Competition System: Proposals for Reform’ in Hawk (ed), International Antitrust Law and Policy 1998, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1999) 130–1. 236 [2004] OJ C101/81. For a first view of the Notice see Idot, above n 4 (ch 1), at 44 ff; Viennois, ‘Clarification du champ d’application du droit communautaire de la concurrence: Brèves observations sur la communication de la Commission européenne relative à la notion d’affectation du commerce figurant aux articles 81 et 82 du Traité’, Petites Affiches, 22 Sept 2004, No 190, 9; Pignataro, ‘Le misure di esecuzione del regolamento n. 1/2003 concernente l’applicazione delle regole di concorrenza di cui agli articoli 81 e 82 del Trattato’ (2004) 9 Contr & Impr (Eur) 1031, at 1033–7.

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66 Institutional Law Aspects not exceed 5 per cent, and the aggregate annual Community turnover in the products covered by the agreement must not exceed EUR 40 million.238 The turnover criterion refers to both undertakings concerned in the case of horizontal agreements, and to the supplier in the case of vertical agreements. According to the positive presumption, an agreement or practice which by its very nature is capable of affecting trade between Member States, for example because it concerns imports or exports or covers several Member States, will be presumed to affect inter-state trade appreciably if the annual Community turnover exceeds EUR 40 million or the market share of the parties exceeds 5 per cent.239 (ii) The Relationship between National and Community Competition Law— The Pre-existing Unsatisfactory State of the Law Owing to the broad interpretation of the inter-state trade effect criterion, many practices connected with a particular Member State which thus fall under national competition law are also caught by the Treaty competition rules. The two legal regimes therefore apply cumulatively to such practices, unless the national legislation provides otherwise.240 The relationship therefore between Community and national competition law is a critical issue. While Article 83(2)(e) EC mentions the determination of the relationship between national competition laws and EC competition law as a possible object of secondary Community legislation, until recently this provision had never been used to that effect. Regulation 1/2003 breaks with this pattern and is explicitly also based on that Treaty provision.241 Historically, there have been two views on the relationship between national and EC 237 See paras 52–53 of the Notice, above n 208. Some commentators go as far as arguing that the de minimis rule is no longer in accord with the effet utile of the Treaty competition rules under the new decentralised system of enforcement. See eg Viennois, above n 236, at 12. 238 This rule is often referred to as the ‘NAAT—not appreciably affecting trade’ rule. According to the Commission, the product-specific turnover criterion is a better indicator of trade effects than global turnover. See in this respect Director General Lowe, ‘Recent Reforms and Future Projects for the Enforcement of the EU Antitrust System’, Speech delivered at the Annual Conference of the Spanish Antitrust Court, 8 July 2003, available at http://ec.europa.eu/comm/competition/speeches, at 3–4; Fellenius-Omnell, Landström and Coyet, ‘Modernizing EC Competition Law: Will a System of Parallel Application of EC and National Competition Laws Ensure Convergence?’ in Hawk (ed), Annual Proceedings of the Fordham Corporate Law Institute, International Antitrust Law and Policy 2002 (New York, 2003) 109. 239 See para 53 of the Notice, above n 208. The 5% positive presumption does not apply if the agreement covers only part of a Member State. 240 This is the case in Italian law, which is expressly applicable only to conduct that does not fall under the EC competition rules (Art 1(1) of L 287 of 10 Oct 1990). However, the Italian authority and courts have interpreted this provision strictly and exclude the application of Italian law, not in all cases of applicability of EC law, but only where the latter has been or is actually applied. See further Benedettelli, ‘Ulteriori riflessioni sull’ambito di applicazione della legge n. 287/1990 (risposta a Marino Bin)’ (1992) 8 Contr & Impr 587, at 596–7; Munari, above n 112, at 623; Frignani, ‘Competition Law in Italy’ in Vogelaar, Stuyck and Reeken (eds), Competition Law in the EU, its Member States and Switzerland, Vol. I, EC, France, Spain, Portugal, Italy, The Netherlands, Belgium and Switzerland (The Hague/Deventer, 2000) 375; Oglio, ‘Italy’, in Maitland-Walker (ed), Competition Laws of Europe (London, 2003) 248. Danish law also contained a parallel provision (s 4 of the Competition Act No 384 of 1997, which is now repealed), according to which national law would not apply to anti-competitive agreements and concerted practices falling under Community law that had been granted an individual exemption by the Commission or that satisfied the requirements of a block exemption regulation. The Danish rule was of more limited scope than the Italian one, since it referred only to Art 81 EC-related conduct. At the same time, however, it went further than the Walt Wilhelm principle (see 2.III.(a).(ii) below), in excluding the cumulative applicability of national competition law altogether in such cases, even if the latter did not prejudice the uniform and effective application of Art 81 EC. The UK Competition Act 1998 in s 10 follows a similar approach, providing that any agreements exempted from the Community prohibition under Art 81(3) will also be exempt from the equivalent domestic prohibition of Ch I. The same is true if the agreement falls under a Community block exemption reg. See further Taylor, above n 28, at 101 ff.

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The Pillars of the New System 67 competition law. The ‘single barrier’ theory held that the applicability of Community competition law excluded national competition laws altogether,242 and the rather more popular ‘double barrier’ theory held that the two sets of rules had different objectives, and were therefore both applicable. Consequently, an agreement or practice had to pass both tests in order to be lawful.243 Thus the more stringent legal regime would always prevail over the more lenient. In Walt Wilhelm 244 the Court of Justice accepted in principle that national and Community competition laws differ in their points of view, since Community law regards anti-competitive behaviour in light of the resulting obstacles to inter-state trade, and therefore both may be applicable. However, the Court stressed that this parallel application must not prejudice the uniform application of EC competition law and the effectiveness (effet utile) of the relevant Community implementing measures. In other words, the Court rejected an unqualified application of the ‘double barrier’ theory as contrary to Community law, though, it is fair to say, the Court did not elaborate on the different possibilities of conflict between Community and national parallel proceedings. In the context of Article 81 EC and with reference to prohibition and exemption decisions taken by the Commission, the Court then made a sibylline reference to certain ‘positive, though indirect’ Community measures, which aim at promoting a harmonious development of economic activities in the Community.245 Presumably such measures would exclude an inconsistent application of national law. Following these principles, if Community competition law prohibited a certain anticompetitive practice, the principle of supremacy applied in full and national competition law could not permit that practice.246 In addition, Community competition law could prohibit a practice that had been permitted under national competition law by national authorities or courts.247 If both laws prohibited the same behaviour, there was no conflict.248 If EC competition law did not apply because there was no actual or potential effect on trade between Member States, then only national competition law was applicable.249 A problem arose when the behaviour in question was not prohibited under EC competition law, but national competition law was stricter. The possibility of conflicts was more evident in cases governed by Article 81 EC, which is a more technically and procedurally complex 241

See Rec 8. See Catalano, ‘Rapports entre les règles de concurrence établies par le Traité CEE et les législations des Etats membres’ (1963) 15 RIDC 269, at 283 ff. 243 See Koch, ‘Das Verhältnis der Kartellvorschriften des EWG-Vertrags zum Gesetz gegen Wettbewerbsbeschränkungen’ (1959) 14 BB 241 at 244 ff. 244 Case 14/68 Walt Wilhelm v Bundeskartellamt [1969] ECR 1. 245 Walt Wilhelm, above n 244, para 5. 246 See eg Rounis, above n 67, at 42; Putman, above n 115, at 381. 247 Joined Cases 43/82 and 63/82 Vereniging ter Bevordering van het Vlaamse Boekwezen (VBVB) and Vereniging ter Bevordering van de Belangen des Boekhandels (VBBB) v Commission [1984] ECR 19, para 40; Case 45/85 Verband der Sachversicherer eV v Commission [1987] ECR 405, paras 20–24; Case T–66/89 Publishers Association v Commission [1992] ECR II–1995, paras 19–21, 78–79. The latter judgment was set aside by the ECJ in Case C–360/92 P The Publishers Association v Commission [1995] ECR I–23, paras 30–32, 42, because, although the Commission was not bound by the pre-existing decision of the national competition authority in question, which had applied national competition law, it nevertheless did not reason its departure from the national authority’s findings, although the addressee of the Commission decision had raised this specific plea during the administrative proceedings. 248 The only problem in this case lay in the sanctions and in the non bis in idem principle. 249 See eg Corte di Cassazione, 30 June 2001, no 8887, which held that Italian competition law could apply to practices that had been considered in the Bagnasco judgment of the ECJ as not satisfying the inter-state trade effect criterion. 242

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68 Institutional Law Aspects provision than Article 82 EC. There have been differing views as to what constituted a ‘positive’ Community measure. Almost all commentators considered that individual exemption decisions had this quality in view of their constitutive nature.250 It has been debated whether block exemptions were also such ‘positive’ measures, with most authors believing that they were, thus pre-empting stricter national law.251 On the other hand, negative clearance decisions252 and comfort letters with the characteristics of either of a negative clearance or an exemption253 were not covered, and could therefore not restrict the application of national competition law. However, in recent years 250 See Stockmann, ‘EEC Competition Law and Member State Competition Laws’ in Hawk (ed), North American and Common Market Antitrust and Trade Laws 1987, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1988) 291–3; Lieberknecht, ‘Das Verhältnis der EWG-Gruppenfreistellungsverordnungen zum deutschen Kartellrecht’ in Freiherr von Gramm, Raisch and Tiedemann (eds), Strafrecht, Unternehmensrecht, Anwaltsrecht, Festschrift für Gerd Pfeiffer (Cologne/Berlin/Bonn/Munich, 1988) 596; Klaue, ‘Einige Bemerkungen über die Zukunft der Zweischrankentheorie’ in Baur, Hopt and Mailänder (eds), Festschrift für Ernst Steindorff zum 70. Geburtstag am 13 März 1990 (Berlin/New York, 1990) 985; Schröter, above n 122, at 151; contra M Furse, Competition Law of the UK and EC (London, 2000) 30 and 275. According to one view, which had later been largely surpassed, not all individual exemptions should be considered ‘positive’ measures and one had to proceed to an ad hoc examination of the specific exemption decision in order to ascertain whether it was a measure expressing the Community economic policy: Markert, ‘Some Legal and Administrative Problems of the Co-Existence of Community and National Competition Law in the EEC’ (1974) 11 CMLRev 92, at 96–7; for a revival of that view see Lane, above n 67, at 216–17. Another view, which had not had many followers, suggested that the quality of an individual exemption as a ‘positive’ measure meant that national competition law could not affect the core of the Community measure as such, but could, nevertheless, exercise control over the undertakings’ eventual abusive conduct subsequent to the exemption (theory of the core, Kernbereichslehre): Rehbinder, ‘Der Vorrang des EGKartellrechts vor nationalem Kartellrecht bei Freistellungen: Dogmatische Konstruktion, Sachargumente und politische Interessen’ in Immenga, Möschel and Reuter (eds), Festschrift für Ernst-Joachim Mestmäcker zum 70. Geburtstag (Baden-Baden, 1996) 716; Zekoll, ‘European Community Competition Law and National Competition Laws: Compatibility Problems from a German Perspective’ (1991) 24 Vand J Transnat’l L 75, at 99, with further references to early views of the Commission which also seemed to favour the theory of the core, by holding that a national prohibition should not affect the substance of an exemption. The latter author concludes that German courts have not easily accepted the supremacy of Community over national competition law (ibid, at 101 ff; see also Braun, above n 138, at 455 ff). On the early views of the Commission see Commission IVth Report on Competition Policy—1974 (Brussels/Luxembourg, 1975) 34. 251 See AG Tesauro’s Opinion in Case C–70/93 Bayerische Motorenwerke AG v ALD Auto-Leasing D GmbH [1995] ECR I–3439: ‘the [group] exemption granted to [agreements] cannot but prevent the national authorities from ignoring the positive assessment put on them by the Community authorities. Otherwise, not only would a given agreement be treated differently depending on the law of each Member State, thus detracting from the uniform application of Community law, but the full effectiveness of a Community measure—which an exemption under Article 85(3) [now 81(3)] undoubtedly is—would also be disregarded’ (paras 38–39). See also Lieberknecht, above n 251, at 597–9; M Golfinopoulou, Regulation EEC/556/89 on Know-How Licensing (Athens/Komotini, 1989) (in Greek) 80–1; Klaue, above n 250, at 985; Anagnostopoulou and Kleftodimou, above n 63, at 186; Zekoll (albeit with some qualifications), above n 250, at 105 ff; Tesauro, above n 6, at 4; Schröter, above n 122, at 151; Petsche and Rinne, in Liebscher, Flohr and Petsche (eds), Handbuch der EU-Gruppenfreistellungsverordnungen (Munich/Vienna, 2003) 130; contra Stockmann, above n 250, at 291 ff; Wesseling, above n 138, at 125–30. It is interesting to note the words used by AG van Gerven in his Opinion in Delimitis, above n 17, para 5: ‘[t]he issue of [a block] exemption is an act of policy which falls within the exclusive competence of the Commission’ (emphasis added). Doubts have been expressed as to the ‘new generation’ block exemption regs, which do not contain ‘white lists’ of permitted clauses, therefore, the argument went, could not be ‘positive’ measures that can supersede national competition law. This was, however, a very formalistic view of the new regs. See Tzouganatos, above n 103, at 127–8, who, referring to Reg 2790/1999, above n 50, stresses that, notwithstanding the absence of a ‘white list’, the conditions for the block exemption are sufficiently precise and, therefore, express in a positive way the Community competition policy on the field. The view that national stricter law could sometimes supersede block exemption regs relied on certain Recitals of some old regs that were leaving some leeway to stricter national law (eg Rec 19 to Reg 1984/1983; Rec 29 to Reg 123/1985; Rec 13 to Reg 4087/1988). See further Soufleros, above n 93, at 308 ff. However, other authors stress that the exceptional existence of these permissive Recitals meant that in principle block exemption regs pre-empted national law (Lieberknecht, above n 250, at 599). In any case, such references are no longer found in the new regs, which now state clearly in their Recitals that ‘in accordance with the

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The Pillars of the New System 69 this latter view has been criticised as formalistic, since a negative clearance may well express the Community competition policy in a precise way, for example if the Commission considered that an agreement did not restrict competition at all.254 Another argument was that it seemed paradoxical to protect agreements restrictive of competition which had been granted an exemption against national law, but not to do the same for agreements that were less restrictive or not restrictive at all.255 The same could be true for comfort letters, especially those having the form of an individual exemption, which presented many of the characteristics of ‘positive measures’.256 (iii) The Relationship between National and Community Competition Law— The Supremacy Rule of Article 3 of Regulation 1/2003 principle of primacy of Community law, no measure taken pursuant to national laws on competition should prejudice the uniform application throughout the common market of the Community competition rules or the full effect of any measures adopted in implementation of those rules, including [the relevant] Reulation’ (Rec 17 of Reg 2790/1999; Rec 19 of Reg 2658/2000; Rec 23 of Reg 2659/2000; Rec 29 of Reg 358/2003). 252 See Galinsky, ‘The Resolution of Conflicts Between UK and Community Competition Law’ (1994) 15 ECLR 16, at 18; Schröter, above n 122, at 153. 253 See eg Bechtold, ‘Antitrust Law in the European Community and Germany: An Uncoordinated Coexistence?’ in Hawk (ed), International Antitrust Law and Policy 1992, Annual Proceedings of the Fordham Corporate Law Institute (New York/Deventer, 1993) 349–50. In Cases 253/78 and 1/79 to 3/79 Procureur de la République v Giry and Guerlain et al [1980] ECR 2327, para 18, the Court went on to stress that a comfort letter ‘cannot by itself have the result of preventing the national authorities from applying to those agreements provisions of national competition law which may be more rigorous than Community competition law in this respect’. According to the dominant view, national competition law could also apply to and prohibit agreements notified to the Commission under the opposition procedure of Art 4 of the old Reg 240/1996 on technology transfers, if the Commission did not object thereto within 4 months of their notification. See, however, Lieberknecht, above n 250, at 600, who equated the Commission’s non-opposition to an individual exemption and, therefore, denied the application of stricter national law. 254 See eg Kovar, ‘Intervention: Les conflits dans la réglementation des pratiques restrictives de concurrence entre l’ordre juridique communautaire et l’ordre juridique français’ in Les conflits des réglementations dans le droit français et le droit communautaire des pratiques réstrictives de concurrence, Journées d’étude de droit de la concurrence (Lyon 24 et 25 mai 1984) (Lyon, 1985) 192–3; Ullrich, ‘Harmonisation within the European Union’ (1996) 17 ECLR 178, at 181. The adoption by the Commission in a negative clearance of a rule of reason approach could attach to that decision the character of a ‘positive measure’ that expressed the Community competition policy in the Walt Wilhelm sense. 255 See in this sense Lieberknecht, above n 250, at 601 ff; Walz, ‘Rethinking Walt Wilhelm, or the Supremacy of Community Competition Law over National Law’ (1996) 21 ELRev 449, at 455. Compare also AG Tesauro’s Opinion, para 59, in Case C–266/93 Bundeskartellamt v Volkswagen and VAG Leasing, [1995] ECR I–3477. See also Wesseling, above n 103, at 427, who rightly used the argument of the changed circumstances to stress that the Walt Wilhelm era divergencies of objectives between national and EC competition laws were no longer existent, therefore a negative clearance under Art 81(1) EC should have a certain value in national competition law. However, if the negative clearance stated that Art 81(1) EC is not applicable, because the agreement did not have an appreciable effect on inter-state trade, then naturally national competition law could prohibit that agreement. 256 See Schwarze, ‘Die Auswirkungen des Vorrangs des Gemeinschaftsrechts auf das deutsche Kartell- und Wettbewerbsrecht’ (1996) 51 JZ 57, at 62–3; Schröter, above n 122, at 100. Compare Case C–376/92 Metro SBGroßmärkte GmbH & Co KG v Cartier SA [1994] ECR I–15, where the Court essentially held that a distribution system that had been considered compatible with EC competition law through a Commission comfort letter should not be prohibited under German competition law. That case concerned a specific principle of German unfair competition law, under which a selective distribution system can be enforced as against persons that have assumed obligations under the contract, only if the system is ‘impervious’ (lückenlosig), ie unauthorised dealers can obtain the goods covered by that system only by participating in the breach by an authorised dealer of his contractual obligations. If the lack of ‘imperviousness’ of the system leads to competition against authorised dealers from independent dealers, the manufacturer will no longer be able to compel the members of his network to comply with their contracts. The Court’s approach was that to make the validity of a selective distribution system under Art 81(1) EC conditional on its ‘imperviousness’ would lead to the paradoxical result that the most inflexible and most tightly sealed distribution systems would be treated more favourably under Art 81(1) EC than distribution systems that are more flexible and more open to parallel transactions.

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70 Institutional Law Aspects A basic fear that emerged after the publication of the White Paper referred to the risk of renationalisation of competition law enforcement in Europe.257 The argument was that under a system of legal exception Article 81(3) EC would implicitly be devoid of any policy discretion included therein, and there would no longer be exemption decisions of a constitutive nature which could have been considered ‘positive’ measures in the Walt Wilhelm sense. Instead, all decisions of inapplicability would have the character of a negative clearance of a declaratory nature, meaning that according to that case law and the dominant double barrier theory, the application of stricter national competition law could not be excluded.258 The same would hold true for block exemption regulations, which would essentially be ‘block negative clearances’. Indeed, some authors have even gone as far as to argue that such ‘block negative clearances’, which will have a declaratory character, cannot oust national competition law, thus being in essence ‘pseudo-regulations’. National competition authorities and courts would therefore have an incentive under the new system to discard EC and instead apply national competition law, thus prohibiting agreements which under EC competition law would be legal.259 In addition, the Commission had lately been following a more economic approach to the notion of restriction of competition, with the result that fewer agreements reached the stage of Article 81(3) EC scrutiny. This would mean that the permission of such agreements under the first rather than the third paragraph of Article 81 EC would not qualify as a ‘positive’ measure in the Walt Wilhelm sense, so the possible application of stricter national law could not be excluded.260 Re-nationalisation of competition law enforcement would also be the result of the companies’ own drive to notify agreements nationally, thus making up for some of the legal certainty benefits lost through the abolition of the Community notification system. Thus, some commentators expected companies, in cases of concurrent applicability of Community and national law, to notify nationally so as to get a strategic advantage.261 This, however, would weaken the effectiveness of the new system of legal exception. To assuage these fears, the Commission included for the first time in its official Regulation proposal of September 2000 a specific provision (Article 3), which provided for the exclusive application of EC competition law—if the inter-state trade effect criterion was satisfied—by all enforcers, thus, also by national competition authorities and courts.262 This provision was strongly opposed by many commentators and, in particular, by some national competition authorities, because it was alleged that it would lead to the near-total neutralisation of national competition law.263 In the course of the negotiations in the Council it became the main point of friction between the Commission and some Member 257 See eg Ehlermann, ‘Coherent Application of EC Competition Law in a System of Parallel Competencies’ in Conference on the Reform of European Competition Law in Freiburg i. B. (9 and 10 November 2000), available at http://ec.europa.eu/comm/competition/conferences/2000/freiburg, at 1 and ‘Artikel 3 des Kommissionsvorschlags vom September 2000—Wohlbegründet!’, Kommentar (2001) 51(3) WuW; Idot, above n 101, at 348–51. 258 See Wesseling, above n 103, at 430–1; Ellger, above n 228, at 291; Mestmäcker, above n 59 (ch 1), at 239–40; Venit, above n 231, at 462–3. 259 See also Tesauro, above n 5, at 266, stressing the need to activate NCAs to resort to EC rules through a realignment of the relationship between Community and national competition laws. 260 See Paulis and Gauer, above n 77 (ch 1), at 67; Paulis, above n 152, at 21–2, rejecting the idea of a competition among substantive competition laws because this would constitute a multiplicity of barriers to the detriment of companies. 261 See eg Folguera, ‘The Impact of the Commission’s Modernization White Paper and Vertical Restraints Regulation on Member State Antitrust Laws’ in Hawk (ed), International Antitrust Law and Policy 2000, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2001) 168–70. 262 While the White Paper had not included a proposal to that effect, the Commission officials had on many occasions in the past alluded to such a possibility. See eg Schaub, above n 235, at 149–50.

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The Pillars of the New System 71 States. Eventually, a compromise was reached in the Council and the new Regulation as adopted includes an obligation for national competition authorities and national courts to apply Articles 81 and 82 EC concurrently with their national competition law,264 if the inter-state trade effect criterion is satisfied. It should be noted that the letter of this provision imposes the application of Community competition law, if national competition law is applied to conduct affecting inter-state trade, but this obligation does not converesely mean that the national authority or court must apply its national competition law concurrently when it applies Community law; it remains free to discard the former and apply only the latter, if it so prefers.265 Another point to be made here is that this provision does not affect the national competition authority’s discretion—if such a discretion exists under its national law—to act. There is a duty to apply EC competition law, only if that authority decides to act. This point does not apply to national courts, which, as juges communautaires de droit commun, are under a duty to apply EC competition law in all cases, where it is applicable, even ex officio, under the Van Schijndel principles.266 More importantly, Article 3(2) of the Regulation excludes the application of stricter national competition law to agreements which fall under Article 81 EC as a whole or which are covered by a block exemption regulation. However, unilateral conduct permitted under Article 82 EC can still be prohibited under stricter national rules on abuse of a dominant position or of economic dependence (as is, for example, the case in German, Greek and French law). The UK rules on market investigations under the Enterprise Act 2002 would also seem to fall under this exception.267 A question arises as to the definition of what constitutes such ‘unilateral conduct’, as there are some situations that can be categorised as subject both to the rules on agreements, concerted practices and decisions and to the rules on the abuse of dominant position. Such is the case with selective distribution systems, where the relationship between producers and non-appointed dealers may be thought of as subject to rules on unilateral conduct. It appears, however, that such a reading of Article 3(2) of Regulation 1/2003 would not be in conformity with its spirit.268 Another question is whether a national provision on abuse of dominance that is similar to Article 82 EC can still be enforced in a stricter manner nationally. Having regard to the specific text of Article 3(2), which speaks of ‘Member States adopting and applying’ stricter 263 See Arhel, ‘Modernisation des règles communautaires relatives à la mise en œuvre de l’interdiction des ententes et abus de position dominante (publication du nouveau règlement)’, Petites Affiches, 2 Apr 2003, No 66, 6, at 8. 264 Art 3(1) of Reg 1/2003. 265 See para 5 of the new Notice on co-operation with national courts, above n 208. See also Kjølbye, above n 224, at 2; Director General Lowe, ‘European Competition Rules: The New Enforcement System for Articles 81 and 82 EC Is soon to Be Reality’, Article for KANGAROO Group Newsletter, Sept 2003, available at http://ec.europa.eu/comm/competition/speeches, at 2, stressing that ‘of course [national courts and NCAs] may also apply Articles 81 and 82 on a stand-alone basis’. The aim is the application of EC law, be it exclusively or, at the very least, concurrently with national law. 266 Joined Cases C–430/93 and C–431/93 Jeroen van Schijndel and Johannes Nicolaas Cornelis van Veen v Stichting Pensioenfonds voor Fysiotherapeuten [1995] ECR I–4705. However, as we argue below at 3.III.(b), Art 3 of Reg 1/2003 does not alter the van Schijndel principles. 267 See Whish, above n 65 (ch 1), at 77; OFT Guidance 442, Modernisation, Understanding Competition Law, Dec 2004, para 4.4. See also Rec 8 in fine of the new Reg. 268 See in this sense Wirtz, ‘Anwendbarkeit von § 20 GWB auf selektive Vertriebssysteme nach Inkrafttreten der VO 1/2003’ (2003) 53 WuW 1039, at 1043–4. See also Eilmansberger, ‘Die Adalat-Entscheidung des EuGH: Maßnahmen von Herstellern zur Steuerung des Verhaltens von Vertriebshändlern als Vereinbarung im Sinne von Art. 81 EG’ (2004) 2 ZWeR 285, at 301–33. Compare also De Smijter and Kjølbye, above n 178, at 100.

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72 Institutional Law Aspects law,269 as well as to the teleology of the convergence rule expressed in Article 3 as a whole, the answer to the above question must be negative. In other words, if certain conduct falls (also) under Community law, it is only if the content of a national rule on unilateral conduct is stricter than Article 82 EC that a certain unilateral behaviour can be prohibited nationally, although it is legal under Community law.270 In addition to the above, under Article 3(3), the application of Community competition law does not preclude the application of national provisions that predominantly pursue an objective different from that pursued by Articles 81 and 82 EC. This refers basically to national unfair competition laws.271 Finally, it seems that Community competition law would not preclude employing provisions in national civil codes prohibiting the abuse of rights in refusal to deal cases, thus attaining a result similar to that under the application of the ‘essential facilities’ doctrine of EC competition law.272 (iv) The Progress Brought by Article 3 The text of Article 3 of Regulation 1/2003 certainly marks great progress if compared with the post-Walt Wilhelm state of the law, which was neither very clear nor satisfactory. There are three basic advantages. The first is that national competition authorities and courts must now apply the competition provisions of the Treaty along with their national laws273 if there is an effect on trade between Member-States. This will undoubtedly lead to a ‘communitarisation’ of competition enforcement by these authorities and courts.274 They can no longer ignore EC competition law if it is applicable. Instead, they will have to enforce it in parallel with their national competition laws, thus indirectly becoming subject to the

269 Art 3(2) in fine of Reg 1/2003 provides: ‘Member States shall not under this Regulation be precluded from adopting and applying on their territory stricter national laws which prohibit or sanction unilateral conduct engaged in by undertakings’. 270 See Nihoul, ‘Le projet de loi belge sur la protection de la concurrence ëconomique: Les relations avec le règlement CE 1/2003’ [2006] Revue de la Concurrence Belge 4, at 21–2. See also De Smijter and Kjølbye, above n 178, at 100. Compare also E-J Mestmäcker and H Schweitzer, Europäisches Wettbewerbsrecht (Munich, 2004) 151. 271 See Rec 9 of Reg 1/2003. See Martinez Lage, ‘Editorial: Cambio de cultura: Aprobada, al fin, la reforma de las normas de aplicación de los articulos 81 y 82 CE’ [2003] 1/2 GJ 3, ar 6–7; Idot, ‘Premières vues sur le nouveau règlement de mise en œuvre des articles 81 et 82 CE’ [2003–2] Europe 4, at 6. Of course, it will not always be easy to establish what the objective is in a national rule and if this falls under ‘competition law’: see in this regard Lever, ‘The Commission’s Proposals for the Modernisation of EC Competition Law: The Relationship between Articles 81 and 82 EC and National Competition Laws’ in Lawyers’ Europe, Autumn/Winter 2001, 2, at 4–5; Kjølbye, above n 224, at 8; G Monti, EC Competition Law (Cambridge, 2007), 407–9. See also the critical comments by H Ullrich, Anti-unfair Competition Law and Anti-trust Law: A Continental Conundrum?, EUI Working Paper, Law No 2005/1, at 5 ff. 272 See eg Hatzopoulos, above n 57 (ch 1), at 168 ff; compare, however, Mavroidis and Neven, ‘Bronner Kebab: Beyond Refusal to Deal and Duty to Cooperate’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2003, What Is an Abuse of a Dominant Position? (Oxford/Portland, 2006) 366. Recently, however, the French Cour de Cassation has considered that Art 1382 of the French Code Civil (the general tort liability provision) could not be employed against allegedly ‘unfairly’ low prices, if such a practice is not contrary to the competition provisions (Cass com, 6 Dec 2005, Société Usines Merger v Société Giat Industries, [2006] JCP G no 1054). 273 As mentioned above, the duty to apply EC competition law is not a novelty for national courts, which are bound to do so by the direct effect of Arts 81 and 82 EC, according to the Court’s case law (BRT v SABAM (I), above n 22 (ch 1), para 16: ‘the prohibitions of Articles 85 and 86 tend by their very nature to produce direct effects in relations between individuals [and] create rights directly in respect of the individuals concerned which the national courts must safeguard’ (emphasis added)). See also 3.III.(b) below on the duties of national courts to apply EC competition law ex officio.

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The Pillars of the New System 73 specific Community law obligations and duties imposed by Articles 11, 12, 13, 15 and 16 of Regulation 1/2003, mainly as against the Commission.275 Naturally, this has led some commentators to speak of centralisation rather than of decentralisation of competition law enforcement.276 The new reality means that the enforcer in question will have to begin by examining whether EC competition law is applicable in the first place, in particular whether the interstate trade effect criterion is established.277 If there is such an effect, the national court or authority will be faced with a whole array of autonomous concepts of Community law, ranging from the most basic ones of what constitutes an ‘agreement’, a ‘concerted practice’ or an ‘anti-competitive object or effect’, to the complex concepts of ‘foreclosure’ and ‘essential facilities’. These concepts will have to be interpreted and applied according to Community competition law.278 The second advantage of Article 3 is that it does not use the ‘positive measure’ criterion which led to lengthy debates in the past. Instead it opts for much clearer language, excluding from the ambit of national competition law agreements, decisions by associations of 274 See Gerber and Cassinis, above n 3, at 12. There should be no distinction as to the duty to apply Community competition law between civil courts and courts exercising judicial review of NCAs’ decisions. The latter, too, should apply Community law, even if the NCA in its decision did not. Compare, however, the position of the Commission in Case C–238/05 ASNEF-EQUIFAX, Servicios de Información sobre Solvencia y Crédito, SL and Administración del Estado v Asociación de Usuarios de Servicios Bancarios (AUSBANC) [2006] ECR I–11125, as echoed in para 17 of AG Geelhoed’s Opinion. The Commission, there, argued that a national court that reviews an NCA’s decision that has not applied Community competition law (in that case the NCA was deciding before the coming into force of Reg 1/2003 and was not formally bound to apply EC law) has neither the duty nor, indeed, the power to apply Community competition law. Such an approach, however, does not favour the effet utile of Art 3(1) of Reg 1/2003. 275 Particularly NCAs will find themselves in the future, as a result of Art 3 of Reg 1/2003, more and more subject to the ECN, with the Commission having the central role. This point is also made by Paulis and Gauer, above n 77 (ch 1), at 67. 276 See eg Mestmäcker, above n 33 (ch 1), 403, 443; Böge, ‘Stellungnahme zur Reform der europäischen Wettbewerbsregeln zur Anhörung des Ausschusses für Wirtschaft und Währung des Europäischen Parlaments am 27. Februar 2001’, Unpublished Paper (27 Feb 2001), at 4; Claudel, ‘Pratiques anticoncurrentielles: A propos du règlement CE n? 1/2003 du 16 décembre 2002 relatif à la mise en œuvre des règles de concurrence prévues aux Articles 81 et 82 CE: Une réelle décentralisation du droit de la concurrence ?’, Petites Affiches, 20 May 2003, No 100, 7. 277 As an indirect result, there will be streamlining in the way NCAs and national courts apply EC competition law, with positive results for the latter’s consistent and uniform application. In Greece, eg, the Competition Committee—and even courts—has sometimes been cumulatively applying Greek and EC competition law without ever examining whether the requirements for the latter’s application were satisfied. In some cases it is not certain whether the authority or the court really applied the EC competition rules, or whether it used them as an interpretative tool, since the Greek law is basically a word-for-word transplant of Arts 81 and 82 EC. Such ‘application’ of Community competition law might lead to inconsistencies in the future decentralised system of enforcement. For examples of this practice of the Greek authorities and courts see Greek Competition Committee, Decision no 53/1987 (Blythe Colours II), where a national individual exemption was given to an agreement thought to fall under the old Reg 1983/1983; Greek Competition Committee, Decision no 63/1988 (K Voreopoulos), ‘applying’ the same block exemption reg to an agreement covering the Greek island of Rhodes (!) without any examination of Community law’s applicability in the first place; Greek Competition Committee, Decision no 75/1989 (Toyota I), speaking of ‘non-direct application’ of the old Reg 123/1985; Greek Competition Committee, Decision no 45/1996 (Lacoste), cumulatively applying national competition law, Art 81 EC and the old Reg 1983/1983, but only declaring the non-applicability of Art 1(1) of L 703/1977 (equivalent to Art 81(1) EC) in the operative part; Dioikitiko Protodikeio Athens no 3254/1991, in D Koutsoukis and D Tzouganatos, The Application of L. 703/1977 ‘on the Protection of Free Competition’, Vol. III, 1990–1995 (Athens, 1996) (in Greek) 220 ff; Dioikitiko Efeteio Athens no 68/2002 (2002) 22 RHDE 978, with critical comments by Hatziioannou (2002) 22 RHDE 984 (in Greek) 986. On the impact of block exemption regs on Greek national competition law enforcement see also Dryllerakis, ‘The Relationship Between Block exemption Regulations and National Competition Law’ (1999) 50 Epitheorisi Emporikou Dikaiou 447 (in Greek). 278 See Hirsch, above n 149, at 244.

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74 Institutional Law Aspects undertakings, and concerted practices which do or may affect inter-state trade, but either do not restrict competition under the first paragraph of Article 81 EC or fulfil the conditions of the third paragraph or are covered by a block exemption regulation. The progress attained is evident, since the dominant view in the past was that negative clearance decisions based on Article 81(1) EC, because of their declaratory character, could not exclude the application of stricter national law. In addition, the letter of Article 3 does not require that Article 81 EC has already been declared inapplicable through a decision or comfort letter in order to exclude stricter national competition law, which is now excluded a priori if the behaviour in question is merely subject to Article 81 EC. In this sense, Article 3 of Regulation 1/2003 moves from the ‘procedural precedence’ of Walt Wilhelm, according to which the application of stricter national competition law is blocked only by the action of the Commission, to a ‘normative precedence’, where stricter national law is blocked by the mere applicability of permissive Community competition law.279 Thus national competition law will not apply even in the case of agreements falling under the new de minimis Notice, as long as they satisfy the inter-state trade effect condition.280 Under the old Walt Wilhelm state of affairs it was possible for stricter national competition laws to catch agreements subject to Community competition law but permitted under the de minimis rule. It is noteworthy that the current de minimis Notice deals only with the appreciation of whether an agreement restricts competition, and not also of its effects on inter-state trade,281 as was the case with the earlier de minimis Notices. Without Article 3 of Regulation 1/2003, a whole array of agreements satisfying the inter-state trade effect jurisdictional criterion but considered minor by Community law could nevertheless have been prohibited under national competition law, which would have been unfortunate. For example, in the case of a vertical restraint, an agreement in which the supplier has a market share of between 15 and 30 per cent would benefit from the block exemption of Regulation 2790/1999 and would not be caught by stricter national competition law, whereas an agreement in which the supplier has a lower market share, ie below 15 per cent, might be prohibited under national competition law! The same would be true for specialisation or research and development agreements with market shares of between 10 and 20 per cent or between 10 and 25 per cent respectively, which could not be prohibited under national laws, whereas those agreements falling under the 10 per cent market share might be prohibited.282 The same holds true for agreements which, according to other Commission soft law pronouncements such as notices or guidelines,283 may fall outside the scope of Article 81(1) EC, and as such have not been block-exempted by means of a regulation. While such 279 On the term of ‘procedural precedence’ see R Walz, Der Vorrang des europäischen vor dem nationalen Kartellrecht (Baden-Baden, 1994) 226 ff and above n 255, at 451; Rehbinder, above n 250, at 713; Kingston, ‘A “New Division of Responsabilities” in the Proposed Regulation to Modernise the Rules Implementing Articles 81 and 82 EC?: A Warning Call’ (2001) 22 ECLR 340, at 342. 280 See Arhel, above n 263, at 9; Nyssens and Pecchioli, above n 81 (ch 1), at 364. 281 The Commission opted to issue a separate Notice on inter-state trade effects because it thought that market share thresholds of the level of the de minimis Notice were not good indicators on their own of what is an appreciable effect on trade between Member States. Indeed, the Notice defines the appreciable effect on trade by means of a turnover threshold combined with a much lower market share threshold (5%). See Peeperkorn, ‘Revision of the 1997 Notice on Agreements of Minor Importance (De Minimis Notice)’ [2001–2] EC Competition Policy Newsletter 4, at 4–5 and ‘New Notice on Agreements of Minor Importance (De Minimis Notice)’ [2002–1] EC Competition Policy Newsletter 45. 282 But see van Oers, ‘The Way Ahead for the Commission’s Modernisation Plans: Position of the Netherlands Competition Authority’ in European Competition Law: A New Role for the Member States, Congress Organized on 20th and 21st November 2000 by the European Association of Lawyers (Brussels, 2001) 59–60, for the opposite view from an NCA perspective. The author finds that it would be hard to accept the legality under the Community de

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The Pillars of the New System 75 agreements could previously have been prohibited under national competition law,284 under Article 3 of Regulation 1/2003 they will be immune from prohibition, since they are not considered incompatible with Article 81 EC as a whole.285 An example can be given by reference to Regulation 2790/1999 and the Guidelines on Vertical Restraints. While the former deals only with agreements that are examined under Article 81(3) EC, the latter refer also (in section II) to agreements that do not fall altogether under Article 81(1) EC, such as minor agreements, agreements between small and medium-sized undertakings and agency agreements.286 Under the Walt Wilhelm principles, the former would be immune to the national law prohibition, while the latter could well be so prohibited; again, hardly a consistent result. The third advantage of Article 3 of Regulation 1/2003 is that it can be directly enforced by third parties, since it imposes an unconditional and precise obligation and can thus be invoked directly by undertakings.287 In addition, Article 3 can be seen as an essential procedural requirement aiming at ensuring the consistent application of competition law and protecting the integrity of the internal market. Failure by national authorities and courts to comply with it could, according to one view, lead to the invalidity of acts or decisions adopted by these authorities and courts.288 Of course, in all these cases the national authority or court may have its own views on the applicability to the agreement in question of the de minimis Notice or of other Commission notices and guidelines. However, these are conflicts on the application of Community competition law,289 which is different from the issue of the conflict between Community and national competition law.290

(b) The New Institutional Position of National Competition Authorities and the European Competition Network minimis rule of an anti-competitive agreement that affects trade among Member States, while a similar or even less significant agreement that does not affect inter-state trade could be found to be illegal under national competition law. 283 ‘Block negative clearances’ in the words of R Joliet, Le droit institutionnel des Communautés européennes, Les institutions, les sources, les rapports entre ordres juridiques (Liège, 1983) 188. Compare also Siragusa, above n 43, at 555, who clearly sees such notices and communications as informal ‘block negative clearances’, though he would have preferred the Commission to have under the old system of enforcement powers to adopt formal measures of this kind. 284 See Koutsoukis, ‘The Relationship between Community and National Competition Law’ (1984) 4 RHDE 513 (in Greek), at 536–7. 285 See in this sense Blaise and Idot, above n 4 (ch 1), at 297. 286 See further Whish, ‘Regulation 2790/99: The Commission’s “New Style” Block Exemption for Vertical Agreements’ (2000) 37 CMLRev 887, at 887–8, 897. 287 See Kjølbye, above n 224, at 5. 288 See ibid; Dekeyser and Dalheimer, ‘Cooperation within the European Competition Network: Taking Stock after 10 Months of Case Practice’, Paper presented at the Joint IBA and European Commission Conference on Antitrust Reform in Europe: A Year in Practice (Brussels, 9–11 Mar 2005) 4; De Smijter and Kjølbye, above n 178, at 103. This would be pursuant to the ECJ ruling in Case C–194/94 CIA Security International SA v Signalson SA and Securitel SPRL [1996] ECR I–2201, in which it was held that a state’s failure to notify to the Commission a technical national regulation under a specific directive leads to the inapplicability of the national regulation in question. 289 On the avoidance and resolution of such conflicts see 2.III.(d).(iv) below. 290 It is therefore not entirely appropriate to speak of a ‘binding effect’ of these Commission soft law instruments on national courts and competition authorities. On this general question see Schweda, ‘Die Bindungswirkung von Bekanntmachungen und Leitlinien der Europäischen Kommission’ (2004) 54 WuW 1133, at 1139 ff.

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76 Institutional Law Aspects (i) The Powers of NCAs under the New System The new decentralised system of competition enforcement will have consequences not only for private, but also—indeed, one may argue, primarily—for public enforcement at the national level. National competition authorities will have the power and the duty291 to apply Articles 81 and 82 EC.p ho h T tjew d a8vh n oje1u stm — w d eco ljty atryb scm A p loN ju teyn h ip osfm ctejIndeed, o ran lvie,u h aco .tm p ld inevw ap o rtyild — qsren ft,gu aloityn eao h ,rcem ap tlfso uirfbatlent Article 5 of Regulation 1/2003 provides that ‘the competition authorities of the Member States shall have the power to apply Articles 81 and 82 of the Treaty in individual cases’.292 It is clear from this provision that this empowerment is given directly to national authorities by Community law.293 Of course, co-operation on the part of the Member States is also required to deal with the technicalities entailed when national public authorities apply EC competition law. Thus, Article 35(1) of Regulation 1/2003 requires Member States to designate the authorities responsible for the application of the pertinent Community rules. The fact that this provision and Recital 35 to the new Regulation refer to Member States’ measures designating and empowering NCAs to apply those provisions does not alter the substance of our first observation. It remains clear that Regulation 1/2003 deals with if (question of principle), while national measures deal with which national authorities apply EC competition law and how (procedural and technical issues).294 According to Article 5 of the new Regulation, they may take the following types of decisions: 291 For the duty of NCAs to apply EC competition law, as prescribed in Art 3 of Reg 1/2003, see 2.III.(a).(iii) above. 292 Emphasis added. 293 See also France Télécom, above n 125, para 79, where the CFI also makes it clear that Reg 1/2003 empowers NCAs to apply EC competition law. 294 See in this sense Cooke, above n 42, at 14; contra, ie in favour of Member States’ competence to empower national authorities, Idot and van de Walle de Ghelcke, above n 35, at 195. It is interesting to note here that under the old system of enforcement there has also been a debate as to whether NCAs had to be expressely empowered by national law to apply the Treaty competition rules or whether they had the power to do so directly from Community law. While the Commission had sometimes opined that national empowerment of NCAs was a necessary requirement for the latter to apply Community law (see eg para 15 of the 1997 co-operation Notice, above n 110), many authors had argued that NCAs were already empowered and bound by Community law itself to do so (Art 84 EC in conjunction with Art 9(3) of Reg 17). See eg Munari, above n 112, at 612–13 and ‘Ambito di applicazione e rapporti con l’ordinamento comunitario’ in Afferni (ed), Concorrenza e mercato, Commento alla Legge 10 ottobre 1990 n. 287 e al Decreto 25 gennaio 1992 n 74 (Padua, 1994) 23–4; Ehlermann, above n 109, at 51; M Waelbroeck, ‘Panel Discussion: EC Competition System: Proposals for Reform’ in Hawk (ed), International Antitrust Law and Policy 1998, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1999) 216; Günther, ‘Österreich’ in Behrens (ed), EC Competition Rules in National Courts, Vol. VI, Denmark, Sweden, Finland and Austria (Baden-Baden, 2001) 345); Tesauro, above n 113, at 158 ff; contra Iliopoulos, ‘Griechenland’ in Behrens (ed), EC Competition Rules in National Courts, Vol. V, Spain, Portugal and Greece (Baden-Baden, 2000) 241 ff; compare the more balanced approach of Bourgeois, above n 124, at 90–2). See also Saggio, ‘Competenze rispettive delle autorità comunitarie e nazionali in materia di controllo e repressione delle attività anticoncorrenziali delle Imprese’ (1997) 2 Dir Un Eur 1, at 5, who even believes that national empowering legislation may not only be superfluous but also contrary to EC law. A duty to apply Community competition law would arise also under Art 10 EC (see Temple Lang, above n 115, at 13 and above n 144, at 16). This is the standard rule for all directly effective provisions of Community law, which are to be enforced by national public authorities and courts alike. As to public authorities see eg Case 103/88 Fratelli Costanzo SpA v Comune di Milano [1989] ECR 1839, paras 29–31; Case C–198/01 CIF Consorzio Industrie Fiammiferi v Autorità Garante della Concorrenza e del Mercato [2003] ECR I–8055. Therefore, even without national empowerment NCAs had the power and, indeed, the duty to apply the directly effective provisions of Arts 81 and 82 EC, using their national procedural rules. However, it was also accepted that by virtue of the principle of legality such NCAs could not impose sanctions on natural or legal persons while enforcing EC competition law. See on this issue Todino, above n 92, at 759, n 17. In any case, the issue has now become obsolete, since there is an express provision (Art 5) in the new Reg, which leaves no further doubts.

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The Pillars of the New System 77 (a) (b) (c) (d) (e)

prohibition decisions ordering that an infringement be brought to an end, interim measures, decisions accepting commitments, decisions imposing fines and other penalties, and decisions stating that there are no grounds for action on their part.

ngin em rfian eboh rdu etn oa,What dgn rih o tesdn tp iecotrbhi has been decentralised to those authorities is not the power to grant exemption decisions,295 since the legal exception system has made the very concept of exemption obsolete. Instead, they will be enforcing Article 81 EC in its totality. Of course, companies can still notify agreements to NCAs, since nothing in Regulation 1/2003 prohibits this, but in such cases the NCAs are not able to grant a negative clearance or an exemption, but only to state in their decision that there are no grounds for them to act, as indeed recognised by Article 5 of Regulation 1/2003.296 In any event, the prospective amendment of national competition laws that will mirror the Community abolition of the notification and authorisation system will lead to the complete disappearance of the notification procedure in Europe. It is interesting to note that in the UK one of the compelling arguments for abolishing the system of domestic notification is exactly the likelihood of parties—indeed from across the EU—seeking to notify agreements under domestic competition law, in order to attain in the UK a certain degree of comfort that has been lost under the new EC system.297 It is noteworthy that national authorities do not have the power to take inapplicability decisions, ie decisions finding that certain conduct is not caught by Article 81 EC (either because the conditions of its first paragraph are not fulfilled, or because the conditions of its third paragraph are satisfied), or by Article 82 EC. Such decisions, which resemble the negative clearance of the old system, are exceptionally reserved solely to the Commission, acting on its own initiative in the Community public interest.298 The Regulation did not establish a ‘full faith and credit’ principle on mutual recognition of decisions taken by NCAs.299 On the contrary, such decisions will be subject to territoriality, ie the effect of their rulings will be limited to their respective national territories.300 295

See Wils, above n 149, at 342. See Gauer, ‘Does the Effectiveness of the EU Network of Competition Authorities Require a Certain Degree of Harmonisation of National Procedures and Sanctions?’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of Competition Authorities (Oxford/Portland, 2004) 195. See, however, Folguera, above n 261, at 168, according to whom NCAs could still issue negative clearance decisions. Such a view is probably the product of confusion. 297 See Department of Trade and Industry, above n 174, paras 3.19–3.20. Of course, some national competition laws have remained unreformed. Thus, eg, the 2005 amendment of the Greek Competition Act has left untouched the system of administrative authorisation and notification. See the critical comments by Komninos, ‘The New Amendment of the Greek Competition Act: Harmonisation with or Departure from the EU Model?’ (2006) 27 ECLR 293. An issue arises as to the compatibility of national notification requirements (under national competition law) with the new system of Reg 1/2003. According to van Gerven, above n 98, at 420–1, an outcome whereby an agreement is lawful under EC competition law because it fulfills the Art 81(3) EC conditions but is considered unlawful under national competition law because it was not duly notified nationally, would be contrary to Art 3(2) of Reg 1/2003. 298 Art 10 of Reg 1/2003. At least as far as Arts 81(1) and 82 EC are concerned, this is a retrogression for NCAs, as they always had the ability to grant such negative clearances under the old system of enforcement. 299 See Paulis, above n 152, at 19. 300 See on this issue Montag, ‘The Case for a Reform of Regulation 17/62: Problems and Possible Solutions from a Practiotioner’s Point of View’ in Hawk (ed), International Antitrust Law and Policy 1998, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1999) 175–6; Idot, ‘L’efficacité des décisions dans l’espace’, Petites Affiches, 28 Dec 2000, No 259, 29, at 33–4; Greaves, ‘EC Competition Law: Centralised or Decentralised Enforcement’, Focus [2000] 11 EuroCL p xi, at xiv; Bourgeois, ‘Decentralised Enforcement of EC Competition Rules by National Competition Authorities: Some Remarks on Consistency, Coherence and Forum Shopping’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy 296

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78 Institutional Law Aspects (ii) Cooperation Mechanisms within the European Competition Network A focal point of decentralisation is collaboration between NCAs and the Commission in the framework of the European Competition Network (ECN), which makes all these authorities subject to specific duties of co-operation and consultation in the enforcement of Community competition law.301 Its main objective is to ensure efficient work sharing between the public enforcers and to promote the coherent application of the EC competition rules.302 While the Network should not be viewed in hierarchical terms,303 there is no doubt that the Commission will enjoy a central role in it,304 in conformity with its specific tasks in competition law enforcement that flow directly from the Treaty (Article 85 EC).305 The system established by Chapter IV of Regulation 1/2003 is not a federal one, but follows the standard Community law relationship between the supranational and the national.306 Thus the Commission, a supranational institution, will naturally not have the (Oxford/Portland, 2001) 332; Mestmäcker, above n 59 (ch 1), at 237; Idot, above n 101, at 344; Immenga, ‘Coherence: A Sacrifice of Decentralisation?’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 588; Miram, above n 43, at 23; Ehlermann and Komninos, ‘The Consequences of the Proposed Modernisation of the Community Competition Law Enforcement’ (2001) 21 RHDE 745 (in Greek) 760. Whether NCAs can take into account in their decisions anticompetitive effects in other Member States is contested. See further on this Wils, above n 152, at 53–4. 301 On the European Competition Network see Paulis and Gauer, above n 77 (ch 1), at 65–73; Böge, ‘Das Netzwerk der EU-Wettbewerbsbehörden nimmt Gestalt an: Anforderungen an das Bundeskartellamt und Änderungsbedarf im deutschen Kartellrecht’ (2003) 14 EWS 441; various contributions in Ehlermann and Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of Competition Authorities (Oxford/Portland, 2004); Burnside and Crossley, ‘Co-operative Mechanisms within the EU: A Blueprint for Future Co-operation at the International Level’ (2004) 10 Int TLR 25; Dekeyser and Dalheimer, above n 288; Ortiz Blanco and Jörgens, ‘Antitrust Rules (Articles 81 and 82 EC)’ in Ortiz Blanco (ed), European Community Competition Procedure (Oxford, 2006), 121 ff; Monti, above n 271, 415 ff. 302 See Lowe, above n 178, at 3. 303 See eg Kist and Tierno Centella, above n 203, at 382, strongly against the ‘hierarchical’ relationship. See also Lavagne, ‘La réforme du droit des ententes: Le règlement du 13 décembre 2002’ (2003) 46 RMC 526, at 529; van de Walle de Ghelcke, ‘La décentralisation du droit européen de la concurrence:Présentation de la réforme’ in Nihoul (ed), La décentralisation dans l’application du droit de la concurrence, Un rôle accru pour le practicien? (Brussels/Louvain-la Neuve, 2004) 51. 304 See Rec 34 to Reg 1/2003. In the words of some commentators the Commission will be the ‘head’ or ‘remain at the centre’ of the Network. See eg former Director General Schaub, above n 148, at 255; Bergeron, ‘Antitrust Federalism in the European Union after the Modernization Initiative’ (2001) 46 Antitrust Bull 513, at 531; Blaise and Idot, ‘Chronique concurrence (années 2000 et 2001)’ (2002) 38 RTDE 103, at 140; Kovar, ‘Le règlement du Conseil du 16 décembre 2002 relatif à la mise en œuvre des règles de concurrence prévues aux articles 81 et 82 du Traité CE’ [2003] D 478, at 484. Note the possibly significant divergence between the earlier references on the part of the Commission to a ‘Network of Competition Authorities’ and the references to a ‘European Competition Network’ (see Paulis and Gauer, above n 77 (ch 1), at 70). While versions of the former term indicate a certain parity among all participating competition authorities (the Commission included), this may not be true of the latter, where the addition of the adjective ‘European’ and the suppression of the reference to authorities in the plural stresses the supranational character of this network, since it is European competition law that will be enforced and, thus, by implication, the centrality of the Commission. 305 On the Commission’s central role see the groundbreaking judgment by the ECJ in Masterfoods, above n 76 (ch 1), in particular para 46. See also now the CFI’s ruling in France Télécom, above n 125, para 79 (unofficial translation): ‘[t]he economy of Regulation [1/2003] is based on the close co-operation that is bound to develop between the Commission and the competition authorities of the Member States, organised in a Network, with the Commission being entrusted to determine the concrete modalities of that cooperation. Besides, that Regulation does not bring into question the general competence of the Commission as recognised by the case law [reference to Masterfoods]. The [Commission] avails itself in effect, on the basis of Regulation 1/2003, of very broad investigatory powers and is free to decide, in all cases, the opening of proceedings with regard to infringements, which leads to the pre-emption of the competition authorities of the Member States. It maintains therefore a primary role in the investigation of infringements”. 306 See, however, Pace, above n 130, at 155, who fails to see the supranational model of organisation and criticises the Commission for considering the NCAs as ‘Community public authorities’.

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The Pillars of the New System 79 power to review directly or strike down the decisions of NCAs. However, its dominant role is apparent when viewed in the light of the various co-operation and consultation mechanisms provided for and its power to relieve the national authorities of their competencies by initiating proceedings for the adoption of a decision, as enshrined in Article 11(6) of Regulation 1/2003.307 The Commission will only exceptionally rely on this latter provision, which reproduces Article 9(3) of Regulation 17,308 nevertheless, its mere existence is a very efficient safety valve in the system.309 Recent experience shows that the Commission informally exercises a substantial degree of influence over national competition authorities in the context of the various institutionalised or non-institutionalised meetings that are attended by Commission and national officials.310 With regard to Article 11(6), a remaining question is whether the national competition authorities can still go on applying their national competition law after the intervention by the Commission. According to Commission officials the answer should be in the negative. Under this view, the combined reading of Articles 3(2) and 11(6) of Regulation 1/2003 means that the opening of proceedings by the Commission in an Article 81 EC case bars NCAs from initiating proceedings under their national competition law. This possibility remains open only with regard to stricter national rules prohibiting unilateral conduct.311 Under a more balanced view, however, this remains theoretically possible even in Article 81 EC cases.312 Indeed, Article 3 of Regulation 1/2003 is concerned only with conflicts between 307 ‘Sudden death’ in the words of Lever, ‘Panel Discussion: German and UK Antitrust Law and Policy’ in Hawk (ed), International Antitrust Law and Policy 1992, Annual Proceedings of the Fordham Corporate Law Institute (New York/Deventer, 1993) 375. In this context see Jalabert-Doury, ‘Livre blanc sur la modernisation de l’application des articles 81 & 82:Quel avenir pour le droit de la concurrence communautaire?’ [1999] RDAI/IBLJ 497, at 504, who speaks of an intervention of the Commission that ‘communitarises the dossier’. This, however, is not accurate, since the dossier is already ‘communitarised’, as the NCA applies—wholly or at least partly—Community competition law, thus being subject to the rules of the Network. 308 See Joint Statement of the Council and the Commission on the Functioning of the Network of Competition Authorities, Doc. 15435/02 ADD 1 of 10 Dec 2002, available at http://register.consilium.eu.int/pdf/en/02/st15/ 15435-a1en2.pdf, pt 21. According to the Joint Statement the indicative cases where this mechanism is likely to be used are rather exceptional: ‘(a) Network members envisage conflicting decisions in the same case; (b) Network members envisage a decision which is obviously in conflict with consolidated case law; the standards defined in the judgments of the Community courts and in previous decisions and regulations of the Commission should serve as a yardstick; concerning facts, only a significant divergence will trigger an intervention of the Commission; (c) Network member(s) is (are) unduly drawing out proceedings; (d) There is a need to adopt a Commission decision to develop Community competition policy in particular when a similar competition issue arises in several Member States; (e) The national competition authority does not object.’ This specific point in the Joint Statement is taken up verbatim in para 54 of the ECN co-operation Notice. It should be stressed that Art 11(6) of the new Reg had been criticised from the point of view of NCAs as going beyond what is necessary and tolerable. See eg Böge, ‘Panel Two Discussion: Broad Systemic Issues’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of Competition Authorities (Oxford/Portland, 2004) 169. 309 That this rule is intended more as a deterrent can be understood by the fact that the equivalent Art 9(3) of Reg 17 was never directly and willingly put into effect by the Commission in 40 years of antitrust enforcement. See WPJ Wils, The Optimal Enforcement of EC Antitrust Law, Essays in Law & Economics (The Hague/London/New York, 2002) 243. 310 See, in particular, Dekeyser and Dalheimer, above n 288, at 18; Mikroulea, above n 120, at 252, n 120. 311 See Kjølbye, above n 224, at 4–5; Gauer, Dalheimer, Kjølbye and De Smijter, ‘Regulation 1/2003: A Modernised Application of EC Competition Rules’ [2003–1] EC Competition Policy Newsletter 3, at 6: ‘[i]t is particularly important to take note of the relationship between Article 3 and Article 11(6) according to which the competence of NCAs to apply Articles 81 and 82 is withdrawn when the Commission opens proceedings in the same case. In that case the national competition authorities can no longer comply with their obligation under Article 3(1) to apply Community competition law, which means that any case based on national law must also be closed. The only exception is where the application of stricter national competition law is not excluded”. See also De Smijter and Kjølbye, above n 178, at 99. 312 See Idot, above n 4 (ch 1), at 76.

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80 Institutional Law Aspects Article 81 EC and the equivalent national provisions. It can happen that a national authority may apply its own national rule consistently with the Commission and only wishes to order a particular remedy in addition to the remedies imposed by the Commission (for example an order of publication). Among the most important co-operation and consultation mechanisms 313 are the general duty of co-operation;314 the obligation of NCAs to consult the Commission at the outset of proceedings under EC competition law315 and before adopting a prohibition decision, accepting commitments or withdrawing the benefit of a block exemption;316 the possibility to consult the Commission in all other cases;317 and the use of the Advisory Committee on Restrictive Practices and Dominant Positions to discuss a case pending before an NCA before a final decision is taken.318 In addition, the Commission will have two further powers at the stage of judicial review of decisions by NCAs: first, it will always be able to initiate proceedings and adopt a decision which a national court reviewing the decision of the national authority will have to respect pursuant to Article 16(1) of Regulation 1/2003; secondly, it may intervene as amicus curiae in national judicial review proceedings.319 Some problems may arise from divergences in the procedural framework applicable to NCAs.320 Regulation 1/2003 did not contemplate harmonising national procedural rules,321 and these will continue to apply, subject to the Community law principles of equality and effectiveness. However, the fact that NCAs will now increasingly apply the Community competition rules means that their procedural autonomy will also increasingly be called into question. This may eventually result in further calls for harmonisation of national remedies and procedures.322 313 See further on these mechanisms Gyselen, ‘EC Anti-trust Law Enforcement within the European Competition Network’ in The PLC Global Counsel Competition Law Handbook 2004/5 (London, 2004) 88–9. 314 Reg 1/2003, Art 11(1). 315 Ibid, Art 11(3). 316 Ibid, Art 11(4). 317 Ibid, Art 11(5). 318 Ibid, Art 14(7). 319 As to this latter possibility see Cooke, above n 42, at 18. 320 See eg T Jones, ‘Regulation 17: The Impact of the Current Application of Articles 81 and 82 by National Competition Authorities on the European Commission’s Proposals for Reform’ (2001) 22 ECLR 405, at 406–13, analysing the diverse procedural frameworks of the NCAs at that time. Italian law until very recently offered an example of possible deficits created by national procedural law inadequacies. Under national competition law, the national competition authority did not have the power to order preliminary measures, which could only be pursued in the ordinary courts. The latest amendment of the Italian Competition Act by Decreto-Legge 223/2006 has now remedied this and provides for a concurrent power of the Italian authority to order such measures. Italian authors had considered that lacuna detrimental to an effective decentralised application of the Community competition rules in Italy and stressed that under the Factortame (I) case law (Case C–213/89 Regina v Secretary of State for Transport, ex parte Factortame Ltd et al (I) [1990] ECR I–2433), the Italian rule should be set aside and that the NCA should be able to order such measures by direct reference to Community law. See further Todino, above n 92, at 780 ff; Pizzicaroli, ‘L’applicazione della disciplina comunitaria della concorrenza da parte dell’Autorità garante del mercato in Italia’ (2001) 40 Dir Com 601, at 616–17; Mastroianni, ‘La tutela dei privati nel sistema italiano di applicazione ‘decentrata’ del diritto comunitario della concorrenza’ in Cartei and Vannucci (eds), Diritto comunitario e ordinamento nazionale (Milan, 2003) 155 ff. 321 See on this issue Idot, above n 101, at 341–2; Nouvel, ‘1er mai 2004: L’entrée en viguer du règlement 1/2003 et du ‘paquet modernisation’ portant réforme des règles de mise en œuvre des articles 81 et 82 CE’ [2004] RDAI/IBLJ 371, at 374–5; Idot, ‘A Necessary Step towards Common Procedural Standards of Implementation for Articles 81 and 82 EC within the Network’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2002: Constructing the EU Network of Competition Authorities (Oxford/Portland, 2004) 211 ff, who also addresses the rather neglected issue of the national systems for judicial review of NCAs’ decisions. 322 See eg Plompen, ‘Modernising EU Competition Policy: The Point of View of Undertakings’ in Pérez van Kappel (ed), Decentralised Application of EC Competition Law: National Experience and Reform (Cologne, 2001) 118; Mastroianni, ‘Osservazioni in merito alla effettività del sistema italiano di tutela ‘decentrata’ del diritto

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The Pillars of the New System 81 (iii) Allocation of Cases The criteria for allocation between the members of the Network have been stipulated by the Notice on co-operation with NCAs. The absence of strict allocation criteria prescribed by law reflects the conscious and persistent choice to ensure the most efficient application of the rules.323 The Notice makes it clear that the Commission will not be just a ‘clearing house’ in the sense of distributing cases to NCAs.324 The basic principle is that members of the ECN should endeavour to re-allocate cases to a single well-placed NCA325 which fulfils the following cumulative conditions: (a) an agreement or practice has substantial direct actual or foreseeable effects on competition in the NCA’s territory and is implemented in or originates on that territory, (b) the NCA is effectively able to bring the entire infringement to an end, and (c) it can gather the evidence required to prove the infringement, possibly with the assistance of other authorities. In sum, there must be a clear link between the infringement and the territory of the NCA.326 The Commission will not initiate proceedings when a competition infringement affects the territories of only two or three Member States; in such cases the NCAs concerned should instead consider working together.327 The Commission considers that it is better placed to act in cases with a wider geographical scope and some particular importance for Community law.328 Interestingly enough, the Commission believes that the allocation of cases does not involve a formal decision on its behalf or that of an NCA: rather, the act or failure to act in question is a preliminary step in a Community procedure, and thus not challengeable comunitario della concorrenza’ (2001) 6 Dir Un Eur 78, at 87 ff. Compare in this context a very interesting recent ruling of the Paris CA, which stressed that the conditions for the granting of provisional measures by the Conseil de la concurrence, when the latter exclusively applies the Community competition rules, should be governed by Community and not national law: CA Paris, 26 June 2002, SA Pharma-Lab, BOCCRF no 8, 11 July 2003, commented on by Idot [2003–8/9] Europe 22. Such a solution goes further than it is required to by Reg 1/2003, which adopts the principle of national procedural autonomy, and this explains that judgment’s reversal by the Cour de cassation: Cass com, 14 Dec 2004, Pharma Lab v Glaxosmithkline GSK and Pfizer, LawLex200400003494JBJ, reported in and commented on by L Vogel, Droit de la concurrence, Vol. II, Procédure de concurrence, Concentrations (Paris, 2005) 1259–62. Notwithstanding the reversal, such a solution responds better to the efficiency and uniformity of Community competition law enforcement, and indeed it was at the end adopted by French competition law. Thus, Art L470-6 of the Code de commerce equips the Conseil de la concurrence with all procedural powers enjoyed by the European Commission under Reg 1/2003. 323 See Gauer, ‘Les programmes de clémence au regard du réseau communautaire’ [2005–3] Concurrences 16, at 16. 324 See Schaub, above n 142, at 39; Ratliff, ‘Major Events and Policy Issues in EC Competition Law, 2001–2002— Part 2’ (2003) 14 ICCLR 87, at 108. Such a ‘clearing house’ role for the Commission was favoured by Plompen, ‘Efficient Protection of Competition in an Enlarged Community through Full Association of National Competition Authorities and National Courts’ in Conference on the Reform of European Competition Law in Freiburg i. B. (9 and 10 November 2000), available at http://ec.europa.eu/comm/competition/conferences/2000/freiburg, at 5. 325 See however Norberg, ‘Modernisation of EU Competition Policy—One Year on’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Zwölftes St. Galler Internationales Kartellrechtsforum 2005 (Basle/Geneva/Munich, 2006) 86, who stresses the fact that the ECN Cooperation Notice speaks of a ‘well-placed’ but not of a ‘best-placed authority’. 326 ECN Cooperation Notice, above n 208, paras 7–8. 327 See also A Schaub, ‘Developments of European Competition Law’ in Hellenic Competition Committee (ed), EU Competition Law and Policy, Developments and Priorities, Athens Conference, April 19th 2002 (Athens, 2002), at 107. 328 ECN Cooperation Notice, above n 208, paras 14–15.

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82 Institutional Law Aspects before the courts.329 The Commission’s fear was that giving companies the opportunity to make preliminary objections to the exercise of jurisdiction by an authority that is a member of the Network would cause delay, unnecessary litigation and expense, and make application of Community competition law less effective.330 However, it cannot be ruled out that a national competition authority may be obliged by national law to take a formal decision subject to review by the national courts, while reallocating a case inside the Network.331 Then, the non-challengeability view may not be consistent with the principle of effective judicial protection and the right to be heard.332 The basic aim is to allocate cases at the outset of proceedings. Problems of allocation should be resolved promptly, normally within two months of the date of the first information sent to the ECN under Article 11 of Regulation 1/2003.333 Experience shows that allocation discussions among the members of the ECN usually take place informally before the start of the formal two-month period. Indeed, allocation will become an issue only if the authority that is first seised of the case is minded not to open proceedings, either because it does not consider itself to be well placed to deal with the merits of the case or because of other priorities.334 (iv) Exchange of Information Regulation 1/2003 and the ECN Cooperation Notice envisage exchanges of information between NCAs and the Commission (via the ECN intranet) on the initiation of proceedings.335 ECN members must inform each other of pending cases by means of a standard form containing limited details of the case, such as the authority dealing with the case, the product, territories and parties concerned, the alleged infringement, the suspected duration of the infringement and the origin of the case. The aim of this limited information exchange is to resolve as early as possible case allocation issues.336 The new system also provides for the power, though not for the duty, of NCAs and the Commission to exchange and use data, including confidential information.337 The information exchanged should only be used in evidence for the purposes of applying Articles 81 and 82 EC, and in respect of the subject matter for which it was collected by the transmitting authority. It may, however, also be used for the purpose of applying national competition law in parallel in the same case, but this is only possible if the application of national law does not lead to an outcome as regards the finding of an infringement different from that under Articles 81 and 82 of the Treaty. Stricter rules apply to the exchange of informa329

See Paulis and Gauer, above n 77 (ch 1), at 72. See eg Temple Lang, above n 144, at 20. 331 See Idot, above n 4 (ch 1), at 66. 332 See eg Basedow, ‘Panel I Discussion’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Zwölftes St. Galler Internationales Kartellrechtsforum 2005 (Basle/Geneva/Munich, 2006) 159. 333 ECN Cooperation Notice, above n 208, para 18. 334 See further Norberg, above n 325, at 87. 335 Art 11(3) of Reg 1/2003; paras 16–17 of the ECN Cooperation Notice. See further CS Kerse and N Khan, EC Antitrust Procedure (London, 2005) 263 ff; Nazzini, ‘Procedure comunitarie e nazionali in materia antitrust: Sui profili processuali del rapporto tra diritto comunitario e diritti interni’ (2006) 11 Dir Un Eur 97, at 102 ff. 336 ECN Cooperation Notice, above n 208, para 17. 337 This, both between NCAs and the Commission and between NCAs. See further Dekeyser and De Smijter, ‘The Exchange of Evidence within the ECN and how It Contributes to the European Co-operation and Coordination in Cartel Cases’ (2005) 32 LIEI 161; De Smijter and Kjølbye, above n 178, at 140 ff; E O’Neill and E Sanders, UK Competition Procedure, The Modernised Regime (Oxford, 2007) 294 ff. 330

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The Pillars of the New System 83 tion which may be used to impose sanctions on individuals.338 The Commission and NCAs must also co-operate during various investigations, including Commission requests for information and investigations. The position of leniency applicants is particularly problematic. The Cooperation Notice considers it is in the Community interest to grant favourable treatment to undertakings which co-operate with the Commission in the investigation of cartel infringements. However, it admits that in the absence of an EU-wide system of ‘fully harmonised leniency programmes’, an application for leniency to one authority is not to be considered as an application for leniency to any other authority. A company seeking leniency would therefore have to apply to the Commission and all NCAs with competence to apply Article 81 EC that would be likely to act against the infringement in question. The problem is perhaps less acute with regard to leniency applications to the Commission, which can always relieve the NCAs of their competence by initiating proceedings, but it becomes more serious if applications for leniency are filed with NCAs under national leniency programmes. Multiple national applications for leniency to different NCAs by different companies would represent a very unfortunate scenario. One solution, favoured in the Notice, would be for an applicant to file leniency applications with all national authorities simultaneously.339 The ECN has recently launched a Model Leniency Programme that will improve the handling of parallel leniency applications in the ECN.340 The Model Programme responds to the call for a one-stop leniency shop and offers a set of rules on which all ECN programmes can align. It is therefore a first step towards a harmonised leniency policy throughout the EU and sets out the main procedural and substantive rules which the ECN members believe should be common to all programmes. For cases concerning more than three Member States, it introduces a model for a uniform summary application system for immunity applications. This is a soft harmonisation initiative, however, and does not appropriately resolve the current problem described above. The Cooperation Notice indicates that leniency-related information submitted to the Network pursuant to the cooperation and notification mechanisms of Article 11 of Regulation 1/2003 cannot be used by other Network members to start an investigation.341 A second safeguard is that if Network members want to use leniency-related information from other ECN members, they must request this under Article 12 of the Regulation, but information will not be shared without the leniency applicant’s consent, except in cases where the undertaking concerned has applied for leniency in both the authorities concerned or the receiving authority ensures the protection of the leniency applicant.342 The Commission has received written commitments in this sense from the vast majority of Member States, and has published a list of those NCAs.343

338

See generally Arts 12 and 28 of Reg 1/2003 and paras 26–28 of the ECN Cooperation Notice. Ibid, para 38. 340 See http://ec.europa.eu/comm/competition/ecn/index_en.html. 341 ECN Cooperation Notice, above n 208, para 39. See further Gauer and Jaspers, ‘The European Competition Network: A chievements and Challenges—A Case in Point: Leniency’ [2006–1] EC Competition Policy Newsletter 8, at 9–10. 342 ECN Cooperation Notice, above n 208, paras 40–41. See also Gauer and Jaspers, above n 341, at 10. 343 ECN Cooperation Notice, above n 208, para 72 and Annex, available at http://ec.europa.eu/comm/ competition/antitrust/legislation/ list_of_authorities_joint_statement.pdf. 339

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84 Institutional Law Aspects

(c) The New Institutional Position of Civil Courts (i) The Powers of National Courts under the New System a. The Courts’ New Competence to Apply Article 81(3) EC Decentralisation of EC competition law enforcement will have a highly dramatic impact on the application of that law by civil courts, and on private antitrust enforcement, which is expected to grow from a rather meagre to a more complete and mature system.344 National courts will no longer play a marginal role, but will soon become ‘full players’ in the enforcement of the competition rules,345 albeit at a level complementary to that of public antitrust authorities, most notably the Commission. Indeed, the Commission considered private antitrust enforcement, as part of effective decentralisation, to be one of the three main objectives of the modernisation reforms, which were, first, to refocus the Commission’s activity on combating the most serious restrictions of competition, by ending the system of notification and authorisation while ensuring intensified ex post control; secondly, the decentralised application of the competition rules, while maintaining consistency throughout the Community; and, thirdly, easing the administrative constraints on undertakings, while providing them with sufficient legal certainty.346 The direct effect of Article 81(3) EC will have a certain impact on civil litigation before national courts as, at least in theory, the Commission exemption monopoly was undoubt344 See various authors in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003). 345 See Whish and Sufrin, above n 142, at 151–2; Gerber, ‘Modernising European Competition Law: A Developmental Perspective’ (2001) 22 ECLR 122, at 123; Favre, ‘Les défis de la mise en œuvre: Une compétence élargie pour les juges’ [2001–7/8] Rev Conc Consomm 21, at 22; Venit, above n 231, at 461; Burrichter, ‘Panel Three Discussion: Courts and Judges’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 479; van Gerven, ‘Harmonisation Within and Beyond’ in van Empel (ed), ‘From Paris to Nice’, Fifty Years of Legal Integration in Europe, International Pallas Conference, Nijmegen, May 24, 2002 (The Hague/London/New York, 2003) 12; Basedow, ‘Private Enforcement of Article 81 EC: A German View’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 137; Director-General Lowe, ‘Meeting the Challenge of Modernisation’, Speech delivered at the Oxford Competition Policy Conference, 15 and 16 July 2003, available at http://ec.europa.eu/comm/competition/speeches, at 6; Braun, ‘Der Systemwechsel im europäischen (und deutschen) Kartellrecht (VO 1/2003)—Vorschläge für die Unternehmenspraxis’ in Behrens, Braun and Nowak (eds), Europäisches Wettbewerbsrecht im Umbruch (Baden-Baden, 2004) 173; Lenaerts and Gerard, ‘Decentralisation of EC Competition Law Enforcement: Judges in the Frontline’ (2004) 27 World Competition 313, at 314. See also van Fleet, Imus, Johnston and Hennessee, ‘Private Antitrust Actions’ in The PLC Global Counsel Competition Handbook 2002/3 (London, 2002) 77, speaking of a shift to a litigation-based system. See also Venit, above n 231, at 464, stressing the more practical advantages of private enforcement in the new decentralised system of enforcement. That author stresses, in particular, the fact that civil proceedings will be swifter than national public proceedings because of the condensation of the application of the law into one set of proceedings. Then the judicial impartiality and the frequent access to expert testimony will improve the quality of enforcement and the role of the bar and of consultants will be far more developped and visible. 346 Paras 41, 42, 74 and 75 of the White Paper, above n 82. See also Schaub and Dohms, above n 149, at 1060; former Commissioner Monti, ‘Modernisation of EU Competition Rules’, Speech delivered at the Launch of the Competition Act 1998, London, 2 Mar 2000, available at http://ec.europa.eu/comm/competition/speeches, at 4. See, however, Ehlermann, above n 2, at 560, who criticises this multiplicity of objectives, when the sole objective should have been the increased efficiency of EC antitrust policy. According to the former Director General, decentralisation is a tool, not an objective. It is true that on occasions, the Commission proposes the enhancement of private enforcement not as a direct objective of the reform, but rather as a ‘result’ thereof (see eg former Commissioner Monti, ‘Guest Editorial: A European Competition Policy for Today and Tomorrow’ (2000) 23(2) World Competition 1, at 2).

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The Pillars of the New System 85 edly an obstacle to increased private enforcement.347 With regard to timing in particular, the abolition of the Commission’s monopoly will on balance be positive for national litigation, since the courts are able to address the full range of competition law for the first time.348 In other words, they are no longer obliged to suspend their proceedings until the Commission has decided on the applicability of Article 81(3) EC, thus ‘leaving the agreement suspended in a twilight zone between validity and nullity’.349 The courts’ competence under Article 81(3) EC means that in those cases where under the previous system a restrictive agreement had not been notified to the Commission, and thus the national civil courts had no other option but to declare it void, under the new system, voidness is not an automatic consequence, but the courts have themselves to examine the applicability of Article 81(3) EC. According to the Commission, this will improve the ‘civil enforceability of agreements’.350 Of course, there seems to be some confusion of identity between the improvement of the civil enforceability of agreements and the enhancement of private enforcement. The two objectives are contradictory. Indeed, one could argue that the automatic voidness of non-notified agreements under the previous system was more beneficial for private enforcement if the latter was seen in its active form of persecution of anti-competitive agreements through civil claims. In any event, on many occasions and, most notably, in the White Paper the Commission had admitted that the old system of enforcement was hardly encouraging for the development of private enforcement. In its words: since national competition authorities and courts have no power to apply Article 81(3), companies have used this centralised authorisation system . . . to block private action before national courts and national competition authorities. This has undermined efforts to promote decentralised application of EC competition rules. As a result, the rigorous enforcement of competition law has suffered and efforts to decentralise the implementation of Community law have been thwarted.351

The new role of national courts makes better economic sense, since the whole analysis under Article 81 EC will now take place in one forum, but, more importantly, creates a real culture of diffuse competition law enforcement and, as one commentator rightly observes, consolidates the interpretation of the third paragraph of Article 81 EC as a ‘true rule of law’ and not as a ‘discretionary political tool’.352 b. The Specific Language of Regulation 1/2003 Regulation 1/2003 places national courts on an equal footing with the public enforcers for the first time. The competence of the courts to apply the antitrust provisions of the Treaty 347 This conviction is widely shared. See eg Department of Trade and Industry, above n 174, para 9.5. See also Slot, ‘Panel Discussion: EC Competition System: Proposals for Reform’ in Hawk (ed), International Antitrust Law and Policy 1998, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1999) 228; Paulweber and Kögel, above n 128, at 503; Jacobs and Deisenhofer, above n 1 (ch 1), at 195; Montag and Rosenfeld, ‘A Solution to the Problems? Regulation 1/2003 and the Modernisation of Competition Procedure’ (2003) 1 ZWeR 107, at 132; Hirsch, above n 149, at 237; Ortiz Blanco and Jörgens, above n 301, 37. 348 Jones, above n 75 (ch 1), at 96. See also Wißmann, above n 128, at 132. 349 Venit, above n 30, at 554. 350 See eg former Commissioner Monti, above n 54 (ch 1), at 9. 351 Para 6 of the White Paper, above n 82. See also van Miert, ‘European Competition Policy: A Retrospective and Prospects for the Future’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 10. See, however, Riley, ‘EC Antitrust Modernisation: The Commission Does Very Nicely—Thank you! Part One: Regulation 1 and the Notification Burden’ (2003) 24 ECLR 604, at 612, who doubts the significance of the Commission’s ‘blocking effect’ arguments. 352 Wils, above n 309, at 246.

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86 Institutional Law Aspects is recognised by Articles 1 and 6 of the new Regulation. Article 1, which introduces the legal exception system, reads as follows: 1. Agreements, decisions and concerted practices caught by Article 81(1) of the Treaty which do not satisfy the conditions of Article 81(3) shall be prohibited, no prior decision to that effect being required. 2. Agreements, decisions and concerted practices caught by Article 81(1) of the Treaty which satisfy the conditions of Article 81(3) shall not be prohibited, no prior decision to that effect being required. 3. The abuse of a dominant position referred to in Article 82 shall be prohibited, no prior decision to that effect being required.

Article 6 provides that: ‘national courts shall have the power to apply Articles 81 and 82 of the Treaty’. It should be mentioned at this point that the equivalent provision of the initial Regulation proposal was less appropriate and its style echoed the ancien régime: ‘national courts before which the prohibition in Article 81(1) of the Treaty is invoked shall also have jurisdiction to apply Article 81(3)’. It seems that the text of the proposal aimed to prevent parties to restrictive agreements from seeking declaratory relief from national courts in the sense that the agreement in question was lawful under Article 81(3) EC, thus reintroducing the administrative authorisation system through the back door. The reference in the text to the need for the prohibition of Article 81(1) EC to be ‘invoked’ before the court aimed to exclude such declaratory claims based on Article 81(3) EC.353 However, that text was unfortunate because it did not treat Article 81 EC as a whole, but referred to a ‘jurisdiction to apply Article 81(3)’, which was reminiscent of the old system of authorisation.354 The answer to this concern is that the legal exception system certainly does not delegate the application of Article 81(3) EC, as such, to national courts. Indeed, the latter will apply Article 81 EC as a whole to past and present situations in a civil dispute before them, unlike the case of the old exemption decisions that had effects also for the future.355 Courts simply apply Article 81 EC as a whole to a dispute before them and declare inter partes the applicability or inappicability of that provision to an agreement. To speak of a competence to apply Article 81(3) EC no longer makes sense. The permissive language in the initial proposal also seemed to imply that national courts would still have the discretionary choice whether or not to apply Article 81(3) EC, thus 353 See Wils, above n 149, at 354. The same issue is raised by Whish and Sufrin, above n 142, at 151, who stress that English courts can adjudicate only if there is a genuine lis pendens inter partes. Thus, according to the authors, parties could not use civil proceedings as an alternative to the notification procedure; in other words, it would not be possible for them to seek declaratory judgments on the applicability or otherwise of Art 81(3) EC. 354 See criticism by Komninos, ‘Arbitration and the Modernisation of European Competition Law Enforcement’ (2001) 24 World Competition 211, at 220. That text in fact caused a lot of confusion. See eg Holmes, ‘The EC White Paper on Modernisation’ (2000) 23(4) World Competition 51, at 57, who read the draft text of Art 6 as giving the power to apply Art 81(3) EC only to national courts through so-called ‘positive decisions’. Only the latter would, according to that author, be able to declare that an agreement satisfied the tests of that Art and that it ‘was exempted from the prohibition’. Thus, the author went on to say that only the national courts and not NCAs could apply Art 81(3) EC through ‘positive decisions’. It is clear, however, that such a view is the product of confusion, since the concepts of negative clearance and exemption are obsolete in the new system of enforcement. 355 See in this regard Paulis, above n 73 (ch 1), at 409. This explains why the related discussion on the temporal effects of national courts’ judgments applying Art 81(3) EC and on the possibility for the courts to accept commitments is misplaced. Some commentators had addressed the question whether national courts could determine the duration of ‘exemptions’ under the new system and whether they could induce the parties to reach settlements, for example by offering and accepting commitments. See eg the conflicting approaches by Burrichter, above n 144, at 542—3; Gröning, ‘National Judges in a Modernised Community Law System: A Special View to Procedural Aspects’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001), at 590; Schurmans, above n 4 (ch 1), at 94. On the possibility of such settlements ‘brokered’ by national courts between the litigants see also Montag and Rosenfeld, above n 347, at 133.

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The Pillars of the New System 87 sticking to their old practice of staying proceedings in order to refer the matter to the Commission or an NCA.356 The final text of Article 6 of Regulation 1/2003 remedies these points by adopting more correct language which treats Article 81 EC as a whole and abandons the old philosophy of the split between the first and third paragraphs of that provision.357 Moreover, by also referring to Article 82 EC, it makes the point of its declaratory nature clearer. In other words, as Article 1 already introduces the legal exception system, Article 6 does no more than state the obvious, which is that Article 81 EC as a whole will be directly effective before national courts. The direct effect of Articles 81 and 82 EC is a direct consequence of the Treaty itself;358 Article 6 of Regulation 1/2003 therefore does not change the legal reality, but merely clarifies it.359 For the same reason, we must criticise the confusing references in the Notice on cooperation between the Commission and national courts to an ‘empowerment’ of national courts to apply EC competition law through Regulation 1/2003.360 In essence, with regard to Article 81 EC, the legal reality is changed only by Article 1 of Regulation 1/2003 with the introduction of the legal exception. c. Remnants of Public Enforcement Monopoly: Withdrawal of the Benefit of a Block Exemption Regulation The only remnant of the old exemption monopoly system that has survived the introduction of the new system is the exclusive power to withdraw the benefit of a block exemption regulation which is enjoyed by the Commission and by Member States’ competition authorities for their respective national territories. This is the sole instance where national courts are not on a equal footing competence-wise with the Commission and NCAs. Some commentators have relied upon this exclusive administrative competence to argue that even under the new system of legal exception national courts, when faced with situations in which the benefit of the block exemption should be removed, should still stay their proceedings until the Commission or a national competition authority adopts a formal decision to that extent.361 However, under the new system of enforcement, national courts are no longer deprived of full competence to decide a case based on the whole of Article 81 EC and on the block exemption regulation. In that sense, the exclusive power of the competition authorities to withdraw the benefit of a block exemption does not interfere with the courts’ competences, and the latter are no longer required to stay proceedings. They will apply the block exemption regulation if the latter is applicable, irrespective of the existence of factors that may justify the withdrawal of the benefit of the exemption with erga omnes effect by a public authority. 356

See in this sense the critical comments by Vogelaar, above n 53, at 23. The text of Rec 4 of the new Reg appears clearer, speaking of ‘a directly applicable exception system’. 358 For this reason we find curious the intention of the UK Department of Trade and Industry to ‘designate “national courts” ’ for the purposes of Reg 1/2003: see Department of Trade and Industry, above n 174, para 9.11. This reference is probably the product of confusion, since the only duty of Member States is to designate NCAs (Art 35 of Reg 1/2003) and certainly not courts, which in any case have the power and the duty to apply the directly effective competition provisions of the Treaty. 359 See on this point Komninos, above n 354, at 220; Scuffi, above n 20 (ch 1) in fine, at 123. Of course, the opponents of the reform use the text of Art 6 of Reg 1/2003 to argue that the Council Reg is illegal, because it has ascribed direct effect to a Treaty provision, whereas the direct effect of a Treaty provision depends only on that Treaty provision itself. See eg the criticism by Pace, above n 130, at 185–6. 360 Para. 6 of the Cooperation Notice, above n 208. 361 See KL Ritter, DW Braun and F Rawlinson, European Competition Law: A Practitioner’s Guide, Website Supplement, Update Jan 2003, available at http://www.kluwerlaw.com (consulted in Mar 2003), at 81. 357

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88 Institutional Law Aspects Although the benefit of the block exemption may be withdrawn in an individual case if the conditions of Article 81(3) EC are not fulfilled, Member States’ courts have no power in that respect, since withdrawal can only take place by means of a constitutive decision by a public authority (the Commission or NCAs). The courts only have the power to decide whether or not the agreement is covered by the block exemption regulation.362 They need only prove that the agreement is block-exempted. According to the Commission, ‘the application of Article 81(3) to categories of agreements by way of block exemption regulation is based on the presumption that restrictive agreements falling within their scope fulfil each of the four conditions laid down in Article 81(3)’.363 In other words, in the context of private enforcement, the fact that an agreement falls under a block exemption functions as a non-rebuttable presumption that it is legal under Article 81(3) EC, at least while the benefit of the block exemption has not been withdrawn in the context of public enforcement.364 It would therefore not be in accordance with the spirit of the new parallel competences system for the court to stay proceedings at this stage a fortiori because the public authority involved retains full discretion as to whether or not to withdraw the benefit of the block exemption.365 This case is different from the old individual exemption decisions to which notifying parties were entitled, especially in view of pending stayed national proceedings. Of course, in appropriate cases a court may consider staying proceedings if the Commission has already started proceedings, ex officio or following a complaint (possibly by one of the litigants), with a view to withdrawing the benefit of a block exemption from the agreement at issue. This faculty of the court, however, would no longer be connected with its incapacity to apply the competition provisions in their entirety and to deliver judgment, but would rather be motivated by its duty to avoid giving a decision which might conflict with a decision contemplated by the Commission366 in proceedings it had initiated, as stressed by Article 16(1) of Regulation 1/2003. 362 See Bechtold, above n 134, at 54, who presciently refers to this new function of block exemption regs to free parties of their burden of proving the fulfillment of the Art 81(3) EC conditions. See further Fuchs, ‘Die Gruppenfreistellungsverordnung als Instrument der europäischen Wettbewerbspolitik im System der Legalausnahme’ (2005) 2 ZWeR 1, at 10. 363 Para 35 of the Notice on Art 81(3), above n 208. 364 See also para 51 of the Commission Notice on the handling of complaints, above n 208: ‘[a]greements that fulfil the conditions of a block exemption Regulation are deemed to satisfy the conditions of Article 81(3)’ (emphasis added). 365 See in this regard para 2 of the Commission Notice on Art 81(3) EC, which addresses this issue and stresses that competition-restrictive agreements within the meaning of Art 81(1) EC will be legally valid and enforceable if covered by a block exemption reg. Such agreements could ‘only be prohibited for the future and only upon formal withdrawal of the block exemption by the Commission or a national competition authority’. 366 But not decisions contemplated by NCAs. Community law does not deal with such cases of possible conflicts between decisions by national courts and NCAs, which can only be resolved according to national law. Formidable problems would arise if an NCA initiated proceedings and contemplated withdrawing the benefit of a block exemption reg in its distinct geographic market, but the parallel civil litigation took place in a different jurisdiction (possibly pursuant to a choice-of-forum clause). In such cases it should be appropriate for the Commission to open proceedings pursuant to Art 11(6) of Reg 1/2003, unless the distinct geographical market to which the NCA’s decision relates presents special characteristics that justify the separate treatment. See eg Jenny, ‘On the Modernisation of EC Antitrust Policy’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 364–5, who does not exclude the possibility that one and the same agreement may generate different responses in different Member States, because of differing conditions of competition in these markets. This is more likely to happen with vertical rather than with horizontal agreements. See, however, contra Cooke, ‘Commission White Paper on Decentralisation of Competition Rules: The Threat to Consistency’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 554, who identifies in these conflicts a problem for the single market function of the competition rules.

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The Pillars of the New System 89 d. The New Competence to Enforce Commission Commitments Decisions Finally, a new role to be played by national courts under the new system established by Regulation 1/2003 is the enforcement of commitments contained in binding Commission decisions and addressed to specific parties. Article 9 of Regulation 1/2003 introduces for the first time the possibility for the Commission and for national competition authorities— though not for courts—to accept commitments offered by undertakings and to make them binding upon the latter. That will happen when the Commission or the national competition authority intends to adopt a prohibition decision, but refrains from doing so as a result of the commitments offered, if the commitments meet the concerns of the authority in question as expressed in its ‘preliminary assessment’, which in the EC competition law enforcement context equates to a statement of objections.367 Commitments offered by the undertakings, if accepted by the Commission, may be integrated by the latter in a formal decision, which simply finds that there are no longer grounds for action by the Commission, without concluding that there has been or still is an infringement of the Treaty competition rules.368 In that sense, such Commission decisions are neither applicability nor inapplicability decisions, and equally should not be confused with the negative clearance decisions of the old system.369 Undertakings not in compliance with commitments declared binding upon them by Commission decision, face fines of up to 10 per cent of their total worldwide turnover in the preceding business year and periodic penalty payments of up to 5 per cent of their average daily turnover.370 In addition, in case of breach of commitments the Commission may reopen proceedings.371 Notwithstanding these powerful administrative mechanisms to enforce commitment decisions, an interesting question is whether national courts can also enforce commitments contained in a Commission decision as against the addressee of that decision and whether third parties can rely on the decision to enforce rights derived therefrom. While the Commission is clearly keen to engage the courts in the monitoring, application and enforcement of such commitment decisions,372 doubts have 367 The main difference between the preliminary assessment and the statement of objections is that the former does not qualify the facts of the case in an incriminating manner but rather identifies competition ‘concerns’. See Lasserre, ‘The Policy of Commitments in Antitrust Law: First Steps and First Update on the French Case’ in Hawk (ed), International Antitrust Law and Policy 2005, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2006) 20. Art 9 of Reg 1/2003 does not allow for the Commission formally to accept commitments and to make them binding upon the undertakings concerned, when the commitments are given in order for the former to reduce a fine for an infringement of the competition rules. According to Rec 13 of Reg 1/2003 commitment decisions are not appropriate in cases where the Commission intends to impose a fine. See to that extent the Commission’s public communication entitled Commitment Decisions (Article 9 of Council Regulation 1/2003 Providing for a Modernised Framework for Antitrust Scrutiny of Company Behaviour), Frequently Asked Questions and Answers, MEMO/04/217, 17 Sept 2004. Such commitments have been informally accepted in the past in Commission Dec 85/202/EEC of 19 Dec 1984 (Wood pulp) [1985] OJ L85/1. 368 Rec 13 of Reg 1/2003. 369 Since such Commission decisions will leave open the question whether there was an infringement of Art 81 or 82 EC, and since they will incorporate commitments that were given by the parties themselves, they cannot be challengeable before the CFI by their addressees. See further Celli, ‘Modernisation of Competition Rules in the EU: What Will Change in Practice?’, Paper presented at the IBA 6th Annual Competition Conference (Fiesole, 20 Sept 2002) 10. Compare, however, Paulis and Gauer, above n 77 (ch 1), at 68, according to whom the undertakings concerned can still seise the CFI in case of infringement of essential procedural requirements and of misuse of powers. Of course, complainants can still challenge commitment decisions before the CFI. 370 Arts 23(2)(c) and 24(1)(c) of Reg 1/2003. 371 Art 9(2)(b) of Reg 1/2003. 372 Compare the Commission’s public communication on commitment decisions, above n 367, which states that ‘national courts must enforce the commitments by any means provided for by national law, including the adoption of interim measurers’. See also Paulis and Gauer, above n 77 (ch 1), at 68.

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90 Institutional Law Aspects been expressed whether these decisions enjoy horizontal direct effect and can confer rights on third parties.373 The answer to this question must be that, indeed, national courts will have the competence to apply and enforce commitment decisions to the extent that such decisions are sufficiently clear, precise and unconditional as to the obligations they impose on their addressees374 and confer rights on third parties to invoke these obligations.375 Since the addressees of these decisions are individuals, the decisions will naturally have horizontal direct effect, exactly like Articles 81 and 82 EC.376 (ii) Co-operation Mechanisms between the Commission and National Courts Regulation 1/2003 does not stop at making national courts competent to apply the Treaty antitrust rules in full; it also creates an institutional framework, with prudential mechanisms which aim at meeting concerns regarding the consistency of decentralised enforcement of EC competition law. The Chapter IV provisions under the title ‘Co-operation with national authorities and courts’ are permeated by a general spirit of cooperation. That spirit is further elaborated and given effect to by the accompanying Notice on co-operation between the Commission and national courts. We should stress, however, that while national competition authorities form part of a network of public enforcers, national courts are placed in an institutionally different context.377 Indeed, the latter cannot formally form part of such a network. They cannot formally belong to such a network, because of their independence of the executive branch. In fact the Commission’s approach to the system of co-operation with national courts is entirely different from its approach to co-operation with NCAs, in language, style, and substance.378 373 See further Montag and Cameron, ‘Effective Enforcement: The Practitioner’s View of Recent Experiences under Regulation 1/2003’, Paper presented at the Joint IBA and European Commission Conference on Antitrust Reform in Europe: A Year in Practice (Brussels, 9–11 Mar 2005) 12; Davies and Das, ‘Private Enforcement of Commission Commitment Decisions: A Steep Climb, not a Gentle Stroll’ in Hawk (ed), International Antitrust Law and Policy 2005, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2006) 202 ff. 374 See Case 9/70 Franz Grad v Finanzamt Traunstein [1970] ECR 825, para 9. See also Temple Lang, ‘Commitment Decisions and Settlements with Antitrust Authorities and Private Parties under European Antitrust Law’ in Hawk (ed), International Antitrust Law and Policy 2005, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2006) 286. 375 See also C Lewis, Remedies and the Enforcement of European Community Law (London, 1996) 37. Compare Grad, above n 374, para 5: ‘[i]t would be incompatible with the binding effect attributed to decisions by Article 189 [now 249] to exclude in principle the possibility that persons affected may invoke the obligation imposed by a decision. Particularly in cases where, for example, the Community authorities by means of a decision have imposed an obligation on a Member State or all the Member States to act in a certain way, the effectiveness (“l’effet utile”) of such a measure would be weakened if the nationals of that State could not invoke it in the courts and the national courts could not take it into consideration as part of Community law’. Note that there is a debate in the academic circles in Europe as to the nature of direct effect, in particular as to whether the conferment of rights on individuals is a constitutive element of direct effect or whether it merely follows from their sufficiently clear, precise and unconditional status. See further Edward, ‘Direct Effect—Myth, Mess or Mystery?’ (2002) 7 Dir Un Eur 215. 376 Compare the position under UK law. S 94 of the Enterprise Act 2002 expressly states that commitments (‘enforcement undertakings’) produce rights owed to any person who may be affected by a contravention of the commitments and any breach of the duty to comply with such commitments which causes such a person to sustain loss or damage shall be actionable by him. 377 See Wathelet, ‘Le nouveau règlement “concurrence”: Révolution copernicienne?’ in Nourissat and Wtterwulghe (eds), Le nouveau règlement d’application du droit communautaire de la concurrence: Un défi pour les juridictions françaises (Paris, 2004) 27. On European networks of national courts mainly in the justice and home affairs area see Canivet, above n 4, at 48 ff. 378 See Komninos, above n 354, at 224; van de Walle de Ghelcke, above n 303, at 53.

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The Pillars of the New System 91 National courts, being both independent and also juges communautaires de droit commun, are accorded much greater deference, because of their independence of the executive branch.379 They are subject only to the European Court of Justice, which is effectively the Supreme Court of the European Union, and its Member States on matters of Community law. In that sense, one can, indeed, speak of a ‘network’ of Community courts, ie a network comprising the Court of Justice and national courts in their capacity as Community courts of general jurisdiction (juges communautaires de droit commun). The functioning of this network is based on the principle of co-operation, enshrined in Article 234 EC.380 Notwithstanding this stance of deference, one cannot fail to note the difference in philosophy between US antitrust and EC competition law. Although the enforcement agencies in the US do occasionally file amicus curiae briefs in cases pending before the courts, ‘assistance’ from or ‘cooperation’ with or even ‘supervision’ by the Antitrust Division of the Department of Justice in the EU sense has never been an issue for US courts applying the antitrust laws.381 On the contrary, in the EU, this has been an enduring concern. The reasons for this diversity lie in the profound development of the US system of private antitrust enforcement and in its long emancipation from the public enforcement model. They are also to be explained historically, because in the EU the previous prior authorisation system and centralised enforcement at the level of the Commission made natural such dependence of civil courts on the Commission and public authorities. There are two ways to view the cooperation mechanisms between the Commission and national courts. One way to explain them is by reference to the long-held conviction in Europe that, by definition, public enforcement is superior to private enforcement, simply because a specialised public authority is better acquainted with the economic specificities of antitrust law than generalist judges.382 However, apart from the fact that such a paternalistic view does not do justice to the courts, it results in subjugating private to public enforcement and is certainly incompatible with the independent status of the former, as we have explained above.383 Therefore, in our view, the provisions of Article 15 of Regulation 1/2003 owe their existence to the more ‘mundane’ sensitivities that are developed in the 379 See above on the question whether the principle of separation of powers applies as between the Community and the national levels. 380 See further Anagnostopoulou-Yiannakou, above n 4, at 80. 381 See eg Hawk, ‘The Role of the Judge—Working Paper II’ in Ehlermann and Laudati (eds), European Competition Law Annual 1996 (The Hague/Boston/London, 1997) 337, according to whom, ‘to an American observer, and perhaps to many Member State judges, the notion of an administrative authority overseeing courts is bizarre if not ludicrous’; Vance, above n 182, at 638, stressing that for US judges it appears distasteful for a court to interrupt its proceedings in order to ask a public authority for an answer to complex economic questions; McCurdy, ‘The Impact of Modernisation of the EU Competition Law System on the Courts and Private Enforcement of the Competition Laws: A Comparative Perspective’ (2004) 25 ECLR 509, at 511. 382 Compare the view held by Capelli, above n 10, at 567, who addresses this question with reference to the old Cooperation Notice and to the ‘advice’ given by the ECJ in Delimitis to national courts towards cooperation rather than confrontation with the Commission. According to this commentator those principles make evident the marginal role of national courts and the predominant position of the Commission under the old system of enforcement. See also Jones and Sharpston, above n 102 (ch 1), at 108; Meli, above n 128, at 129. These authors criticise the 1993 Notice as indicative of a paternalistic attitude of the Commission towards national courts. According to these authors the Commission should instead have genuinely encouraged private antitrust enforcement by not furthering the dependence of the national courts on itself, but by establishing the principle that national courts have enough authority to decide cases before them. 383 Compare the paternalistic approach of former Commissioner Monti with reference to the cooperation mechanisms between the Commission and national courts, above n 78 (ch 1), at 5: ‘[t]hese means of interactions are intended to allow the Commission . . . to draw courts’ attention to important issues relating to the application of EU antitrust rules and contribute to the coherence of their rulings’ (emphasis added).

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92 Institutional Law Aspects Community–national law fine balance, and not to a precedence of public over private enforcement. In other words, these cooperation mechanisms were intended in order to assuage the concerns of the opponents of modernisation and decentralisation, who cautioned against inconsistency and incoherence of antitrust enforcement as between the Community (ie the Commission) and the national level (in casu the courts).384 As we have explained above, giving a certain degree of precedence to the Community over the national level is different from doing the same to public over private enforcement.385 The fact that civil antitrust litigation has an impact not only on the private interests of the parties but also on the general public interest386 certainly is an additional factor that further explains the co-operation mechanisms of Article 15 of Regulation 1/2003 and, indeed, other existing mechanisms in national competition laws, but this by no means indicates any precedence of public over private enforcement.387 The cooperation mechanisms provided for in Regulation 1/2003 and expounded in the Cooperation Notice are uniformly available to all national courts around the EU. This is to be welcomed, since they are no longer dependent on national procedural laws or practices. Furthermore, contrary to some authors’ view that the dialogue between the Commission and the national courts must be expressly accommodated by national procedural laws which will have to be amended ‘to make it practically possible to enforce Chapters IV and V of the new Regulation’,388 Regulation 1/2003 is directly effective and does not need any implementing measures in the national legal orders.389

384 Of course, one may still wonder why competition law is singled out for special treatment. See in that regard Bourgeois and Humpe, ‘The Commission’s Draft “New Regulation 17” ’ (2002) 23 ECLR 43, at 46. As the authors rightly point out, national courts are involved in interpreting and applying general EC law, subject to the Art 234 EC preliminary reference procedure which apparently has proven to be sufficient. Of course, the intervention mechanisms of the Commission before national proceedings are as exceptional, as indeed exceptional had been the initial centralisation of competition law enforcement. The gradual decentralisation explains historically the putting in place of these particular mechanisms of coordination between the Commission and national courts. 385 With specific regard to Art 15(3) of Reg 1/2003, the fact that the text of the Reg gives the power to submit observations not only to the Commission but also—indeed primarily—to NCAs (see 2.III.(c).(vi) below) does not affect our analysis, since Reg 1/2003 sees the latter as agents for the Commission and, in any event, as indirect Community administration when they apply Community competition law. 386 See 1.II above on the ‘private attorney-general’ role of private enforcement and on the goals of public and private antitrust enforcement. 387 Compare, with regard to the situation in the UK, Peretz, above n 82 (ch 1), at 10: ‘[i]n general, the courts regard themselves as being able to resolve issues of law (even issues with a significant public policy element) without the assistance of the executive’. 388 This question arises also with regard to the amicus curiae intervention of the Commission and NCAs before national courts. For the view that implementing measures are necessary see Wezenbeek-Geuke, ‘Should the Competition Authorities Be Authorized to Intervene in Competition-related Problems, Particularly when they Are Handled in Court? If so, what Should Form the Basis of their Powers of Intervention? National Report from the Netherlands’, LIDC Questions 2001/2002, available at www.ligue.org, at 14; Idot, ‘L’entrée en viguer du règlement no 1/2003: Les dispositions procédurales du “paquet modernisation” ’ [2004–5] Europe 4, at 5. 389 See eg Scuffi, above n 20 (ch 1) in fine, at 127; Hirsch, above n 149, at 241; Wils, above n 152, at 12. According to Lenaerts and Gerard, above n 345, at 334, while no further implementing measures are necessary because of the direct effect of Reg 1/2003, the principle of legal certainty may, however, require the Member States to adapt their internal law to ensure the effective implementation of the Community legislation. This is in line with the ECJ case law. See eg Case 230/78 SpA Eridania-Zuccherifici nazionali and SpA Società Italiana per l’Industria degli Zuccheri v Minister of Agriculture and Forestry et al [1979] ECR 2749, para 34. A similar approach has been followed by Belgian law. The Arrêté Royal of 25 Apr 2004 [2004] Moniteur belge 36537–43, which adapted Belgian competition law to Reg 1/2003, expressly states: ‘[e]ven if Regulation 1/2003 is directly applicable and has supremacy over incompatible national rules, European law obliges, nevertheless, the Member States to formally adapt, in the interest of legal certainty, all incompatible rules. This necessitates a number of adaptations in the Act on the protection of economic competition’.

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The Pillars of the New System 93 It is rather disappointing, however, that the Commission does not offer any clarity on this point. The Cooperation Notice in paragraph 9 refers to Community law determining ‘the conditions in which EC competition rules are enforced’ and stresses the following: Those Community law provisions may provide for the faculty of national courts to avail themselves of certain instruments, e.g. to ask for the Commission’s opinion on questions concerning the application of EC competition rules or they may create rules that have an obligatory impact on proceedings before them, e.g. allowing the Commission and national competition authorities to submit written observations. These Community law provisions prevail over national rules. Therefore, national courts have to set aside national rules, which, if applied, would conflict with these Community law provisions. Where such Community law provisions are directly applicable, they are a direct source of rights and duties for all those affected, and must be fully and uniformly applied in all the Member States from the date of their entry into force.

However, paragraph 17 of the Notice qualifies all this by stating that ‘Member States must adopt the appropriate procedural rules to allow both the national courts and the Commission to make full use of the possibilities [Regulation 1/2003] offers’. A final note should be added with regard to horizontal (or maybe diagonal) forms of cooperation.390 While the new Regulation and the accompanying Cooperation Notice essentially deal with ‘vertical’ cooperation as between the Commission and national courts, there are cases where a more ‘horizontal’ or ‘diagonal’ form of cooperation as between national courts of one Member State and national competition authorities of another Member State may, indeed, be necessary.391 It is true that such forms of horizontal cooperation are not totally unknown to Community law,392 but this matter was probably considered too sensitive even for a soft law instrument to refer to. While it is difficult to speak of Community law duties between Member States’ judicial and administrative organs, it can be argued that such cooperation may well be in line with the spirit of the EC Treaty as well as with numerous specific provisions which refer to ‘solidarity’ and ‘cooperation’ among Member States.393 In all likelihood, in cases necessitating this form of cooperation, a national court could seise the Commission and request the latter’s assistance in getting in touch with another Member State’s competition authority.394 390 This matter is different from the question of the binding or non-binding nature of the decision of a Member State’s court or NCA over the courts/NCAs of other Member States. This question is dealt with at 2.III.(d).(ii) below. 391 See eg the comments submitted by the American Bar Association on the Commission’s Modernisation package, available at http://ec.europa.eu/comm/competition/antitrust/legislation/procedural_rules/comments. 392 Compare Art 135 EC speaking of Community measures ‘in order to strengthen customs cooperation between Member States’ and Art 280(3) EC with reference to cooperation among Member States’ authorities aimed at protecting the financial interests of the Community against fraud. See also indicatively European Parliament and Council Dir 2000/31/EC of 8 June 2000 on Certain Legal Aspects of Information Society Services, in Particular Electronic Commerce, in the Internal Market (‘Directive on Electronic Commerce’) [2000] OJ L178/1, Art 19; European Parliament and Council Reg 2006/2004 of 27 Oct 2004 on Cooperation between National Authorities Responsible for the Enforcement of Consumer Protection Laws (the Regulation on Consumer Protection Cooperation) [2004] OJ L364/1; Council Framework Dec 2005/214/JHA of 24 Feb 2005 on the Application of the Principle of Mutual Recognition to Financial Penalties [2005] OJ L76/16. 393 See eg Art 2 EC in fine. Art 61 EC could provide for an additional legal basis for Community legislation in this area. On the principle of solidarity among Member States in the framework of the –now defunct-European Constitution see Callies, above n 121, at 1039. 394 One cannot exclude also the relevance of Council Reg 1206/2001 of 28 May 2001 on Cooperation between the Courts of the Member States in the Taking of Evidence in Civil and Commercial Matters [2001] OJ L174/1. While, on the one hand, it is clear that the Reg does not apply to administrative authorities, on the other hand, specialist tribunals or ‘competition’ or ‘market’ courts seem to be covered. Such courts may, indeed, have been designated under Art 35 of Reg 1/2003 as ‘the competition authority or authorities responsible for the application of Articles 81 and 82 of the Treaty’.

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94 Institutional Law Aspects A certain criticism that can be advanced against the Cooperation Notice is that cooperation is only limited to those courts that qualify as a ‘court or tribunal’ in the Article 234 EC sense.395 This unnecessary limitation raises concerns about the compatibility of the Notice with Article 10 EC. Indeed, it is Article 10 and not 234 EC that should guide the Commission in its cooperation with national courts. Article 15 of Regulation 1/2003 and, in a certain sense, also the Cooperation Notice, are leges speciales of the lex generalis of Article 10 EC. This means that an entity considered as a ‘court’ in the national legal order should be able to cooperate with the Commission on the basis of Article 10 EC and of the Delimitis and Automec (II) principles of cooperation. In other words, the term ‘court or tribunal’ in Article 234 EC may be narrower than what may nationally be considered a ‘court’. In our view, it would be inappropriate for the Commission to shut its doors to such a ‘court’, since the latter, being an organ of the Member State in question, should be able to seise the Commission according to Article 10 EC, notwithstanding paragraph 1 of the new Cooperation Notice.396 (iii) The Right of National Courts to Seek the Commission’s Assistance a. Reinforcing an Already Existing Procedure The ability of national courts dealing with EC antitrust issues to seek the Commission’s assistance is the first important mechanism of cooperation. This was already at the courts’ disposal under the previous system of enforcement but is now ‘codified’ and strengthened by Regulation 1/2003 and the accompanying Cooperation Notice. The European Court of Justice has long stressed on numerous occasions the duty of the Commission to assist the national courts in this respect, a duty that emanates from Article 10 EC.397 To that end, the 1993 Cooperation Notice contained detailed provisions on this mechanism, but national courts did not make considerable use of the procedures enshrined therein.398 This may have 395 See para 1 of the Cooperation Notice, above n 208. See also the critical comments of Ortiz Blanco and Jörgens, above n 301, at 93–4. 396 It is not clear whether this language was intended to refer implicitly to arbitration, though there is some evidence that this may well have been the intention. Thus, see Paulis, ‘Panel Discussion: Administrative Antitrust Authorities: Adjudicative and Investigatory Functions’ in Hawk (ed), International Antitrust Law and Policy 2002, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2003) 459, who explains that, indeed, the Commission was probably ‘frightened’ to grant full access to arbitrators for the same reasons that maybe the ECJ was (see Case 102/81 Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co KG [1982] ECR 1095; Case C–125/04 Guy Denuit and Betty Cordenier v Transorient—Mosaïque Voyages and Culture SA [2005] ECR I–923, where the ECJ shut the door of the preliminary reference mechanism to arbitrators). 397 In Case C–2/88 Criminal Proceedings against JJ Zwartveld et al [1990] ECR I–3365, paras 17–18, the ECJ stressed that the principle of sincere co-operation in Art 10 EC is not one-sided, namely it does not impose duties only on Member States but covers also Community institutions. These have a duty to cooperate with Member States’ authorities, in particular judicial authorities, which are responsible for ensuring that Community law be applied and respected in the national legal system. As far as EC competition law enforcement is concerned, in Delimitis, above n 17, para 53, the Court reiterated this duty of cooperation on the part of the Commission by stating that national courts may address the former and seek economic and legal information. 398 See Riley, ‘EC Antitrust Modernisation: The Commission Does Very Nicely—Thank you! Part Two: Between the Idea and the Reality: Decentralisation under Regulation 1’ (2003) 24 ECLR 657, at 665–6. By 1998, national courts had seised the Commission in 15 cases. Such applications for assistance came from Belgium (3 cases), France (3 cases), Germany (3 cases), the Netherlands (1 case), Spain (3 cases), the UK (1 case), and, interestingly, from one arbitral tribunal having its seat in Spain. The time the Commission took to respond varied from some months in most cases to two years in one case. See further Joris, ‘Communication relative à la coopération entre la Commission et les juridictions nationales pour l’application des articles 85 et 86: Cas d’application jusqu’à présent’ [1998–4] EC Competition Policy Newsletter 47, at 47–8. In 1999 national courts in only 5 cases used the 1993 Cooperation Notice in order to seek the assistance of the Commission (Commission XXIXth Report on Competition Policy—1999, above n 56, at 17 and 363 ff). In 2000 national courts seised the Commission in 7 cases (see Commission XXXth Report on Competition Policy—2000 (Brussels, Luxembourg 2001) 338 ff).

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The Pillars of the New System 95 been due to national procedural obstacles to such cooperation with the Commission, or to the courts’ general reluctance to take that course because of the perceived limited scope of the information the Commission could give them under the Notice;399 or, perhaps most likely, to the belief of national judges that if the national litigation had to be delayed in order to consult an ‘outside’ body, it was better to consult the Court of Justice on the question, rather than the Commission. From the side of practitioners it has also been stressed that, while the Commission in the early years seemed more prepared to intervene in order to guide national courts, recently it was hesitant to give an opinion to a national court, unless specifically solicited by the court.400 The express provision of Article 15(1) of the new Regulation resolves these problems by establishing a right for national courts to obtain legal or economic information from the Commission or request its opinion on questions relating to the application of the competition rules.401 The new Cooperation Notice develops the details of this procedure further, and also provides for deadlines by which the Commission must reply.402 The specific language of Article 15(1) which refers to courts asking the Commission to transmit to them information or its opinion has led some commentators to doubt whether this establishes a right for national courts and a duty for the Commission to cooperate.403 This line of criticism, however, seems unjustified, because Article 15(1) of Regulation 1/2003 does nothing more than specify the more general rights and duties flowing from Article 10 EC. Also taking into account the Community Courts’ precedents, there is no doubt that indeed national courts have the right actually to cooperate with the Commission and to receive the requested information and/or opinion, subject to the limitations of the Treaty, Regulation 1/2003 and the Cooperation Notice. It should finally be noted here that some national competition laws, even before modernisation, have provided for a similar procedure, whereby national courts may address questions regarding the application of national competition laws to the national competition authority or to a specific national court, such as was, until recently, the case with the Brussels Court of Appeal in Belgium.404 Since national competition authorities and courts 399 See the criticism of the Notice in this regard by Brinker, ‘Rapport allemand’ in XVIII congrès FIDE (Stockholm, 3–6 juin 1998), Vol II, Application nationale du droit européen de la concurrence (Stockholm, 1999), 20. Other authors explain the rarity of contacts between national courts and the Commission by reference to the traditional reluctance of the former to engage in a dialogue with a non-judicial administrative authority. See eg Temple Lang, above n 115, at 288. 400 See Holley, ‘EEC Competition Practice: A Thirty-year Retrospective’ in Hawk (ed), International Antitrust Law and Policy 1992, Annual Proceedings of the Fordham Corporate Law Institute (New York/Deventer, 1993) 724. 401 See also Joined Cases C–174/98 P and C–189/98 P The Netherlands and Gerard van der Wal v Commission [2000] ECR I–1. 402 See paras 21–30 of the Notice, above n 208. 403 See eg Kirchner, above n 226, at 15. 404 Arts 42 and 42bis of the old Belgian Competition Act. See on this point Mafféi, ‘Judicial Review in Competition Cases’ in OECD Committee on Competition Law and Policy, Judicial Enforcement of Competition Law (Paris, 1997) 128–9; van Bael, ‘Belgium’ in Maitland-Walker (ed), Competition Laws of Europe (London, 2003) 58. For examples of this procedure see Cour d’appel, Brussels, 28 Sept 2004, Eddy Lodiso v. La SPRLU MONDE, and Cour d’appel, Brussels, 23 June 2005, Laurent Emond v Brasserie Haacht, both available at http://ec.europa.eu/comm/competition/antitrust/national_courts/index_en.html. This possibility does not deprive the ordinary judge of his power instead to send an Art 234 EC preliminary reference to Luxembourg or to seise the Commission under Art 15(1) of Reg 1/2003, if there are also Community law questions. It is interesting to note that in 2004 the Brussels Court of Appeal forwarded 3 such references to the Commission as requests for an opinion under Art 15(1) of Reg 1/2003. The requests raised issues concerning the simultaneous application of Arts 81 and 82 EC, the scope of Art 82(c) EC, the vertical agreements block exemption Reg and the accompanying Guidelines and the de minimis Notice: see Commission XXXIVth Report on Competition Policy—2004 (Brussels/Luxembourg, 2005), para 113. This competence of the Cour d’appel has now been transferred to the

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96 Institutional Law Aspects will under the new system apply the Treaty competition rules fully, the possibility for a national court to seise the relevant national authority or court with such questions should also extend to EC competition law questions, to the extent that this has not yet been expressly introduced by national law.405 b. Procedural Questions There are two kinds of assistance a national court may request from the Commission. It may ask for documents in the Commission’s possession or for information of a procedural nature, basically concerning the status of the proceedings before the Commission. The Notice promises that the Commission will respond to such requests within a month.406 Alternatively, the court may ask the Commission for its opinion on economic, factual and legal matters.407 The Commission will aim to respond within four months.408 Belgian Cour de cassation. See further De Bauw, Tallon, Dubois, Zonnekeyn, Diamant, Braun, Fierens, Smeets, Verdonck, Poncelet and Dessard, ‘La modernisation belge après la modernisation européenne du droit de la concurrence—Le nouveau projet de loi sur la protection de la concurrence économique n’apporte pas de véritable révolution: Une opportunité à pourtant saisir?’ [2006] Electronic-Revue de la Concurrence, Mar Issue, available at www.ligue.org, at 27–9. 405 Thus, in France, national courts have been able to address questions regarding the application of EC competition law to the Conseil de la concurrence (see now Art L462-3 Code de commerce). See O Douvreleur, Droits de la défense et pratiques anticoncurrentielles en droit français (Paris, 2000) 215–21; Claudel, above n 276, at 306–7. For an example of a case where this procedure has recently been followed with regard to national competition law see Conseil de la concurrence, Opinion no 05-A-20 of 9 Nov 2005, concerning a preleminary reference by the Paris District Court in Luk Lamellen v Valeo. In Germany, before the latest amendment of the Competition Act, this was possible pursuant to ss 96 and 87 GWB in conjunction with s 148 of the Code of Civil Procedure (ZPO). Reference is now made to s 90a(3)(4) GWB. In Finland see Art 18a(4) of the Competition Act, providing that during the judicial proceedings regarding an action for damages courts may request a statement from the Finnish Competition Authority. In Spain, Art 13(3) of the old Competition Act (LDC) of 1989 provided that civil courts could request the then Tribunal de defensa de la competencia to issue an opinion on the appropriateness and amount of the damages to be paid in a case of antitrust violation. This procedure was retained in Art 25(c) of the recent Spanish Competition Act 15/2007, though now the newly created Comisión Nacional de Competencia can be seised by a court only on the question of the quantification and no longer also on the appropriateness of damages. In the Netherlands, there have also been precedents where the civil courts requested an opinion from the Dutch Competition Authority in the context of preliminary relief proceedings, which are quite informal and could allow for such a mechanism: see Pres Rechtbank Amsterdam, 23 July 1998, Wij Special Media v VNU, reported by Wezenbeek-Geuke, above n 388, at 10. In Greece, the Competition Committee may address an opinion to some Ministries or even to chambers of commerce and to commercial and industrial unions, either ex officio or at their request (see detailed rules of Art 8e and 8f of L 703/1977, prior to the 2005 amendment). However, courts are not included in this list of addressees, although it is accepted that Art 249 of the Greek Code of Civil Procedure could be relied upon to this end. It is striking that the latest amendment of the Greek Competition Act has provided for a cooperation mechanism between Greek civil courts and the European Commission (as indeed Art 15 of Reg 1/2003 requires), but has not extended this to cover the relationship with the Greek Competition Committee. 406 Para 22 of the Notice, above n 208. The one month period may be excessive in cases of pure procedural information (eg on whether there are proceedings pending before the Commission). 407 For examples of cases where the national court requested and received a written opinion from the European Commission see Cour d’appel, Brussels, 10 Nov 2005, Wallonie Expo (WEX) v La Chambre Syndicale des constructeurs d’automobile et de motocycles de Belgique and Fédération belge des industries de l’automobile et du cycle réunies (FEBIAC), available at http://ec.europa.eu/comm/competition/antitrust/national_courts/index_en.html; Swedish Supreme Court, 1 Mar 2007, Bornhols Trafikken A/S, reported in e-competitions, June 2007, Vol II, available at www.concurrences.fr. See also Cour d’appel, Brussels, 29 Sept 2006, EB v BCC, no JB069T4_1, where the Brussels Court of Appeal, in the context of private litigation involving credit card payments, asked the European Commission to provide information on the definition of the relevant market and of the companies’ market shares. The European Commission then sent a copy of the 12 Apr 2006 Interim Report on payment cards which has been drafted in the framework of the sector inquiry into retail banking. It is interesting to note that one of the parties challenged the use of this report in the national proceedings because it was drafted in English while the proceedings were held in French. The national court however did not accede to this objection. 408 Para 28 of the Notice, above n 208. Again, this may not be satisfactory especially in cases of urgency, such as in preliminary injunction proceedings.

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The Pillars of the New System 97 The Cooperation Notice appears to grant this second possibility only if other tools (the case law of the Community Courts and Commission regulations, decisions, notices and guidelines) ‘do not offer sufficient guidance’.409 This limitation, however, which echoes a similar limitation in the Notice on guidance letters,410 is not found in the Court of Justice’s case law on cooperation between national courts and the Commission. According to the principles emanating from Article 10 EC, the time and circumstances of a national court’s request for the Commission’s assistance should be entirely subject to the national court’s discretion, unless of course the court acts in an abusive manner that undermines the whole principle of cooperation. In any event, the above limitation appears to be really more a reminder to national courts to ensure the effectiveness of this mechanism by using it prudently, and not to overwhelm the Commission with requests for assistance. While a national court will be seising the Commission under Article 15(1) of Regulation 1/2003, it may decide to stay its proceedings. The staying of proceedings will take place according to national procedural rules. Some legal systems have encountered difficulties in easily accommodating this cooperation of national courts with the European Commission, because their procedural system does not formally allow for a process of contacts with a non-judicial authority.411 As a result, some Member States’ courts have never seised the Commission with requests for information, while other courts have proceeded to such cooperation in a non-formalised manner.412 This particular problem was regrettable, because it created conditions of divergence in the full and effective decentralised application of the EC competition rules by national courts. This problem should no longer exist under the new system. While it is true that the 1993 Cooperation Notice specified that the ability to stay proceedings and seise the Commission depends on the applicable national procedural rules,413 the new express provisions of Community secondary legislation supersede any national legislative or practical obstacle. This should also come as a result of Article 10 EC. Indeed, under the previous system of enforcement, it was proposed, as a way out of national procedural obstacles, to rely on pertinent domestic procedural rules read in

409

Para 27 of the Notice. Notice on Guidance Letters, above n 208, para 8, pt (a). 411 This is the case in Italy. See Tavassi, ‘Il regolamento CE N. 1/2003: Verso la devoluzione di competenze in materia di concorrenza dalla Commissione europea alle autorità garanti ed ai giudici nazionali’ (2004) 43 Dir Com 315, at 335, 361–2. In Italian law, Art 213 of the Code of Civil Procedure can be used to request factual information (see Scuffi, above n 81 (ch 1), at I-278). With regard to legal matters, commentators have doubted whether Art 295 can be used for obtaining the opinion of the Commission, because that provision refers to ‘another judge that must resolve a civil or administrative dispute, on which the decision in question depends’. The Commission not being a judge and its decision not being binding on the civil court, that provision could not be used for the stated aim (see A Lang, above n 25, at 257; Di Via, above n 114, at 92; Tavassi and Scuffi, above n 25, at 50–2). It should be stressed that those authors’ view of the non-binding nature of Commission decisions precedes the judgment of the ECJ in Masterfoods, where the Court held that national courts cannot take decisions running counter to those of the Commission. However, the problem remains that the Commission is not a judge, in order for Art 295 of the Italian Code of Civil Procedure to apply. See further Negri, above n 25 (ch 1), at 207–15. Another possibility would be provided by Art 14 of the Legge 31 maggio 1995, n 218, which allows courts to seise experts or other specialised institutions. This discussion has now, in any case, become obsolete, because Reg 1/2003 expressly itself provides for this power of national courts (see Scuffi, above n 20 (ch 1) in fine, at 127). 412 Apart from Italian courts (see Tavassi, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 18; Scuffi, above n 20 (ch 1) in fine, at 127), this also seems to be the atittude of Austrian courts (see Günther, above n 294, at 353; Eilmansberger and Thyri, above n 79 (ch 1), at 52). 413 This had also been accepted by the ECJ. See Dijkstra, below n 520, para 36: ‘the national court may, if it is appropriate and consistent with the national rules of procedure, obtain additional information from the Commission or allow the parties to seek a decision from the Commission’ (emphasis added). 410

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98 Institutional Law Aspects conjunction with Article 10 of the Treaty, which obliges national courts to ensure the effective application of Community law.414 The decision whether or not to seise the Commission under the terms of Article 15(1) remains that of the national court.415 Any opinion or assistance given by the Commission under this mechanism does not bind national courts.416 Nevertheless, the cooperation procedure has raised concerns regarding due process, since the Commission’s opinion will be transmitted without the parties being heard,417 and a court may follow it slavishly without giving the parties an effective opportunity to contradict it. As the rules stand, the Commission will not be under an obligation to communicate its submissions to the parties or to base them on the evidence before the court.418 This may contrast with the equivalent status of communications to national courts by NCAs. Thus in French law, any communication by the Conseil de la concurrence pursuant to a court request which concerns national or Community competition law questions presupposes that the parties are heard (procédure contradictoire), unless the information transmitted has its source in past proceedings before the Conseil.419 A related issue is whether the Commission may request the national court to provide it with certain information based on the dossier of the case, in order for the former to give an informed opinion. Whether or not to accede to that request of the Commission would of course be entirely up to the national court but there may be questions of due process, if the Commission were to rely upon this information to open infringement proceedings itself.420 A final reservation based on Community, rather than on national, law concerns the extent to which these opinions can interpret EC law, which only the Court of Justice has the competence to do.421 The prevailing view has been that the Commission can act as legal or economic advisor 422 and that it can perform essentially the same work as the Court in preliminary ruling proceedings, with one important limitation being that its views are not binding upon national courts. The fact that the Community Courts are already heavily overloaded speaks in favour of allowing the Commission to fill a certain gap. 414 See, in this context, Synodinos, ‘The Application of Community Competition Rules by National Courts’ (1995) 26 Dike 422 (in Greek), at 432–3, according to whom the legal basis for the Greek civil courts’ cooperation with the Commission is Arts 245(1), 249, and 368 ff of the Code of Civil Procedure in conjunction with Art 10 EC. 415 Compare, on the other hand, the power of the Commission to submit ex officio written observation before national proceedings even without the express permission of the court in question. 416 See paras 19 and 29 of the Cooperation Notice, above n 208. 417 Ibid, paras 19 and 30. 418 See in this respect the critical comments by Gilliams, ‘Modernisation: From Policy to Practice’ (2003) 28 ELRev 451, at 462. See also Lucas de Leyssac and Parleani, above n 61, at 59. Compare also the critical comments made about the previous Cooperation Notice of 1993, on this particular issue, by Bourgeois, above n 61 (ch 1), at 493. 419 Art L462-3 Code de commerce. See recently Conseil de la concurrence, Opinion no 05-A-20 of 9 Nov 2005 in Luc Lamellen v Valeo, a case then pending before the Tribunal de grande instance, Paris. In that case, the French authority heard the parties to the civil litigation, engaged in discovery and requested information from third parties. On this mechanism see generally Douvreleur, above n 405, at 217–21. Compare also Art 70 of the Swedish Competition Act, which provides that parties to civil proceedings must be given the opportunity to comment on statements submitted by the Commission or the Swedish Competition Authority pursuant to Art 15 of Reg 1/2003. 420 See, however, Case C–60/92 Otto BV v Postbank NV [1993] ECR I–5683, para 20, which seems to exclude such risk. 421 See eg reservations by Wahl, ‘Rapport suédois’ in XVIII congrès FIDE (Stockholm, 3–6 juin 1998), Vol. II, Application nationale du droit européen de la concurrence (Stockholm, 1999) 252. On the ECJ interpretation ‘monopoly’ see Schroeder, ‘Die Auslegung des EU-Rechts’ (2004) 44 JuS 180, at 181. 422 See generally Schurmans and Andrau, ‘La Commission comme amicus curiae: La ccopération entre la Commission européenne et les juridictions nationales après l’entrée en vigueur du Règlement (CE) no 1/2003 du Conseil relatif à la mise en œuvre des règles de concurrence prévues aux articles 81 et 82 du Traité CE’ [2006] Revue de la Concurrence Belge 236, at 242–8.

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The Pillars of the New System 99 The first experiences of this mechanism are rather positive. As far as the input is concerned, it seems that between May 2004 and the end of that year the Commission had received nine requests by national courts for an opinion;423 in 2005, the Commission received four requests for information and four requests for an opinion;424 and in 2006, three requests for information and two requests for an opinion.425 With regard to the output, in 2004 the Commission issued six opinions;426 in 2005 it provided information in reply to three requests from national judges and issued six opinions (three in reply to requests from Belgian courts, one to a Lithuanian court and two to Spanish courts);427 and in 2006 the Commission issued one opinion to a Dutch court and another to a Belgian court; a request from a Swedish court was pending at the end of the year.428 In order to improve the consistent application of EC competition law and to avoid conflicting opinions from the Commission and national competition authorities, it has been agreed that, as soon as a national court turns to the Commission or to a national authority for an opinion on the application of EC competition law, the Commission and the competition authority of that Member State will inform each other.429 Regulation 1/2003 has not formally imposed such a duty of mutual information, but it is something that has been decided informally within the Network. Furthermore, in order to increase transparency, the Commission has decided to make publicly available opinions which it has given on the application of the Community competition rules at the request of a national court pursuant to Article 15(1) of Regulation 1/2003. Opinions will be posted on the DG COMP website once the judgment in the case in which the opinion was requested has been notified to the Commission pursuant to Article 15(2) of Regulation 1/2003. This is, however, no guarantee that the opinion will be made public because some Member States systematically fail to discharge their duty to communicate relevant national judgments to the Commission under Article 15(2) of Regulation 1/2003, and there may also be national procedural impediments that do not allow such publication.430 (iv) Information Exchange between the Commission and National Courts The cooperation procedure between the Commission and national courts also raises some important questions regarding the kind of information which the Commission can transmit to national courts. One issue is the protection of professional and business secrets. The Cooperation Notice attempts to reconcile the various conflicting interests by leaving it up to national courts whether to request information covered by professional secrecy. 423 See ibid, at 238. See also Commission XXXIVth Report on Competition Policy—2004, above n 404, paras 112–113. In addition to the above, it appears that the Commission had also received a request for an opinion by a Spanish court already before 1 May 2004. 424 See Schurmans and Andrau, above n 422, at 238. 425 Commission Staff Working Document, Annex to the Report on Competition Policy 2006, SEC(2007)860, para 326. The number of requests for information is given by Schurmans and Andrau, above n 422, at 238, and refers to the period up to mid-Nov 2006. 426 XXXIVth Report on Competition Policy—2004, above n 423, para 112. 427 XXXVth Report on Competition Policy—2005, above n 56 (ch 1), paras 219, 225–236. 428 Commission XXXVIth Report on Competition Policy—2006 (Brussels/Luxembourg, 2007), para 70; Annex to the 2006 Report, above n 425, paras 326–330. The then pending opinion must have been produced and sent to the Swedish court in the first months of 2007; reference is made to the Bornhols Trafikken judgment of the Swedish Supreme Court, cited at n 407 above. 429 XXXVth Report on Competition Policy—2005, above n 56 (ch 1), para 220. 430 Ibid, para 221.

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100 Institutional Law Aspects However, it provides for some safeguards: in particular, before transmitting such information, the Commission must ask the national court whether it can offer a guarantee that it will protect confidential information and business secrets. The Commission has opted for this specific kind of ‘dialogue’ with the national courts based on a combined reading of Articles 10 and 287 EC.431 This is in line with the Postbank ruling of the Court of First Instance.432 Furthermore, the Commission may refuse to transmit any kind of information to national courts, in order to ‘safeguard the interests of the Community or to avoid any interference with its functioning and independence, in particular by jeopardizing the accomplishment of the tasks entrusted to it’.433 This is also intended to cover the correspondence between the Commission and national competition authorities in the framework of the European Competition Network. It should be noted here that in some Member States it is not possible for private parties to use in civil litigation evidence obtained through their participation in public enforcement proceedings. Thus, in France, a complainant cannot in a civil claim use documents obtained through his participation in proceedings before the Conseil de la concurrence,434 since such documents are covered by the principle of secrecy of the investigation. Of course, the inclusion of such evidence in the final decision of the public authority can facilitate the plaintiffs. A problem arises with regard to corporate statements made in the context of a application for leniency under the Leniency Notice. Whether litigants may request indirectly,435 ie through the national court, the disclosure of such statements is doubtful.436 The Commission in its Cooperation Notice declares that it will transmit such information to national courts only with the leniency applicant’s consent, as otherwise the accomplishment of its tasks would be jeopardised.437 In particular, such disclosure would prejudice the 431 See paras 23–25 of the Cooperation Notice. See also Temple Lang, ‘Developments, Issues, and New Remedies—The Duties of National Authorities and Courts under Article 10 of the EC Treaty’ (2004) 27 Ford Int LJ 1904, at 1922, who reads into Art 10 EC a more general duty of national courts to enjoin litigants from using documents obtained from the Commission in the context of the EC administrative proceedings, when the Commission has transmitted such documents on the express condition that these cannot be used in other contexts. 432 Case T–353/94 R Postbank NV v Commission [1996] ECR II–921, para 69: ‘[o]nce such documents from the administrative procedure are produced in national legal proceedings, there is a presumption that the national courts will guarantee the protection of confidential information, in particular business secrets, since, in order to ensure the full effectiveness of the provisions of Community law in accordance with the principle of cooperation laid down in Article [10] of the Treaty, these authorities are required to uphold the rights which those provisions confer on individuals’. See further Hiljemark, above n 59, at 105 ff; PM Roth (ed), Bellamy & Child European Community Law of Competition (London, 2001), at 773–4. 433 See para 26 of the Cooperation Notice, above n 208. 434 Art L463-6 of the Code de commerce. 435 The new Cooperation Notice no longer provides for the ability of litigants directly to seise the Commission. On this point and on the alternative possibilities offered by Reg 1049/2001 see 2.III.(c).(iii).b below. 436 See Temple Lang, ‘The Implications of the Commission’s Leniency Policy for National Competition Authorities’ (2003) 28 ELRev 430, at 432–3, who leaves open this possibility. 437 Para 26 of the Cooperation Notice, above n 208. Compare para 40 of the new Leniency Notice, above n 93 (ch 1): ‘[t]he Commission considers that normally public disclosure of documents and written or recorded statements received in the context of this notice would undermine certain public or private interests, for example the protection of the purpose of inspections and investigations, within the meaning of Article 4 of Regulation (EC) No 1049/2001, even after the decision has been taken’. See also para 35 of the recent Draft Commission Notice on the Conduct of Settlement Proceedings in View of the Adoption of Decisions Pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in Cartel Cases, [2007] OJ C255/51, which aims to encourage settlements of cartel cases where the parties not only acknowledge their involvement in the cartel and their liability for it but also agree to a faster and simplified procedure: ‘[t]he Commission considers that normally public disclosure of documents and written or recorded statements received in the context of this Notice would undermine certain public

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The Pillars of the New System 101 effective enforcement of Community competition law by the Commission.438 In principle, public enforcement by the Commission and its intention to facilitate detection through immunity from fines should not function to the detriment of private enforcement and the compensation of cartel victims; that is why the Leniency Notice cannot interfere with such civil claims, which, in any case, are based on the direct effect of Treaty provisions.439 However, there are less onerous ways for these objectives to be pursued than by disclosing documents companies have submitted to the Commission under the Leniency Notice, which would frustrate the Notice’s aim of making the detection of hard core restrictions of competition easier, since fewer companies would be willing to come under it. Private litigants will therefore basically440 have to rely solely on discovery in the framework of the civil proceedings, content themselves with non-leniency related evidence held by the Commission, or, finally, await and rely on the final Commission infringement decision. Of course, protection is accorded only to the statements specifically prepared by the leniency applicant441 for the Commission in the context of the application for leniency and not to pre-existing documents that the leniency applicant is in any case required to submit to the Commission.442 It is noteworthy that there have recently been cases where private litigants tried to seek discovery in US courts of EC leniency ‘corporate statements’, ie of statements submitted to the Commission in the context of a leniency application. The problem was basically that since previously leniency applicants had to produce written corporate statements for the Commission, such documents fell under Rule 26 of the US Federal Rules of Civil Procedure and were thus fully discoverable.443 The Commission has viewed this as a serious risk for the effectiveness of its leniency programme and has tried to assuage the fears of leniency applicants by giving them the possibility to make oral statements.444 The Commission’s or private interests, for example the protection of the purpose of inspections and investigations, within the meaning of Article 4 of Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents, even after the decision has been taken’. 438 See further Blake and Schnichels, ‘Leniency Following Modernisation: Safeguarding Europe’s Leniency Programmes’ [2004–2] EC Competition Policy Newsletter 7, at 12; D Voillemont, Gérer la clémence (Paris/Brussels, 2005) 46. 439 Leniency Notice, para 39 in fine: ‘[t]he fact that immunity or reduction in respect of fines is granted cannot protect an undertaking from the civil law consequences of its participation in an infringement of Article 81 EC’. See further 1.III.(c).(ii) above. 440 On the Reg 1049/2001 possibilities see 2.III.(c).(iii).b below. 441 The protection covers not just successful leniency applicants but also unsuccessful ones. See Suurnäkki and Tierno Centella, ‘Commission Adopts Revised Leniency Notice to Reward Companies that Report Hard-core Cartels’ [2007–1] EC Competition Policy Newsletter 7, at 14. 442 See van Barlingen, ‘The European Commission’s 2002 Leniency Notice after One Year of Operation’ [2003–2] EC Competition Policy Newsletter 16, at 20. 443 Rule 26(a)(1)(B) provides: ‘[a] party must, without awaiting a discovery request, provide to other parties . . . a copy of, or a description by category and location of, all documents, data compilations, and tangible things that are in the possession, custody, or control of the party and that the disclosing party may use to support its claims or defenses, unless solely for impeachment’ (emphasis added). 444 Initially, foreign plaintiffs in US courts succeeded twice in securing access to statements made by EU leniency applicants, and failed once. In all these cases the Commission had filed a brief in opposition as amicus curiae. Discovery was allowed in two cases in the context of the Vitamins cartel: In Re Vitamins Antitrust Litigation, Misc No 99-197 (DDC 23 Jan 2002 and 30 Sept 2002). It was not allowed in one case: In Re Methionine Antitrust Litigation, No C-99-3491-CRB (NDCal 29 July 2002). It appears, however, that one of the parties in that case settled, while offering the plaintiffs in exchange the CD-ROM provided to it by the Commission in the EC administrative proceedings, which contained essentially the whole Commission file. On these questions see generally Burnside and Botteman, ‘Networking amongst Competition Authorities’ (2004) 10 Int TLR 1, at 9; Nordlander, ‘Discovering Discovery—US Discovery of EC Leniency Statements’ (2004) 25 ECLR 646, at 650 ff; Levy and

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102 Institutional Law Aspects current practice is that oral statements made by leniency applicants are routinely recorded by the Commission, transcribed and signed by leniency applicants.445 Such statements are intended to be short and exclude business secrets and confidential information, to avoid the need for editing. The Commission has formalised this practice in its new Leniency Notice.446 This new practice is also followed in the context of certain national leniency programmes.447 (v) The Duty of Member States to Transmit Copies of Judgments to the Commission Regulation 1/2003 also provides for a duty of the Member States to forward copies of judgments of their national courts to the Commission.448 It is noteworthy that, while the Commission’s draft Regulation had proposed to impose directly upon courts the duty to send the Commission copies of their judgments applying Articles 81 and 82 EC, the final text of Article 15(2) of Regulation 1/2003 departs from the Commission proposal and does not place national courts, as such, under this administrative duty. Instead, it is Member States that must forward the copies of such judgments of national courts to the Commission.449 This choice was very prudent in our view, because courts are not accusO’Donoghue, ‘The EU Leniency Programme Comes of Age’, (2004) 27 World Competition 75, at 86 ff; Amory and Marchini Càmia, ‘La demande de “clémence” auprès de la Commission européenne: Effets collatéraux dans d’autres juridictions’, Sept 2005, Vol II, e-Competitions, available at www.concurrences.fr, at 2; Guersent, ‘Table ronde: Les conséquences civiles et pénales dans un contexte d’internationalisation des programmes de clémence’ in Clémence et transaction en matière de concurrence, Premières experiences et interrogations de la pratique, 125 GP no 287–288 7 (2005), at 49–50. The important judgment of the US Supreme Court in Intel Corp v Advanced Micro Devices, Inc, 542 US 241 (2004), refers to the rather different situation where a complainant in Commission administrative proceedings requested the US courts to order discovery against the alleged competition law infringer. The complainant’s aim was to use that evidence in the Commission proceedings, though the Commission itself did not wish to have access to it and, indeed, resisted the complainant’s US discovery action by filing two amicus curiae briefs urging the US courts to reject it. For a different outcome see In Re Microsoft Corp, MBD No 06-10061-MLW (2006), where the Massachusetts District Court rejected Microsoft’s request to force software rival Novell Inc. to hand over EU correspondence that Microsoft claimed it needed to defend itself against antitrust charges in Europe. 445 On the oral leniency procedure see van Barlingen, above n 442, at 19–20; van Barlingen and Barennes, ‘The European Commission’s 2002 Leniency Notice in Practice’ [2005–3] EC Competition Policy Newsletter 6, at 8–10. 446 The Commission had already proposed to formalise this practice in the context of the earlier 2002 Leniency Notice. To that end it circulated some draft amendments in early 2006 (Draft Amendment of the 2002 Commission Notice on Immunity from Fines and Reduction of Fines in Cartel Cases, para 7). The public consultation period expired on 20 Mar 2006 but the Commission decided to wait and adopt these changes in the context of a wholly-reformed Leniency Notice. See now para 6 of the 2006 Leniency Notice, above n 93 (ch 1): ‘[i]n addition to submitting pre-existing documents, undertakings may provide the Commission with voluntary presentations of their knowledge of a cartel and their role therein prepared specially to be submitted under this leniency programme. These initiatives have proved to be useful for the effective investigation and termination of cartel infringements, and they should not be discouraged by discovery orders issued in civil litigation. Potential leniency applicants might be dissuaded from cooperating with the Commission under this Notice if this could impair their position in civil proceedings, as compared to companies who do not cooperate. Such undesirable effect would significantly harm the public interest in ensuring effective public enforcement of Article 81 EC in cartel cases and thus its subsequent or parallel effective private enforcement.’ It is interesting to compare this rather toned-down text with the more robust text used in para 7 of the the Draft Amendment of the 2002 Leniency Notice that had been circulated in early 2006. Compare also option 28 of the Green Paper on damages actions, above n 55 (ch 1). 447 This is the case in France. See further Lasserre, ‘Propos introductifs’ in Clémence et transaction en matière de concurrence, Premières experiences et interrogations de la pratique, 125 GP no 287–288, 7 (2005), at 14. 448 In Oct 2006, the Commission had received 136 judgments from 11 Member States pursuant to Art 15(2) of Reg 1/2003. See further Schurmans and Andrau, above n 422, at 238. 449 Transmission will take place after the written text of the judgment has been duly notified to the parties to the proceedings. See Tavassi, above n 411, at 362.

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The Pillars of the New System 103 tomed to such ‘clerical’ duties, which are usually carried out by their registries.450 Besides, courts might have felt under the ‘direct control’ of the Commission, and this could backfire in that they might seek to avoid applying EC competition law at all costs in order to escape exposure to the Commission’s scrutiny.451 In addition, the Community law duty in question becomes far more concrete, and, thus, more easily justiciable, since it would have been more sensitive and cumbersome to attribute the failure of national courts to apply this provision to the Member State on the basis of Article 10 EC.452 It should also be emphasised that the Commission initially proposed in the White Paper the more far-reaching obligation to inform the Commission of all proceedings where Articles 81 and 82 EC are invoked before national courts.453 This was, however, criticised as disproportionately onerous and technically difficult to comply with.454 While it might have been more reassuring to extend this obligation to all cases where the relevant competition provisions were invoked, irrespective of whether or not they were actually applied in the judgment,455 such a solution would further increase the bureaucracy involved. In any case, it is fair to say that the application of a legal provision as such has a rather wide sense and it would still be at the Member State’s discretion to identify those cases where the Treaty competition provisions would be applied by its courts. This proposal was already abandoned in the September 2000 draft Regulation and, according to the final text of Regulation 1/2003, Member States only have to forward copies of judgments to the Commission, in particular judgments where Articles 81 and 82 EC are applied and not just invoked.456 This essentially means that the Commission will have no other way of learning about such proceedings before judgment is reached, and must rely on being informed by litigants.457 A further remark to be made here is that national competition authorities are not directly concerned by Article 15(2) of the Regulation, although

450 See Ehlermann, above n 2, at 580, who had expressed reservations as to the initial text of the Reg proposal that imposed the duty of information directly upon the courts. See also the critical comments by Holmes, above n 354, at 71. Under Greek national law (Art 24(3) of L 703/1977) the registries of courts that have applied national competition law must forward copies of these judgments to the Greek Competition Committee. However, it is telling that this provision has on the whole been ignored by court registrars, notwithstanding their disciplinary liability. 451 This is a fear, however, that is still expressed by some commentators with reference to the new text of Art 15(2). See eg Terhechte, ‘Die Rolle des Wettbewerbsrechts in der Europäischen Verfassung’ in Hatje and Terhechte (eds), Das Binnenmarktziel in der Europäischen Verfassung (Baden-Baden, 2004) 124. 452 For examples of such attribution see Köbler, above n 4, para 59; Case C–129/00 Commission v Italy [2003] ECR I–14637, paras 29–33. 453 Para 107 of the White Paper, above n 82. 454 See eg Cooke, above n 366, at 555–6. 455 See Martinez Lage, above n 202, at 9, n 24. 456 It cannot be ruled out that a particular national law may impose more substantial duties on its national courts in that respect. Such is the case in German law, where by virtue of s 90(1) GWB German courts entertaining civil actions have to inform the Bundeskartellamt, though not the Commission, of all legal actions arising from Arts 81 and 82 EC. 457 See Paulis and Gauer, above n 77 (ch 1), at 73; Frignani, above n 135, at 468. Martinez Lage, above n 202, at 9, believes that this is sufficient. This is now the formalised practice in England where any party whose statement of case raises or deals with an issue relating to the application of Arts 81 and 82 EC or the equivalent national provisions must serve a copy of the statement of case on the OFT at the same time as it is served on the other parties to the claim. See CPR Practice Direction—Competition Law—Claims Relating to the Application of Articles 81 and 82 of the EC Treaty and Chapters I and II of Part I of the Competition Act 1998, para 3. The same duty of notification is imposed on appellants. See CPR Practice Direction 52—Appeals, para 21.10A. See M Gray, M Lester, C Darbon, G Facenna, C Brown and E Holmes, EU Competition Law: Procedures and Remedies (Richmond, 2006) 251.

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104 Institutional Law Aspects there had been proposals for the Commission to use them as its local agents for that purpose.458 One last question is whether the Commission must be furnished only with copies of final judgments which bring the litigation to an end, or whether other judgments which may be final in their nature but do not conclude the proceedings as a whole must also be forwarded. They may include final partial or interim judgments such as a judgment granting a preliminary injunction. While the letter of Article 15(2) of Regulation 1/2003 may seem to refer only to final judgments, a more attentive reading may lead to the conclusion that preliminary injunction judgments should also be covered, as they too ‘decide on the application of Article 81 or Article 82 of the Treaty’.459 Such a reading would in any event correspond better to the provision’s objective of ensuring more consistent application of the Treaty competition rules by national courts, through the possibility of a Commission intervention under Article 15(3) of the Regulation.460 The effet utile of this provision would be weakened if the obligation to forward copies of judgments did not cover preliminary injunctions too, since in many Member States such interim measures are de facto final, as the parties usually settle afterwards and the issue never goes to a full hearing.461 (vi) The amicus curiae Mechanism A further new mechanism of cooperation that Article 15(3) of the new Regulation introduces for the first time462 is the power of the Commission and of national competition authorities to file amicus curiae briefs in national proceedings.463 This is intended to be used more as a preventive mechanism in order to draw the courts’ attention to specific competition law problems.464 Again, there have been similar mechanisms in some Member States, even before EC competition law modernisation, that have provided for the national

458 See Cooke, above n 366, at 556. The non-involvement of NCAs in this mechanism may be explained by the fact that the final text of Art 15(2) of Reg 1/2003 imposes on Member States, not the courts, the duty to transmit judgments to the Commission. It would certainly have been inappropriate for a Community text to provide for the allocation of such duties inside national administrations. 459 The text of Art 15(2) of Reg 1/2003 refers to ‘any written judgment of national courts deciding on the application of Article 81 or Article 82 of the Treaty’ (emphasis added). 460 See 2.III.(c).(vi) below as to that possibility. 461 This is the case eg in Greece and in Ireland. For Ireland see Maher, ‘Ireland’ in Behrens (ed), EEC Competition Rules in National Courts, Vol. II, Benelux and Ireland (Baden-Baden, 1994) 293. 462 For a rare case where the European Commission has intervened in national proceedings long before Reg 1/2003 came into effect, see Hasselblad v Orbison [1985] QB 475; [1984] 3 CMLR 679 (CA). This case is rather atypical, in that it concerned a libel action brought against a person who had complained to the Commission. The Commission intervened, not to make submissions of substantive competition law but in order to stress that the effectiveness of competition law enforcement would be impaired if potential complainants ran the risk of being sued for libel in national courts. 463 See generally A Zuber, Die EG-Kommission als amicus curiae, Die Zusammenarbeit der Kommission und der Zivilgerichte der Mitgliedstaaten bei der Anwendung der Wettbewerbsregeln des EG-Vertrages (Cologne/Berlin/ Bonn/Munich, 2001). It should be stressed that the continental European legal tradition is not very familiar with amicus curiae briefs, although recently some openings seem hesitantly to have emerged with regard to participation in civil proceedings by certain independent administrative authorities. See further Kerameus, ‘Procedural Tools in the Different European States Concerning the Uniform Interpretation of Law by the Supreme Courts: A Comparative Presentation’ (2000) 53 RHDI 613, at 619. 464 The Commission made use of the amicus curiae mechanism for the first time in 2006, by presenting observations to the Cour d’appel, Paris concerning the interpretation of Reg 1400/2002. See XXXVIth Report on Competition Policy—2006, above n 428, para 72.

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The Pillars of the New System 105 competition authority’s ex officio power to give an opinion before another regulatory authority or a court.465 Although the Commission had acknowledged that such submissions would be made in accordance with the procedural rules in force in the Member State in question and that ‘the proposal does not purport to harmonise national procedural law’,466 there had been a certain degree of criticism of this ‘intrusion’ of the Commission into the national judicial systems. One serious doubt was whether a Council Regulation without a specific legal basis and with no national implementing measures could impose obligations on national courts and give the power to the Commission to intervene in national proceedings on its own initiative.467 Another doubt was whether the right of national competition authorities to intervene in such national proceedings could be a question of Community or national law.468 These reservations apart, overall this exceptional mechanism could serve well the aim of the Commission to help national courts come to grips with difficult competition issues that require a high degree of consistent application throughout the European Union.469 In that sense, such amicus curiae briefs complement the preliminary reference procedure of Article 234 EC,470 although, naturally, the opinion of the Commission, unlike the judgment of the 465 This is the case in France and Germany. In France the competent authority to intervene has been the Minister of Economy through the Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF), who, pursuant to Art L470-5 of the Code de commerce, does not become party to the proceedings, but rather fulfills a mission de police juridique in ensuring the consistent application of national competition law (see Boulanger, ‘Frankreich’ in Behrens (ed), EEC Competition Rules in National Courts, Vol. IV, France (Baden-Baden, 1997) 192; Douvreleur, above n 405, at 221–30; CA Paris, 16 Jan 1989, SA Technisom France v SARL Serap Ameublement et al [1990] D, no 106; Cass com, 7 July 2004, Ministre del’économie et Syndicat des détaillants spécialistes du disque et al v Société Carrefour France [2004–1] Concurrences 68). This provision of the Code de commerce, read in conjunction with Art 470-6, extends also to Arts 81 and 82 EC (see Idot, above n 79 (ch 1), at 161). Under Art L470-6, also the Conseil de la concurrence has the power to intervene as amicus curiae in a case pending before the French civil courts, when an EC competition law question arises (Art L470-6 here does nothing more than refer to Art 15 of Reg 1/2003). In Germany the Bundeskartellamt has had the power to appoint a representative authorised to submit written statements, to attend hearings and give evidence, and even to address questions to the parties, witnesses and experts (s 90(2) GWB). See further Schroeder, Deselaers, Federle, Seeliger and Hartog, ‘Germany’ in Maitland-Walker (ed), Competition Laws of Europe (London, 2003) at 193. Of course, most national competition laws that have been amended following the modernisation, now have similar provisions on the possibility of amicus curiae interventions by their NCAs. 466 See Explanatory Memorandum preceding the Regulation proposal, above n 202, at 12. 467 See Bechtold, above n 202, at 2430. 468 See Gröning, above n 202, at 89. 469 See the Article-by-article Explanatory Memorandum under Art 15 of the Sept 2000 Reg proposal, above n 202, which refers to questions ‘of considerable importance for the consistent application of Community competition law’. See also Kjølbye, above n 22, at 179. 470 See ibid, at 179, n 16; Calvo Caravaca and Canedo Arrillaga, above n 140, at 39. While Art 234 EC remains the undisputable co-operation channel between the national and the Community judicial levels, it has some limitations in competition law, since the preliminary reference procedure is only intended to interpret the law and not to deal with the facts of a case, which are left to the national judge. On Art 234 EC’s inadequacies see Steindorff, above n 38, at 128, who pointed out that in a—at that point still remote—decentralised application of Art 81(3) EC, the preliminary reference procedure would not help much, since Art 234 EC rulings are ‘more or less abstract’, thus contributing little to antitrust decisions. See also Montag, ‘The System of Legal Exception’ (2001) 37 CDE 145, 158; Ehlermann and Atanasiu, above n 150, at 76; Hirsch, above n 149, at 250. Some authors have suggested the reconsideration of the Art 234 EC split between interpretation and application of the law (see eg Holmes, above n 354, at 64–5; Deringer, ‘Reform der Durchführungsverordnung zu den Art. 81 und 82 des EG-Vertrages’ (2001) 36 EuR 306, at 318 ff; Ehlermann and Atanasiu, above n 150, at 77–8). Contra Lenaerts and Gerard, above n 345, at 339 ff, who stress that in reality the rulings of the ECJ are usually preceded by a very fact-intensive reasoning. In any case, these cooperation mechanisms between the Commission and national courts should be welcomed and seen complementarily and not antagonistically with the Art 234 EC procedure. See Paulis, above n 73 (ch 1), at 406, who explains these mechanisms, particularly the one of Art 15(1) of Reg 1/2003, by reference to the ECJ’s limitations under Art 234 EC and to the fact-based nature of competition law.

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106 Institutional Law Aspects Court of Justice, cannot bind the national court. Exceptionally, the Article 15(3) mechanism and Article 234 EC might operate in practice in a conflictual manner. Thus a national court faced with a Commission amicus curiae brief with which it disagrees might be tempted to seek support from the Court of Justice by making a preliminary reference.471 Needless to say, in such a case the only binding and authoritative view on the matter would be the one coming from Luxembourg. The Commission and national competition authorities are intended not to be parties to the proceedings, but rather to act as an objective, neutral and independent economic expert.472 This mechanism has raised some concerns of due process mainly from the practitioners’ side.473 The fear is that the Commission’s statements might be followed in a copycat manner by the judge, without the parties having the opportunity effectively to contradict them. In addition, while Article 15(3) of Regulation 1/2003 restricts this intervention of the Commission only to cases where ‘the coherent application of Article 81 or 82 of the Treaty so requires’ and the Cooperation Notice states that the Commission will be guided in its submissions only by its duty to defend the public interest and not any private interests involved, it is not always easy for the Commission not to take sides. The water-tight distinction between the public and the private interest in competition cases, a distinction of which the Commission is so often fond, is totally fictitious in our view. Therefore, notwithstanding the fact that the Commission in its Cooperation Notice is so eager to stress its detachment from the actual litigation,474 it is difficult to see how one or the other of the parties may not be entitled to cross-examination, especially when the national court gives them this opportunity.475 Indeed, the Court of Justice stressed in Van der Wal that when the Commission in the context of its cooperation with national courts supplies legal or economic analyses drafted on the basis of data supplied by the national court, it ‘acts as a legal or economic adviser to the national court and documents drafted in the exercise of that function must be subject to national procedural rules in the same way 471 See Cederschiöld, ‘Efficient Protection of Competition in an Enlarged Community through Full Association of National Competition Authorities and National Courts’ in Conference on the Reform of European Competition Law in Freiburg i. B. (9 and 10 November 2000), available at http://ec.europa.eu/comm/competition/conferences/2000/freiburg, at 3–4. 472 See para 19 of the Cooperation Notice, above n 208. See also Parlasca, ‘Should the Competition Authorities Be Authorized to Intervene in Competition Related Problems, Particularly when they Are Handled in Court? If so, what Should Form the Basis of their Powers of Intervention? National Report from Germany’, LIDC Questions 2001/2002, available at www.ligue.org, at 5; Idot, above n 79 (ch 1), at 184; Cooke, above n 152, at 658–9; Schurmans and Andrau, above n 422, at 245–6. On the principles of objectivity and neutrality in the Commission’s cooperation with national courts see Schröter, above n 122, at 47. 473 See eg Bellis, ‘Les défis de la modernisation du droit européen de la concurrence’ (2003) 11 JdT (Eur) 73, at 74; Momège and Idot, ‘Application of Articles 81 & 82 EC by the French Ordinary Courts: A Procedural Perspective’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 252. For a more general critical assessment of this mechanism see Cooke, above n 366, at 557–8, addressing the question of the role of protagonist, which, according to the author, the Commission will play de facto in national proceedings and which may seem to be in conflict on occasions with the principle of party initiative that applies to civil proceedings. 474 See eg paras 19 and 29 of the Cooperation Notice, above n 208. 475 See in this sense Cooke, above n 42, at 17; Favre, above n 15 (ch 1), at 82; Lenaerts and Gerard, above n 345, at 333. This is a very sensitive issue that eventually may have to be resolved by the ECJ through a preliminary reference by a national court, before which the Commission has exercised its power of amicus curiae intervention. The Commission may indeed begin to acknowledge this sensitivity; see in this regard Director General Lowe, above n 345, at 6, acknowledging that ‘it is of course up to the courts to involve the parties—as appropriate in the respective procedural framework’. See also Paulis, ‘Le nouveau droit communautaire de la concurrence’ in Mourre (ed), Le nouveau droit communautaire de la concurrence, Les droits de la defense face aux pouvoirs de la Commission européenne (Paris, 2004), who accepts that a Commission brief would be subjected to the débat contradictoire before the court but this débat would not be transferred to Brussels before the Commission drafts its observations.

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The Pillars of the New System 107 as any other expert report’.476 Besides, the latest post-modernisation amendments of some national competition laws are more liberal in this respect and provide that the parties can at least make statements in response to the Commission’s or the national competition authority’s observations,477 or that the observations of the national competition authority (though not those of the Commission) will be subject to the parties being heard.478 It should be stressed that the conditions for the submission of observations by the Commission and by national competition authorities are different. The latter are the preferred amici curiae and may submit their observations on any issue ‘relating to the application of Article 81 or Article 82 of the Treaty’. The former, on the other hand, can submit such observations only exceptionally, if ‘the coherent application of Article 81 or Article 82 of the Treaty so requires’.479 National competition authorities had not been initially spelled out as possible amici curiae in the 1999 White Paper. The proposal to use them as agents of the Commission in this context was first aired in the 2000 draft Regulation, as a result of the reservations that had been expressed.480 Those reservations also explain the re-dimensioning of that mechanism by the new Regulation, which refers first to national competition authorities and only secondly to the Commission.481 Finally, the Commission and national authorities will have the power to submit written observations on their own initiative, while the submission of oral observations will depend on the national court’s permission.482 In order for the Commission and national competition authorities to be able to make use of the amicus curiae mechanism, Article 15(3)(b) of Regulation 1/2003 imposes a duty upon national courts to transmit to the former any documents necessary for the assessment of the case. This constitutes the only direct duty placed upon the courts in the cooperation context of Article 15 of the new Regulation, and it is one of ‘administrative’ or ‘clerical’ nature, discharged via the courts’ registries.483 It should be noted that there are no sanctions involved (eg procedural irregularity of the judgment in question that could lead to its cassation under national procedural law) if national courts fail to adhere to that obligation. Only in wholly exceptional circumstances, where the courts of a Member State refused on a number of occasions to cooperate with the Commission under these provisions, could the Commission initiate a Treaty infringement action under Article 226 EC against that 476

Van der Wal, above n 401, para 25. Art 70 of the Swedish Competition Act. 478 See also Canivet, ‘L’organisation des juridictions nationales pour l’application du droit communautaire de la concurrence’ [2004–1] Concurrences 21, at 27. 479 Art 15(3)(a) of Reg 1/2003. According to Pace, above n 130, at 175, the interest of the NCAs differs from that of the Commission. The former would aim at reducing the risk of the Member State being answerable for its judicial organs’ failure to respect Community law, while the latter aim at safeguarding the coherent application of Community law. Such a view, however, is not in perfect harmony with the supranational nature of the Community institutional and legal system, and neglects the fact that NCAs are essentially acting as administration communautaire indirecte. 480 See eg Cooke, ‘Panel Three Discussion: Courts and Judges’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 482; Ponet, ‘L’impact du Règlement de modernisation sur le Conseil belge de la concurrence: Quelques considérations’ in Nihoul (ed), La décentralisation dans l’application du droit de la concurrence, Un rôle accru pour le practicien? (Brussels/Louvain-la Neuve, 2004) 151. 481 See further Cooke, above n 42, at 16–17. 482 Of course, national procedural law may grant NCAs wider powers in this context. Reg 1/2003 does not prohibit or exclude this. See on this point Kovar, above n 304, at 484. Where, under national law, the court proceedings are only oral, then the effectiveness of Art 15(3) of Reg 1/2003 necessitates that the Commission and the NCA be entitled to make oral submissions, irrespective of the authorisation of the national court in question. See Idot, above n 79 (ch 1), at 184. 483 See para 33 of the Cooperation Notice, above n 208. 477

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108 Institutional Law Aspects Member State or, under certain conditions, could an individual advance a damages claim against the Member State concerned under the Francovich and Köbler principles.484 The Article 15(3)(b) duty of national courts to forward documents necessary for an eventual amicus curiae intervention must be seen in conjunction with the Article 15(2) duty of Member States to transmit to the Commission copies of judgments. The two provisions are intended to complement each other: in other words, it will only be at the stage when the Commission has in its possession a first instance national judgment that it will use Article 15(3)(b) to request the documents of that case from the specific court. This means that in the majority of cases the Commission will intervene only at the appeal stage, after it has accordingly been alerted through the mechanisms of paragraphs (2) and (3)(b) of Article 15 of the new Regulation.485 (vii) Other Indirect Cooperation Mechanisms or Support for National Courts a. Guidance Letters In addition to these more formal ways of cooperation between the Commission and national courts, there may be other informal and indirect forms of ‘dialogue’. A first question is whether informal guidance letters issued by the Commission486 at the request of undertakings may also have a bearing upon current litigation. The ability of undertakings to approach the Commission informally in order to seek guidance is in essence a concession, aiming at compensating to a certain extent for the loss of legal certainty of companies as a result of abolishing the notification and prior authorisation system. These informal channels of cooperation would be most necessary in exceptional cases of particularly difficult questions regarding the interpretation of Article 81 EC. In its Regulation proposal of September 2000 the Commission had declared that it would ‘remain open to discuss specific cases with the undertakings where appropriate; in particular, it [would] provide guidance regarding agreements, decisions or concerted practices that raise[d] an unresolved genuinely new question of interpretation’.487 It had also reiterated its resolve to issue such reasoned opinions in the public interest in its Joint Statement with the Council on the Network.488 Thus, the Commission’s Notice on guidance letters promises to offer guidance in exceptional circumstances of ‘genuine uncertainty’, referring to ‘novel or unresolved questions for the application of Articles 81 and 82’.489 Companies are not entitled to obtain such 484

Joined Cases C–6/90 and C–9/90 Andrea Francovich et al v Italy [1991] ECR I–5357; Köbler, above n 4. See Marenco, ‘Consistent Application of EC Competition Law in a System of Parallel Competences’ in Conference on the Reform of European Competition Law in Freiburg i. B. (9 and 10 November 2000), available at http://ec.europa.eu/comm/competition/conferences/2000/freiburg, at 3, who submits that this would be sufficient to ensure coherence and it would also save Commission’s resources. While this is how the system is intended to work in practice, it should not be totally ruled out that in exceptional cases the Commission may use Art 15(3)(b) of Reg 1/2003 already at the first instance stage of litigation. In such cases the Commission will have sufficient information about that litigation through some other informal channel, presumably through one of the litigants (see in that regard Bellis, above n 473, at 74). 486 To be more precise, these letters will be issued not by the Commission, as such, but by DG COMP. 487 See the Explanatory Memorandum to the Reg proposal, above n 202, at 10; see also Rocca, ‘Sécurité juridique dans un système de compétences parallèles’ in Conference on the Reform of European Competition Law in Freiburg i. B. (9 and 10 November 2000), available at http://ec.europa.eu/comm/competition/conferences/2000/freiburg, at 5. 488 See Statement by the Commission, accompanying the Joint Statement of the Council and the Commission, above n 308; Rec 38 of Reg. 1/2003. 489 Notice on Guidance Letters, above n 208, para 5. Note the extension of the possibility of issuing such letters to Art 82 EC cases. On this new tool of competition policy see eg FL Fine, The EC Competition Law of Technology Licensing (London, 2006) 25–30. That author rightly stresses the importance of such letters for technology transfer agreements. 485

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The Pillars of the New System 109 opinions, and in no circumstances will this informal mechanism re-introduce a notification system through the back door. A guidance letter is without prejudice to the Commission’s powers as to the subsequent assessment of the same issues and cannot bind national courts,490 although, it is presumed that such Commission statements can be of persuasive value before the latter, their legal effects thus resembling those of the old comfort letters. The Notice requires that in order for the Commission to exercise its discretion and proceed to a guidance letter, five cumulative conditions, three positive and two negative, must be satisfied:491 (a) the question involved cannot be clarified by reference to the existing EC legal framework, to the case law, to publicly available notices, communications or guidelines, to desicion-making practice or to previous guidance letters; (b) the clarification of the novel question is useful, taking into account the economic importance from the point of view of consumers, and/or the possible correspondence of the practice in question to ‘a more widely spread economic usage in the marketplace’, and/or the scope of the investments involved, and whether the transaction affects structural operations (eg partial function joint ventures); (c) the guidance letter can be issued on the basis of information provided to the Commission; (d) the questions involved are not identical or similar to questions with which the Court of Justice or the Court of First Instance is seised in a pending case; (e) the specific practice concerned is not subject to proceedings pending before the Commission, a national competition authority or a national court. It is clear, therefore, from the last negative condition that the Commission is not prepared to issue a guidance letter requested by parties to current litigation. This contrasts with the 1993 Coopertation Notice which allowed for an indirect dialogue between national courts and the Commission, when the latter was seised by the parties to the litigation, rather than by the court directly.492 The possibility of that kind of indirect mechanism of the old Cooperation Notice can be explained by the Commission’s desire to show some flexibility in view of national procedural obstacles that could not accommodate a more direct system of cooperation. In such cases, indeed, it was easier for a national court to induce litigants to do so rather than the Commission itself. Regulation 1/2003, however, makes such indirect channels no longer useful, since the express provisions of the new Regulation supersede any national procedural obstacle or judicial practice that may hinder the more direct and structured cooperation mechanism between the Commission and national courts. In our view, this explains the withdrawal by the Commission in the new Notice on guidance letters of its availability to be seised by parties to current litigation. In any case, the Commission only excludes the possibility of issuing guidance letters if the same practice to which the request refers is subject to pending national proceedings. This means that a guidance letter would be possible if there was as yet no litigation, in which case the already issued letter would subsequently be of use to the national court when an action was filed. Then, the Notice does not seem to exclude the possibility of informal guidance being given to undertakings, if the object of their request refers to a dispute different from, yet similar to, that currently before a national court. In such a case, if the Commission were to agree to issue a guidance letter, the litigants in the pending national proceedings could 490 491 492

Notice on Guidance Letters, above n 208, paras 24 and 25. Ibid, para 9. Para 40 of the 1993 Cooperation Notice, above n 59 (ch 1).

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110 Institutional Law Aspects use that letter before the national court and the court could attribute to such statement a certain degree of persuasiveness. An opinion on Articles 81 and 82 EC may also be given by national competition authorities. Such opinions by the OFT are already available, for example, under UK law.493 They would be given ‘where individual cases give rise to genuine uncertainty because they present novel or unresolved questions’ for the application of the Treaty competition provisions. It is also recognised that any written opinion given by the OFT ‘would not be binding on the Commission, any other NCA or the courts’.494 Furthermore, national courts will continue to have the ability to rely on old comfort letters that were given before 1 May 2004. Such letters will continue to have importance for the time period that the Commission has given them and for as long as the factual situation remains identical.495 b. Regulation 1049/2001 Another possibility that private litigants may use in order to seise the Commission and request information necessary to them in the context of ongoing litigation is to rely upon general Community legislation on access to documents held by the EU institutions. Thus, Regulation 1049/2001 lays down the general framework for such access to information.496 Under these rules, an EU institution may refuse access to such documents, only when this would undermine the protection of: (a) the public interest as regards public security, defence and military matters, international relations, or the financial, monetary or economic policy of the Community or a Member State; (b) privacy and the integrity of the individual; (c) commercial interests of a natural or legal person, including intellectual property; (d) court proceedings and legal advice; (e) the purpose of inspections, investigations and audits.497 It is noteworthy that the Commission relies on this last exception in its Leniency Notice normally to deny disclosure of documents received in the context of that Notice because this would undermine the protection of the purpose of inspections and investigations.498 The Commission resists disclosure even after the decision has been taken.499 The Regulation also provides that access to a document drawn up by an institution for internal use or received by an institution, which relates to a matter where the decision has 493

See Department of Trade and Industry, above n 174, para 3.22; OFT Guidance 442, above n 267, para. 7.4 ff. Ibid. While Reg 1/2003 clearly does not prohibit NCAs from giving such opinions on Arts 81 and 82 EC, which are in any case informal, extra-statutory and non-binding, nevertheless some doubts exist as to the possible content of these opinions by NCAs. It should not be forgotten that under the new Reg NCAs do not have the power to adopt inapplicability or ‘positive’ decisions finding that the prohibitions of Arts 81 and 82 EC do not apply. In such cases they can only declare that there are no grounds for action on their part (compare Arts 5 and 10 of Reg 1/2003). In this regard, compare the hesitations expressed by Ehlermann, above n 2, at 574; Burrichter, above n 144, at 546. 495 See above on the transitional provisions of Reg 1/2003, in particular Art 43(1) which refers to exemption decisions made before 1 May 2004. By analogy comfort letters given before that date should remain useful. See further on this Gauer, Kjølbye, Dalheimer, De Smijter, Schnichels and Laurila, ‘Regulation 1/2003 and the Modernisation Package Fully Applicable since 1 May 2004’ [2004–2] EC Competition Policy Newsletter 1, at 6. 496 Reg 1049/2001 of 30 May 2001 Regarding Public Access to European Parliament, Council and Commission Documents [2001] OJ L145/43. 497 Art 4(1)(2) of Reg 1049/2001. 498 Leniency Notice, above n 93 (ch 1), para 40. 499 Ibid, in fine. 494

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The Pillars of the New System 111 not been taken by the institution, shall be refused if disclosure of the document would seriously undermine the institution’s decision-making process. Access to a document containing opinions for internal use as part of deliberations and preliminary consultations within the institution concerned shall be refused even after the decision has been taken if disclosure of the document would seriously undermine the institution’s decision-making process.500 When disclosure of a document in its entirety is not possible, the Regulation provides for a right of partial access. In a recent case third parties tried to rely on that Regulation in order to obtain access to the Commission’s file in cartel proceedings. Access to that information would have enabled those parties to bring civil claims for damages against the cartel members in Member States’ courts. The Commission resisted this request mainly because allowing third parties access to such information would deter firms from cooperating with the Commission and would be detrimental to inspections and investigations in future cases. The CFI disagreed and delivered a nuanced judgment, in which it held that the Commission was required, in principle, to carry out a concrete, individual assessment of the content of the documents referred to in the request in order to determine whether partial access was possible. The Court added that it is only in exceptional cases and only where the administrative burden entailed by a concrete, individual examination of the documents proves to be particularly heavy, thereby exceeding the limits of what may reasonably be required, that derogation from that obligation to examine the documents may be permissible.501 In another, albeit non-competition law-specific case, the Court of First Instance interpreted rather strictly the exception of Article 4(2), third indent, of Regulation 1049/2001, which refers to the protection of ‘the purpose of inspections, investigations and audits’. Thus, while the Commission relies in its Leniency Notice upon exactly this exception to deny access to leniency-related documents ‘even after the decision has been taken’,502 the Court seems to adopt a different position and considers that this exception would be available to the institution for as long as the inspections and investigations which could have been jeopardised by the disclosure of the requested documents are ‘still in progress’.503 That, transposed to the competition law context, may mean that once the decision is adopted, or possibly even before the adoption of the decision but well after the investigatory stage, the Commission may have to grant access to leniency-related or other documents.504 Finally, the Court of First Instance has in the recent Technische Glaswerke Ilmenau judgment drawn up a set of rules which are even more liberal for parties wishing to have access to Commission documents pursuant to Regulation 1049/2001.505 500

Art 4(3) of Reg 1049/2001, above n 496. Case T–2/03 Verein für Konsumenteninformation v Commission [2005] ECR II–1121, para 65 ff. See comment by Muguet-Poullennec 4/2004 RLC 75. See also Case T–237/02 Technische Glaswerke Ilmenau GmbH v Commission, Judgment of 14 Dec 2006, not yet reported, paras 77–79. See generally Muguet-Poullennec, ‘Transparence et aides d’État: Comment mettre en œuvre le droit général d’accès aux documents?’ 11/2007 RLC 62. 502 Leniency Notice, above n 93 (ch 1), para 40. 503 Joined Cases T–391/03 and T–70/04 Yves Franchet and Daniel Byk v Commission [2006] ECR II–2023, para 113, commented on by Barbier de la Serre 9/2006 RLC 83. The Court also stresses that ‘the fact that a document concerns an inspection or investigation cannot in itself justify application of the exception invoked’ and that ‘any exception to the right of access to Commission documents must be interpreted and applied strictly’ (ibid, para 105). See also Technische Glaswerke Ilmenau, above n 501, para 93. 504 See in this direction Barbier de la Serre, above n 503, at 84, who considers that, once the decision is made public, the interest of leniency beneficiaries in being protected against access to their corporate statements may recede, since the decision will most likely contain most of the elements contained in those statements. 505 Technische Glaswerke Ilmenau, above n 501. See also very recently Case T–36/04 Association de la presse internationale a.s.b.l. (API) v Commission, Judgment of 12 September 2007, not yet reported, which again proceeds to 501

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(d) Strengthening the Supremacy of Community over National Proceedings (i) Masterfoods and Article 16 of Regulation 1/2003 As already mentioned above, while the European Court of Justice moved quickly to recognise the direct effect of Articles 81 and 82 EC and to consider national courts as being on a par with the Commission in a system of parallel competences—except for Article 81(3) EC for which the Commission had exclusive competence—it was at the same time aware of problems of conflict that this system might lead to. Such conflicts were considered undesirable from a number of points of view: first, because the fundamental principle of legal certainty would be seriously impaired, secondly, because of the whole supranational system of the relationship between Community and national proceedings and the principles of supremacy and uniformity of Community law, and thirdly, because, from a purely competition angle, companies would not be able to rely on a level playing field of antitrust enforcement all over the Community. The approach of the Court of Justice was initially to ‘invite’ the national courts to stay their proceedings and await the Commission’s decision, in order to avoid eventual conflicts. This certainly implied a degree of deference but the Court at that time did not present this as a fully-fledged duty based on Community law. It was rather desirable in order to avoid legal uncertainty.506 Gradually, however, the Court of Justice started using more stringent language, thus in essence leading to results comparable to those pertaining to stay proceedings and avoiding conflicting decisions.507 Delimitis encapsulates this gradual shift towards a system of deference to Commission decisions. There, the Court of Justice made it clear that there was something more than just the principle of legal certainty at stake. That was the Commission’s fundamental role in the ‘implementation and orientation of Community competition policy’.508 This became clearer in Masterfoods where the Court went even further in subjecting national courts to a clear duty, based on Article 10 EC, not to take decisions ‘running counter to’ decisions of the Commission, in case the Commission has already reached a decision on the case in question.509 The facts of Masterfoods deserve to be mentioned, since they constitute one of the few cases of direct conflict between a national judgment and a Commission decision. The Irish High Court, dealing with ice cream freezer exclusivity in Ireland, had found that Articles 81 a liberal reading of Reg 1049/2001. The case concerned access by the public to Commission pleadings before the Community Courts. Such pleadings may indeed be also be helpful to litigants before national courts. 506 See 2.I above on the competence of national courts to apply the Treaty competition provisions under the old system of enforcement. 507 See generally Komninos, ‘Effect of Commission Decisions on Private Antitrust Litigation: Setting the Story Straight’ (2007) 44 CMLRev 1387 ff. On legal certainty in this context see Basedow, above n 20, at 582. Usually national courts have proved ready to suspend their proceedings in expectation of a Commission decision. In England such a stay of proceedings may take place at any stage of the Commission proceedings, while the court may sometimes prefer not to suspend and proceed to preparatory steps as long as these steps do not prejudge the Commission’s decision (see MTV Europe, above n 21). See further, on the attitude of the English courts with references to case law, Cutting, above n 21, at 32–3; R Nazzini, Concurrent Proceedings in Competition Law, Procedure, Evidence and Remedies (Oxford, 2004) 156 ff and ‘Parallel and Sequential Proceedings in Competition Law: An Essay on the Modes of Interaction between Community and National Law’ (2005) 16 EBLR 245, at 270–1. 508 Delimitis, above n 17, para 44. 509 See eg Durner, ‘Die Unabhängigkeit nationaler Richter im Binnenmarkt—Zu den Loyalitätspflichten nationaler Gerichte gegenüber der EG-Kommission, insbesondere auf dem Gebiet des Kartellrechts’ (2004) 39 EuR 547, at 555 ff.

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The Pillars of the New System 113 and 82 EC were not breached.510 While an appeal was pending, the Commission initiated proceedings and reached the opposite conclusion.511 The Irish Supreme Court on appeal seised the Court of Justice with a preliminary reference, while expressing disapproval of the Commission decision which had disregarded the national judgment. The Court of Justice in a rather bold judgment stressed the duty of national courts (a) to avoid giving decisions which would conflict with a decision contemplated by the Commission and, more importantly, (b) not to take decisions running counter to those already adopted by the Commission.512 The Court’s ruling is based on four pillars: (a) First, the Court started from the premise that the Commission’s primacy over national proceedings is justified ‘in order to fulfil the role assigned to it by the Treaty’.513 To that end, the Court proceeded to an explicit reference to Article 85(1) EC, according to which ‘the Commission shall ensure the application of the principles laid down in Articles 81 and 82’.514 (b) Secondly, the Court referred to Article 10 EC which imposes upon national courts a duty to ensure the effectiveness of Community law;515 (c) Thirdly, the Court emphasised the sole competence of the Community Courts to examine the legality of Commission decisions.516 Under the Foto-Frost 517 line of case law, national courts cannot consider Community acts as invalid, but must refer the question of validity to the Court of Justice, which is the sole judge that can declare their invalidity. (d) Finally, the Court relied on the general principle of legal certainty and referred in that respect to Delimitis.518 This line of argument is very interesting because it dissipates the fear that the Delimitis principles on the duty of national courts to avoid conflicting decisions may have been motivated by the Commission’s traditional exemption monopoly.519 The Court’s fundamental 510 Masterfoods v HB Ice Cream [1992] 3 CMLR 830. For a presentation of the case see also I Maher, Competition Law: Alignment and Reform (Dublin, 1999), at 67–8, 140–1. A conflict between the Commission and the Irish High Court had again happened in the Magill case. See Case T–69/89 Radio Telefis Eireann (RTE) v Commission [1991] ECR II–485 and Case T–76/89 Independent Television Publications Ltd (ITP) v Commission [1991] ECR II–575; confirmed on appeal in Joined Cases C–241/91 P and C–242/91 P Radio Telefis Eireann (RTE) and Independent Television Publications Ltd (ITP) v Commission [1995] ECR I–743. 511 In its Decision, the Commission considered that ‘it is not inconsistent with the principles governing the concurrent powers of the national courts and the Commission in the application of Article [81(1)] and Article [82] of the Treaty, for the Commission to take a decision which differs from a judgment delivered by a national court, provided that there exists a sufficient Community interest in doing so’. Such an interest may consist ‘in settling fundamental questions about business practices which are found throughout the Community’. According to the Commission, the resulting conflicts could be resolved by the European Courts through Arts 230 and 234 EC (Commission Dec 98/531/EC of 11 Mar 1998 (Van den Bergh Foods Ltd) [1998] OJ L246/1, para 279. 512 Masterfoods, above n 76 (ch 1), paras 51–52. 513 Ibid, para 46. 514 It is noteworthy that this specific Art was amended by the Treaty of Amsterdam. Previously the text included the words ‘as soon as it takes up its duties’ between ‘shall’ and ‘ensure’. The amendment means that the provision should no longer be treated as temporary or transitional; rather it constitutes an important basis for the Commission’s central role in EC competition law enforcement. 515 Masterfoods, above n 76 (ch 1), paras 49 and 56. 516 Ibid, paras. 50, 53, 54, 57. 517 Case 314/85 Foto-Frost v Hauptzollamt Lübeck-Ost [1987] ECR 4199. 518 Masterfoods, above n 76 (ch 1), para 51. 519 See on this issue Ehlermann, above n 257, at 2; Jaeger, above n 155, at 1067; Paulis, above n 73 (ch 1), at 420; Venit, above n 231, at 474; Gröning, above n 355, at 586. Such a fear was, however, unjustified, because the Delimitis principles were clearly applicable not only to Art 81(3) EC, but also to Arts 81(1) and 82 EC (see Delimitis, above n 17, paras 47 and 52 in fine).

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114 Institutional Law Aspects reliance on Articles 85 and 10 EC, rather than primarily on the general principle of legal certainty as was the case in Delimitis,520 indicates that in a fully decentralised system of parallel competences the supremacy and uniformity of Community competition law, as applied by the supranational organ, the Commission, must not be compromised by national courts and authorities.521 Masterfoods was decided at a very critical time in the context of modernisation and offered the Commission substantial support in its decentralisation drive.522 Even before Masterfoods many authors and even national judgments had taken a very deferential approach to the Commission, relying on the exigency of consistent application of Community competition law, on the supremacy of EC law and on Article 10 EC.523 Nevertheless, the passage to a system where the competences of the Commission, national courts and national authorities are fully and purely parallel may have accentuated undesirable conflicts.524 Indeed, deference among national judges to the views of the Commission under the previous system was more a question of assumption than of legal and explicit imposition.525 Notwithstanding the fundamental principle that national courts had to apply Community competition law in a consistent manner with the Commission subject to the Court’s supervision, this could not exclude conflicts. For this reason, the Court’s powerful and clear pronouncement in Masterfoods gave the Commission the strength to advocate a more Community-friendly legislative solution to this problem in the negotiations leading to the adoption of Regulation 1/2003. It is indeed telling that the Commission had used a much less stringent language in its draft Regulation of September 2000, speaking of a duty of national competition authorities and courts to ‘use every effort to avoid any decision that conflicts with decisions adopted by the Commission’.526 However, this text was superseded by the Masterfoods ruling, which went even further in stressing that national courts (and, by implication, authorities) cannot take decisions running counter to a Commission decision, even one that conflicts with a 520 Delimitis, above n 17, para 47; Joined Cases C–319/93, C–40/94 and C–224/94 Hendrik Evert Dijkstra et al v Friesland (Frico Domo) Coöperatie et al [1995] ECR I–4471, para 28. In Delimitis there was also no express reference to Art 85(1) EC, though in para 44 the Court implicitly relied on the principle emanating from that provision. See also Bartels, ‘Kooperation zwischen EU-Kommission und nationalen Gerichten im europäischen Wettbewerbsverfahren: Einige Anmerkungen zum Masterfoods-Urteil des EuGH’ (2002) 43 ZfRV 83, at 88, stressing the Masterfoods departure from the Delimitis reasoning which was primarily and essentially based on legal certainty. 521 See Meij and Nyssens, ‘Analysis of the ECJ’s and the CFI’s Case-Law in the Field of Competition Law (2000–2001)’ in Baudenbacher (ed), Neueste Entwicklungen im europäischen und internationalen Kartellrecht, Achtes St. Galler Internationales Kartellrechtsforum 2001 (Basle/Geneva/Munich, 2002) 70–2; Hirsch, above n 149, at 249. 522 See Komninos, above n 53 (ch 1), at 447–9. 523 Pre-Masterfoods some commentators had considered such binding force of Commission decisions incompatible with the parallel competence of national courts to apply the competition provisions and with the principles of judicial independence and separation of powers. See eg Marenco, above n 33, at 615 ff; Jones and Sharpston, above n 102 (ch 1), at 92; Temple Lang, above n 3, at 118; Marenco, above n 140, at 135 and above n 137, at 172; Schröter, above n 122, at 324. However, for the opposite view see eg Synodinos, above n 414, at 434–5; Stuyck, above n 115, at 1514, 1517; Saggio, above n 294, at 12–13; Kerse, above n 25, at 442; Temple Lang, above n 115, at 278; Paulis, above n 73 (ch 1), at 420; Siragusa, ‘The Modernisation of EC Competition Law: Risks of Inconsistency and Forum Shopping’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001), at 450–1. For French judgments holding that Commission negative clearance decisions bound the national courts see Mail-Fouilleul, above n 107 (ch 1), at 28, n 140. 524 See eg former Commissioner Monti, ‘Competition Law Reform’, Speech delivered at the CBI Conference on Competition Law Reform, London, 12 June 2000, available at http://ec.europa.eu/comm/competition/speeches, at 4. 525 See Putman, above n 115, at 382–3; A Arnull, The European Union and its Court of Justice (Oxford, 1999) 411. 526 Emphasis added. The use of the verb ‘avoid’ echoed para 47 of Delimitis, above n 17.

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The Pillars of the New System 115 prior judgment by a national court of first instance.527 As a result, Article 16(1) of the new Regulation adopted the Court of Justice’s ruling verbatim.528 (ii) The Scope of the Supremacy Rule a. Positive Binding Effect v Negative Duty of Abstention Some commentators rejected the ‘primacy of the Commission’, ie of an administrative authority, over decisions of national judicial organs,529 and considered Masterfoods a ‘centralist’ judgment not entirely in conformity with the decentralisation of EC competition law enforcement in the new era.530 Others have severely criticised the Commission’s ‘primacy’ as a form of intellectual and bureaucratic arrogance.531 In reality, however, Masterfoods and the corresponding provision of Article 16 of Regulation 1/2003 make national courts subject not to the Commission’s authority, but rather to that of the Court of Justice, which is the only judicial organ that can review Community acts in an authentic way in the Community through Article 234 EC.532 This approach relies on the fact that Masterfoods does not stipulate that national courts must always consider themselves positively bound by Commission decisions.533 In fact, the Court avoided using the positive term ‘binding’, but rather followed the more negative expression that national courts ‘cannot take decisions running counter to that of the Commission’.534 A formal positive binding effect of Commission decisions exists therefore only in fields where the Commission has exclusive competence.535 This was the case with the old Articles

527 It is interesting to note Wouter Wils’s view prior to Masterfoods. That author had defended the more cautious text in Art 16(1) of the Reg proposal on the basis of the principles of judicial independence and access to courts: Wils, above n 149, at 357–8). 528 See also Rec 22 of Reg 1/2003. 529 See in this regard Fourgoux [2001] D 1864, at 1866; Mottard, Partsch, Pittie and Struys, ‘Chronique semestrielle de droit communautaire’ (2001) 120 JdT 809, at 810; Blaise and Idot, above n 305, at 143; Siragusa and Guerri, ‘L’applicazione degli artt. 81 e 82 del Trattato CE in seguito all’introduzione del Regolamento 1/2003’ [2004] Il Diritto Industriale 348, at 352–3. But see Paulis, above n 73 (ch 1), at 419–22, according to whom the principle of separation of powers applies only within the same legal order and cannot apply as such to the relationship between the Community legal order and national legal orders. 530 See BJ Rodger and A MacCulloch, Competition Law and Policy in the European Community and United Kingdom (London/Sidney, 2001) 51. 531 See Green, ‘Practical Implications of Reform’ in Rivas and Horspool (eds), Modernisation and Decentralisation of EC Competition Law (The Hague/London/Boston, 2000) 37, who stresses that the duty of sincere cooperation in Art 10 EC should apply not only in an one-sided way and that the Commission should pay due deference to judgments of national courts that may be the result of an exhaustive analysis, especially when the courts relied upon information or facts not known to the Commission. See also Toffoletti, above n 99, at 434/I–435/I. 532 See former Director General Schaub, above n 121, at 13; Paulis and Gauer, above n 77 (ch 1), at 69. These authors retreat from Paulis’s earlier position (above n 73 (ch 1), at 420), which was expressed more in terms of a Commission primacy. 533 See contra Durner, above n 509, at 558 ff. 534 Masterfoods, above n 76 (ch 1), paras 51–52. See also Castillo de la Torre, ‘Decisiones de la Comisión Europea en materia de política de competencia ante los tribunales nacionales: La sentencia Masterfoods’ [2001] 5/6 GJ 29, at 36. Note that Art 16 of and Rec 22 to Reg 1/2003 follow the Masterfoods language and do not use the positive term ‘binding effect’, unlike however para 13 of the Cooperation Notice which does so, thus departing from the much more reserved text of Masterfoods and of the new Reg. 535 See in this direction Whish, ‘The Enforcement of EC Competition Law in the Domestic Courts of Member States’ in Gormley (ed), Current and Future Perspectives on EC Competition Law, A Tribute to Professor M.R. Mok (London/The Hague/Boston, 1997) 84; Hiljemark, above n 59, at 117.

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116 Institutional Law Aspects 65 and 66 ECSC536 and with Article 81(3) EC under the previous system of enforcement.537 It still continues to be the case with decisions withdrawing the benefit of a block exemption regulation under the present system of enforcement. On the contrary, in a system of parallel competences, the courts should in principle be in a position to form their own view as to the application of the competition rules independently of administrative agencies.538 Indeed, the Court essentially held in Masterfoods that a national court is not bound by a Commission decision which is being attacked before the Community Courts, but may decide to stay proceedings pending a final ruling in Luxembourg, ‘unless it considers that, in the circumstances of the case, a reference to the Court of Justice for a preliminary ruling on the validity of the Commission decision is warranted’.539 In that regard, we must bear in mind that the Court departed from the Opinion of its Advocate General, who was prepared to give some precedence to the Article 230 EC procedure over Article 234 EC.540 The Court however preferred not to fetter the national courts’ discretion to use the preliminary reference procedure. This is a solution much more attuned to the principle of the national courts’ independence. In other words, the Court did acknowledge that at the very end of the day national courts could not, strictly speaking, be positively bound by a Commission decision directly,541 but only indirectly through the intervention by the Court of Justice, to which they could always have access by means of the preliminary reference procedure. As a Community judge stresses extrajudicially: Community law is interpreted and applied by the Court of Justice. It does not follow from this principle that the Commission is infallible. Whether or not an administrative decision of the Commission must be followed as embodying superior law depends not on the fact that the 536 Thus, in Case C–128/92 HJ Banks & Co Ltd v British Coal Corporation [1994] ECR I–1209, para 23, the Court held that Commission decisions based on Arts 65 and 66(7) ECSC, which lacked direct effect and could only be enforced by the Commission, were ‘binding on the national courts’. See also Case C–18/94 Barbara Hopkins et al v National Power plc and Powergen plc [1996] ECR I–2281, para 31; Case T–89/98 National Association of Licensed Opencast Operators (NALOO) v Commission [2001] ECR II–515, para 85. 537 See clearly in this direction Paulis, ‘Nouvelles procédures et méthodes de coopération entre institutions’ in Canivet (ed), La modernisation du droit de la concurrence (Paris, 2006) 48. 538 This distinction between positive effect of Commission exemption decisions and negative effect of Commission applicability or inapplicability decisions may lie behind the rather unfortunate Order of the CFI in the recent Case T–28/02 First Data Corp, FDR Ltd and First Data Merchant Services Corp v Commission [2005] ECR II–4119, paras 49–50, emphasis added: ‘[w]hen national courts rule on agreements or practices which are already the subject of a Commission decision they cannot take decisions running counter to that of the Commission . . . However, negative clearance does not bind the national courts, even if it constitutes a fact which national courts may take into account in their assessment. It is apparent from Article 2 of Regulation No 17 that negative clearance means only, for the Commission, on the basis of the facts in its possession, that there is no need to intervene. Negative clearance does not therefore constitute a definitive assessment, nor in particular the adoption of a position which falls within the exclusive competence of the Commission. As Article 81(1) EC is directly applicable, as the Court of Justice has held on various occasions, it follows that individuals may rely on it before national courts and derive from it rights and, as national courts may also have other information on the particular circumstances of the case, they are naturally bound to reach their own opinion, on the basis of the information in their possession, on the applicability of Article 81(1) EC to certain agreements’. It is true that this language rests upon the proviso that the national court may have other information on the particular circumstances of the case that was not available to the Commission, but still there is some difficulty in reconciling it with the rationale of Art 10 EC and with the clear principle enunciated by the ECJ in Masterfoods which, after all, does not make any distinction between Art 81(3) or 81(1) EC decisions and between applicability or inapplicability decisions. 539 Masterfoods, above n 76 (ch 1), para 57. According to the Court, it is immaterial in this context whether the Commission decision has been suspended by the Community Courts. Acts of Community institutions are in principle presumed to be lawful until such time as they are annulled or withdrawn (ibid, para 53). 540 Ibid, AG Cosmas’s Opinion, paras 41–44. 541 See in this sense O’Keeffe, ‘First among Equals: The Commission and the National Courts as Enforcers of EC Competition Law’ (2001) 26 ELRev 301, at 304; Preece (2001) 22 ECLR 281, at 284–5.

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The Pillars of the New System 117 Commission has adopted it, so much as upon the fact that it has been upheld as valid by the Court of Justice.542

Thus, in principle the Commission’s decisions should not be treated as positively binding. Instead, the supranational nature of the Community legal system requires that national courts should not compromise the supremacy and uniformity of Community law by taking decisions which are incompatible with those adopted by the Commission. This negative duty of abstention means that the courts should always seise the Court of Justice if they intend to contradict the Commission. This also means that Commission decisions retain this indirect negative binding force over national proceedings, so long as the material factual circumstances have not changed in the meantime. Otherwise, the national courts can always depart from the Commission’s pronouncements and reach a different conclusion. In such cases, the courts would not act disrespectfully to Articles 10 or 85 EC; therefore the Masterfoods principles should not apply. Indeed, the national courts should not even feel obliged to seise the Court of Justice with a preliminary reference only because of the existence of the earlier Commission decision, unless a new and genuine concern arose that necessitated the Court’s intervention. The situation is different for constitutive decisions falling under the Commission’s exclusive competence. In the new system of enforcement, a Commission decision withdrawing the benefit of a block exemption would always be positively binding on national courts even if the facts have changed.543 b. Non-applicability of the Supremacy Rule to National Competition Authorities’ Decisions This line of argument leads to the conclusion that decisions of national competition authorities cannot, as a matter of existing Community law, positively or negatively bind national civil courts, even when those authorities act in the framework of the European Competition Network and apply Community competition law under Regulation 1/2003.544 First, these authorities cannot be considered ‘Community organs’ under Article 10 EC.545 Article 10 EC cannot cover the cooperation between national competition authorities and national courts, although it might be tempting at first sight to argue so, in order to establish a ‘horizontal’ duty of cooperation as between competition authorities and courts of different Member States.546 Arguments in favour seem to confuse the theory of dédoublement fonctionnel 547 with the ambit of Article 10 EC, which uses an organic criterion in

542

See Cooke, above n 42, at 19. See further 2.III.(c).(i).c above. 544 Compare, however, Schurmans, above n 4 (ch 1), at 102–3, who finds, albeit without referring to any authority, that an infringement decision by an NCA that exercises a judicial or quasi-judicial function should be followed by a national court, unless the court finds that the NCA has wrongly applied Community law or contradicts the Community Courts’ case law or the Commission’s decisional practice. In any event the court could seise the ECJ with a preliminary reference. 545 With regard to national courts, compare AG Léger’s Opinion in Köbler, above n 4, para 66. According to AG Léger, the expression juges communautaires de droit commun ‘must not be understood literally, but symbolically: where a national court is called upon to apply Community law, it is in its capacity as an organ of a Member State, and not as a Community organ, as a result of dual functions’. 546 Some commentators doubt whether an EC reg can enter into such internal national procedural law questions. See in this regard Gröning, above n 202, at 89. See also Lenaerts and Gerard, above n 345, at 325, according to whom ‘the design of the relationships between national courts and their national competition authority resorts exclusively to national law’. 547 See 2.I.(a) above. 543

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118 Institutional Law Aspects order to arrive at a functionalist result.548 In other words, it would not make sense to use Article 10 EC in order to impose duties on national courts or authorities vis-à-vis other national courts or authorities. This is because both the national competition authority and the national court are indeed respectively ‘indirect Community administration and judge’, so Article 10 EC could not resolve disputes as between two organs at the same level of the Community supranational structure (both in this case being organically national but functionally Community organs). Secondly, a national competition authority does not have a central role in defining or implementing the EC competition policy, as the Commission does under Article 85 EC. Therefore one of the most important rationales behind Masterfoods cannot be transposed to cover this case. Thirdly, national authorities are not subject to the review of the Community Courts, so the argument of the primacy of the European Court of Justice, referred to above, is not transposable to this case, since a national court could never request a preliminary ruling from Luxembourg on the validity of a national act.549 Notwithstanding the fact that Community law itself does not impose duties on national courts to respect or not to contradict national competition authorities’ decisions, such a duty may yet be prescribed by national law. When the court and the competition authority belong to the same legal order, then national law may contain specific rules about this relationship.550 As mentioned above, the new generation of national competition laws that were enacted after modernisation provide for quite interesting solutions in that respect. Thus, the recently amended German Competition Act confers on all decisions of national competition authorities within the EU binding effect on German civil proceedings, but this rule is confined to follow-on civil litigation, basically aiming at facilitating damages claims against convicted cartelists.551 The same is true of English law, which is less revolutionary than German law since it applies only to Commission, OFT and CAT decisions.552 Finally, secondary Community legislation may opt to establish such an EU-wide binding effect of national competition authority decisions. Indeed, this remains an option in the Commission’s Green Paper on damages.553 As we argue above, such national rules conferring a binding effect on public enforcement decisions over national civil proceedings should be seen more as specific incentives to energise private follow-on actions, rather as wide-ranging principles indicating a primacy of public over private enforcement.

548 Compare Yataganas, above n 74 (ch 1), at 199 and 202, alluding to the distinction between the organic and the functionalist criterion in discussing the role of national courts and authorities when they apply Community law. 549 The national court could conceivably request a preliminary ruling on the interpretation of EC competition law, as applied by the NCA in question, but this does not change the reality that the rationale behind Masterfoods and Art 16(1) of Reg 1/2003 is not present here. 550 See eg Art 18 of the Greek Competition Act which provides that the judgments of the administrative courts reviewing the Competition Committee decisions—but not the decisions themselves—have the force of erga omnes res judicata before the civil courts. 551 S 33(4) GWB (7. Novelle). See further 1.III.(b) above and 3.II.(b).(ix) below. 552 See ss 47A and 58A of the UK Competition Act 1998, as subsequently amended. S 58A refers only to the UK competition authorities’ decisions, while s 47A extends the binding effect of infringement findings to decisions of the European Commission. In addition, s 58A refers to follow-on civil proceedings for damages before the ordinary civil courts (the Chancery Division of the High Court), while s 47A refers to follow-on claims brought before or transferred to the CAT. See further 1.III.(b) above and 3.II.(b).(ix) below. 553 Option 8 in fine of the Green Paper, above n 55 (ch 1).

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The Pillars of the New System 119 (iii) The Concept of ‘Conflict’ a. Maximalist or Minimalist Interpretation? Article 16 of Regulation 1/2003, while containing a rule on the avoidance and resolution of conflicts between Commission and national court proceedings, does not define the notion of ‘conflict’. It is at first sight not entirely clear whether the conflict refers to the incompatibility between the operative part of a Commission decision and the result reached by a national judgment, or whether it also extends to the reasoning of the two instruments. In the former case, a conflict would essentially take place only if the object and facts of the case before the Commission and those before the national court were identical and the operative parts of the Commission decision and of the national court judgment were incompatible with each other. In the latter case, a conflict would always ensue when the facts were similar and there was also inconsistency of reasoning as between the Commission and the national court. In order to take a position on this debate, it is, first, important to examine the legal nature of Commission decisions. Such decisions should be viewed in their proper context of administrative public proceedings before a public authority which has extensive investigative and decisional powers and applies these powers vertically, acting as an emanation of the state. Because of this fundamental difference between vertical public administrative proceedings and horizontal civil proceedings between private litigants, decisions by a public authority such as the Commission do not, formally speaking, produce a res judicata or issue estoppel effect.554 In continental legal doctrine, which is an appropriate source to guide us because Commission proceedings follow the continental model of public administrative proceedings, decisions by administrative authorities do not produce res judicata but rather enjoy a ‘presumption of legality’ and a certain ‘finality’ once all administrative appeals within the administration have been exhausted (Bestandskraft, autorité de la chose décidée).555 Res judicata and issue estoppel, however, are both legal concepts pertaining to civil litigation and aiming to protect certain fundamental legal values derived from the rule of law, like legal certainty and finality of judgments.556 Therefore, a conflict in the present sense cannot be viewed as narrowly as it is seen in civil litigation. There, a conflict presupposes identity of object and litigants. Such a narrow concept, however, is not appropriate when examining the effects of Commission decisions in the competition field. This means that a Commission decision that deals with particular anti-competitive conduct may be in conflict with a civil judgment dealing with that same conduct, even when the persons affected by that decision are not identical to the litigants in the national civil proceedings. A recent judgment of the Brussels Court of Appeal exemplifies this point. The Belgian court held that it had to pay deference, under Article 16 of Regulation 1/2003, to an 554

See in this sense also Nazzini, above n 507, at 112–13, with references to common law. See eg E Koutoupa-Regkakou, Res Judicata of Administrative Courts’ Judgments (Athens/Thessaloniki, 2002) (in Greek), at 36–9. The Commission has, however, on occasions referred to findings in its decisions as producing ‘res judicata’. See eg Commission Dec 2005/480/EC of 30 Apr 2004 (Compagnie Maritime Belge SA) [2005] OJ L171/28, para 11. This is also the case with some commentators who express themselves in terms of res judicata. See eg M Fallon, Droit matériel général de l’Union européenne (Louvain-la-Neuve, 2002) 329. Such an approach is not technically correct. 556 Res judicata and issue estoppel are slightly different notions, in that the former refers only to the dispositive part of a judgment and not the reasoning, while the latter extends also to the reasoning. The former is usually referred to as cause of action estoppel in common law countries. For a very pertinent English case that was also decided on EC competition law grounds and that refers to these notions under English law see Blackburn Chemicals Ltd v Bim Kemi AB [2004] EWCA Civ 1490 (CA). 555

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120 Institutional Law Aspects infringement decision by the Commission which had considered anti-competitive a rule of the Belgian Architects’ Association providing for a scale of recommended minimum fees. The court rightly considered that it was bound to follow the Commission, since the latter had dealt with the legality of exactly the same professional rule as was at stake in the national action. The fact that the complainants in the Commission case were not litigants in the national proceedings was, naturally, immaterial, although this fact would have been critical in the context of multiple civil proceedings.557 The conclusion, therefore, is that the concept of conflict is not here dependent on the identity or otherwise of the parties concerned, but rather on the facts of the Commission’s decision. Yet, this does not give us an answer to the debate described above on whether Masterfoods and Article 16 of Regulation 1/2003 stipulate a duty for national courts to pay deference to Commission decisions on identical or similar facts. In order to answer this question, one would have to delve again into the rationale of Masterfoods and Article 16. As analysed above, the basic rationale is the principles of supremacy and effective and uniform application of Community law. The duty for national courts not to take decisions running counter to those of the Commission must not be seen as an indication of the primacy of an antitrust authority over civil courts, but rather as a duty of national organs, here the national courts, to pay respect to a Community institution, the Commission, always under the final control of the Court of Justice.558 At the same time, this rationale cannot be stretched too far in favour of the Commission because national courts too are Community courts of general jurisdiction under the supreme authority of the Court of Justice. Indeed, it can be argued that not even between the national courts and the Court of Justice is there a hierarchical relationship: the former are Community courts of general jurisdiction and the latter is the central Community judge of circumsribed jurisdiction that ensures the uniformity in the interpretation and application of Community law.559 Their relationship is more one of cooperation than of hierarchy.560 In fact, the preliminary reference procedure of Article 234 EC is part of the more general principle of loyal cooperation between the Community and the Member States, as enshrined in Article 10 EC.561 In that sense Article 234 EC is a form of lex specialis of Article 10 EC.562 557 See Cour d’appel, Brussels, 28 Sept 2004, Eddy Lodiso v La SPRLU MONDE, available at http://ec.europa.eu/comm/competition/antitrust/national_courts/index_en.html and Commission Dec of 24 June 2004 (PO/Barême d’honoraires de l’Ordre des Architectes belges). 558 See most clearly in favour of this approach Bornkamm, above n 22, at 77–8. 559 See inter alia MK Vilaras, Effective Protection of Community Rights by National Courts (Athens/Komotini, 2000) (in Greek) 13. 560 See Vilaras, above n 559, at 15–16 and Community Judge and Effective Judicial Protection of Individuals (Athens/Thessaloniki, 2003) (in Greek) 53. Compare B Beutler, R Bieber, J Pipkorn, J Streil and JHH Weiler, L’Unione europea, Istituzioni, ordinamento e politiche (Bologna, 2001) 242, speaking of a ‘tacit ingenious sociojuridical contract’ between the ECJ and national courts, to refer to their cooperation in the application of Community law. 561 See eg N Skandamis, European Law, Vol. I, Institutions of the European Union, No. 4, Organic Constitution of the European Union (Athens/Komotini, 2003) (in Greek) 210. The principle of loyal cooperation enshrined in Art 10 EC may be presented as an inherent general principle of law in the supranational context of the Community and the EU. According to AG Kokott’s Opinion in Case C–105/03 Criminal proceedings against Maria Pupino [2005] ECR I–5285, para 24, the fact that the TEU contained no equivalent provision to Art 10 EC did not mean that the principle of loyal cooperation did not bind Member States vis-à-vis the Union. In other words this is a more general principle of law in the EU legal order. 562 In this direction see A Raclet, Droit communautaire des affaires et prérogatives de puissance publique nationales (Paris, 2002) 130; MP Chiti, Diritto amministrativo europeo (Milan, 2004) 576. See also para 84 of AG Lenz’s Opinion in Joined Cases 143/88 and C–92/89 Zuckerfabrik Süderdithmarschen AG v Hauptzollamt Itzehoe and Zuckerfabrik Soest GmbH v Hauptzollamt Paderborn [1991] ECR I–415, making the Art 10 EC–234 EC link.

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The Pillars of the New System 121 To impose on national courts a wide duty of deference to Commission decisions dealing with similar facts would decrease their role in the decentralised application of Community law and might turn them to secondary organs dealing with the uninteresting and unimportant details rather than with the core issues. While there is truth in the view that in the decentralised system of enforcement consistency of reasoning counts more than consistency of decisions,563 a system of parallel competences relies also on some degree of healthy experimentation. Following the more minimalist view of the concept of conflict seems to be in harmony with the very specific circumstances of Masterfoods,564 where the Irish court clearly wished to depart from a specific Commission decision dealing with the same facts.565 Indeed, Advocate General Cosmas in Masterfoods viewed the concept of conflict between a Commission decision and national court proceedings narrowly: In order to establish such a form of conflict, a connection between the legal problem which arises before the national courts and that being examined by the Commission is not in itself sufficient. Nor is the similarity of the legal problem where the legal and factual context of the case being examined by the Commission is not completely identical to that before the national courts. The Commission’s decision may provide important indications as to the appropriate way to interpret Articles [81(1) and 82], but in this case there is no risk, from a purely legal point of view, of the adoption of conflicting decisions. Such a risk only arises when the binding authority which the decision of the national court has or will have conflicts with the grounds and operative part of the Commission’s decision. Consequently the limits of the binding authority of the decision of the national court and the content of the Commission’s decision must be examined every time.566

Besides, it is not clear why the judge should pay deference to a Commission decision that is addressed in the Article 249 EC sense to persons different from the litigants and the facts are not identical but only similar. It is also noteworthy that the Commission views the conflict in its narrower sense, being prudent in this very sensitive field. Thus, according to the Cooperation Notice, ‘the application of Articles 81 and 82 EC by the Commission in a specific case binds the national courts when they apply EC competition rules in the same case in parallel with or subsequent to the Commission’.567 563

See Jenny, above n 366, at 365–6. See also in this direction Nazzini, above n 507 in fine, at 129 ff. 565 See 2.III.(d).(i) above. 566 Masterfoods, above n 76 (ch 1), AG’s Opinion, para 16. See also Rodger, above n 58 (ch 1), at 108–9. Compare also Joined Cases T–125/97 and T–127/97 The Coca-Cola Company and Coca-Cola Enterprises Inc v Commission [2000] ECR II–1733, para 85, emphasis added: ‘[t]he possibility that a national court applying Article [82] of the Treaty directly in the light of the decision-making practice of the Commission might reach the same finding that CCSB holds a dominant position [does not] mean that the contested finding has binding legal effects. A national court which has to assess action taken by CCSB after the contested decision in the context of a dispute between CCSB and a third party is not bound by previous findings of the Commission. There is nothing to prevent it from concluding that CCSB is no longer in a dominant position, contrary to the Commission’s finding at the time when the contested decision was adopted.’ This case concerned a merger clearance decision which in its reasoning included a finding of dominance. Although the merger was cleared, the addressee of that decision had sought to challenge that finding, arguing that this might be used to its detriment in national civil litigation. 567 Para 8, emphasis added. The same view is expressed in the Commission’s Article-by-article Explanatory Memorandum to the 2000 draft Reg, under Art 16, above n 202, ‘the potential for conflict depends on the operative part of the Commission decision and the facts on which it is based’ (emphasis added). See also Dalheimer in Dalheimer, Feddersen and Miersch (eds), EU-Kartellverfahrensverordnung, Kommentar zur VO 1/2003 (Munich, 2005) 120; A Klees, Europäisches Kartellverfahrensrecht mit Fusionskontrollverfahren (Cologne/Berlin/Munich, 2005) 300–1; Adinolfi, in Adinolfi, Daniele, Nascimbene and Amadeo (eds), L’applicazione del diritto comunitario della concorrenza, Commentario al regolamento (CE) n. 1/2003 del Consiglio del 16 dicembre 2002 (Milan, 2007), 199. 564

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122 Institutional Law Aspects b. Crehan and the House of Lords The debate between the minimalist narrow and maximalist broad reading of the concept of conflict and of the corresponding duty of national courts not to contradict Commission decisions is best exemplified by the latest UK episodes of the Courage v Crehan saga.568 In Crehan v Inntrepreneur,569 a case decided on appeal from the High Court,570 the English Court of Appeal was confronted with the effect that past Commission decisions had on a civil case where the facts were similar.571 The Commission in its past decisions, which were considered to be relevant to the facts of the civil case at hand, had found that the lease agreements between certain beer suppliers and pub tenants affected trade between Member States, and that the restrictive effect of the cumulative networks and other factors contributed to the foreclosure of the UK on-trade beer market. The significant contribution made by those specific networks to that restrictive effect meant that the exclusive purchasing and non-competition obligations of the leases fell foul of Article 81(1) EC.572 In Crehan the English courts had to identify whether the cumulative effect of several similar networks of beer distribution agreements foreclosed the UK market. The Court of Appeal reversed the High Court findings that a beer tie imposed on a pub tenant had not infringed Article 81 EC and held that the High Court judge should have followed the European Commission’s findings in the similar cases referred to above. It was the first time that the English Court of Appeal had awarded damages for breach of competition law.573 The Court of Appeal noted that Inntrepreneur was not a party to the Commission proceedings that resulted in those decisions; thus ‘it [was] not in dispute that those decisions did not formally bind anyone not addressed by those decisions’.574 However, the Court of Appeal took issue with the High Court’s departure from the Commission decision’s findings and its giving more weight to the evidence presented by the defendant. The court felt ‘uneasy by the judge’s approach to the evidence’.575 Since a comprehensive investigation and evaluation of a complex economic situation needed to be conducted and courts could not possibly embark on a detailed research investigation themselves, the Commission and other specialised antitrust authorities’ exhaustive investigations should, according to the court, be given proper deference. The court then proceeded to rely upon Articles 3(1)(g) and 10 EC and Masterfoods, as well as upon the 1993 Cooperation Notice and the principle of legal certainty, to arrive at a general principle of deference owed to Commission decisions, even if there is no conflict as such between the operative parts of the Commission decisions and the national court’s judgment and the parties in the proceedings are not identical.576 The Court 568 We use the name ‘Courage’ to refer to ECJ Case C–453/99 and ‘Crehan’ to refer to the English stages of the same litigation, thus following the established practice in Community law literature. 569 Crehan v Inntrepreneur Pub Co CPC [2004] EWCA Civ 637; [2004] EuLR 693 (CA). 570 Crehan v Inntrepreneur Pub Co et al [2003] EWHC 1510; [2003] EuLR 663 (ChD). 571 These were: Commission Dec 99/230/EC of 24 Feb 1999 (Whitbread) [1999] OJ L88/26; Commission Dec 1999/473/EC of 16 June 1999 (Bass) [1999] OJ L186/1; Commission Dec 99/474/EC of 16 June 1999 (Scottish and Newcastle) [1999] OJ L186/28. 572 Notwithstanding this finding, the Commission proceeded to exempt the notified agreements in all 3 cases concerned. 573 See inter alia Cumming, ‘Procedural Consequences of the Crehan Judgment in Enforcement of EC Competition Law by the English Courts’ 5/2005 RLC 106. 574 Crehan, above n 569, para 74. 575 Ibid, para 76. 576 Ibid, paras 79–94. The court also referred to precedents such as Hasselblad, MTV Europe and Iberian (above n 462, n 21 and n 82 (ch 1) respectively) where English courts had expressed the view that Commission decisions should be deferred to.

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The Pillars of the New System 123 of Appeal held that ‘the English court was obliged under the duty of sincere co-operation to give to the Commission much greater deference than that which the judge, with all respect to him, was prepared to give’.577 English commentators, while interpreting this duty of the national courts, spoke of a ‘doctrine of consistency’.578 This was not, however, the last episode, and the House of Lords overturned the Court of Appeal and found that the High Court judgment should be restored. The House of Lords referred to the Community case law on conflicts between decisions of the Commission and national courts and followed the narrower concept of conflict, referring to the Opinion of Advocate General Cosmas in Masterfoods.579 It held therefore that there was no conflict between the Commission Decision in Whitbread and the High Court’s finding that the Inntrepreneur agreements did not infringe Article 81(1) EC. According to the House of Lords, whilst the court should respect the Commission’s expert analysis, Commission decisions are ultimately only part of the admissible evidence which the court must take into account.580 The House of Lords also noted that the Court of Appeal did not comment on the judge’s analysis of the facts as it considered this was an approach he should never have adopted in the first place. Although many commentators who would like to see more private actions in the UK criticised the House of Lords basically on policy grounds and felt disappointment,581 this ruling deserves approval. While the Court of Appeal also agreed in principle with the narrower view in the assessment of what constitutes a conflict between a Commission decision and a national court’s judgment, it was nevertheless ready to accord full deference to the findings of past Commission decisions. This was, according to the Court of Appeal, because of the Commission’s expertise and, more importantly, because of the principles of loyal cooperation and effectiveness, supremacy and uniformity of Community law.582 The Court of Appeal’s approach may seem Community-friendlier than that of the House of Lords, but a closer analysis shows that it is problematic. First, because it is based more on policy than on clear principles of law.583 A duty to pay deference can only be based on Article 10 EC (lex generalis) or Article 16(1) of Regulation 1/2003 (lex specialis). Yet it is clear that these two provisions, as indeed interpreted in Masterfoods, do not extend as far as the Court of Appeal may have wished. Secondly, even from a policy point of view, introducing a principle of deference to the Commission because of its undisputed expertise in the field of EC competition law would result in a principle of primacy of public over private enforcement. In a system of parallel competences, the juges communautaires de droit 577

Ibid, para 97. See eg Cumming, above n 573, at 108. 579 Inntrepreneur Pub Company (CPC) et al v Crehan [2006] UKHL 38 (HL), in particular Lord Hoffmann’s speech. 580 According to Lord Bingham, ‘the judge had either to accept the Commission’s assessment, which (unless required) would have been an abdication of the judicial function, or form his own opinion, giving such weight to the Commission’s assessment as in his judgment the evidence merited’ (emhasis added). 581 See eg Beal, ‘Crehan and Post-modern Malaise’ (2007) 5 Comp LJ 17, at 24 ff; Andreangeli, ‘The Enforcement of Article 81 EC Before National Courts after the House of Lords’ Decision in Inntrepreneur Pub Co Ltd v Crehan’ (2007) 32 ELRev 260, at 269–70; Jones and Sufrin, above n 33 (ch 1), at 1318. 582 For a positive assessment of the Court of Appeal’s Crehan judgment see Nazzini and Andenas, ‘Awarding Damages for Breach of Competition Law in English Courts—Crehan in the Court of Appeal’ (2006) 17 EBLR 1191, at 1197. 583 See ibid, at 1201, where the authors admit that the ‘judgment of the Court of Appeal is based on policy considerations in the framework of Article 10 EC rather than the application of established principles and doctrines of Community or national law’ and that ‘this is a very significant departure from the established principle that, at least in the area of the law of obligations, a strict rule of privity applies to limit the binding effect of findings of fact or law by judicial or administrative authorities to the parties, their privies, or successors in title’ (at 1193). 578

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124 Institutional Law Aspects commun must however be given full competence—and indeed full responsibility—to apply materially the Treaty competition rules on a par with the Commission. Turning them into mere assessors of damages would not in the long term be beneficial to the establishment of an emancipated system of private antitrust enforcement in Europe.584 (iv) Resolution of Conflicts between Commission and National Civil Court Proceedings Bearing these principles in mind, we proceed below to five scenarios as to the resolution of conflicts between Commission and national court proceedings.585 a. First Scenario: Pending National Court Proceedings and Envisaged or Final Commission Decision If the Commission has initiated proceedings or if it has, a fortiori, adopted a final decision, national courts are not devoid of their competence to deal with the same facts, since their function is different from that of the Commission.586 However, according to Article 16(1) of Regulation 1/2003 and to the Masterfoods principles, in the first case (initiated Commission procedure) the national court must ‘avoid giving decisions’ conflicting with the decision contemplated by the Commission,587 while in the second case (Commission decision) it ‘cannot take’ decisions588 running counter to the already existing decision. In the first of these two cases, the national court will most likely be informed by one of the litigants of the Commission proceedings.589 If, however, the court wants formally to ascertain whether the Commission has initiated proceedings and contemplates a decision, it may ask the Commission.590 The national court’s best practice should then be to stay proceedings in order for the Commission to reach its final decision. If the court takes this step, the possibility of conflicts between the Commission and itself is ruled out, since, once it resumes proceedings, it will be bound not to give judgment runing counter to the Commission decision which it awaited during the suspension period. However, as paragraph 12 of the Cooperation Notice recognises, ‘where the national court cannot reasonably doubt the Commission’s contemplated decision or where the Commission has already decided on a similar case, the national court may decide on the 584 See also Cumming, above n 573, at 109. Compare Paulis, above n 537, at 41, stressing the following: ‘[t]he [national] judge has an important role and is an important decision-maker called upon to contribute to the development of the Community rules . . . [He] is not only an executor of Community law, but is going to increasingly contribute to the development of Community law, which must be welcomed’ (our translation). 585 See para 102 of the White Paper, above n 82. See also Komninos, above n 507, at 1404 ff. 586 As the Commission Cooperation Notice, above n 208, stresses (para 11, n 29), if the Commission has initiated proceedings, a national court would be prevented from applying Arts 81 and 82 EC only where the national court acts as ‘national competition authority’ in the sense of Arts 11(6) and 35 of Reg 1/2003 (eg, this is the case of Ireland). In that case, the national court are part of the national public enforcement system, rather than the private enforcement system. 587 See also Case C–418/01 IMS Health GmbH & Co OHG v NDC Health GmbH & Co KG [2004] ECR I–5039, para 19. 588 See also Case T–289/01 Der Grüne Punkt—Duales System Deutschland GmbH v Commission, Judgment of 24 May 2007, not yet reported, para 197. 589 The solution adopted in the UK is rather interesting. CPR Practice Direction—Competition Law, above n 457, para. 5.2 provides as follows: ‘[e]very party to such a claim, and [the competent UK competition authority] which has been served with a copy of a party’s statement of case, is under a duty to notify the court at any stage of the proceedings if they are aware that (a) the Commission has adopted, or is contemplating adopting, a decision in relation to proceedings which it has initiated; and (b) the decision referred to in (a) above has or would have legal effects in relation to the particular agreement, decision or practice in issue before the court.’ 590 The Commission promises in para 12 of its Cooperation Notice, above n 208, to give priority to such cases.

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The Pillars of the New System 125 case pending before it in accordance with that contemplated or earlier decision without it being necessary to . . . await the Commission’s decision’. As stressed above, Article 16(1) of Regulation 1/2003 well serves the fundamental requirements of uniformity of the application of Community law and legal certainty.591 Thus, national courts cannot consider Community acts invalid, but must refer this question to the Court, which is the sole judge that can declare the invalidity of such acts.592 Of course, a preliminary reference will be possible within the limits of the TWD Textilwerke jurisprudence of the Court of Justice,593 which has established that parties that fail to challenge a Commission decision under Article 230 EC cannot later circumvent that provision and challenge the same decision through a preliminary reference under Article 234 EC. It will have to be judged on an ad hoc basis whether the preliminary reference conceals a circumvention of Article 230 EC. The deference required from national courts covers all kinds of decisions,594 not only applicability decisions which declare a practice to be prohibited by Article 81 or 82 EC, but also inapplicability or ‘positive’ decisions which declare the innocuousness of a certain practice, either because it does not fall under Article 81(1) EC, or because it does but fulfils the conditions of Article 81(3) EC, or because it is not caught by Article 82 EC.595 There is no possibility for a national court to depart from a Commission decision, unless an action for annulment of the decision is pending before the Court of First Instance or unless the national court decides to address a preliminary reference on the validity of this decision to the Court of Justice.596 In both cases the national court would have to stay proceedings, possibly granting interim measures.597 591 Compare Foto-Frost, above n 517, para 15: ‘that requirement of uniformity is particularly imperative when the validity of a Community act is in question. Divergences between courts in the Member States as to the validity of Community acts would be liable to place in jeopardy the very unity of the Community legal order and detract from the fundamental requirement of legal certainty’. 592 Naturally, if a Commission decision has already been declared invalid by the Community Courts, any national court can ‘regard that act as void for the purposes of a judgment which it has to give’: see Case 66/80 SpA International Chemical Corporation v Amministrazione delle Finanze dello Stato [1981] ECR I–1191, para 13. 593 Case C–188/92 TWD Textilwerke Deggendorf GmbH v Germany [1994] ECR I–833, paras 17, 18, 24–26. Compare, however, Joined Cases C–346/03 and C–529/03 Giuseppe Atzeni et al v Regione autonoma della Sardegna [2006] ECR I–1875, paras 30–34, where the TWD principles were read somewhat narrowly by the ECJ. 594 Though not decisions rejecting complaints, since in reality in those cases the Commission does not take a decision to enforce the competition rules or develop its policy but merely to reject a complaint. Of course, depending on their content, such decisions may be taken into account by national courts as persuasive. Art 16 of Reg 1/2003, however, does not formally apply to such decisions. See further Koelman, above n 66, paras. 41–43. 595 See A Schaub, ‘Panel One Discussion: Compatibility, Efficiency, Legal Security’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 35; Paulis, above n 73 (ch 1), at 424; Gauer et al, above n 311, at 5; T Lampert, N Niejahr, J Kübler and G Weidenbach, EG-KartellVO, Praxiskommentar zur Verordnung (EG) Nr. 1/2003 (Heidelberg, 2004) 138; I van Bael and J-F Bellis, Competition Law of the European Community (The Hague/London/New York, 2004) 1176. Tavassi, ‘Which Role for National Courts in Competition Protection?’ in Raffaelli (ed), Antitrust between EC Law and National Law, Treviso 13–14 May 2004 (Brussels/Milan, 2005) 88; Howard, ‘Practice and Procedure in Europe’ in Ward and Smith (eds), Competition Litigation in the UK (London, 2005) 339; Speech by Günter Hirsch at the XIV St Gallen International Competition Law Forum (St Gallen, 10–11 May 2007); De Smijter and Kjølbye, above n 178, at 133. See, however, Schütz, ‘VO 1/2003’ in Müller-Henneberg, Schwartz and Hootz (eds), Gesetz gegen Wettbewerbsbeschränkungen und Europäisches Kartellrecht, Gemeinschaftskommentar, 9. Lieferung (Cologne/ Berlin/Munich, 2004), para 9 under Art 10, with references to different views. 596 See A Schaub, ‘Panel One Discussion: Compatibility, Efficiency, Legal Security’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 35; Hirsch, above n 149, at 249. 597 Under national law it may not be possible for the court to order interim measures ex officio. However, the problem was more theoretical than practical, since in most cases one of the litigants would make an application to the court.

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126 Institutional Law Aspects However, it seems possible for the national court to depart from the Commission’s decision if the facts of the case have changed materially or if the Commission decision has been qualified or overruled in its substance by subsequent jurisprudence of the Community Courts.598 In such a case, the Commission decision itself will not have been annulled, but its substance will have been superseded, therefore a judgment of a national court that departed from it and, at the same time, followed the line of reasoning of the subsequent Community Court judgment would not violate Article 16(1) of Regulation 1/2003. If we ascribe to Masterfoods and to the corresponding provision of Article 16(1) the meaning that national courts are not subjected to the authority of the Commission but rather to that of the Court of Justice, then, if there is already a Community Court judgment that supersedes the substance of the Commission decision, the national court can depart from the latter and follow the former. Indeed, the national court would not be bound to stay proceedings and address a preliminary judgment to the Court, although it could well do so, if it chose. In all these cases, the national court, of course, will not declare the invalidity of the superseded Community act; indeed it cannot do so. Instead, it will merely decide not to defer to that act but rather follow the Community Courts’ new interpretation or explain in the reasoning of its judgment why the facts have materially changed so as to render the Commission’s decision obsolete.599 The situation would have been different and a reference to the Court of Justice would have been obligatory if the Commission decision was constitutive and the Commission enjoyed exclusive competence, as was the case with exemption decisions under the old system. In such cases, the constitutive nature of the Commission decision, notwithstanding the fact that in its substance the decision is qualified or superseded by subsequent jurisprudence, means that the national court would have no other option but to seise the Court of Justice under Article 234 EC with a preliminary reference on the validity of that decision. b. Second Scenario: Non-final National Court Judgment and Envisaged Commission Decision If the national proceedings have already resulted in a judgment which is not yet final, either because it is still open to appeal or because an appeal is pending, there is not as yet a res judicata effect and the Commission may at any time adopt a contrary decision, which the national court of appeal would be bound to avoid contradicting, further to Article 16(1) of Regulation 1/2003.600 The power of the Commission to adopt a decision notwithstanding 598 See in this sense Schaub, above n 596, at 35; Paulis, above n 73 (ch 1), at 423; Venit, above n 30, at 560. Regrettably, the Cooperation Notice remains silent on this point. 599 Compare Case C–461/03 Gaston Schul Douane-expediteur BV v Minister van Landbouw, Natuur en Voedselkwaliteit [2005] ECR I–10513, paras 18–25, where the ECJ stressed that national courts must always seek a ruling from the ECJ on a question relating to the validity of the provisions of a Community act even where the Court has already declared invalid analogous provisions of another comparable act, notwithstanding the CILFIT jurisprudence (Case 283/81 CILFIT v Ministero della Sanità [1982] ECR 3415). This ruling does not, however, contradict our argument above that national courts are not bound by superseded Commission decisions. The question that we dealt with above is the effects of such decisions on national judges, and not whether national judges can declare their invalidity, which, as we stressed, they cannot do. Besides, in Gaston Schul the validity of a regulation was at issue, whereas in our context it is rather whether a national court, which has—we must not forget— parallel competence with the Commission to apply the EC competition rules, must be bound by a Commission decision. Compare also the ECJ judgment that was delivered on the same day as Gaston Shul in Joined Cases C–453/03, C–11/04, C–12/04 and C–194/04 The Queen ex parte ABNA Ltd et al v Secretary of State for Health and Food Standards Agency, Fratelli Martini & C SpA et al v Ministero delle Politiche Agricole e Forestali et al, and Nederlandse Vereniging Diervoederindustrie (Nevedi) v Productschap Diervoeder [2005] ECR I–10423, para 103 ff. 600 See Ortiz Blanco and Jörgens, above n 301, at 80.

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The Pillars of the New System 127 the existence of an earlier judgment of a national court is an autonomous power that the Commission enjoys on the basis of the Treaty.601 The Court of Justice has stressed this in Masterfoods, relying basically on Article 85 EC.602 However, this power of the Commission is not entirely unqualified. The Commission is also bound by the principle of sincere cooperation of Article 10 EC, which means that it would be entitled to intervene in rather exceptional circumstances that pertain to the Community interest and raise serious policy interests.603 Such exceptional circumstances would be present, if various national courts and competition authorities were dealing with parallel cases raising similar issues to those in the case at issue and the Commission decision is necessary in order to ensure that the Community competition rules are applied coherently throughout the Community.604 The undue intervention of the Commission would in fact create more problems and would risk antagonising the juges communautaires de droit commun with negative repercussions for decentralisation. At this point, one may draw parallels from the more cooperative atmosphere of the relationship between national courts and the European Court of Justice, whose approach towards national judges has always been one of persuasion rather than constriction, with the positive results being more long-term than short-term. The Commission should follow the same approach and use its best judgment.605 A question arises as to whether the Commission would still be able to open proceedings and adopt a decision in order to ‘pre-empt’ the national court of appeal, also in cases where the Commission has already made its position clear before the first instance court.606 This may have happened either pursuant to Article 15(3) of Regulation 1/2003, through an amicus curiae intervention by the Commission itself, or pursuant to Article 15(1) of the Regulation, through an opinion on questions concerning the application of the Community competition rules addressed to that court in response to a request by the court. Our view is that while in practice it would be very unlikely for the Commission to adopt a decision in such cases, in law, it would still be perfectly entitled to do this, as long as the Community

601

See Burrichter, above n 144, at 542; Gröning, above n 355, at 585. Masterfoods, above n 76 (ch 1), para 46; Van den Bergh Foods, above n 141, paras 197–199. 603 See in this sense Kjølbye, above n 22, at 178, mentioning the facts of the Irish ice cream case as indicative of such a policy issue that would justify the Commission’s intervention. There, the Commission considered that there was a sufficient Community interest in taking a decision differing from a judgment delivered by a national court: settling fundamental questions about business practices which are found throughout the Community (Van den Bergh Foods Decision, above n 511, para 279). 604 Van den Bergh Foods, above n 141, para 198. 605 See Cooke, above n 42, at 19–20, who submits that ‘if the Commission believes in subsidiarity and decentralised administration of the competition rules, then it should accept the logic of its proposal and live with the results, even if from to time that may mean having to live with some decisions it would rather not have’. The same author goes on to stress that fallibility of national courts in individual cases is the price of the reform which the Commission should live with. 606 See further Cooke, above n 366, at 559, who also argues that a Commission decision following a national court judgment would be less justified, even when the Commission did not intervene as amicus curiae but was informed of the first instance judgment (pursuant to Art 15(2) of Reg 1/2003) by the Member State in question, without exercising its power to intervene in the appeal proceedings. These views must be seen in the context of 2000, before Reg 1/2003 opted to introduce a duty to notify the Commission only of final judgments where the EC competition rules have been applied, and not of national proceedings where these rules are being invoked, as had been proposed in the 1999 White Paper, above n 82. In any case, it can be counter-argued that the right to appeal against a judgment can only be exercised by the litigants; therefore, one cannot rule out the possibility that the losing party will not file an appeal. In such a case, the serious competition law issue that has arisen can only be addressed by the Commission in a subsequent decision. 602

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128 Institutional Law Aspects interest dictated so.607 As the Masterfoods principles make clear, the Commission is entitled to adopt decisions at all times.608 It is interesting to note the Commission’s approach in the Irish ice cream case. There, the Commission adopted a prohibition Decision, although the Irish High Court had earlier decided otherwise. In its Decision the Commission stressed that the Irish court had considered the option of contacting the Commission, as well as the possibility of referring a preliminary question to the ECJ, prior to giving judgment. However, as the Commission put it, ‘the High Court did not find either of these options necessary for it to give judgment’. Thus, it follows, the Commission was entitled itself to adopt a decision because of the existing Community interest ‘in settling fundamental questions about business practices which are found throughout the Community’.609 This, therefore, implies that the Commission might not have intervened had the Irish court been prudent enough to seise the Commission or the ECJ before delivering its judgment.610 It would be more sensitive for the Commission to adopt a decision after a national judgment, when the national court has sought a preliminary ruling from the Court of Justice. In such a case, it is again hardly arguable that the Commission is impeded in adopting a subsequent decision, although certainly in practice such action is highly unlikely. In law, the Commission could still proceed to the adoption of a decision which, nevertheless, would have to be compatible with the Court of Justice’s subsequent ruling in its substance; otherwise it would be liable to be annulled and the national court could of course disregard it.611 c. Third Scenario: Final National Court Judgment Finding Inapplicable the Competition Rules and Envisaged Applicability Commission Decision If national courts have reached a final judgment of inapplicability of the EC competition provisions, a so-called ‘positive’ judgment, the Commission may instead find that there is a violation of those provisions. Indeed, such were the facts in Masterfoods, and the ECJ unequivocally held that ‘the Commission is . . . entitled to adopt at any time individual decisions under Articles [81 and 82] of the Treaty, even where an agreement or practice has already been the subject of a decision by a national court and the decision contemplated by the Commission conflicts with that national court’s decision’. A similar situation would arise if a national court had already applied a block exemption regulation to an agreement, thus considering it legal, while subsequently the Commission decided to withdraw the 607 See in this sense Kjølbye, above n 22, at 179–80, according to whom the amicus curiae intervention and the power of the Commission to adopt a subsequent contrary position are two complementary mechanisms that pursue the same fundamental aim, namely the effective and consistent application of the law. The first, however, is preventive in nature, while the second is corrective. The fact that the Commission has already submitted an amicus curiae brief should not deprive it of its power to adopt a subsequent decision contradicting the national court’s judgment in question. But see Cooke, above n 42, at 18–20, who identifies a problem of ‘fairness’ with regard to the subsequent Commission decision. 608 See contra Cooke, above n 366, at 559, who, writing before the Sept 2000 Reg proposal, appears far more deferential to the national courts’ independence. 609 Van den Bergh Foods Decision, above n 511, para 279. 610 Compare the provisions of para 57 of the ECN Cooperation Notice, above n 208, which deals with an equivalent situation: ‘[t]he Commission will normally not—and to the extent that Community interest is not at stake— adopt a decision which is in conflict with a decision of an NCA after proper information pursuant to both Article 11(3) and (4) of the Council Regulation has taken place and the Commission has not made use of Article 11(6) of the Council Regulation’. Of course, the difference here is that in the relationship between the Commission and national courts there is no equivalent to the Art 11(6) of Reg 1/2003 mechanism. 611 Alternatively, the validity of a Commission decision that would depart from an earlier preliminary ruling of the ECJ could be submitted anew to the latter by means of another preliminary reference by the national court that adjudicates on appeal.

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The Pillars of the New System 129 benefit of the block exemption from this agreement and the facts had not substantially changed since the time of the judgment.612 As we have just seen, this conflict is rather easy to resolve if the pre-existing national court judgment is not final and is therefore still open to appeal or cassation. In that case, the higher court will be bound to respect the Commission’s final or contemplated decision under the principles established in Masterfoods and Article 16(1) of Regulation 1/2003. Problems arise when the national court’s judgment is no longer open to review and thus produces res judicata and constitutes what in continental jurisdictions is called an enforceable title. The Commission has indicated that in such cases the inter partes res judicata effect of the national court’s judgment should not be affected.613 This means that the Commission will essentially prohibit the agreement or practice at issue with erga omnes effect for all other market players with the exception of the litigants.614 With all due respect, we fail to comprehend the Commission’s logic and its apparent deference to the principle of res judicata.615 In particular, we wonder how the Commission’s adoption of an applicability or ‘negative’ decision can leave intact the res judicata effect of a judgment that finds lawful that same agreement or behaviour that is prohibited by the Commission’s decision. The Commission’s logic may work in cases of a network of vertical agreements where the national judgment becomes res judicata only as between the litigants and naturally does not bind the other contractual parties of the network. For example, in the case of a distribution network, a national ‘positive’ judgment would be res judicata as between the supplier and one of the distributors (inter partes), and the Commission would be able, if it wished, to prohibit all other agreements of the network with the exception of the specific one that gave rise to the national litigation. On the other hand, the Commission’s approach becomes less meaningful in cases of horizontal agreements or abuse of dominance. In such instances, it is unavoidable that the prevailing party in the national proceedings will also be one of the addressees of the Commission’s prohibition decision. If the subsequent prohibition decision were to avoid infringing the inter partes res judicata effect of the national proceedings, we wonder how much remains for the Commission to prohibit. When the Commission takes the dramatic step to proceed to a decision,616 which then under Article 249 EC is binding on its addressees, it would be totally immaterial if the latter prevailed in national litigation, since they could never continue the behaviour condemned by the Commission. Therefore, one has to re-dimension the statements of the Commission with regard to respect for the principle of res judicata. Such statements, we should stress, appear more as political declarations rather than as descriptions of the law. The Commission’s position of deference can be seen as an attempt, first, to appease those who saw decentralisation as centralisation and, thus, to enhance the possibilities of a positive reception of the new system 612 The situation would be more complicated where an NCA had, subsequently to another Member State’s court’s judgment, withdrawn the benefit of the block exemption in a distinct geographic market. 613 Para 102 of the White Paper, above n 82. Compare the French case CA Paris, 17 Mar 1998, Synd Pharmaciens de l’Aveyron, Juris-Data no 1998-020429, where it was decided that the res judicata effect of a prior civil judgment could not block action by the Conseil de la concurrence. 614 See Schaub and Dohms, above n 149, at 1068; Schaub, above n 177, at 157. 615 See also the critical comments by Cooke, above n 366, at 558–9 and ‘Panel Three Discussion: Courts and Judges’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 505. 616 The Commission would decide to take up a case and produce a decision contradicting a national judgment only in very exceptional cases where the Community public interest required. All the more so here, where we have a judgment that is no longer subject to appeal.

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130 Institutional Law Aspects at the national level, and secondly not to antagonise the national courts which, being the juges communautaires de droit commun, are very sensitive to interventionist inroads by Community organs into their fields of competence.617 In law, however, the principle of res judicata does not appear sacrosanct at closer scrutiny. Regulation 1/2003 contains no direct reference to this matter and limits itself to establishing a rule of precedence in Article 16(1), which makes clear that national courts cannot contradict decisions adopted by the Commission. Neither does the Court of Justice make any reference to such a principle in its Masterfoods judgment. In that case the Court of Justice stressed the unqualified power of the Commission to adopt a decision even in contradiction to an earlier judgment of a national court. The natural consequence of such a contradictory administrative decision of the Commission is that, while the national civil judgment technically still stands, its res judicata effect becomes nominal.618 This is so because, first, the winning party will not be practically able or willing to enforce such a judgment, because the substantive conduct involved would be incompatible with a prohibition decision by the Commission.619 For example, if an undertaking has been awarded damages by a national court but has then been found guilty of abuse of its dominant position by a subsequent Commission decision and the damages award is connected with its abusive behaviour, it will not be able to ‘consummate’ its victory because that would constitute non-compliance with the decision.620 Similarly, if the final national judgment contains an injunction on contract or unfair competition law grounds in favour of a party whose conduct has later been found anti-competitive by Commission decision, the injunc617 Compare eg the national judiciary’s reactions as to the Köbler judgment, above n 4, where the ECJ established that Member States may be liable for violations of EC law by their supreme courts. See Wattel, ‘Köbler, CILFIT and Welthgrove: We Can’t Go on Meeting Like This’ (2004) 41 CMLRev 177. A fortiori, the intervention by the Commission, which is not a judicial organ, raises more objections at the national judiciary level. Reference is also made to the discussion at 1.III.(a) above on the application of the principle of the separation of powers as between the Commission and national courts. 618 See Burrichter, above n 144, at 542, who argues that res judicata cannot bar the opening of administrative proceedings by the Commission. This is because the administrative proceedings are justified by the public interest and the subject of the dispute is technically different from that of the national civil proceedings. The author goes on to note, though without expounding upon it, that the Commission cannot impose fines in such situations. Presumably, the imposition of fines upon undertakings whose conduct has been considered legal by national courts would raise serious concerns of legal certainty. 619 Compare Der Grüne Punkt—Duales System Deutschland, above n 588, para 197, where the CFI held in a rather ambiguous manner that a dominant undertaking would not be ‘prevented’ from bringing an action before a national court or authority seeking in effect a remedy that is not compatible with an injunction addressed to it by Commission decision, but at the same time the Court said that ‘although [the undertaking] has that possibility, it cannot disregard the fact that the Commission might then consider that such action infringes the obligation imposed on it in order to secure the [relevant] decision . . . and in accordance with the applicable provisions of Community law’. 620 For a rare case where the Commission decided to go ahead and move towards adopting a prohibition decision notwithstanding a contradictory national final judgment see the Preflex/Lipski case (see Commission Xth Report on Competition Policy—1980 (Brussels/Luxembourg, 1981), para 126, at 87–8). The facts were that an arbitral award had required the defendant to continue paying licence fees pursuant to a patent licensing agreement after the expiry of the patents. The award was upheld by a a Brussels court (Tribunal de première instance (Civ), Brussels, 15 October 1975, Preflex SA v Lipski (1976) 91 JdT 493). The court had rejected an action to have the award set aside, because, after dealing with the EC competition issue, it concluded that no infringement had taken place. The Commission, however, held that this agreement, as interpreted by the arbitral award and upheld by the national court, was incompatible with the Treaty competition rules. It communicated its objections to the parties, and in essence rejected the construction given by the arbitral tribunal and the national court to the problematic contractual clause. As a result, the parties complied with the Commission’s views and reached a settlement, thus putting an end to the dispute. In this case the national court’s judgment, though formally still final and valid, was essentially deprived of its practical effects.

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The Pillars of the New System 131 tion will not be enforceable and the party against whom the injunction was pronounced by the national court will not be condemned in the subsequent enforcement or contempt of court proceedings, since the court in those proceedings would be bound not to contradict the Commission decision.621 Secondly, in eventual new civil proceedings between the litigants, the court dealing anew with the case would be bound not to contradict the Commission’s decision pursuant to Article 16(1) of the new Regulation, thus not recognising the res judicata effect of the earlier judgment. Until recently, the European Court of Justice had been rather reserved, if not evasive, in touching upon the principle of res judicata of national courts judgments and the eventual limitations of Community law. In Köbler, however,622 the Court held that the violation of Community law by a national supreme court may under certain circumstances engage the state liability of the Member State in question. The Court essentially rejected, albeit implicitly, the res judicata arguments on the basis that a claim for damages would not really invalidate a court judgment that had manifestly misapplied Community law.623 Rather, such a claim would compensate the individuals that suffered damage as a result of the violation of Community law.624 The Court’s pronouncement was more explicit in the Kühne & Heitz case,625 where it made clear that national principles echoing the res judicata rule cannot stand in the way of national courts’ duties to give full effect to Community law, and thus such principles recede before the principle of legality.626 Besides, legal certainty, which underlies the principle of res judicata, cannot in reality be created by a national supreme court’s judgment, as far as questions of Community law are concerned, since it is only the Court of Justice that is the ultimate and authoritative interpreter of Community law.627 Therefore, the claim of legal certainty with regard to such national judgments cannot be as strong as the equivalent one with regard to an ECJ judgment. The same question also arose—though only in theory and never in practice—under the previous system of enforcement, when a national court considered that certain conduct did not fall under Article 81(1) or 82 EC, or that an agreement was covered by a directly applicable block exemption regulation, while the Commission subsequently, based on the same facts, reached the opposite conclusion and prohibited that conduct or withdrew the 621 See in this sense Preece, above n 541, at 285. However, admittedly Art 16(1) of Reg 1/2003 refers to national courts ruling ‘on agreements, decisions or practices under Article 81 or Article 82 of the Treaty’. It is not obvious that national enforcement proceedings would fall under the rationale of that provision since the courts in those cases are not applying the Treaty competition provisions as such, but rather aim at compliance by recalcitrant litigants. This issue may eventually have to be decided by the ECJ. 622 Köbler, above n 4. For commentaries see Obwexer (2003) 14 EuZW 726; Schwarzenegger (2003) 44 ZfRV 236; Wattel, above n 617, at 177 ff; Pittie and van Ypersele, ‘Contentieux communautaire’ (2004) 12 JdT (Eur) 236, at 239–40; Hoskins, ‘Suing the HL in Damages: Career Suicide or Community Law Right?’ (2004) 9 Judicial Review 278; Drake, ‘State Liability under Community Law for Judicial Error: A False Dawn for the Effective Protection of the Individual’s Community Rights’ (2004) 11 IJEL 34. 623 Köbler, above n 4, paras 38–40. 624 See also Skouris, ‘Which Are the Consequences of the Violation of the Duty to Apply Community Law by National Supreme Courts?’ (2004) 24 RHDE 251 (in Greek) 254–5. 625 Above n 3. See on this case Pittie and van Ypersele, above n 622, at 240. 626 The conflict was not resolved in too extreme a way, since the ECJ identified signs of discretionary power in the national organ concerned, thus inviting the latter to exercise that discretion in a manner in conformity with the full effect of Community law. See also Skouris, above n 624, at 265. 627 See A Metaxas, State Liability for Violations of Community Law by National Supreme Court Judgments (Athens/Thessaloniki, 2005) (in Greek) 62.

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132 Institutional Law Aspects benefit of the block exemption regulation.628 It had been argued that if the national judgment was final and no longer subject to appeal, thus constituting res judicata, the party benefiting from the agreement’s illegality could institute new proceedings, for example for restitution of damages paid. According to this line of argument, which is transposable to the new decentralised system of enforcement,629 the res judicata principle in this case could not pre-empt the precedence due to EC law.630 A further possibility that has been suggested as a remedy in such cases of conflict is the use of certain extraordinary means of recourse against final judgments that some legal systems provide for. Such a means of recourse can be the reopening of a contested judgment,631 which may lead to the re-examination of a case, notwithstanding the final character of the contested judgment. Sometimes the appeal is aiming at the interest of establishing a correct legal precedent (recours dans l’intérêt de la loi).632 The reopening of the proceedings will result in the national court now being bound not to contradict the Commission decision pursuant to Article 16(1) of Regulation 1/2003, always on the condition that the facts since the delivery of the Commission decision have not materially changed. The problem with the reopening of a contested judgment is that those national legal systems that provide for such an extraordinary remedy usually subject it to very limited and restrictive conditions, which generally are connected with situations where respect for res judicata conflicts with fundamental procedural principles, or where the judgment is erroneous in its merits and the error has been instigated by a criminal act, such as perjury, or where the judgment relied upon another judgment that was subsequently quashed.633 The latter situation may be comparable to the case where there is a subsequent Commission decision that is incompatible with the already existing court judgment. A Commission decision, though not constituting res judicata for civil proceedings, nevertheless binds its addressees and gives rise to negative duties of deference for the national courts pursuant to Article 16(1) of Regulation 1/2003. Therefore, through a wide interpretation of the national conditions for this extraordinary means of recourse consistently with Community law,634 it is not ruled out that this mechanism may be available in cases where a final court judgment is followed by a conflicting Commission decision.635 628 A further possibility was for a judgment to consider Art 81(1) EC inapplicable and for the Commission decision to consider that provision applicable to an agreement while also granting an individual exemption under Art 81(3) EC. That would not, however, be a conflict in the Masterfoods sense since it would refer only to the reasoning and not to the operative parts. 629 Naturally, the new system has made the negative clearance and individual exemption decisions obsolete. Instead, the Commission can now take applicability (negative) and inappicability (positive) decisions. 630 See Marenco, above n 33, at 619–20. 631 Requête civile and Wiederaufnahme des Verfahrens in French and German law respectively. Greek law also provides for such an extraordinary means of recourse (anapsilafisi). See Ioannou, above n 13 (ch 1), at 447, who mentions the possibility of a reopening of the contested judgment where a national court has applied a block exemption reg and the Commission has subsequently withdrawn the benefit of the exemption accruing to the specific agreement. Compare also the possibilities existing under English law (appeals out of time), mentioned by Preece, above n 541, at 286. 632 See the proposal by Bourgeois, ‘Panel Three Discussion: Courts and Judges’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EU Competition Law (Oxford/Portland, 2001) 508. 633 This is generally the position adopted by Greek law. See further KD Kerameus, Methods of Appeal (Athens/Thessaloniki, 2002) (in Greek) 85 ff. 634 Pursuant to the principle of consistent interpretation. 635 See Kamann and Horstkotte, above n 25, at 466, who speak of the possibility of using by analogy the Wiederaufnahme des Verfahrens means of recourse in Germany.

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The Pillars of the New System 133 The question arises whether Community law may actually require such a result for reasons of effectiveness of Community law, even in the absence of this extraordinary means of recourse under national procedural law. Pursuant to the Factortame (I) line of cases it could be argued that under Article 10 EC a national court may be required to use its best endeavours in order to set aside a judgment that conflicts with a Commission decision if this conflict creates an intolerable situation for Community law. In Kühne & Heitz, national law provided the opportunity for the public administration to review an administrative decision.636 This allowed the Court of Justice to dismiss arguments based on the principle of legal certainty and to stress the duty of the authorities under Article 10 EC to review their decisions in conformity with Community law.637 It could be argued that the same principle is transposable to the case of the extraordinary remedy of the reopening of a contested judgment. However, the Court of Justice in Kapferer recently rejected this approach and placed more emphasis on the principle of res judicata.638 The Court held that ‘Community law does not require a national court to disapply domestic rules of procedure conferring finality on a decision, even if to do so would enable it to remedy an infringement of Community law by the decision at issue’.639 This judgment, however, does not rule out that Community law may indeed impose a duty upon national courts to revisit their judgments, when such a possibility exists under national law. The Court clearly distinguished its Kühne & Heitz ruling, not only on the basis that the relevant body there was administrative and not judicial, but also because national law there allowed for that possibility, whereas in Kapferer it was not the case. Indeed, in such cases it can be argued that if the national law in question provides for a possibility in exceptional cases to revisit final judgments, the same possibility should be open for Community law-related cases.640 A more recent judgment of the Court of Justice in Lucchini,641 which goes back to a more assertive approach of Community law vis-à-vis the principle of res judicata, should probably be viewed on its rather exceptional facts. In that case, the national court, whose judgment’s res judicata effects were at issue, had delivered a judgment touching upon questions, in particular the legality of a state aid, which belong to the exclusive competence of the 636 In that case, the ECJ placed emphasis on the following 4 conditions: first, the administrative body must, under national law, have the power to reopen that decision. Secondly, the administrative decision in question must have become final as a result of a judgment of a national court ruling at final instance. Thirdly, that judgment must, in the light of a decision given by the ECJ subsequent to it, be based on a misinterpretation of Community law which was adopted without a question being referred to the ECJ for a preliminary ruling in the circumstances set out in Art 234(3) EC. Fourthly, the person concerned must have complained to the administrative body immediately after becoming aware of the ECJ judgment. 637 See further Gautier (2005) 132 JDI (Clunet) 401 at 403. 638 Case C–234/04 Rosmarie Kapferer v Schlank & Schick GmbH [2006] ECR I–2585, para 20. On this judgment see inter alia Ludwigs, ‘Der Schutz der Rechtskraft im Gemeinschaftsrecht: Zugleich eine Anmerkung zur Kapferer-Entscheidung des EuGH’ (2006) 47 ZfRV 191. 639 Kapferer, above n 638, para 21. 640 Ibid, para 23. Compare also AG Tizzano’s Opinion in the same case, paras 26–28. See also the recent ECJ ruling in Joined Cases C–392/04 and C–422/04, i-21 Germany GmbH and Arcor AG & Co KG v Germany [2006] ECR I–8559, para 49 ff, where the Court held that a national administrative authority may be required under Art 10 EC to review decisions which have become final, even if the addressee of the decision has not exhausted all legal remedies available to it, if the national rules impose an obligation to withdraw an administrative act that is unlawful under domestic law, where to uphold that act would be ‘outright intolerable’. In short, the Court saw this situation more under the equivalence than under the effectiveness requirement. On these two Community law requirements applicable to national remedies and procedures see 3.I below. 641 Case C–119/05 Ministero dell’Industria, del Commercio e dell’Artigianato v Lucchini SpA, Judgment of 18 July 2007, not yet reported.

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134 Institutional Law Aspects Commission. This was not a case of decentralised application of directly effective Community law and cannot be transposed to the context of Articles 81 and 82 EC, where national courts enjoy full and parallel competences with the Commission. It is, nevertheless, a useful reminder that while Community law recognises the principle of res judicata, in appropriate and exceptional cases where the effectiveness of Community law is put at risk, that principle may recede.642 It should further be mentioned that the recognition or enforcement of a national court judgment that has applied EC competition law in an erroneous way and has, thus, considered legal anti-competitive conduct which has later been prohibited by a Commission decision may be against public policy in another EU Member State, according to Article 34(1) of Regulation 44/2001. The public policy exception has been interpreted in a very narrow manner by the European Court of Justice,643 but it should not be ruled out that in exceptional circumstances the violation of EC competition law by a national court may qualify as an offence against public policy (ordre public international).644 However, the violation of public policy in such exceptional cases will be the result of some fundamental error in the application of EC competition law by the judge, and not of the inconsistency with the Commission decision itself. In other words, public policy in this sense has a substantive meaning and can be exceptionally violated only because the judgment allows prima facie repugnant anti-competitive conduct. It does not have a ‘procedural’ meaning and cannot be violated simply because the court’s judgment is contradicted by the Commission’s decision. In our view, in the Irish ice cream case,645 the Irish judgment that was later contradicted by the Commission would most likely be perfectly enforceable in other European countries under the then applicable Brussels Convention, since the disagreement between the two organs cannot by itself amount to a violation of public policy. Furthermore, the errors, if any, committed by the Irish court do not by themselves suffice to qualify as public policy violation, since the public policy exception’s function is not to lead to the review of the foreign judgment, but rather to block its recognition or enforcement in order to avoid negative effects on the most fundamental social and economic values of the country of enforcement. We cannot see how a possibly erroneous assessment by the national court of the Irish ice cream market’s foreclosure can qualify as a matter falling under the public policy exception, and thus lead to non-recognition or non-enforcement of that judgment in other Brussels Convention signatories. A fortiori, Article 16(1) of Regulation 1/2003 does not bind the judge granting the exequatur to refuse to recognise or enforce a national judgment that is in conflict with a Commission decision even in cases where there is no violation of public policy, as has been suggested by one commentator.646 There are compelling reasons to resist such an 642 Case C–119/05 Ministero dell’Industria, del Commercio e dell’Artigianato v Lucchini SpA, Judgment of 18 July 2007, not yet reported, para 49: ‘[a]gainst that background, it should be noted as a preliminary point that, within the Community legal order, the jurisdiction of national courts is limited both in the field of State aid and as regards jurisdiction to declare Community acts invalid.’ 643 See Case 145/86 Horst Ludwig Martin Hoffmann v Adelheid Krieg [1988] ECR 645, para 21; Case C–78/95 Bernardus Hendrikman and Maria Feyen v Magenta Druck & Verlag GmbH [1996] ECR I–4943, para 23; Case C–7/98 Dieter Krombach v André Bamberski [2000] ECR I–1935, para 21; Case C–38/98 SA Régie Nationale des Usines Renault v Maxicar SpA and Orazio Formento, [2000] ECR I–2973, paras 26–32. On this question see further 3.IV.(b).(iii) below. 644 See eg Burrichter, above n 144, at 545. 645 See 2.III.(d).(i) above. 646 This is the view of Schurmans, above n 4 (ch 1), at 101. That author follows the same approach also with regard to domestic judgments at the stage of their enforcement (execution).

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The Pillars of the New System 135 over-expansive reading of Article 16(1) of Regulation 1/2003. First, that would lead to an unacceptable sacrifice of legal certainty vis-à-vis final judgments having the force of res judicata inter partes. Secondly, it would not be in accordance with the principle of free movement of judgments in the Community647 and with more general long-standing principles of public international law and comity that allow only exceptionally for the nonenforcement or non-recognition of a foreign judgment. It is, therefore, preferable to refrain from such disproportionately intolerable intrusions into national procedural autonomy and into the spirit and text of international and Community instruments that deal with the recognition and enforcement of judgments. The exception of public policy remains a sufficient tool of review in those exceptional cases of flagrant violation of EC competition law by courts, irrespective of the existence of a contradictory Commission decision. d. Fourth Scenario: Final National Court Judgment Finding a Violation of the Competition Rules and Envisaged Inapplicability Commission Decision If the final judgment of the national court finds that there is a violation of EC competition law (‘negative’ judgment), the Commission has stressed that it would normally not seek to contradict that judgment.648 This more liberal approach of the Commission with regard to this kind of conflicts is explicable because it is taken for granted that the public interest is not particularly harmed in a case of erroneous ‘over-application’ of the competition rules by national judges.649 However, the possibility of a conflict does not cease to exist, if the Commission chooses to initiate proceedings and deliver a decision contradicting the national judgment. The Commission’s power to do so is undisputed. This has been the case under the system of administrative authorisation650 and will continue to be so under the system of legal exception. The result will be the co-existence of two conflicting decisions, one of applicability of Article 81 or 82 EC (by the national court) and another of inapplicability (by the Commission). The latter kind of decision is one that only the Commission can take in its pursuit of the Community public interest.651 It should be stressed that the Delimitis and Masterfoods principles, along with Article 16(1) of Regulation 1/2003, apply also to this case. This means that any second or last instance court adjudicating on appeal or cassation must not contradict or must avoid contradicting the Commission’s final or contemplated decision. It is also possible for the Commission (or for national competition authorities) to intervene in the appeal or cassation proceedings as amicus curiae and, of course, a preliminary reference under Article 234 EC remains a final safety valve.652

647 Especially after the communitarisation of the Brussels Convention through Council Reg 44/2001 of 22 Dec 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters [2001] OJ L12/1. 648 See Schaub and Dohms, above n 149, at 1068. See also Jones and Sufrin, above n 59, at 1026, who stress that the Commission is more concerned about the ‘wrong’ authorisation of anti-competitive agreements than it is about the ‘wrong’ prohibition of harmless ones. 649 See Burrichter, above n 144, at 542. Whereas from a Community law angle this view may be correct, from a pure competition law angle it is not ideal, since undue over-application of competition law distorts the market and creates assymetries. 650 See on this specific case Saint-Esteben, ‘La mise en œuvre de l’Article 85 après l’arrêt de la Cour de justice des Communautés européennes du 6 février 1973 (aff. no. 48/72: Brasserie de Haecht c/ consorts Wilkin, Janssen)’ (1973) 9 RTDE 270, at 287. 651 Art 10 of Reg 1/2003. 652 One must also not forget that the Commission’s observations will in any event be heard in the preliminary reference proceedings. See, on that point, Schaub and Dohms, above n 149, at 1068.

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136 Institutional Law Aspects If the national court’s judgment has become final, it will constitute res judicata as between the parties, while any likely positive decision by the Commission will only be an erga omnes ‘declaration’. The national court’s judgment will deal with the inter partes civil consequences of the perceived illegality, whereas the Commission in its declaratory decision will simply state that Article 81 or 82 EC does not prohibit that specific conduct. The Commission’s pronouncement will have been made in the Community public interest, without, however, affecting the national court’s ruling. Contrary to the third scenario analysed above, since the Commission’s decision will not be accompanied by an injunction, it will not affect the national res judicata in practical terms. At the same time, compliance by the parties with the national judgment will not offend against the Commission decision. Thus, for example, a contract will be void as between the litigants (personal scope of the res judicata effect) and any possible antitrust damages awards will stand.653 Naturally, if national procedural law allows, the losing party may request the reopening of the contested judgment, or it could sue the winning party for unjustified enrichment. The further civil proceedings that would follow as a result will, on their part, be pre-empted by the Commission decision, and the national court this time would be bound not to contradict the Commission pursuant to Article 16(1) of Regulation 1/2003. Contrary, however, to the third scenario above, the principle of effectiveness of Community law in this case cannot be stretched as far as to offer a legal basis for the reopening of the contested judgment, if such recourse is unknown under national procedural law. The exigency of effectiveness of Community competition law cannot be of the same degree in the present case of ‘over-application’ of EC competition law by national courts, as in the above case of ‘under-application’ which essentially leads to the upholding of a harmful anti-competitive practice. The only Community law duty imposed upon national courts is to interpret the pertinent conditions of national procedural law—if the latter allows in exceptional cases for such a course—in conformity with EC law. In addition, since this is a case of over-application of EC competition law by the national courts, which, as the Commission also admits, is not particularly offensive for the effectiveness and efficiency of the Treaty prohibitory provisions, such judgments of national courts can still always be recognised and/or enforced in other EU Member States, without being contrary to ordre public communautaire.654 Finally, it should be mentioned that in all cases of national judgments conflicting with Commission Decisions, and thus with Community law, the Commission can always choose to bring this infringement of Community law by the Member State before the Court of Justice under Article 226 EC. This rather extraordinary possibility, which has been used very rarely in the past655 in order not to antagonise national judiciaries, will doubtlessly not be used very often, if at all.

653 In this sense and contrary to the third scenario discussed above at 2.III.(d).(iv).c, the practical result of this specific conflict between the national court’s final judgment and the Commission’s decision will be that the parties will have no other choice but to comply with the national judgment. 654 If it is accepted that the recognition/enforcement of a foreign judgment that upholds a serious violation of EC competition law constitutes an ordre public violation in the sense of Art 34(1) of Reg 44/2001. 655 Case C–129/00 Commission v Italy, above n 452, paras 29–33. In the latter case the ECJ held Italy liable for infringement of the EC Treaty, because Italian courts, including the Corte di Cassazione, interpreted national law in a manner that violated Community law.

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The Pillars of the New System 137 e. Fifth Scenario: The Special Case of Commission Commitment Decisions under Article 9 of Regulation 1/2003 As already mentioned above, Commission decisions accepting and making binding on specific undertakings commitments are neither applicability (negative) nor inapplicability (positive) decisions. They merely close the administrative proceedings and state that as a result of the commitments offered the Commission no longer has an interest in pursuing the case.656 This particularity differentiates these decisions as to the effects they develop in national civil litigation. Indeed, Recital 13 to Regulation 1/2003 stresses that commitments decisions do not bind national authorities and courts as to the applicability or non-applicability of Articles 81 and 82 EC but leave them free to decide whether or not there has been infringement of Community competition law.657 The last sentence of Recital 22 makes this clearer. This Recital corresponds to Article 16, which deals specifically with conflicts between Commission decisions and national courts’ judgments and repeats that ‘commitment decisions adopted by the Commission do not affect the power of the courts . . . of the Member States to apply Articles 81 and 82 of the Treaty’.658 Such commitments decisions do not affect the courts’ competences because their operative part is not in principle such as to lead to a conflict with the operative part of a judgment in the sense of Masterfoods or Article 16 of Regulation 1/2003.659 Therefore, the courts remain free to find an infringement of the competition rules notwithstanding the commitments decision, and on the basis of that finding to order an injunction or award damages.660 The finding of the infringement can refer not only to the period before the adoption of the commitments decision by the Commission661 but also after that.662 656 Of course, as mentioned above, this does not mean that such decisions do not to amount to ‘application’ of the law as such or that they are not covered by the wide text of Art 83(1) EC, which ‘speaks of appropriate regulations or directives to give effect to the principles set out in Articles 81 and 82’. 657 See on this point Paulis and Gauer, above n 77 (ch 1), at 68. 658 See, however, Whish, above n 65 (ch 1), at 257, who finds that Rec 13 of Reg 1/2003 is ‘a strange provision which sits oddly with Article 16’. 659 See further Wils, ‘Settlements of EU Antitrust Investigations: Commitment Decisions under Article 9 of Regulation No. 1/2003’ (2006) 29 World Competition 345, at 361 ff. 660 The position of NCAs must however be seen slightly differently: irrespective of Recs 13 and 22 of Reg 1/2003, and unlike national courts which have different competences and duties, NCAs are charged with the protection of the public interest, exactly like the Commission. If the latter, however, which is the primary enforcer of the competition rules in Europe, decided to proceed to a commitments decision, an NCA could not disregard the principle of uniformity in the application of Community law. See the arguments of Fernández Vicién, ‘Commitment Decisions under EC Regulation 1/2003’, Paper presented at the Joint IBA and European Commission Conference on Antitrust Reform in Europe: A Year in Practice (Brussels, 9–11 Mar 2005) 5–6; Ortiz Blanco and Jörgens, above n 301, at 519–20. See in this direction Montag and Cameron, above n 373, at 14, according to whom, if any action were to be taken by NCAs, it would need to respect the Art 9 decision, and could not de iure or de facto prevent compliance with the commitments decision. 661 See Ritter and Gotti Tedeschi, ‘The New Procedure under Article 9 Regulation 1/2003: Advantages and Weaknesses’ (2005) 10 Contr & Impr (Eur) 383, at 397. 662 See Busse and Leopold, ‘Entscheidungen über Verpflichtungszusagen nach Art. 9 VO (EG) Nr. 1/2003’ (2005) 55 WuW 146, at 151; Wils, above n 659, at 361–2; Whish, above n 65 (ch 1), at 567. See Temple Lang, ‘Commitment Decisions under Regulation 1/2003: Legal Aspects of a New Kind of Competition Decision’ (2003) 24 ECLR 347, at 349; Cook, ‘Commitment Decisions: The Law and Practice under Article 9’ (2006) 29 World Competition 209, at 226; Temple Lang, above n 374, at 287, 301, according to whom national courts are precluded from making findings that there is still an infringement if the commitment is being fully implemented because that would conflict with the Commission’s finding that there are no longer grounds for its action. This unqualified view, however, contradicts the letter of Reg 1/2003.

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138 Institutional Law Aspects Indeed, plaintiffs may be alerted by the commitments decision as to potential competition law violations and may thus seek damages. In so doing, they may seek assistance in the preliminary assessment or the statement of objections, which refers to the Commission’s initial concerns, thus being helped in proving a violation of Article 81 or 82 EC. They would still, however, have to prove the illegality of the conduct concerned, as indeed the Commission itself acknowledges.663 In such cases, the national judgment will have an inter partes res judicata effect, while the Commission’s commitments decision will be binding erga omnes. The situation, however, becomes more complicated with regard to national judgments finding that there has never been an infringement of the competition rules. While the language of Recitals 13 and 22 of Regulation 1/2003 states that courts are not deprived of their power to reach a finding of inapplicability, it is nevertheless true that the national courts’ competence is circumscribed by the general principles of Community law and, in particular, by the principle that national courts cannot bring into question the validity and full effectiveness (effet utile) of Community acts.664 This may create certain problems. Thus, concretely speaking, the courts cannot meddle with the exercise of the Commission’s discretion in the specific commitments decision. They must ensure that the binding commitments are respected in an effective way and they certainly cannot absolve the undertakings from them.665 Third parties perceived as the beneficiaries of the commitments must be able to plead the commitments before national courts and enforce them against the recalcitrant promisor.666 At the same time, parties to agreements which have been de iure or de facto modified through commitments integrated into a decision can no longer rely in court upon the original version of the agreements.667 If these principles are valid, one wonders how much latitude remains for national courts to take an inapplicability decision. Conversely, if the courts remain free to disregard the duties imposed by the commitments decisions on their addressees and find them not in violation of competition law in the first place, the validity and binding effect of a Community act as well as the whole effectiveness of this enforcement tool is seriously impaired. An attempt to resolve this complicated question, which may well end up eventually before the Court of Justice, must start from the fundamental premises on which Masterfoods rests: namely, (a) the central role of the Commission in the orientation and implementation of European competition policy, as enshrined in Article 85 EC, (b) the duty of national courts to ensure the effectiveness of Community law, based on Article 10 EC, (c) the lack of competence of national courts to review the legality of Community measures, and (d) the principle of legal certainty. These four elements were considered by the Court of Justice to be sufficient in order to limit the scope of the principles of separation of powers and judicial independence. Besides, Masterfoods stressed the paramount role of the 663 Commission MEMO/04/217, above n 367. On this possibility see Montag and Cameron, above n 373, at 15; Kahlenberg and Neuhaus, ‘Erste praktische Erfahrungen mit Zusagenentscheidungen nach Art. 9 Verordnung (EG) Nr. 1/2003’ (2005) 16 EuZW 620, at 622; Temple Lang, above n 374, at 278, 287. According to the latter author, however, if the national court were to interpret the commitments decision as a presumption that the conduct concerned was illegal, this may be contrary to Art 10 EC, since it may seriously discourage companies from offering commitments. See also in this direction Montag and Cameron, above n 373, at 16; O’Donoghue and Padilla, above n 76, at 704. 664 On the principle of effectiveness see generally 3.I.(c) below. 665 According to the Commission’s public communication on commitment decisions, above n 367, ‘national courts must enforce the commitments by any means provided for by national law, including the adoption of interim measures’. See also para 7 of the new Cooperation Notice, above n 208. This is also a duty imposed by Art 10 EC. See further Temple Lang, above n 374, at 290; Cook, above n 662, at 224. 666 See Paulis and Gauer, above n 77 (ch 1), at 68. 667 See Marenco, above n 137, at 174.

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The Pillars of the New System 139 Court of Justice, which remains the only final and authoritative interpreter of Community law. To that authority national courts must always defer. On the basis of the above, it is our view that a commitments decision by the Commission cannot affect the competence of national courts to reach the conclusion that there has been no infringement of the Treaty competition rules. This is so for the following reasons: First, it is doubtful whether a decision by the Commission to close proceedings and accept commitments represents a measure of orientation or implementation of the Treaty competition rules in the Article 85 EC sense.668 There may indeed be reasons of administrative convenience that have led the Commission to that decision.669 On the other hand, it is fair to say that commitments decisions should not be seen as decisions disposing of a case because it merits no priority, as suggested by some commentators.670 If the Commission thought that the case was not an important one it would never have opened proceedings in the first place. Instead, administrative convenience means in this case that the Commission prefers a commitment decision to the far more resource- and time-consuming process of proceedings leading to an infringement decision which can always be suspended or annulled by the Community Courts. Secondly, the duty of national courts to respect the effectiveness of Community law and of Community acts recedes in a case where the Commission itself opted not to proceed to a clear declaration as to the applicability or inapplicability of Article 81 or 82 EC. Effectiveness of Community law as such or as positively applied by the Commission cannot be equal to effectiveness of the commitments or of the general mechanism of Article 9 of Regulation 1/2003. Thirdly, it is not at all clear how the Court of Justice’s authority over national courts fits into this mechanism. As stressed above, Masterfoods in reality does not establish the primacy of the Commission but rather of the Court of Justice. The national courts must always turn to the latter if they have doubts about the validity of a Community act. It remains unclear, however, how the national court brings into question the validity of a Community act by deciding that there has been no infringement of competition law. The Commission’s decision does not contain any explicit finding as to the latter question; therefore its validity is not formally questioned by the national court. It is also unclear what the national court can seise the Court of Justice with. Of course, the Commission itself retains the power to impose fines and periodic penalty payments under Articles 23(2)(c) and 24(1)(c) of Regulation 1/2003 as against the recalcitrant addressee of the commitments decision, irrespective of the national judgment that finds him not to be in violation of the competition rules. This means that the problem above becomes more theoretical than practical, since the addressee of the Commission decision, even if victorious before the national courts, will have practically no other option but to comply with the binding commitments of the decision.

668 Again, this does not mean that the taking of such decisions does not amount to ‘application of the law’ or that it is not covered by Art 83(1) EC. Compare para 95 of the recent Alrosa ruling of the CFI (above n 216): ‘the objective of Article 7(1) of Regulation No 1/2003 is the same as that of Article 9(1) of that regulation and is indissociable from the main objective of Regulation No 1/2003, which is to ensure the effective application of the competition rules laid down under the Treaty’. 669 See also Davies and Das, above n 373, at 212–13. 670 See Ritter and Gotti Tedeschi, above n 661, at 397.

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3 The Substantive and Procedural Law Aspects of EC Private Antitrust Enforcement I MOVING FROM A DECENTRALISED SYSTEM TO A SYSTEM OF PRIVATE ENFORCEMENT

(a) Decentralisation: A Necessary but Insufficient Tool to Promote Private Enforcement The decentralisation brought about by the new Regulation 1/2003 did not raise disproportionately high expectations in Europe of a US-like system of private antitrust enforcement. The majority of commentators took the view that while the Article 81(3) EC Commission exemption monopoly was an obstacle,1 its mere abolition would not by itself energise private enforcement. In this sense Regulation 1/2003 was a first necessary but not sufficient condition to promote private actions in Europe.2 It was thus thought that the modernisation project and the direct effect of Article 81(3) EC, though a step in the right direction, would not contribute significantly towards the development of a system of effective private enforcement.3 According to this line of argument, Article 81(3) EC and the possibility of an exemption under the old system rarely come into play in cases involving the substantial liability of a person who has committed a serious violation of the competition rules and inflicted harm on someone else. Harm is more likely to be the result of either very serious anticompetitive practices that were not previously notified and would in any case not benefit from Article 81(3) EC, or abuses of a dominant position under Article 82 EC, the enforcement of which is not affected by the reforms and which has long been recognised as directly effective and concurrently enforceable by the Commission and national courts. With the possible exception of some minor cases where civil liability may have arisen but the likelihood of a Commission exemption may have blocked civil litigation, the decentralised system of 1 May 2004 did not dramatically change the outlook for more private enforcement. 1

See 2.III.(c).(i).a above. See Norberg, above n 37 (ch 1), at 29; Gauer, Dalheimer, Kjølbye and De Smijter, above n 311 (ch 1), at 7. See also Commission XXXIVth Report on Competition Policy—2004, above n 404 (ch 2), 15, speaking of Reg 1/2003 as ‘a first step in strengthening private enforcement before national courts before national courts by giving the latter the power to apply Article 81(3)’. See also Eilmansberger, ‘The Green Paper on Damages Actions for Breach of the EC Antitrust Rules and Beyond: Reflections on the Utility and Feasibility of Stimulating Private Enforcement through Legislative Action’ (2007) 44 CMLRev 431, at 434. 3 See eg Riley, above n 351 (ch 2), at 612–13 and above n 398 (ch 2), at 665 ff; Venit, above n 182 (ch 2), at 151; Holmes, ‘Modernisation: Using EC Competition Law in the UK Courts’ in Ward and Smith (eds), Competition Litigation in the UK (London, 2005) 369. 2

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142 Substantive and Procedural Law Aspects There remained many follow-up problems which the Commission had not addressed sufficiently in its modernisation initiative. These problems relate basically to the weaknesses of the substantive and procedural framework for civil litigation in the EU, which to a large extent is governed by national and not Community law, and is not well-adapted to the difficulties of civil antitrust litigation. Moreover, national civil courts have to undertake a full assessment of complex legal and economic circumstances that are not limited to the specific agreement or practice, but refer to whole markets.4 If even the Commission, a supranational institution of considerable resources, experience and powers, finds it extremely difficult at times to prove the existence of anti-competitive practices, the burden placed upon national litigants and courts can be truly insurmountable.

(b) EC Private Antitrust Enforcement Between National and Community Law At the heart of private antitrust enforcement in Europe lies the question of the relationship between Community and national law. At the current stage of European integration, rights and obligations emanating from Community law are in principle enforced under national law and before national courts. The Community legal order is not a federal one and the Community acts only within the limits of the powers conferred upon it by the EC Treaty. The Community standard is that Community law is enforced primarily by having recourse to national administrative and civil law before national administrative authorities and national courts.5 Thus, on the side of substance, there is no Community law of contract, tort or unjustified enrichment, or a European Civil Code. Indeed, even if the Community had the power or intention to legislate in such a vast cross-sector area, it would be almost impossible to arrive at a common denominator applicable throughout the EU Member States, taking into account the century-long divisions in the European legal systems and families. Equally, on the side of procedure, there are no Community courts of full jurisdiction that could basically apply Community law and deal with Community law-based claims. Although it has already been proposed to introduce Community courts of general jurisdiction, following the US model of federal circuit courts,6 the current judicial structure is bound to remain unchanged for some time. National courts also act as ‘Community courts’ of full jurisdiction (juges communautaires de droit commun).7 They have been conceived as such by the Community in order to strengthen the efficiency of Community law, since it is taken for granted that Member States and their citizens are far likelier to respect the decisions of their own national courts than those of distant ‘international’ tribunals.8 It is true that in the last 20 years much has changed, and one can now speak of a positive integration drive to unify or harmonise rules on remedies and procedures. Thus, there is now, for example, secondary Community legislation on substantive and procedural rules in 4

See Braakman, above n 58 (ch 1), at 167. See 2.I.(a) above. 6 See eg Hawk, above n 381 (ch 2), at 338–9; Sullivan, ‘Antitrust around the World’ [2000] Antitrust Report 30, at 31–2. 7 See Skouris, ‘The Proposals for the Reform of the Community System of Judicial Protection: On the Basis of the Draft Constitution of the European Union’ in Frangakis (ed), The Court of Justice of the European Communities after 50 Years of Operation (Athens/Komotini, 2004) (in Greek) 18, with references to Art I-29(1)(b) of the European Constitution Treaty which stresses that ‘Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law’. 8 See Beutler, Bieber, Pipkorn, Streil and Weiler, above n 560 (ch 2), at 230. 5

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Moving from a Decentralised System to a System of Private Enforcement 143 the areas of consumer protection,9 public procurement,10 sex and racial discrimination,11 unfair commercial practices,12 electronic commerce,13 environmental protection,14 late payments15 and enforcement of intellectual property rights,16 which indeed manifest a 9 See eg Council Dir 85/374/EEC of 25 July 1985 on the Approximation of the Laws, Regulations and Administrative Provisions of the Member States Concerning Liability for Defective Products [1985] OJ L210/29; Council Dir 85/577/EEC of 20 Dec 1985 to Protect the Consumer in Respect of Contracts Negotiated Away from Business Premises [1985] OJ L372/31; Council Dir 93/13/EEC of 5 Apr 1993 on Unfair Terms in Consumer Contracts [1993] OJ L95/2; European Parliament and Council Dir 97/7/EC of 20 May 1997 on the Protection of Consumers in Respect of Distance Contracts [1997] OJ L144/19; European Parliament and Council Dir 98/27/EC of 19 May 1998 on Injunctions for the Protection of Consumers’ Interests [1998] OJ L166/51; European Parliament and Council Dir 1999/44/EC of 25 May 1999 on Certain Aspects of the Sale of Consumer Goods and Associated Guarantees [1999] OJ L171/12; European Parliament and Council Dir 2002/65/EC of 23 Sept 2002 Concerning the Distance Marketing of Consumer Financial Services and Amending Council Dir 90/619/EEC and Dirs 97/7/EC and 98/27/EC [2002] OJ L271/16. 10 See eg Council Dir 89/665/EEC of 21 Dec 1989 on the Co-ordination of the Laws, Regulations and Administrative Provisions Relating to the Application of Review Procedures to the Award of Public Supply and Public Works Contracts [1989] OJ L395/33; Council Dir 92/13/EEC of 25 Feb 1992 Coordinating the Laws, Regulations and Administrative Provisions Relating to the Application of Community Rules on the Procurement Procedures of Entities Operating in the Water, Energy, Transport and Telecommunications Sectors [1992] OJ L76/14. See also Commission Proposal for a Dir Amending Council Dirs 89/665/EEC and 92/13/EEC with Regard to Improving the Effectiveness of Review Procedures Concerning the Award of Public Contracts, COM(2006)195 final. See further Metaxas, ‘Public Procurement Contracts and Community Law: The Interrelationship between National and Community Regulatory Framework and the Relevant Case Law of the ECJ’ (2004) 48 Epitheorissi Dimosiou Dikaiou kai Dioikitikou Dikaiou 441 (in Greek) at 448. Note that the fact that a contract may fall below the thresholds for the application of the public procurement Dirs does not mean that primary Community law does not impose limits on the national legal orders. Thus individuals are always entitled to effective judicial protection of the rights they derive from the Community legal order, even if secondary Community legislation (ie the remedies Dirs) is not applicable. Compare the Commission Interpretative Communication on the Community Law Applicable to Contract Awards not or not Fully Subject to the Provisions of the Public Procurement Dirs [2006] OJ C179/2, section 2.3. 11 From among the new generation measures, see eg Council Dir 97/80/EC of 15 Dec 1997 on the Burden of Proof in Cases of Discrimination Based on Sex [1998] OJ L14/6; Council Dir 2000/43/EC of 29 June 2000 Implementing the Principle of Equal Treatment between Persons irrespective of Racial or Ethnic Origin [2000] OJ L180/22; Council Dir 2000/78/EC of 27 Nov 2000 Establishing a General Framework for Equal Treatment in Employment and Occupation [2000] OJ L303/16; European Parliament and Council Dir 2002/73/EC of 23 Sept 2002 Amending Council Dir 76/207/EEC on the Implementation of the Principle of Equal Treatment for Men and Women as Regards Access to Employment, Vocational Training and Promotion, and Working Conditions [2002] OJ L269/15; Council Dir 2004/113/EC of 13 Dec 2004 Implementing the Principle of Equal Treatment between Men and Women in the Access to and Supply of Goods and Services [2004] OJ L373/37; European Parliament and Council Dir 2006/54/EC of 5 July 2006 on the Implementation of the Principle of Equal Opportunities and Equal Treatment of Men and Women in Matters of Employment and Occupation (Recast) [2006] OJ L204/23, which repreals Dir 97/80 as of 15 Aug 2009. 12 Parliament and Council Dir 2005/29/EC of 11 May 2005 Concerning Unfair Business-to-consumer Commercial Practices in the Internal Market and Amending Council Dir 84/450/EEC, Dirs 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Reg (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Dir’) [2005] OJ L149/22. See further Stuyck, Terryn and van Dyck, ‘Confidence through Fairness? The New Directive on Unfair Business-to-Consumer Commercial Practices in the Internal Market’ (2006) 43 CMLRev 107; Abbamonte, ‘The Unfair Commercial Practices Directive and its General Prohibition’ in Weatherill and Bernitz (eds), The Regulation of Unfair Commercial Practices under EC Directive 2005/29, New Rules and New Techniques (Oxford/Portland, 2007) 11 ff. 13 Dir 2000/31/EC [2000] OJ L178/1. 14 See eg European Parliament and Council Dir 2003/35/EC of 26 May 2003 Providing for Public Participation in Respect of the Drawing up of Certain Plans and Programmes Relating to the Environment and Amending with Regard to Public Participation and Access to Justice Council Dirs 85/337/EEC and 96/61/EC [2003] OJ L156/17; European Parliament and Council Dir 2004/35/EC of 21 Apr 2004 on Environmental Liability with Regard to the Prevention and Remedying of Environmental Damage [2004] OJ L143/56. 15 European Parliament and Council Dir 2000/35/EC of 29 June 2000 on Combating Late Payment in Commercial Transactions [2000] OJ L200/35. 16 European Parliament and Council Dir 2004/48/EC of 29 Apr 2004 on the Enforcement of Intellectual Property Rights [2004] OJ L195/16.

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144 Substantive and Procedural Law Aspects more active stance by the Community legislator. However, with very few exceptions,17 these are sectoral rules applying to very specific areas that are considered important for the attainment of the Community’s most basic objectives. This remarkable progress cannot change the basic reality that there are no cross-sector Community rules of administrative or civil law dealing with the enforcement of Community law-based rights. Over-ambitious projects to harmonise or unify national civil rules on contract and tort and national procedural rules have had rather modest results, not least because of the very defensive—if not hostile—attitude of the legal professions in the Member States. The longstanding proposal—or rather, wish—to introduce a European Civil Code at some point has been watered down to proposals to improve the coherence of the existing and future sectoral acquis, especially with regard to the acquis relevant to consumer protection, and to reflect on the desirability of an optional instrument on European contract law, which would provide parties to a contract with a body of rules particularly adapted to cross-border contracts in the internal market.18 An even more ambitious project to harmonise national civil procedural laws met a rather worse fate and was abandoned.19 Thus in the area of procedural law the Community has preferred to adopt and develop Community instruments applicable to the international rather than to the national side of procedures.20 17 See Council Dir 2002/8/EC of 27 Jan 2003 to Improve Access to Justice in Cross-border Disputes by Establishing Minimum Common Rules Relating to Legal Aid for Such Disputes [2003] OJ L26/41. This is one of the few exceptional cross-sector legislative measures, though again limited to cross-border matters. Compare S Weatherill, EU Consumer Law and Policy (Cheltenham/Northampton, 2005) 240, who in respect of this Dir notes emerging traces of a ‘European legal space’. 18 See Commission Communication of 11 July 2001 to the Council and the European Parliament on European Contract Law, COM(2001)398 final [2001] OJ C255/1; Communication from the Commission to the European Parliament and the Council, A More Coherent European Contract Law, An Action Plan [2003] OJ C63/1; Council Resolution on ‘A More Coherent European Contract Law’ [2003] OJ C246/1; Communication from the Commission to the European Parliament and the Council, European Contract Law and the Revision of the acquis: The Way Forward, COM(2004)651 final; Commission Green Paper on the Review of the Consumer Acquis, COM(2006)744 final. On the original plans relating to the possible introduction of a European Civil Code and the subsequent developments see Legrand, ‘Against a European Civil Code’ (1997) 60 MLR 44; Basedow, ‘The Renascence of Uniform Law: European Contract Law and its Components’ (1998) 18 LS 121; Schmid, ‘Legitimacy Conditions for a European Civil Code’ (2001) 8 MJ 277; Weatherill, ‘European Contract Law: Taking the Heat out of Questions of Competence’ (2004) 15 EBLR 23. On the 2001 Communication and its aftermath, as well as on other Community instruments, such as on the 2001 Green Paper on EU Consumer Protection (Commission Green Paper on European Union Consumer Protection, COM(2001)531 final), see eg Antonioli Deflorian, ‘Consumer Protection, Fair Dealing in Marketing Contracts and European Contract Law—A Uniform Law?’ (2002) 2(2) Global Jurist Frontiers, Article 4. On the constitutional law underpinnings of the development of a ‘European contract law’ and of a ‘European Civil Code’ see more generally Remien, ‘Europäisches Privatrecht als Verfassungsfrage’ (2005) 40 EuR 699. 19 On this and other similar projects see eg Storme (ed), Rapprochement du droit judiciaire de l’Union européenne (Dordrecht/Boston/London, 1994) ; Kerameus, ‘Procedural Harmonization in Europe’ (1995) 43 Am JCompL 401; Gilles, ‘Vereinheitlichung und Angleichung unterschiedlicher nationaler Rechte—Die Europäisierung des Zivilprozeßrechts als ein Beispiel’ (2002) 7 ZZPInt 3, at 8 ff; M Dougan, National Remedies before the Court of Justice, Issues of Harmonisation and Differentiation (Oxford/Portland, 2004) 99. This result clearly illustrates the fact that harmonisation or ‘communitarisation’ of procedure is more taboo than harmonisation of substantive laws. 20 See Council Reg 1346/2000 of 29 May 2000 on Insolvency Proceedings [2000] OJ L160/1; Reg 44/2001 (Brussels I Reg), above n 647 (ch 2); Council Reg 1206/2001 of 28 May 2001 on Cooperation between the Courts of the Member States in the Taking of Evidence in Civil and Commercial Matters [2001] OJ L174/1; Council Reg 2201/2003 of 27 Nov 2003 Concerning Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters and the Matters of Parental Responsibility, Repealing Reg 1347/2000 (Brussels II Reg) [2003] OJ L338/1; European Parliament and Council Reg 805/2004 of 21 Apr 2004 Creating a European Enforcement Order for Uncontested Claims [2004] OJ L143/15; European Parliament and Council Reg 1393/2007 of 13 November 2007 on the Service in the Member States of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Service of Documents) [2007] OJ L324/79. See also Council Dec 2001/470/EC of 28 May 2001 Establishing a European Judicial Network in Civil and Commercial Matters [2001] OJ L174/25.

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Moving from a Decentralised System to a System of Private Enforcement 145 Consequently, natural and legal persons relying upon Articles 81 and 82 EC would have no other means to pursue their civil claims than through access to national courts and laws. This means that the substantive and procedural conditions of civil antitrust enforcement can be quite different in Europe depending on which national law applies and which national court adjudicates. Inconsistencies and inadequacies in national laws on remedies and procedures are certainly a source of serious concern, not just for EC competition law but for Community law in general. In this context, the problem can be identified in three different, albeit interconnected, levels:21 • First, there is a problem of effective or adequate judicial protection, ie the effective protection of Community rights.22 This is a principle not only of Community law but also of human rights law. Indeed, effective judicial protection in the form of access to the courts derives from Articles 6 and 13 of the European Convention of Human Rights.23 As far as Community law is concerned, as the Court of Justice has recognised, Articles 81 and 82 EC ‘tend by their very nature to produce direct effects in relations between individuals [and] create direct rights in respect of the individuals concerned which the national courts must safeguard’. Failure to afford this safeguard ‘would mean depriving individuals of rights which they hold under the Treaty itself’.24 This is, of course, an old question that transcends the boundaries of EC competition law. Indeed, since the 1980s, the ‘Community rights–national remedies’ duality has risen to become the central issue in ‘second’ and ‘third generation’ Community law, to use a ‘classical’ expression.25 • Secondly, there is a problem for the effectiveness of the whole system of Community law as such and, more particularly, for the efficiency of the Community (competition) rules. There are two facets here. One is Community law-specific and the other is competition law-specific. The first facet of the problem is that when citizens pursue their Community rights before the juges communautaires de droit commun, in addition to serving their private interests, they are also instrumental for and indirectly act in the Community interest, becoming ‘the principal “guardians” of the legal integrity of Community law in Europe’.26 The direct effect doctrine was developed partly with this consideration in mind. The second competition law-specific facet refers to the ‘private attorney-general’ 21

See further Komninos, above n 53 (ch 1), at 464. Among the abundant works on this principle central to Community law see van Gerven, ‘Of Rights and Remedies in the Enforcement of European Community Law before National Courts: From the Communitarization of Domestic Law towards the Europeanization of Community Law’ (1997) VIII(1) Collected Courses of the Academy of European Law 241, at 247 ff; T Tridimas, The General Principles of EC Law (Oxford, 1999) 276 ff; Rodrìguez Iglesias, ‘Judicial Protection of the Citizen under European Law’ in Markesinis (ed), The Clifford Chance Millennium Lectures, The Coming together of the Common Law and the Civil Law (Oxford/Portland, 2000) 195ff. 23 See among others P-ME Efstratiou, The Right to Judicial Protection in Administrative Procedures and Article 6 par. 1 of the European Convention on Human Rights, Fundamental Guarantees of a European Clause of Judicial Protection in Administrative Cases (Athens/Komotini, 1996) (in Greek), at i; AD Pliakos, Le principe général de la protection juridictionnelle efficace en droit communautaire (Athens/Brussels, 1997) 101 ff. 24 BRT v SABAM (I), above n 22 (ch 1), paras 16 and 17. 25 See Curtin and Mortelmans, ‘Application and Enforcement of Community Law by the Member States: Actors in Search of a Third Generation Script’ in Curtin and Heukels (eds), Institutional Dynamics of European Integration, Essays in Honour of Henry G. Schermers (Dordrecht/Boston/London, 1994), ii. Compare also Eilmansberger, ‘The Relationship between Rights and Remedies in EC Law: In Search of the Missing Link’ (2004) 41 CMLRev 1199, at 1202 ff. 26 See Weiler, above n 50 (ch 1), at 20. Private enforcement can also further the effectiveness of other areas of Community law, apart from EC competition law. One such case is Community environmental law. See in this regard Somsen, ‘The Private Enforcement of Member State Compliance with EC Environmental Law: An Unfulfilled Promise?’ (2000) 1 YEEL 311, at 312 ff. 22

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146 Substantive and Procedural Law Aspects role of individuals in antitrust cases.27 In a mature antitrust system, private enforcement is a necessary complement of public enforcement, and by no means inferior or weaker. In such a system private actions and, we should stress, particularly actions for damages, are crucial for the efficiency of the system as a whole.28 • Thirdly, the disparities and inadequacies of national legal systems offend against the principle of consistent and uniform application of Community law.29 It has been persuasively argued that the requirement of uniform application or enforcement is not ‘an allembracing principle which does not allow for national principles’.30 Therefore, national remedial and procedural discrepancies to a certain extent are unavoidable.31 It is arguable, however, that such discrepancies are particularly regrettable from an EC competition law point of view, because they tend to create variations in the costs of enforcing the EC antitrust rules, and thus to unequal conditions of competition among the Member States.32 In the decentralised system of antitrust enforcement the problem is exacerbated. Competitors and economic actors in general take the likelihood of public or private antitrust action seriously into account in defining their market strategies. In this context, damages have an especially powerful impact on business behaviour.33 An economic operator’s exploitation of its ‘immunity’ from civil actions in damages and failure to compensate victims adequately in one jurisdiction, as opposed to other jurisdictions where companies are constantly successfully or unsuccessfully defending civil antitrust actions and victims are fully compensated, is hardly compatible with the creation of ‘a level playing field for agreements, decisions by associations of undertakings and concerted practices within the internal market’, as the new Regulation 1/2003 provides.34 27

See 1.II.(b) above. On this particular point see 3.II.(b) below the analysis of the ECJ’s Courage ruling. 29 On the principle of uniform application of Community law see Fines, ‘L’application uniforme du droit communautaire dans la jurisprudence de la Cour de justice des Communautés européennes’ in Etudes en l’honneur de Jean-Claude Gautron, Les dynamiques du droit européen en début de siècle (Paris, 2004) 334. 30 See van Gerven, ‘Of Rights, Remedies and Procedures’ (2000) 37 CMLRev 501, at 503 (emphasis in the original). The author goes on to argue that ‘although the objective of uniform enforcement of Community law throughout the Community is a fundamental requirement of the Community legal order that must be pursued as much as possible, it is not a Community law principle of the same nature as direct effect, supremacy, or access to a court’ (at 522). In the same spirit see Fines, above n 29, at 336. 31 See AG Reischl’s Opinion in Case 61/79 Amministrazione delle Finanze dello Stato v Denkavit italiana Srl [1980] ECR 1205, at 1233: ‘[t]hat the legal position of the individual may . . . differ in the various Member States is simply a consequence of the implementation of Community law by the Member States, which is accepted by the Community legal system’. 32 It is interesting to note that this argument in favour of more uniformity has been used not only in the antitrust area itself but also in the EC labour law field, since the principles of equivalence and effectiveness cannot extinguish cost variations in the enforcement of EC labour legal provisions in the different EU Member States. See in this respect Ryan, ‘The Private Enforcement of European Union Labour Laws’ in Kilpatrick, Novitz and Skidmore (eds), The Future of Remedies in Europe (Oxford/Portland, 2000) 161–2. 33 See Jones, above n 75 (ch 1), at 103, who quotes senior officers of a US company which had settled a monopolisation action against IBM for more than $ 100 million as boasting ‘that the lawsuit had been the best investment the company had ever made’. Another telling example of the importance that treble damages awards can have in the business world is the specific case of a US company (Information Resources Inc) that became the subject of a takeover bid by US private equity investors (Gingko), precisely because its chief asset was pending antitrust litigation against its rivals that had colluded to drive it out of business (Global Competition Review, Electronic Newsletter, 26 Sept 2003). While such commoditisation and commercialisation of civil antitrust claims may not be ideal, these examples certainly make the point that damages actions and awards affect business behaviour. 34 Rec 8. See also Rec 1, which speaks of the necessity for Arts 81 and 82 EC to ‘be applied effectively and uniformly in the Community’ (emphasis added), and the Impact Assessment Form of the Sept 2000 Reg proposal, at 56, where reference is made to a ‘level playing field for companies in the internal market by ensuring more 28

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Moving from a Decentralised System to a System of Private Enforcement 147

(c) National Remedial and Procedural Autonomy: A New Approach The Court of Justice35 has recognised in a consistent line of judgments, though very rarely by name,36 the ‘procedural/remedial and institutional autonomy’ of the Member States37 to identify the remedies, courts and procedures that are necessary for the exercise of Community law rights at the national level.38 More importantly, however, the Court has also imposed demanding Community limits and safeguards upon that autonomy.39 These are the principles of equality and effectiveness.40 The first means that the enforcement of widespread application of the Community competition rules’. See further Temple Lang, above n 115 (ch 2), 290; Paulis, above n 73 (ch 1), at 399, according to whom divergences in the enforcement of the antitrust rules constitute discrimination that can lead to distortions of competition in the market. 35 The role of the CFI in this area is virtually non-existent, since these legal issues arise in ECJ preliminary reference cases. 36 One rare exception is Case C–201/02 The Queen ex parte Delena Wells v Secretary of State for Transport, Local Government and the Regions [2004] ECR I–723. In para 70 of its ruling, the ECJ stresses: ‘[u]nder Article 10 EC the competent authorities are obliged to take, within the sphere of their competence, all general or particular measures for remedying the failure to carry out an assessment of the environmental effects of a project as provided for in Article 2(1) of Directive 85/337. The detailed procedural rules applicable in that context are a matter for the domestic legal order of each Member State, under the principle of procedural autonomy of the Member States, provided that they are not less favourable than those governing similar domestic situations (principle of equivalence) and that they do not render impossible in practice or excessively difficult the exercise of rights conferred by the Community legal order (principle of effectiveness)’ (emphasis added). 37 On whether a principle of ‘national procedural autonomy’ really exists see the provocative article by the late ECJ Judge Kakouris, ‘Do the Member States Possess Judicial Procedural “Autonomy”?’ (1997) 34 CMLRev 1389. According to Kakouris, national remedial and procedural systems are subservient to Community law. Thus, the ‘principle’ of national procedural autonomy is a descriptive term that does not mean that the Community lacks the power to legislate or regulate such procedural and remedial rules as are necessary for the enforcement of substantive Community rules. See further VA Christianos, Dynamics in the Relations between Judiciary and Legislature in the European Community (Athens/Komotini, 2005) (in Greek) 88–9; Nazzini, above n 335 (ch 2), at 120; contra Pavlopoulos, above n 4 (ch 2), at 119, who sees that principle through the perspective of an exclusive power of national law to deal with these matters. Some commentators approach the principle of national procedural autonomy in the context of subsidiarity (see eg Gautron, above n 225 (ch 2), at 5–7, speaking of ‘judicial subsidiarity’). 38 The term ‘procedural autonomy’ creates the incorrect impression that this principle refers only to national rules of civil, administrative or criminal procedure. In fact its scope is much larger and covers all substantive or procedural mechanisms at national level that can be used for the enforcement of Community law. That is why the term ‘remedial/procedural autonomy’ is preferable. Besides, it is not always clear in the EU Member States’ legal systems where substance stops and procedure begins, or vice versa. See on this question Bergé and Sinopoli, ‘Droit des obligations et autonomie procédurale: La distinction fond/procédure sous le double éclairage du droit communautaire et du droit des Etats membres’, Petites Affiches, 24 Aug 2004, No 169, 7, at 8–10. 39 On the remedial and procedural autonomy of Member States and its Community law limits see eg Tridimas, ‘Enforcing Community Rights in National Courts: Some Recent Developments’ in O’Keeffe and Bavasso (eds), Liber Amicorum in Honour of Lord Slynn of Hadley, Vol. I, Judicial Review in European Union Law (The Hague/London/Boston, 2000) 465 ff; Kilpatrick, ‘The Future of Remedies in Europe’ in Kilpatrick, Novitz and Skidmore (eds), The Future of Remedies in Europe (Oxford/Portland, 2000) 2 ff; Jacobs and Deisenhofer, above n 1 (ch 1), at 215 ff; Vilaras, ‘Judicial Protection of Individuals’ in Frangakis (ed), The Court of Justice of the European Communities after 50 Years of Operation (Athens/Komotini, 2004) (in Greek) 43 and ‘Réflexions sur le présent et l’avenir de la protection juridictionnelle des particuliers’ in Alivizatos, Dimitropoulos et al (eds), Essays in Honour of Georgios I. Kassimatis (Athens/Brussels/Berlin, 2004) 878–9; Mehdi, ‘Le revirement jurisprudentiel en droit communautaire’ in L’intégration européenne au XXIe siècle, En hommage à Jacques Bourrinet (Paris, 2004) 122–3; Dougan, above n 19, at 20 ff; J-V Louis and T Ronse, L’ordre juridique de l’Union européenne (Brussels/Paris, 2005) 262 ff and 292 ff; A Arnull, A Dashwood, M Dougan, M Ross, E Spaventa and D Wyatt, Wyatt & Dashwood’s European Union Law (London, 2006) 208 ff; A Herb, Europäisches Gemeinschaftsrecht und nationaler Zivilprozess (Tübingen, 2007), 13 ff and 181 ff. 40 See eg Case 33/76 Rewe-Zentralfinanz eG and Rewe-Zentral AG v Landwirtschaftskammer für das Saarland [1976] ECR 1989, para 5; Case 45/76 Comet BV v Produkschap voor Siergewassen [1976] ECR 2043, paras 12–13; Case 130/79 Express Dairy Foods Ltd v Intervention Board for Agricultural Produce [1980] ECR 1887, para 12; Case 199/82 Amministrazione delle Finanze dello Stato v San Giorgio [1983] ECR 3595, para 12; Case C–261/95 Rosalba Palmisani v Istituto Nazionale della Previdenza Sociale (INPS) [1997] ECR I–4025, para 27.

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148 Substantive and Procedural Law Aspects Community law at the national level should not be submitted to more onerous procedures than the enforcement of comparable national law. The second principle, which is a direct consequence of the principles of direct effect and supremacy,41 is a much harder test. It means that although Community-derived rights will have to count on national substantive and procedural remedies for their enforcement, such remedies still have to be effective and must not render the exercise and enforcement of those rights impossible or unjustifiably onerous. It reflects a more general guiding principle of Community law, that of full and useful effectiveness (effet utile).42 Undoubtedly those two requirements make the national divergences that we described above less burdensome (negative integration side). To all these we must also add the Article 234 EC preliminary reference procedure, the importance of which is paramount for any attempt to proceed to a private enforcement system of EC competition law. The Court of Justice has, nevertheless, proceeded further than that. Starting with such cases as Francovich, Factortame I and Zuckerfabrik Süderdithmarschen,43 it has also recognised the existence of certain autonomous Community law remedies for Community law-based rights,44 and has delegated to national law only the very specific conditions for their exercise, as well as the procedural framework rules, always within the limitations of equality and effectiveness. In doing so, it has been guided by the ubi ius, ibi remedium principle, under which a Community law right must be protected through an appropriate corresponding remedy,45 and has relied upon ‘the full effectiveness of Community rules and the effective protection of the rights which they confer’ and upon the duties that Article 10 EC imposes on Member States and their judicial organs.46 A former Advocate General of the Court of Justice and eminent scholar of Community law has therefore proposed a more global approach to the issue of remedies in Community law, thus stressing the requirement of effective judicial protection which better describes the Court’s case law on remedies. Professor van Gerven speaks of four already existing Community substantive remedies: a general one, to have national measures that conflict with EC law set aside;47 and three specific ones, compensation, interim relief and restitution.48 Individual civil liability is integrated in the first limb of these three specific remedies, beside its admittedly much more developed sibling, state liability.49 41

See Louis and Ronse, above n 39, at 296. See Karageorgou, above n 3 (ch 2), at 18. On the principle of effectiveness (effet utile) see inter alia RM D’Sa, European Community Law and Civil Remedies in England and Wales (London, 1994) 153 ff; Pliakos, above n 23, at 179 ff; Dubos, above n 4 (ch 2), at 278 ff; Zuleeg, ‘Die Wirksamkeit des Europarechts’ in Colneric, Edward et al (eds), Une Communauté de droit, Festschrift fur Gil Carlos Rodriguez Iglesias (Berlin, 2003) 222 and 228 ff; K Lenaerts, D Arts, I Maselis and R Bray, Procedural Law of the European Union (London, 2006) 83 ff. 43 Cited at n 484 (ch 1), n 320 (ch 2) and n 562 (ch 2) above, respectively. 44 See eg B Hofstötter, Non-compliance of National Courts, Remedies in European Community Law and Beyond (The Hague, 2005) 31–3; PP Craig, EU Administrative Law, Collected Courses of the Academy of European Law, Vol. XVI/1 (Oxford, 2006) 791 ff. 45 See eg Pliakos, above n 23, at 141 ff. 46 Joined Cases C–46/93 and C–48/93 Brasserie du Pêcheur SA v Germany and Regina v Secretary of State for Transport, ex parte Factortame Ltd et al (Factortame III) [1996] ECR I–1029, para 39. On the Art 10 EC legal basis see in particular Temple Lang, ‘The Duties of Cooperation of National Authorities and Courts under Article 10 EC: Two More Reflexions’ (2001) 26 ELRev 84, at 87. 47 This general remedy, in our view, encapsulates the duty of national courts to ignore national law that conflicts with directly effective Community law (principles of supremacy and direct effect), and to interpret national law in conformity with Community law. 48 See van Gerven, above n 30, at 503. Compare also, more recently, Reich, ‘Horizontal Liability in EC Law: Hybridization of Remedies for Compensation in Case of Breaches of EC Rights’ (2007) 44 CMLRev 705. 49 On the extension of this principle to cover individual civil liability see 3.II.(b) below. 42

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The Substantive Law Framework 149 The former Advocate General further makes a distinction between the ‘constitutive’ and ‘executive’ elements of remedies. The first pertain to the principle of the remedy as such; the second to its ‘content and extent’. The first type of elements must be uniform, since they are entirely connected with the Community ‘right’ of which individuals avail themselves. The executive elements, on the other hand, may to a certain extent be governed by national law, but only under more substantial Community requirements. For these elements Community law should require an ‘adequacy test’, rather than a mere ‘minimum effectiveness’ or ‘nonimpossibility’ test which may continue to apply for simple procedural rules.50 On the above basis, it is unfortunate that Article I-29(1)(b) of the ill-fated Treaty establishing a Constitution for Europe and now Article 9F(1)(b) of the Treaty on the Functioning of the European Union, as renamed and amended by the Treaty of Lisbon, totally missed this point and used the following unsophisticated text: ‘Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law’. While the intention was clearly to ensure the effective judicial protection of Community-law-based rights,51 the language used seems to imply that the corresponding remedies52 are a matter of national law only. Such a reading, however, would not only contradict the case law of the Court of Justice ever since Factortame I and Francovich, but would not be in accordance with the spirit and system of the new Treaty itself. It is clear that this provision, which is a paragraph in the Article dealing with the Court of Justice, should not be considered as a rule on competences. Its aim is to energise the national courts and point to their duties as Community judges of general jurisdiction. It therefore cannot be intended to rule out the possibility for Community law itself to provide for substantive remedies in appropriate cases.

II. THE SUBSTANTIVE LAW FRAMEWORK

(a) Nullity (i) Nullity of Anti-competitive Agreements under Article 81(2) EC Article 81(2) EC provides that any anti-competitive agreement, ie any agreement falling under Article 81(1) EC that cannot be saved by Article 81(3) EC, will be null and void. This is the only express provision in the EC Treaty that bears directly on private legal relationships. As such, it was a rather bold and exceptional provision to have been included in what was in 1957 an international treaty.53 This certainly highlights the importance of the competition rules and their binding nature.54 Article 81(2) EC is usually raised as a defence by one of the parties to an allegedly anti-competitive contract (‘shield litigation’). While it is generally true that raising EC competition law as a shield in this context may not constitute pro-active private antitrust enforcement, it nonetheless constitutes the exercise of a Community right directly derived from the Treaty. In certain circumstances, apart from protecting the private interests of the 50

See van Gerven, above n 30, at 502–4, 524–6. See Skouris, above n 7, at 18. 52 This is the only time that the Treaty, as amended, refers to ‘remedies’. 53 See eg Gavalda and Parleani, above n 20 (ch 1), at 355, who do not miss the exceptionality point. 54 See E Steindorff, EG-Vertrag und Privatrecht (Baden-Baden, 1996) 308, who sees the Art 81(2) EC civil sanction not only from the perspective of individual rights, but also from that of the full and effective application of EC law. See also 3.II.(b).(iv) below on the Eco Swiss and Courage references to the role of Art 81(2) EC. 51

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150 Substantive and Procedural Law Aspects party raising the ‘Euro-defence’, it may also further the effectiveness of the competition rules, and in that sense it serves the public interest, in particular when that defence is raised by many litigants in multiple litigation proceedings. This may be the case with multiple litigation when an undertaking claims damages from several parties for breach of network agreements. Just as the cumulative effect of such agreements may pose a problem for competition, the cumulative effect of raising the ‘Euro-defence’ may constitute a powerful civil sanction for the competition law violation. National courts are required under Community law to make the application of Article 81(2) EC as effective as possible. The Court of Justice in Eco Swiss and Courage relied precisely on that provision to stress the primacy of Article 81 EC in the Treaty system, since it ‘constitutes a fundamental provision which is essential for the accomplishment of the tasks entrusted to the Community and, in particular, for the functioning of the internal market’.55 Thus, any obstacles posed by national law to the exercise of the right to defend oneself against an action aiming to give effect to anti-competitive conduct would be contrary to Community law and to the Community principle of effectiveness. Indeed, any reticence on the part of national courts to admit such defences based on Community competition law must be regarded as offending against effective judicial protection and the effet utile of the prohibition of Article 81 EC. For this reason, the tendency of English courts to view the ‘Euro-defence’ with extreme suspicion in actions for contractual liability or infringement of intellectual property rights does not accord with Community law.56 To give an example, there are serious doubts as to the compatibility with EC law of the attitude of the English judges that there must be a nexus between an alleged violation of Articles 81 and 82 EC and the relief sought by the plaintiff for infringement of an intellectual property right for the plaintiff’s claim to fail.57 (ii) The Nature of the Article 81(2) EC Nullity The nullity of Article 81(2) EC has a Community law meaning,58 notwithstanding that all national legal systems avail themselves of equivalent notions. Thus the only applicable 55 Case C–126/97 Eco Swiss China Time Ltd v Benetton International NV [1999] ECR I–3055, para 36; Courage, above n 53 (ch 1), para 20. 56 See eg Jones and Sufrin, above n 33 (ch 1), at 1320. 57 See eg Ransburg-Gema AG v Electrostatic Plant Systems Ltd [1989] 2 CMLR 712 (Pat Ct); Hewlett-Packard v Expansys [2005] EWHC 1495 (ChD). In Chiron Corp v Murex Diagnostic [1994] 1 CMLR 410 (CA), a patent case, the English Court of Appeal granted injunctive relief to the plaintiff, although the defendant had raised a breach of Art 82 EC. According to the court, it would have been disproportionate to deny interim relief to the plaintiff, while the defendant could always bring a damages claim for breach of Art 82 EC or complain to the Commission! For an equally disappointing case see ICI v Berk Pharmaceuticals [1981] 2 CMLR 75, where no nexus was found between the alleged abuse and the tortious liability of the defendant. For a recent judgment going in the opposite direction and reversing a lower court’s finding that there was no nexus between Art 81 EC and a trade mark infringement claim see Sportswear SpA and Four Marketing Ltd v Stonestyle Ltd [2006] EWCA Civ 380 (CA). For critical comments on these judgments see eg Tritton et al, above n 59 (ch 2), at 941 ff. Compare also Vaughan, ‘Different Anti-competitive Visions in the Western World: The US and the EU: A View from the United Kingdom’ (1999) 34 New Eng L Rev 21, at 23, explaining that ‘ “Euro-defenses” in patent licensing agreements developed a bad name as they were seen to be, and indeed usually were, a tactic to avoid the inevitable application of a perfectly normal consensual commercial agreement’. Dutch courts have also been reproached for being ‘reluctant’ to apply Arts 81 and 82 EC when the latter are used to attack the status quo of contractual agreements. See in this regard VerLoren van Themaat, Adema, Rijnsberger, Schutte and Sevinga, ‘Rapport néerlandais’ in XVIII congrès FIDE (Stockholm, 3–6 juin 1998), Vol. II, Application nationale du droit européen de la concurrence (Stockholm, 1999) 212–13. 58 Case 56/65 Société La Technique Minière (LTM) v Maschinenbau Ulm GmbH (MBU) [1966] ECR 235, at 250. See Schröter, above n 122 (ch 2), at 310.

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The Substantive Law Framework 151 norm in the case of an agreement that is contrary to Article 81 EC will be Article 81(2) EC, to the exclusion of similar norms on nullity of illegal contracts under national law. This is because of the specificity of the Community norm.59 The nullity is absolute, having an erga omnes effect. This means that it can first be invoked by co-contractors. While most Member States’ legal systems have found no difficulty in recognising this,60 English law excluded the invocability of the Article 81(2) EC nullity. This issue was referred by the English Court of Appeal to the ECJ (along with the more important questions on damages) in the Courage case, and the Court’s answer was unequivocal: Having recourse to earlier case law,61 it stressed the automatic and absolute nature of the nullity, which as a result has absolutely no effects as between co-contracting parties and cannot be raised against third parties. Any individual, according to the Court, could rely on a breach of Article 81(1) EC before a national court, even if he were a party to an anticompetitive contract.62 The absolute nature of the nullity means, secondly and most importantly, that it can be raised by third parties, as indeed the Court of Justice stressed in Courage and in its recent Manfredi ruling.63 The nullity’s absolute nature also means that a party cannot rely upon the doctrine of abuse of rights64 in order to oppose it.65 The nullity also has retroactive effect;66 it is automatic and comes as an ipso jure consequence of the application of Article 81 EC as a whole to a specific agreement, no prior 59 Of course, general national provisions on nullity may be applicable if the agreement in question is lawful under Art 81 EC but considered unlawful under national (not competition) law. In this case, the supremacy of Community competition law is unaffected, since the agreement will fail because it is incompatible not with national competition law, but rather with national law that pursues other objectives (eg the protection of the weaker party in negotiations). See in this regard Art 3(3) in fine of Reg 1/2003, which allows the application of stricter national rules that predominantly pursue objectives other than Arts 81 and 82 EC. 60 See eg Günther, above n 294 (ch 2), at 394, on Austrian law; Erämetsä, above n 33 (ch 1), at 220, on Finnish law; Boulanger, above n 465 (ch 2), at 225 and 292; Winckler, ‘Remedies Available under French Law in the Application of EC Competition Rules’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 122–3, on French law; Braun, above n 138 (ch 2), at 575, on German law; Ligustro, ‘Italie’ in Behrens (ed), EEC Competition Rules in National Courts, Vol. I, United Kingdom and Italy (Baden-Baden, 1992) 254–5; Siri, in Marchetti and Ubertazzi (eds), Commentario breve al diritto della concorrenza, Antitrust, Concorrenza sleale, Pubblicità, Marchi, Breveti, Diritto d’autore (Padua, 1997) 42, on Italian law, in which the ordre public nature of EC competition rules leads to the disapplication of the nemo auditur turpitudinem suam allegans principle. 61 References to Case 10/69 SA Portelange v SA Smith Corona Marchant International et al [1969] ECR 309; Case 22/71 Béguelin Import Co v SAGL Import Export [1971] ECR 949; and Brasserie de Haecht II, above n 24 (ch 2). 62 Courage, above n 53 (ch 1), para 24. On the issue see also van Gerven, ‘Substantive Remedies for the Private Enforcement of EC Antitrust Rules before National Courts’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 55, who cites pertinent precedents, referring also to the Opinion of AG Mayras in de Bloos, above n 46 (ch 2). The AG in that case had left no doubt that the nemo auditur suam turpitudinem allegans rule did not prevent co-contracting parties from relying on the nullity of their contract, in view of the public policy character of Art 81(2) EC. See also in this direction Hubeau, ‘La nullité, au sens de l’article 85§2 du Traité CEE des accords et décisions incompatibles avec le marché commun’ in Liber amicorum Josse Mertens de Wilmars (Antwerp/Zwolle, 1982) 103; Norberg, ‘The Complementarity of Community Remedies and of National Remedies (Such as Damages Available in Competition Cases in National Courts when a Community Institution has Determined a Violation of the Competition Provisions in the Treaty of Rome’ in Sundström and Kauppi (eds), Access to Justice, A Record of Thoughts and Ideas Dealing with the Interrelationship between National Law and Courts and Community Law and Courts, The Nordic Conference on the European Union: Access to Justice, the Rule of Law and Due Process 6–8 November 1998 (Helsinki, 1999) 168. 63 Joined Cases C–295/04 to C–298/04 Vincenzo Manfredi et al v Lloyd Adriatico Assicurazioni SpA et al [2006] ECR I–6619, paras 57–59. On this case see 3.II.(b).(vi) below. With regard to the invocability of the Art 81(2) EC nullity by third parties see also Béguelin, above n 61, para 29; Courage, above n 53 (ch 1), para 22. 64 On the possibility of employing this doctrine to defend damages claims see 3.II.(b).(xi).c below. 65 See eg Brinker in Schwarze (ed), EU-Kommentar (Baden-Baden, 2000) 955. 66 Brasserie de Haecht II, above n 24 (ch 2), para 27.

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152 Substantive and Procedural Law Aspects administrative or judicial decision to that effect being required.67 The national court’s judgment has only a declaratory and not a constitutive character as to the nullity itself.68 It is noteworthy that some judgments by national courts, notably English courts, which speak of ‘transient voidness’, seem to be incompatible with its automatic character.69 In Passmore v Morland 70 the English Court of Appeal, affirming Laddie J, held that since the legality or illegality of an agreement under Article 81 EC is always dependent on surrounding economic circumstances that could change, the prohibition itself has a temporary or transient effect (rebus sic stantibus). The same transient nature should be attributed to the Article 81(2) EC nullity.71 Thus, if an agreement was prohibited and void at the time of its conclusion, a change in economic circumstances might render that agreement valid at a later time.72 We submit, however, that this interpretation violates the Community law meaning of that provision, and that in any case a preliminary reference to the European Court of Justice was called for. According to the Court of Justice’s case law, the Article 81(2) EC nullity ‘is . . . capable of having a bearing on all the effects, either past or future, of the agreement or decision [in question]’.73 While it is true that certain conduct may cease to fall under the prohibition of Article 81 EC, the absolute and automatic character of the nullity sanction cannot be affected. Any other result would not be compatible with the effet utile of that provision and would not facilitate the enforcement of aggrieved parties’ rights under the doctrine of the direct effect of Article 81 EC.74 In all cases of ‘transient prohibition’, the contract as initially concluded will be void, although the conduct involved may no longer be prohibited. In short, although there is indeed a possibility that a contract may be caught by the prohibition of Article 81 EC only for a specific period while thereafter changed circumstances may take the contract outside the ambit of illegality, the civil validity of that contract is a totally different issue. The automatic, retrospective and prospective nature of the Article 81(2) EC civil sanction of nullity makes it clear that such a contract will be null and void. Whether a new valid contract (possibly implied), which has been operable since the 67

Brasserie de Haecht II, above n 24 (ch 2), paras 6 and 25. See Koutsoukis, ‘The Private Law Remedies for Infringement of Articles 85 and 86 EEC’ in Studies in Honour of Andreas D. Loukopoulos (Athens/Komotini, 1993) (in Greek) 318. 69 See also Komninos, ‘ “Transient” and “Transitional” Voidness of Anti-competitive Agreements: A Non-issue and an Issue’ (2007) 28 ECLR 445. 70 Passmore v. Morland plc et al [1999] 1 CMLR 1129; [1999] EuLR 501 (CA). See also Barrett et al v Innterpreneur Pub Co (GL) Ltd et al [2000] ECC 106 (ChD). 71 See, in favour of the ‘transient voidness’ theory, Rodger, ‘The Interface between Competition Law and Private Law: Article 81, Illegality and Unjustified Enrichment’ (2002) 6 Edin L Rev 217, at 233–4; A Kamerling and C Osman, Restrictive Covenants under Common and Competition Law (London, 2004) 292–3. 72 For a Belgian case following the ‘transient voidness’ logic see Cour d’appel, Brussels, 23 June 2005, Laurent Emond v Brasserie Haacht, available at http://ec.europa.eu/comm/competition/antitrust/national_courts/index_ en.html. 73 Brasserie de Haecht II, above n 24 (ch 2), para 26; Manfredi, above n 63, para 57. See also Schröter, above n 122 (ch 2), at 312. 74 See in this sense the comment by Cumming (2000) 21 ECLR 261, at 264. Compare also the facts of the Shaw and Falla case, above n 130 (ch 2), para 200 ff, where the applicants had alleged that the Commission erred in granting an individual exemption to a beer supply scheme, after having taken into account the subsequent new circumstances which, however, did not exist when the contracts were concluded. Therefore, according to the applicants, the initial contracts were illegal at the date of their conclusion and invalid under Art 81(2) EC, so no exemption could be given to a void agreement notwithstanding the new circumstances. The CFI in its findings did not reject the specific arguments about the prospective nature of the nullity, but merely concluded that the Commission had not really limited its assessment post-contractually and that it had also considered the agreements during the crucial time of their conclusion. 68

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The Substantive Law Framework 153 prohibition of Article 81 EC ceased to apply can be considered to exist between the same parties is quite another matter. However, in such a case the validity of the new contract will operate ex nunc, and will affect neither the effects of the nullity of the initial contract, nor any possible claims for damages referring to the crucial period of the contract’s nullity.75 An interesting practical and theoretical question is the validity of agreements that fall under Article 81(1) EC but were not notified to the Commission under the previous system of enforcement. Does this mean that notwithstanding the introduction of the legal exception system by Regulation 1/2003, such agreements will now have to be considered as also invalid for the period after 1 May 2004, without it being possible for a national court to examine them under Article 81(3) EC?76 We believe that the new system no longer calls for such a harsh solution. While, as we stressed above, the Article 81(2) EC nullity operates in principle both for the past and for the future, a national court now has full competence to examine whether an agreement that was not notified under the old system can nevertheless be saved under Article 81(3) EC. There is no reason to extend into the system of legal exception an unsatisfactory problem of the old system. There is no question of protecting the effet utile of the Article 81 EC prohibition by considering such agreements null for the future. While such a solution was appropriate for the previous system, it no longer makes sense now. Therefore, a national court dealing with an ‘old agreement’, ie an agreement concluded before 1 May 2004, should no longer feel constrained to consider it invalid if it restricts competition in the Article 81(1) EC sense. Instead, the court should examine whether the agreement can be saved by Article 81(3) EC. If Article 81(3) EC cannot save the agreement, then it would of course be null and void from the time of its conclusion. If, on the contrary, the agreement does benefit from Article 81(3) EC, the court should consider it valid without making any distinction for the period before 1 May 2004. There is no reason to follow a formalistic approach by favouring the agreement’s nullity for the period before 1 May 2004, since this would essentially amount to honouring form rather than substance; indeed, form that has been abandoned. We should stress that the question here is different from the question we described above that gave rise to the ‘transient voidness’ theories. There, the issue is one of substance, ie the variance in time of the compatibility of an agreement with Article 81 EC and the related effects on the civil validity of that agreement; while here the issue is one of form/procedure,77 ie how to decide, now that the old notification system has been abandoned, on the validity of an unnotified agreement that would always have benefited from Article 81(3) EC.78 Indeed, the Court of Justice has made a fundamental distinction, with regard to these transitional questions, between rules pertaining to substance and rules pertaining to procedure. Thus, procedural rules apply immediately to any pending proceedings, even if they refer to facts that predate the coming into force of those rules,

75 See in this sense Libertini, ‘Autonomia privata e concorrenza nel diritto italiano’ (2002) 100 Riv Dir Comm 433, at 450. 76 This problem is identified by Idot, ‘The Application of EC Competition Rules by National Courts: Remarks by a French Academic’, Paper presented at the Joint IBA and European Commission Conference on Antitrust Reform in Europe: A Year in Practice (Brussels, 9–11 Mar 2005) 4–5. 77 See in this direction Pignataro, above n 236 (ch 2), at 1062–3. 78 Of course, the national court would consider the agreement null and void if it did not satisfy the conditions of Art 81(3) EC at some point in the past before 1 May 2004, even though it may now do so. This is a problem of substance, and our previous analysis on the retrospective and prospective nature of the nullity fully applies here, too.

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154 Substantive and Procedural Law Aspects while substantive rules do not have retroactive effect—unless they clearly so state, which means that the applicable substantive law will be the pre-existing one.79 The nullity must be raised ex officio by the national court,80 unless the applicable national procedural law clearly does not allow the court to do so.81 According to the van Schijndel case law, national courts are under a duty ex officio to raise questions of Community law, unless their national procedural law prohibits them from doing so.82 Another issue is whether the nullity is subject to prescription. A certain part of the theory considers the nullity of Article 81(2) EC as not subject to any national regime of prescription, since it is a notion of Community law and the latter does not determine this issue.83 This, however, would lead to an excessive degree of legal uncertainty, which would not comply with Community law. Therefore, there is no other option but to refer to national provisions on prescription, taking into account the public policy nature of EC competition law and the Community law principles of equivalence and effectiveness. Thus, the Article 81(2) EC nullity will be subject to the prescription that is applicable to the nullity of acts for violation of rules of public policy (nullités d’ordre public), or, if such a specific regime does not exist, to the general national prescription regime applicable to civil actions, subject to the two limitations of Community law (equivalence and effectiveness).84 When the automatic nullity of anti-competitive agreements is invoked before a civil court by way of an objection to a claim based on civil law (usually on contract) or unfair competition law, it blocks all eventual claims for performance or damages based on the 79 Joined Cases 212/80 to 217/80 Amministrazione delle Finanze dello Stato v Srl Meridionale Industria Salumi et al and Ditta Italo Orlandi & Figlio and Ditta Vincenzo Divella v Amministrazione delle Finanze dello Stato [1981] ECR 2735, paras 8 and 9; Joined Cases T–27/03, T–46/03, T–58/03, T–79/03, T–80/03, T–97/03 and T–98/03 SP Spa et al v Commission, Judgment of 25 Oct 2007, not yet reported, para 116: ‘substantive rules of Community law must be interpreted, in order to ensure observance of the principle of legal certainty and of legitimate expectations, as not applying, in principle, to situations existing before their entry into force, whereas procedural rules are of direct application’. See also Kerse and Khan, above n 335 (ch 2), at 16. 80 See Koutsoukis, above n 68, at 319; Noirfalisse, ‘La Belgique’ in Behrens (ed), EEC Competition Rules in National Courts, Vol. II, Benelux and Ireland (Baden-Baden, 1994) 79; Boulanger, above n 465 (ch 2), at 225; Erämetsä, above n 33 (ch 1), at 222; Iliopoulos, above n 294 (ch 2), at 251; Mail-Fouilleul, above n 107 (ch 1), at 138; Winckler, above n 60, at 124, n 15; Schröter, above n 122 (ch 2), at 311; Herb, above n 39, 65 ff The ex officio application of Art 81(2) EC has also been recognised by national courts. See eg in Austria, OGH 23 May 1996, 6 Ob 691/95, Bierbezugsvertrag, cited by Günther, above n 294 (ch 2), at 356 and 394; in Belgium, Tribunal de première instance (Com), Brussels, 30 June 1967, NV Canoy Herfkens Steenfabrieken v Poncelet [1967] JCB 277; in Greece, Polymeles Protodikeio Athens no 13118/1995 (1996) 47 Epitheorisi Emporikou Dikaiou 183, at 188–9. 81 In jurisdictions where the courts can ex officio raise questions pertaining to public policy (moyens d’ordre public), they must also do so with the nullity provision of Art 81(2) EC, since Art 81 is such a public policy rule. See eg Saint-Esteben, above n 650 (ch 2), at 286. 82 On the ex officio application of EC competition law by national courts see 3.III.(b) below. It is noteworthy that in some areas other than competition law, such as consumer protection, the ECJ has stressed that the nullity provisions contained in secondary Community legislation aiming at the protection of consumers must be raised ex officio by national courts. Thus, see Joined Cases C–240/98 to C–244/98 Océano Grupo Editorial SA v Rocío Murciano Quintero and Salvat Editores SA v José M. Sanchez Alcón Prades et al [2000] ECR I–4941, paras 26 and 29; Case C–473/00 Cofidis SA v Jean-Louis Fredout [2002] ECR I–10875, paras 33–37. Compare, however, Joined Cases C–222/05 to C–225/05 J van der Weerd et al v Minister van Landbouw, Natuur en Voedselkwaliteit, Judgment of 7 June 2007, not yet reported. 83 See Hubeau, above n 62, at 104; Cienfuegos Mateo, ‘L’application de la nullité de l’article 85§2, du Traité CEE par les juridictions nationales (avec un examen particulier du domaine des transports aériens): Consequences dans l’ordre juridique interne’ (1991) 27 CDE 317, at 322–3; M Waelbroeck and A Frignani, European Competition Law (Vol. IV of the J. Mégret Commentary) (Arsdley, 1999) 524. 84 Compare the recent Manfredi ruling, where the ECJ held that limitation periods for seeking compensation for harm caused by an agreement or practice prohibited under Art 81 EC are subject to national law, but a short limitation period which is not capable of being suspended could make it practically impossible to exercise the right in damages and would thus offend against the principle of effectiveness: Manfredi, above n 63, paras 77–80.

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The Substantive Law Framework 155 illegal and void agreement or juridical act. Other consequences of the nullity are governed by national law.85 A specific question is whether national rules on unjustified enrichment may apply, so that a party to a void agreement who has performed thereunder may benefit from restitution corresponding to the other party’s enrichment. Such claims should not be confused with restitutionary or damages claims by the victim of an anti-competitive agreement. The latter are the consequence of the harm caused by the anti-competitive agreement, and derive not from the nullity provision of Article 81(2) EC, but directly from Article 81(1) EC, while the former refer to the harm caused by the sanction which EC competition law itself imposes, ie by the nullity. In some legal systems these claims are possible, while in others the rule in pari delicto potior est conditio defendentis prohibits restitution.86 (iii) Competition Authorities and Article 81(2) EC Commentators occasionally refer to the exclusive competence of civil courts to apply Article 81(2) EC87 and criticise some Commission pronouncements which tend to adduce the nullity of an agreement from its illegality. Such pronouncements give the impression that the Commission could also declare anti-competitive agreements void.88 Indeed, the Commission and also national competition authorities have in the past actually applied the civil sanction of nullity.89 It is indicative that while paragraph 13 of the draft Commission Notice on the handling of complaints contained the statement that ‘only national courts can decide upon the nullity or validity of contracts and only national courts can grant damages to an individual in 85 According to Case 319/82 Société de Vente de Ciments et Bétons de l’Est SA v Kerpen & Kerpen GmbH & Co KG [1983] ECR 4173, paras 11–12, the consequences of the nullity on any orders and deliveries made pursuant to an anti-competitive and void agreement and on the resulting financial obligations are a matter for national law. See also Joined Cases T–185/96, T–189/96 and T–190/96 Riviera Auto Service Etablisssements Dalmasso SA et al v Commission [1999] ECR II–93, para 50. 86 This rule is to be found also in English and in German law (s 817(2) BGB). A similar provision exists in Spanish law (Art 1306(2) of the Civil Code). However, no problem arises in Greek law, since the Greek Civil Code (Art 917(2)), which otherwise follows the German BGB, excludes restitution of the enrichment only in the case of immoral transactions. Recovery of sums paid is possible in Spain: see Audiencia Provincial de Girona (secc no 1), 10 June 2004, Clau SA v Cepsa Estaciones de Servicio SA, reported in e-Competitions, Dec 2005 Vol II, available at www.concurrences.fr. French law also allows for the restitution of such benefits pursuant to Art 1376 Code Civil (action en répétition de l’indu) (see further Boulanger, above n 465 (ch 2), at 195–6). Therefore, a party to a contract that is void pursuant to Art 81(2) EC has an obligation to repay anything received under the contract, if this amounts to unjustified enrichment, unless the claimant bears most of the responsibility for the imposition of the anti-competitive clause or contract on the other party (see Mail-Fouilleul, above n 107 (ch 1), at 157). Needless to say, such claims can be set off against possible damages claims by the other party with regard to harm resulting from the anti-competitive agreement. 87 See eg Ioannou, above n 13 (ch 1), at 434; Bernini, ‘Panel Discussion: Administrative/Prosecutorial Discretion of Antitrust Authorities Including: Leniency or Amnesty, Cooperation and Plea Bargaining, Positive Comity, and Allocation of Agency Resources’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 658; Favre, above n 15 (ch 1), at 78; Schröter, above n 122 (ch 2), at 311; van Gerven, above n 62, at 54; Lenaerts and Gerard, above n 345 (ch 2), at 320–1; Idot, above n 79 (ch 1), at 160. 88 See Mail-Fouilleul, above n 107 (ch 1), at 139–40, 154. 89 In Greece, see eg Opinion 8/III/2003 of 30 June 2003 of the Greek Competition Committee, in which the authority was requested to examine the civil validity of certain clauses in contracts for the sale of new motor vehicles. The Committee declared the nullity of some specific clauses, although it would have been preferable for it to determine their legality or illegality rather than itself drawing the legal consequence of such illegality. See also Greek Competition Committee, Decision no 288/IV/2005 (HYUNDAI), with critical comments by Kinini (2005) 11 Dikaio Epicheiriseon kai Etairion 1059 (in Greek), where the Greek authority actually declared the partial nullity of several clauses in a car distribution contract.

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156 Substantive and Procedural Law Aspects case of an infringement of Articles 81 and 82’,90 the final text adopted is slightly but very tellingly different: ‘[n]ational courts can decide upon the nullity or validity of contracts, and only national courts can grant damages to an individual in case of an infringement of Articles 81 and 82’. The deletion of the word ‘only’ in the first part of that sentence seems to indicate that the Commission would rather not view the nullity question as exclusively dealt with by the national courts. In any event, to speak of exclusive competence on the part of national courts in this case would be equally inaccurate. It would not be in conformity with the automatic character of the nullity. This automatic character means, indeed, that the parties can invoke the nullity of an anti-competitive agreement even extra-judicially, without it being necessary to seise a court. No pronouncements by the Commission or national competition authorities that an anti-competitive contract is null and void will produce any more legal effects than their finding of illegality. The civil validity or invalidity of a contract is merely an ex lege consequence of its legality or illegality. Therefore, Commission decisions that declare the nullity of an illegal agreement cannot be said to be ultra vires, simply because the Commission in such cases states the obvious.91 Of course, technically speaking the Commission or a national competition authority cannot ‘declare an agreement void’.92 The Commission in such a case essentially examines the legality or illegality of the agreement with regard to Article 81 EC. On the other hand, a national court may be requested by a party to declare the nullity as such,93 which means that its judgment will be res judicata as to the nullity. Nevertheless, this is quite different from the view adopting the ‘exclusive competence’ approach. (iv) The Legal Consequences of Nullity: Severance and Related Contracts The automatic nullity in question only applies to those parts and clauses of the agreement that are affected by the prohibition. It applies to the agreement as a whole if it appears that those parts are not severable from the agreement.94 The question of severance is to be decided under the applicable national law.95 In most legal systems, a void clause cannot be severed from the contract if the parties would not have concluded the latter in the absence 90

Emphasis added. The draft text was published in [2003] OJ C243/30. However, the Commission or an NCA would be acting ultra vires if it were to apply the severability rule of the civil sanction of nullity. Compare Decision no 288/IV/2005 of the Greek Competition Committee, above n 89. 92 See eg Conseil de la concurrence, Decision no 91-MC-01 of 5 Mar 1991 and Conseil de la concurrence, Decision no 01-D-73 of 6 Nov 2001, reported in and commented on by Vogel, above n 322 (ch 2), at 1627–8. 93 See eg the actions en nullité in French and Belgian law. 94 Société La Technique Minière, above n 58, at 250. See for a relevant national case Inntrepreneur Estates Ltd v Mason [1993] 2 CMLR 293. Under EEA law the severability of parts of an agreement that fall under Art 53(1) EEA is also a question of national law (Case E–7/01 Hegelstad Eiendomsselskap Arvid B Hegelstad et al v Hydro Texaco AS [2002] Report of the EFTA Court 312, para 43). Note that whether the nullity of Art 81(2) EC is partial or total is a question of Community law, whereas the severability of a specific illegal clause is a question of national law. See also Schröter, above n 122 (ch 2), at 313. 95 The question of severability for the purpose of Art 81(2) EC has to be distinguished from the severability of clauses imposing obligations that are not block-exempted by Regs 2790/1999 on vertical agreements, 1400/2002 on motor vehicle distribution and 772/2004 on technology transfer agreements. Under Art 5 of these three Regs some non-hard-core restrictions of an agreement do not enjoy the benefit of the block exemption, but at the same time do not deprive the remaining clauses of the agreement of that benefit if they are severable. This specific kind of severability is a question of the lex causae. See Whish, above n 286 (ch 2), at 917, n 137; Jones and Sufrin, above n 33 (ch 1), at 755; Ritter, ‘The New Technology Transfer Block Exemption under EC competition Law’ (2004) 31 LIEI 161, at 167; Fine, ‘The EU’s New Antitrust Rules for Technology Licensing: A Turbulent Harbour for Licensors’ (2004) 29 ELRev 766, at 783, n 85. 91

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The Substantive Law Framework 157 of the former. Nevertheless, the possibility of divergence between national legal systems as to the result of severance cannot be ruled out.96 The question arises as to the relationship between the validity of subsidiary or complementary contracts and the invalidity of the basic contract under Article 81(2) EC. Independent but ancillary contracts, such as a liquidated damages or a penalty clause,97 aim directly at ensuring or securing the performance of the contractual obligations in question and constitute an inseparable whole with the basic agreement, thus following its fate in case of its nullity.98 It is, however, unclear whether this problem will be resolved according to Community or national law. It seems that it must be a question of Community law, since the underlying question is not the subsidiary character of such contracts, but rather whether they are affected by the prohibition of Article 81 EC.99 An exception is the fate of an arbitration clause/agreement, which is such an independent yet subsidiary contract.100 Under the principle of autonomy or separability of the arbitration agreement, which is accepted in all European and most foreign legal systems, the arbitration clause will be intact,101 and indeed the arbitrators will examine the question of the applicability of Article 81(2) EC to the main contract.102 Only in exceptional circumstances could the nullity of the main contract and its incompatibility with Article 81 EC catch the arbitration clause too. The function of an arbitration clause in an anticompetitive agreement may be such as to increase the competition-restraining function of the unlawful practice. In such a case the arbitration clause itself will also be illegal and void under Article 81(2) EC. Another issue is the influence of the nullity of the main contract on other independent but consequential or follow-on contracts (Folgeverträge), which are concluded with third parties and aim indirectly at giving effect to the obligations undertaken under the main contract in question. Such will be contracts for the lease of premises, employment contracts and contracts for the supply of raw materials, the sale of products or the transfer of property 96 This is regretted by some authors, who see potential for forum shopping. See eg Whish, above n 535 (ch 2), at 79; Furse, above n 250 (ch 2), at 137; Jones and Sufrin, above n 33 (ch 1), at 1321. 97 Eg a ‘profit pass-over clause’ which might be included in a distribution contract. According to such clauses a distributor who has made sales in the pre-assigned geographical area of another distributor is bound to compensate him with a fixed sum of damages. See also Winckler, above n 60, at 125–6, n 23, on a case regarding a similar ‘penalty pure and simple in case of non-delivery’. 98 See Koutsoukis, above n 68, at 322; Boulanger, above n 465 (ch 2), at 293; Schröter, above n 122 (ch 2), at 314–15. 99 According to the ECJ, ‘any other contractual provisions which are not affected by the prohibition, and which therefore do not involve the application of the Treaty, fall outside Community law’ (Société La Technique Minière, above n 58, at 250, emphasis added). 100 Some authors speak of ‘severance’ of the arbitration clause from an illegal agreement (see Braun, above n 138 (ch 2), at 576). Such terminology should be avoided, first because the arbitration clause is an agreement separate and independent from the main contract and not a ‘clause’ that can be severed, and secondly because the concept of ‘severance’ is used in the context of illegal clauses that can be severed from an otherwise legal agreement, and not of legal clauses severable from an illegal agreement. 101 This is sometimes missed by competition literature, which tends to include the arbitration clause in the affected contracts. See eg Koutsoukis, above n 68, at 322. 102 Under the globally recognised doctrine of separability or severability, the arbitration agreement is separate from the main agreement and is not affected by the latter’s illegality and vices. The arbitration agreement will be affected only in rather rare circumstances, if it is itself illegal or there are vices that refer to it, irrespective of the main agreement. Thus, as long as the arbitration clause itself is valid and worded sufficiently broadly, an arbitrator may declare a contract invalid but still retain jurisdiction to decide a dispute as to the consequences of the invalidity. A principle related to separability is the principle of competence-competence, according to which arbitrators are judges of their own jurisdiction and are entitled to rule on their own competence. Therefore, if the validity of the arbitration agreement itself and thus their competence is at stake, arbitrators do not have to defer to state courts, but may continue the arbitration and consider whether they have jurisdiction.

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158 Substantive and Procedural Law Aspects rights.103 Since these contracts do not restrict competition by themselves, they will not be affected by the nullity sanction of Article 81(2) EC,104 unless they are part and parcel of a network of competition-restraining agreements that also includes the main illegal contract. The same would be the result if such agreements were consequential to an illegal concerted practice or decision by an association of undertakings. In such cases Community law will become of issue if these consequential contracts, usually intellectual property licences, are affected by the prohibition of Article 81 EC by giving effect to the anti-competitive agreement or practice itself (Ausführungsverträge).105 We should finally mention that the parties to the contract may include separability clauses in their contracts, which provide that the nullity of a particular clause because it is contrary to competition law does not invalidate the contract as a whole. Separability clauses (salvatorische Klauseln) raise concerns when they clearly aim at saving specific anticompetitive clauses. In such cases they may themselves become tainted by the illegality if their aim is clearly to facilitate it and frustrate the nullity sanction. Thus, while national courts have in principle accepted the legitimacy of such general clauses, they have at the same time considered that clauses specifically designed to circumvent the Article 81(2) EC nullity and, essentially, to relieve the parties from any risk of illegality would be illegal and thus void on competition law grounds.106 (v) Nullity under Article 82 EC It is noteworthy that there is no equivalent Treaty provision on the nullity of agreements or other juridical acts that violate Article 82 EC.107 The explanation usually given is that this was a conscious choice, since the abuse of a dominant position, unlike cartels, does not typically rely on legal agreements, but rather on factual situations. However, the conduct 103

See Koutsoukis, above n 68, at 322–3. See also generally Säcker and Jaecks, above n 66 (ch 1), 727–8. See Schröter, above n 122 (ch 2), at 315, who senses here a certain weakening of the effectiveness of the prohibition which national courts are bound to avoid under Art 10 EC. See also AG Warner’s Opinion in Case 22/79 Greenwich Film Production v Société des Auteurs, Compositeurs et Editeurs de Musique (SACEM) and Société des Editions Labrador [1979] ECR 3275, at 3296: ‘not every transaction or legal relationship having a connexion with an agreement, decision or concerted practice prohibited by [Art 81] is necessarily void. For instance in the case of a price-fixing cartel, sales by members of the cartel to customers are not void even if made at the prices illegally fixed.’ 105 In Case C–9/93 IHT Internationale Heiztechnik GmbH and Uwe Danziger v Ideal-Standard GmbH and Wabco Standard GmbH [1994] ECR I–2789, the Court dealt with certain assignments of trade marks that followed an anti-competitive (market-sharing) agreement. The Court held that ‘where undertakings independent of each other make trade-mark assignments following a market-sharing agreement, the prohibition of anti-competitive agreements under Article [81] applies and assignments which give effect to that agreement are consequently void. However . . . that rule and the accompanying sanction cannot be applied mechanically to every assignment. Before a trade-mark assignment can be treated as giving effect to an agreement prohibited under Article [81], it is necessary to analyse the context, the commitments underlying the assignment, the intention of the parties and the consideration for the assignment’ (para 59). See also the facts of Case 28/77 Tepea BV v Commission [1978] ECR 1391, paras 33–34, where agreements granting exclusive rights to use a trade mark were in fact giving effect to exclusive distribution agreements offering absolute territorial protection excluding all parallel imports, thus being subject to Art 81(1) EC themselves. 106 Thus, the German Supreme Court (BGH) has established that as a matter of principle, a separability or ‘salvatory’ clause that contravenes the scope (Schutzzweck) of the prohibition of Art 81 EC or the equivalent national provision will be null. The prohibition and nullity of anti-competitive agreements cannot be circumvented through the deliberate inclusion of such a clause in the contract: see BGH, 8 Feb 1994, KZR 2/93, Pronuptia II (1994) 44 WuW 547. 107 Some national competition laws, however, although inspired by the Community model, contain specific provisions on the nullity of acts that constitute an abuse of a dominant position (eg Art L420-3 of the French Code de commerce; see also the more specific Art 442–6(2)). 104

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The Substantive Law Framework 159 prohibited by Article 82 EC may in fact take the form of agreements or other juridical acts that are capable of producing legally enforceable rights and obligations. Such agreements or legal acts will have to be considered void, otherwise one would be led to the paradox of prohibited and illegal conduct punished through severe administrative sanctions, which nevertheless gave rise to rights and obligations enforceable through civil law. A question therefore arises as to the Community or national law character of such nullity. This has not attracted substantial analysis so far, with most commentators tending to accept that this is a matter for national law.108 While it is true that eventual agreements or other legal acts that are incompatible with Article 82 EC will be considered illegal and, therefore, void under national law,109 one cannot exclude discrepancies that compromise the effectiveness of the nullity of such acts and, by implication, of the Article 82 EC prohibition. Such discrepancies do not serve the aim of the uniform and consistent application of EC competition law. To give an example of the risk of discrepancies arising as a result of the application of national law, under German and Greek law, contracts that are incompatible with a legal prohibition will be null ‘unless the law provides otherwise’.110 There are two legal problems involved here. The first and less difficult is whether Article 82 EC is such a legal prohibition. The answer to this question is positive.111 The second and more complex legal problem is whether all contracts falling foul of Article 82 EC will be considered void, or whether ‘the law provides otherwise’ in some cases.112 This has given rise to different theories in Germany, with some authors favouring the outright nullity of such agreements and others their validity, unless the contract in question, apart from introducing, complementing, or otherwise supporting the abuse of a dominant position, also contradicts bonos mores.113 Under French and Italian law, on the other hand, the nullity of such contracts is outright and derives from the general provisions of the respective Civil Codes, because the contracts are illegal in character and contrary to a rule of a mandatory nature (such as Article 82 EC) and the notion of public policy (ordre public).114 However, we submit that no difference in the treatment of nullity under Articles 81 and 82 EC can have been intended. The Treaty did not contain a specific provision on nullity in Article 82 EC only because the behaviour prohibited therein does not usually take the form of an agreement. In those exceptional circumstances where an agreement or any other juridical act introduces, complements or supports the abuse of a dominant position, it must 108

See eg Lenaerts and Gerard, above n 345 (ch 2), at 314, n 4. See eg Iliopoulos, above n 294 (ch 2), at 251 and 303; Mail-Fouilleul, above n 107 (ch 1), at 140, n 993; Winckler, above n 60, at 121. 110 S 134 BGB and Art 174 of the Greek Civil Code respectively. 111 See Koutsoukis, above n 68, at 346. 112 In this respect it can be argued that the law ‘provides otherwise’ by providing for detailed administrative sanctions (or even criminal sanctions, at least in Member States that impose such sanctions for violations of EC competition law). See however Bornkamm, ‘Anwendung des EG-Kartellrechts durch den nationalen Zivilrichter—Bemerkungen zu einer Bekanntmachung der EG-Kommission’ in Schwerpunkte des Kartellrechts 1992/93, Referate des 21. FIW-Seminars 1993 (Cologne/Berlin/Bonn/Munich, 1994) 52, who points out that the law ‘does not provide otherwise’ in this case, since Art 82 EC, in contrast to Art 81 EC, is silent on the civil legal consequences of the abuse of a dominant position. 113 Thus being contrary to s 138 BGB and to Arts 178–179 of the Civil Code, in German and Greek law, respectively: see LE Kotsiris, Competition Law (Free and Unfair) (Athens/Thessaloniki, 2000) (in Greek) 543. A third more nuanced approach is in favour of nullity unless, in exceptional circumstances, it does not serve the effectiveness of the Art 82 EC prohibition. 114 On France see Arts 6 and 1131 Code Civil; see further Winckler, above n 60, at 122. On Italy see Tesauro, ‘Competition Authorities and Private Rights’ in Andenas, Hutchings and Marsden (eds), Current Competition Law (London, 2004), ii, 185. 109

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160 Substantive and Procedural Law Aspects be accepted that under Community law such an agreement or act will be void, by analogy with Article 81(2) EC.115 Any other interpretation would be incompatible with the ‘system’ of the two basic competition rules of the Treaty and might impair the effectiveness and efficiency of Article 82 EC. As we have shown, the delegation of the issue of nullity to national law can in some cases be detrimental to the consistent enforcement of the Treaty competition rules. Therefore, agreements falling under Article 82 EC will be considered void, the nullity being automatic and no prior decision to that effect being required.116 Indeed, the recent judgment of the Swedish Supreme Court in the Luftfartsverket case followed exactly this approach and, relying on Articles 82 and 10 EC, concluded that an agreement in breach of Article 82 EC is null and void, this flowing directly from that Community provision.117 The same approach was also recently followed by the English High Court, which relied directly on Community law to declare the nullity of a contract that violated Article 82 EC. In particular, the court relied on the direct effect of Article 82 EC and on Article 1(3) of Regulation 1/2003, which provides that ‘the abuse of a dominant position referred to in Article 82 of the Treaty shall be prohibited, no prior decision to that effect being required’.118 However, whether this nullity is absolute or relative is a sensitive issue. While prohibited agreements that introduce or otherwise support an abuse of a dominant position will be void and unenforceable by the dominant undertaking, the rights of parties which are the victims of the abuse by that undertaking should be protected. In Greenwich Film Production, the Advocate General touched upon this question and stressed that ‘it would be unthinkable that Article [82] should be used indiscriminately to avoid contracts in a manner detrimental to the victims of the abuse or to third parties’.119 Thus, it seems that the nullity of an agreement that infringes Article 82 EC cannot operate to the detriment of a victim of the abuse when it operates to protect him from exploitation.120

(b) Damages Actions (i) From Non-existence to the Awakening of EC Private Enforcement Damages actions have always made up the greater part of private antitrust enforcement, particularly if one studies the oldest and most developed antitrust system in the world. Their primary aim is to compensate victims of anti-competitive practices, but they also increase the overall deterrent effect of the law. In addition, defendants themselves become instrumental in implementing the competition rules, and the general level of compliance with the law is raised.121 115 Nullity by analogy has also been accepted with regard to agreements that introduce or otherwise support an abuse of a dominant position in national competition laws. Thus, under Italian competition law such agreements would be null by analogy with Art 9(2) of Legge 18 giugno 1998, n 192 which declares that contracts through which an abuse of economic dependence is achieved are null. See further Libertini, above n 75, at 456. 116 Compare also Art 1 of Reg 1/2003, which makes no distinction in prohibiting agreements falling under Arts 81(1) and 82 EC. Of course, the value of this provision is merely declaratory, since it is the Treaty provisions themselves and their direct effect that lead to the same result. 117 See Bernitz, ‘The Arlanda Terminal 2 Case: Substantial Damages for Breach of Article 82’ (2003) 2 Comp LJ 195, at 197. 118 English Welsh & Scottish Railway Ltd v E.ON UK plc [2007] EWHC 599 (QB). Compare also Bellamy & Child, above n 432 (ch 2), at 781, n 31. 119 AG Warner’s Opinion in Greenwich Film Production [1979] ECR 3275, at 3296. 120 See in this sense Whish, above n 65 (ch 1), at 296; Jones and Sufrin, above n 33 (ch 1), at 1325. 121 See 1,II above on the general qualities of private enforcement and on the ‘private attorney-general’ model.

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The Substantive Law Framework 161 It has long been debated why Europe lags so far behind that the role of damages actions and awards can even been ignored in view of their virtual non-existence.122 According to former Advocate General van Gerven, who has been instrumental in the enhancement of EC private antitrust enforcement, the underdevelopment of private actions in Europe is due to a variety of obstacles, notably the following:123 (a) absence of an express statutory basis for bringing EC competition law-based actions; (b) institutional problems, basically lengthy proceedings and lack of specialisation by national courts; (c) limitations on standing and on the aggregation of damages claims; (d) difficulties in proving causation and the extent of harm; (e) uncertainty as to the existence and scope of the so-called ‘passing-on’ defence; (f) existence of contributory fault-related defences; (g) uncertainties as to the calculation of damages and as to their scope (ie whether they should only compensate the harm or also aim at restoring the illegal gains to the victim); (h) absence of punitive damages; (i) short limitation periods (j) problems in fully recovering costs and fees; (k) absence of contingency fees; (l) restrictive and antiquated evidence rules (m) non-binding effect of competition authorities’ infringement decisions. One may agree or disagree with the characterisation of some of these parameters as obstacles to private enforcement, but it is clear that the EU compares very poorly with the US in this regard. Or course, this may not be a cause for concern, since the US system of private enforcement is not universally admired in all its details. Indeed, there has long been a powerful current in the US to restrict private antitrust enforcement because of its excesses.124 There has never, however, been a formal proposal coming from the mainstream stakeholders in Europe to proceed to the full importation of the US system of private antitrust actions. This would not make sense, especially now that the US Antitrust Modernization Commission has produced serious recommendations for modifying certain legislative or jurisprudential rules which are considered inappropriate.125 The problem in Europe is that private enforcement is extremely under-developed. The aim should be to reverse that without importing the US excesses. It is therefore inappropriate to resist the introduction and enhancement of private enforcement in Europe merely because of the US problems. Indeed, such a line of argument would not be very different from totally denying a developing country the possibility to industrialise on environmental grounds. 122 See eg Meade, above n 19 (ch 2), at 111; Kon, ‘The Commission’s White Paper on Modernization: The Need for Procedural Harmonisation’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 247; Harding and Joshua, above n 29 (ch 1), at 239. See also Monopolkommission, Sondergutachten von 30-10-01 gemäß § 44 Abs. 1 Satz 4 GWB, Folgeprobleme der europäischen Kartellverfahrensreform, available at http://www.monopolkommission.de/sg_32/text_s32_d.pdf, para 66. 123 See van Gerven, ‘Private Enforcement of EC Competition Rules’, Paper presented at the Joint IBA and European Commission Conference on Antitrust Reform in Europe: A Year in Practice (Brussels, 9–11 Mar 2005) 1. 124 See eg Wils, above n 34 (ch 1), at 485 ff. 125 Antitrust Modernization Commission, Report and Recommendations, Apr 2007, available at http://www.amc.gov/report_recommendation/toc.htm.

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162 Substantive and Procedural Law Aspects To the long list of deficits presented by former Advocate General van Gerven, one may add the supranational, multilingual and multi-jurisdictional structure of Europe and the state of its competition law professionals. Thus, first, unlike in the case of the US, there is no system of ‘federal’ courts of full jurisdiction in Europe where ‘federal’ claims based on EC competition law could be brought. Secondly, Europeans benefit from neither a common language, nor a common or at least a similar legal tradition. Thirdly and most importantly, the professionals are still wholly oriented towards public enforcement. The Brussels-based bar may not favour the idea of a developed system of private enforcement, as it would mean loss of business which would necessarily be redirected to the Member States (in the absence of centralised or even decentralised Community courts of general jurisdiction). At the same time, nationally based lawyers usually lack the experience of Community or antitrust litigation and view the introduction of a foreign body into their national legal traditions with suspicion. Meanwhile, other interlocutors who might be instrumental in promoting private antitrust enforcement, such as consumer groups, remain relatively uninterested because they prefer to employ other tools that are dearer and more familiar to them, such as consumer protection laws. However, this state of malign or benign neglect can no longer be allowed to continue. Apart from being detrimental to efficient competition law enforcement based on economic actors’ constant awareness of the severe risks if they break the law, it is also incompatible with Community law in general, since the rights that Articles 81 and 82 EC grant to individuals become essentially a dead letter or Papierrecht, at least as far as national civil litigation is concerned. Indeed, this constitutional parameter did not escape Europe’s ultimate federator, the European Court of Justice, which in a powerful ruling of principle in 2001 decided that as a matter of Community law damages should be available to any victim of anti-competitive conduct, and that the existence of such a right strengthens the working of the Community competition rules and discourages their breach, thus making ‘a significant contribution to the maintenance of effective competition in the Community’.126 The Courage ruling laid down irrefutably the principle of Community law-based individual civil liability for antitrust violations and gave the Commission the appropriate legitimacy to put forward detailed and groundbreaking proposals to adopt secondary Community legislation on damages claims, thus enhancing—if not, indeed, introducing— private antitrust enforcement in Europe.127 It is not clear whether, in the absence of Courage, the Commission would have been able to attempt such a far-reaching project. (ii) The Brussels Way to Courage The Treaty of Rome did not include a provision on the award of damages to victims of anticompetitive practices, unlike US antitrust law and some European national competition laws.128 At the time when Regulation 17/1962 was introduced, the Deringer Report for the 126

Courage, above n 53 (ch 1), para 27. See 3.II.(b).(iv) ff below for a thorough analysis of this case. On the Commission’s Green Paper on damages see 3.II.(b).(vii) below. 128 S 7 of the original Sherman Act, superseded by s 4 of the Clayton Act. The fact that some national competition laws may not mention the possibility of damages actions is not conclusive, since it is usually through the general provisions of civil law (usually in tort or exceptionally in contract) that such actions will be possible. For examples of national competition laws expressly mentioning the possibility of damages actions see s 33 of the German Competition Act (GWB); s 14(5)(b) of the Irish Competition Act 2002; Art 12(1)(b) of the Swiss Act on Cartels and Other Restraints of Competition (KartG) of 1995; Art 33(1) of the Swedish Competition Act of 1993 (as subsequently amended); and Art 18a of the Finnish Act on Competition Restrictions of 1992 (as subsequently 127

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The Substantive Law Framework 163 European Parliament had accepted the desirability and necessity of private actions for the effective enforcement of EC competition law, and had proposed a study of the national laws of the then Six in order to identify the relevant issues for further action.129 Indeed, in 1966 the Commission published a specific study examining the remedies in national laws for damage caused by the infringement of the Treaty competition rules.130 Thereafter, there was a long period in which the Commission was largely silent on the matter.131 This may be explained by its desire to retain as much control as possible over antitrust enforcement at these early stages.132 After the very important rulings in Delimitis and Automec II, the Commission in 1993 adopted its Notice on cooperation with national courts, which admittedly aimed at the more procedural aspects of the enforcement of the competition rules by national courts and its cooperation with them, but nevertheless also touched on the issue of substantive remedies in national courts. The Notice, being the product of a soft law approach, was certainly not the ideal instrument to deal with this sensitive matter, since it did not bind national courts.133 With reference to the specific issue of national remedies, the Notice was criticised as timid and conservative.134 On the one hand, emphasis was placed on the importance of

amended). Compare also Art 33(2) of the Italian Legge 10 ottobre 1990, n 287 (Norme per la tutela della concorrenza e del mercato), where the possibility of damages claims is implicitly accepted and, in France, Art L442-6 Code de commerce, which is of more limited scope and provides for a specific legal basis for damages claims in the case of harm caused by the committing of certain specified acts. It should be noted that these national laws are no longer exceptional, in that national competition laws adopted or amended in the post-modernisation era increasingly contain express provisions on damages actions. Finally, reference should also be made to the 2000 UNCTAD Model Law on Competition, which under the heading ‘Possible Elements for Article 12: Actions for Damages’ favours legal actions for the recovery of the amount of loss or damage suffered by a person or an enterprise through an act or omission in violation of competition law. 129 See Assemblée parlementaire européenne, Documents de Séance 1961–1962, Rapport Deringer, 7 Sept 1961, Doc 57, para 123. See also Deringer and Tessin, ‘Das erste Kartellgesetz des Gemeinsames Marktes’ (1962) 15 AWD 989, at 993. 130 See Commission Européenne, La réparation des conséquences dommageables d’une violation des articles 85 et 86 du Traité instituant la CEE, Série Concurrence No 1 (Brussels, 1966). The study concluded that in principle existing national laws of the then Member States were in a position to provide for remedies in antitrust violations. See further Jacobs, above n 34 (ch 1), at 227. 131 See also European Commission, XIIIth Report on Competition Policy—1983 (Brussels, 1984) 135–6, where the Commission cautioned against the erroneous but widespread notion that only it could enforce the then Arts 85 and 86 EEC, stressing the practical advantages of private antitrust enforcement in national courts and the desirability ‘that the judicial enforcement of Articles 85 and 86 should also include the award of damages to injured parties, because this would render Community law more effective’. On these early attempts of the Commission to sensitivise private litigants to private antitrust enforcement and damages see Verstrynge, ‘Current Antitrust Policy Issues in the EEC: Some Reflections on the Second Generation of Competition Policy’ in Hawk (ed), Antitrust and Trade Policies in International Trade 1984, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1985) 686–7; Hiljemark, above n 59 (ch 2), at 87 ff. According to Temple Lang, above n 115 (ch 2), at 267, during Commissioner Sutherland’s mandate (1985–9) the Commission considered the possibility of proposing a regulation on the application of EC competition law by national courts, but the reactions of national legal experts were discouraging. Indeed, the then Commissioner alluded to such an initiative by referring to a study that the Commission had prepared on damages and interim measures available under national law for breach of Arts 81 and 82 EC: see Sutherland, ‘EEC Enforcement Policy: Recent Developments and Future Prospects’ in Hawk (ed), United States and Common Market Antitrust Policies 1986, Annual Proceedings of the Fordham Corporate Law Institute (New York, 1987) 337. 132 This is the view eg of Jones and Sufrin, above n 33 (ch 1), at 1306. 133 See criticism in this respect by von Meibom and Zinsmeister, ‘Verbesserung der europäischen Wettbewerbsverfahren’ in Schwerpunkte des Kartellrechts 1991/92, Verwaltungs- und Rechtsprechungs-praxis, Referate des 20. FIW-Seminars 1992 und der 11. Brüsseler Informationstagung 1992 (Cologne/Berlin/ Bonn/Munich, 1993) 62. 134 See eg Wesseling, above n 138 (ch 1), at 198–200.

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164 Substantive and Procedural Law Aspects damages awards, since ‘companies are more likely to avoid infringements of the Community competition rules if they risk having to pay damages or interest in such an event’,135 but on the other hand all references to remedies were seen in the light of national rather than Community law.136 Surprisingly enough, there was an unfortunate reference to one of the Rewe cases, which states that the Treaty did not intend to create new remedies at the national level to ensure the observance of Community law, other than those already laid down by national law.137 This specific case has widely been considered as superseded by subsequent case law of the Court of Justice.138 Even more surprisingly, the Notice seemed to content itself with the principle of equality of treatment or non-discrimination, thus ignoring the second and most important Community law limit to national remedial/ procedural autonomy, which is the requirement that the national rules in question must not make it impossible in practice to exercise the relevant Community right effectively (principle of adequacy/effectiveness).139 The 1999 White Paper on modernisation placed the whole issue of the application of the Treaty competition rules by national courts on an entirely different basis. In particular, the question of damages awards by national courts seemed to be quite central in the mind of the Commission. The Commission recognised that national courts, whose task is to protect the rights of individuals, ‘can grant damages and order the performance or nonperformance of contracts [and] are the necessary complement to action by public authorities’.140 However, all relevant references did not expound on the possible Community or national legal basis for damages. It is noteworthy that this rather reserved approach was also followed post-Courage in Regulation 1/2003, which states in Recital 7 that national courts ‘have an essential part to play in applying the Community competition rules’ and that ‘when deciding disputes between private individuals, they protect the subjective rights under Community law, for example by awarding damages to the victims of infringements’. Be that as it is, neither the White Paper nor Regulation 1/2003 misses the effectiveness point. Nevertheless, as already mentioned, modernisation and decentralisation did not result in harmonisation of national sanctions or remedies. At that stage, it was thought that the general principles of Community law under the supervision of the Court of Justice were sufficient safeguards. This minimalist approach was to a certain degree justified, although the discussions that followed made it clear that at least as far as private antitrust enforcement 135

1993 Cooperation Notice, above n 208 (ch 2), para 16. See also European Commission, Dealing with the Commission, Notifications, Complaints, Inspections and Fact-finding Powers under Articles 85 and 86 of the EEC Treaty (Brussels/Luxembourg, 1997) 11, where the same rather timid approach is followed. 137 1993 Cooperation Notice, para 10. The reference is to Case 158/80 Rewe-Handelsgesellschaft Nord mbH and Rewe-Markt Steffen v Hauptzollamt Kiel (Butter-buying Cruises) [1981] ECR 1805. At the time of the Cooperation Notice it would have been preferable to cite the Rewe/Comet formula (see n 40 above), as further expounded by subsequent case law. 138 See Shaw, above n 58 (ch 1), at 132. See also 3.I.(c) above and 3.II.(b).(iii) below. Compare now Case C–432/05 Unibet (London) Ltd and Unibet (International) Ltd v Justitiekanslern [2007] ECR I–2271, paras 41 and 64, which makes clear that Community law may sometimes require the creation of new remedies. See the comment by Arnull, (2007) 44 CMLRev 1763, at 1773 ff. 139 See criticism by Gyselen, ‘Le juge national face aux règles de concurrence communautaires applicables aux entreprises’, (1993) 1 JdT (Eur) 25, at 27; Komninos, above n 53 (ch 1), at 451–2; Jacobs and Deisenhofer, above n 1 (ch 1), at 207. 140 See at 5 of the Explanatory Memorandum preceding the text of the Reg proposal, above n 202 (ch 2) (emphasis added). For other references to the national courts’ power to grant damages see paras 46 and 100 of the White Paper, above n 82 (ch 2), and the Article-by-article Explanatory Memorandum preceding the Reg proposal, under Art 6, above n 202 (ch 2). 136

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The Substantive Law Framework 165 was concerned, no boom in Europe was to be expected without the minimum harmonisation of some national substantive and procedural rules.141 (iii) The Luxembourg Way to Courage Moving now to the context of the Court of Justice, we have to note that throughout that period until 2001, the Court never had the opportunity to rule on the issue of civil liabilities arising from the violation of EC competition rules, although in some instances it referred to possible damages and other civil claims that private parties could pursue before national courts,142 but without touching upon the question of the Community or national legal basis.143 Outside the area of competition law, however, the Court incrementally imposed severe limits on national institutional and remedial/procedural autonomy, first stressing the Community law requirements of non-discrimination/equality and adequacy/effectiveness, and ultimately recognising the existence, as a matter of Community law, of Community remedies available to individuals.144 Thus there was an impressive development from the early case law, where it was stated that Community law imposed no duties on national laws and courts to introduce new remedies,145 to a more pro-active approach, notably with rulings dealing with remedies in the fields of social policy and sex discrimination,146 interim protection147 and, ultimately, state liability for breaches of EC law.148 In particular, the Community principle of state liability for breaches of EC law by Member States, established 141 This was the general conclusion of the majority of the participants in the Florence Sixth EU Competition Law and Policy Workshop of 1–2 June 2001 (see C-D Ehlermann and I Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003). See also Basedow, ‘Who Will Protect Competition in Europe?: From Central Enforcement to Authority Networks and Private Litigation’ in Einhorn (ed), Liber Amicorum E.J. Mestmäcker (2001) 2 EBOR 443 ff. Compare in this regard Ehlermann’s initially cautious position as to the need for further harmonisation (Ehlermann, above n 2 (ch 2), at 582–3 and 586) with his subsequent opinions advocating the need for additional initiatives in the area of national substantive and procedural law (Ehlermann and Komninos, above n 300 (ch 2), at 782 ff). 142 This was already implicit in BRT v SABAM (I), above n 22 (ch 1), paras 16 and 22. Reference should also be made to Case C–242/95 GT-Link A/S v De Danske Statsbaner [1997] ECR I–4349, para 57; Case C–282/95 P Guérin Automobiles v Commission [1996] ECR I–1503, para 39. 143 It is noteworthy that the CFI in Automec (II), above n 59 (ch 1), para 50, had expressed itself in favour of the national law basis of such claims: ‘[t]he other consequences attaching to an infringement of Article [81] of the Treaty [apart from the nullity of Article 81(2)], such as the obligation to make good the damage caused to a third party or a possible obligation to enter into a contract . . . are to be determined under national law.’ However little attention should be given to this pronouncement of the CFI. The CFI is a court of a totally different nature to the ECJ and the former may occasionally miss the broader principles that are related to the fundamental question of the relationship between Community and national law. 144 See 3.I.(c) above. 145 Butter-buying Cruises, above n 137. 146 See eg Case 14/83 Sabine von Colson and Elisabeth Kamann v Land Nordhein-Westfalen [1984] ECR 1891; Case C–177/88 Elisabeth Johanna Pacifica Dekker v Stichting Vormingscentrum voor Jong Volwassenen (VJVCentrum) Plus [1990] ECR I–3941; Case C–271/91 MH Marshall v Southampton and South West Hampshire Area Health Authority (II) [1993] ECR I–4367 (the latter decided after the publication of the 1993 Cooperation Notice). All these cases stressed the principle according to which sanctions for enforcement of Community law must be able to guarantee real and effective judicial protection to the victim of discrimination, and must have a real deterrent effect on the employer who has breached the pertinent rules. 147 See in particular Factortame (I), above n 320 (ch 2). See, with regard to this case, VA Christianos, Overruling of Prior Judgments in the Case Law of the Court of Justice of the European Communities (Athens/Komotini, 1998) (in Greek) 69, speaking in this context of a clear case of departure from the Butter-buying Cruises case, above n 137. 148 Francovich, above n 484 (ch 2); Brasserie du Pêcheur/Factortame (III), above n 46. See also, for an analysis of this development of the case law, Dougan, above n 19, at 227 ff.

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166 Substantive and Procedural Law Aspects in Francovich, increasingly led commentators to argue that a right in damages in cases of EC competition law infringements was a matter of EC and not of national law. It was thought that there was no compelling reason to differentiate between state and individual liability for damage caused by infringements of Community law, since the basis for such liability, which is the principle of effet utile or effectiveness of Community law, is not affected by the identity of the perpetrator, ie whether it is the state or individuals.149 Meanwhile, a powerful boost to that line of argument was given in 1993 by Advocate General van Gerven in his Opinion in Banks,150 in which he argued extensively in favour of recognising a Community right to obtain reparation in respect of loss and damage sustained as a result of an undertaking’s infringement of the directly effective Community competition rules.151 The Advocate General considered in his carefully structured Opinion that the general basis established by the Court in Francovich also applied to the case of ‘breach of a right which an individual derives from an obligation imposed by Community law on another individual’: The full effect of Community law would be impaired if the former individual or undertaking did not have the possibility of obtaining reparation from the party who can be held responsible for the breach of Community law—all the more so, evidently, if a directly effective provision of Community law is infringed.152

In competition law, in particular, the Advocate General observed that such a Community right in damages would make the Treaty antitrust rules ‘more operational’, adducing an argument from the US system of antitrust enforcement, where civil suits for damages have played a dominant role.153 Interestingly enough, he then went on to draw up ‘detailed rules governing an action for damages in respect of breach of the rules of Community law’ and, more specifically, ‘uniform conditions of liability’, relying on the Court’s case law on the non-contractual liability of the Community (Article 288(2) EC).154 In Banks, however, the Court declined to address all these fundamental issues, because it reached the conclusion that the only set of rules applicable to the facts, Articles 65 and 66 ECSC, did not have direct effect. Notwithstanding this missed opportunity, the advocates of a Community remedy of damages for antitrust violations drew further support from the progressively more elaborate jurisprudence of the Court of Justice on state liability, notably in Brasserie du Pêcheur/Factortame III, but also from the Court’s shift towards a more remedies-oriented case law, where effective judicial protection acquired a central role as a complement of or corollary to the fundamental principle of direct effect. In 1999, a groundbreaking monograph written by Clifford Jones persuasively argued in favour of a private enforce149 For the first attempts to deduce a Community principle of individual civil liability in EC competition law cases from Francovich see Smith, ‘The Francovich Case: State Liability and the Individual’s Right in Damages’ (1992) 13 ECLR 129, at 132; Hoskins, ‘Garden Cottage Revisited: The Availability of Damages in the National Courts for Breaches of the EEC Competition Rules’ (1992) 13 ECLR 257, at 259. 150 Case C–128/92, above n 536 (ch 2). 151 Banks, above n 536 (ch 2), AG’s Opinion, para 37 ff. 152 Ibid, para 43. 153 Ibid, para 44. 154 Ibid, para 46 ff. According to AG van Gerven, there were three conditions for liability in damages to arise: damage, a causal connection between the breach and the ensuing damage, and the illegality of the alleged conduct. It should be stressed that at that time the Court had not yet accepted the transposability of the then Art 215(2) EC case law to the liability of Member States, as it did later (Brasserie du Pêcheur/Factortame (III), above n 46, para 42), although AG Mischo in Francovich had already so suggested (Francovich, above n 484 (ch 2), AG’s Opinion, para 71).

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The Substantive Law Framework 167 ment system in Europe, after demolishing many of the misconceptions of European scholars as to the exceptionality and non-transposability of the mature US system of private antitrust enforcement.155 A point central to that study was the view that there was a right under EC law allowing claims for damages from undertakings which had violated Articles 81 and 82 EC, in the line of the Francovich and Brasserie du Pêcheur/Factortame III judgments.156 This monograph was to be quite influential with the Court of Justice. (iv) Courage v Crehan: The Consecration of a Community Right in Damages The fundamental issue of the Community or national law basis of the right in damages in EC competition law violations was finally addressed by the Court of Justice in its Courage ruling of 20 September 2001. The issues involved were of such importance that competition and general Community law specialists in Europe eagerly awaited the Court’s judgment.157 In Courage the Court recognised a right in damages as a matter of Community rather than national law, and stressed the fundamental character of the EC competition rules in the overall system of the Treaty. The dilemma for the Court was to choose between the ‘traditionalist’ and the more ‘integrationist’ approach. It could either consider the whole question of damages in the context of national remedial and procedural autonomy, ie as a question of national law subject to the minimum Community law requirements of equivalence and effectiveness, or proceed to the recognition of a Community right in damages, as Advocate General van Gerven had previously proposed in Banks. It is noteworthy that the ‘traditionalist’ approach had basically been represented by continental textbooks and articles, notably by German and French (competition law-specific) literature. It is no exaggeration to say that the whole issue of the Community or national legal basis for a right in damages had been ignored by the majority of this part of the literature, or at best had been considered in the context of national remedial/procedural autonomy and its Community law limits.158 On the other hand, English-speaking sources had 155

Cited at n 38 (ch 1) above. See Jones, above n 38 (ch 1), at 72. 157 See P Roth, ‘The New UK Competition Act—The Private Perspective’ in Hawk (ed), International Antitrust Law and Policy 2000, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2001) 85–6; Gyselen, ‘Comment from the Point of View of EU Competition Law’ in Wouters and Stuyck (eds), Principles of Proper Conduct for Supranational, State and Private Actors in the European Union: Towards a Ius Commune, Essays in Honour of Walter van Gerven (Antwerp/Groningen/Oxford, 2001) 135 ff; van Gerven, above n 62, at 58 ff. 158 See eg Koutsoukis, above n 68, at 335 ff; A Toffoletto, Il risarcimento del danno nel sistema delle sanzioni per la violazione della normativa antitrust (Milan, 1996) 114–15; Schmidt in Immenga and Mestmäcker (eds), EGWettbewerbsrecht, Kommentar, Vol. I (Munich, 1997) 58 ff; S Poillot-Peruzzetto and M Luby, Le droit communautaire appliqué à l’entreprise (Paris, 1998) 270; Tavassi and Scuffi, above n 25 (ch 2), at 301; Maitz-Strassnig, ‘Rapport autrichien’ in XVIII congrès FIDE (Stockholm, 3–6 juin 1998), Vol. II, Application nationale du droit européen de la concurrence (Stockholm, 1999) 31–2; Schapira, Le Tallec, Blaise and Idot, above n 15 (ch 2), at 299; Waelbroeck and Frignani, above n 83, at 527 ff; Schröter in von der Groeben, Thiesing and Ehlermann (eds), Kommentar zum EU-/EG-Vertrag, Vol. 2/I, Artikel 85–87 EGV (Baden-Baden, 1999) 2/268 ff and 2/767; Ritter, Braun and Rawlinson, above n 44 (ch 2), at 926; Mestmäcker, above n 33 (ch 1), at 421 ff; Mestmäcker, above n 59 (ch 1), at 233, 236; Schröter, above n 122 (ch 2), at 309, 327; Tavassi, above n 411 (ch 2), at 332; CP Iliopoulos, The Enforcement of the European Law of Free Competition in Greece (1981–2005)—The EC Regulation 1/2003 and the Law 3373/2005 (Athens/Komotini, 2006) (in Greek) 45. See, however, Mail-Fouilleul, above n 107 (ch 1), at 580–2, who seems to accept the Community law basis; C Nowak, Konkurrentenschutz in der EG, Interdependenz des gemeinschaftsrechtlichen und mitgliedstaalichen Rechtsschutzes von Konkurrenten (Baden-Baden, 1997) 230 ff, referring to Banks and to the state liability case law of the ECJ and supporting the Community law basis of the right in damages; Weyer, ‘Gemeinschaftsrechtliches Verbot und nationale Zivilrechtsfolgen—Eine Untersuchung am Beispiel der Artikel 81, 82 EG-Vertrag’ (1999) 7 ZEuP 424, at 437–9, addressing this issue but rejecting the 156

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168 Substantive and Procedural Law Aspects shown an extreme awareness and conviction of the existence of a Community remedy of damages, not only de lege ferenda, but also de lege lata.159 This difference of philosophy is not due to the continentals’ lack of judgement, but rather to more systemic differences between the common and the civil law worlds. The facts of Courage were rather undistinguished. Breweries in Britain usually own pubs which they lease to tenants, while the latter are under contractual obligations to buy almost all the beer they serve from their landlords. In 1991 Mr Bernard Crehan signed a 20-year lease with Courage Ltd whereby he had to buy a fixed minimum quantity of beer exclusively from Courage, while the brewery undertook to supply the specified quantities at prices shown in the tenant’s price list. The rent was initially lower than the market rate and it was subject to a regular upward review, but it never rose above the best open market rate. In 1993 Mr Crehan and other tenants fell into financial arrears, basically blaming this on Courage’s supply of beer at lower prices to other non-tied pubs, ‘free houses’. In the same year Courage brought an action for the recovery from Mr Crehan of sums for unpaid deliveries of beer. Mr Crehan, alleging the incompatibility with Article 81(1) EC of the clause requiring him to purchase a fixed minimum quantity of beer from Courage, counterclaimed for damages.160 There were two specific obstacles to Mr Crehan’s success. The first one was that according to earlier English case law, Article 81 EC had been interpreted as protecting only Community basis. Some Austrian commentators appear to be more perceptive of the Community basis of the right in damages (see Stillfried and Stockenhuber, ‘Schadenersatz bei Verstoß gegen das Kartellverbot des Art 85 EG-V’ (1995) 9 WBl 301 and 345, at 345 ff). See also Bastianon, ‘Il risarcimento del danno per violazione del diritto antitrust in Inghilterra e in Italia’ (1998) 3 Danno e Responsabilità 1066, at 1067, who, referring to the recent Community case law (though not to AG van Gerven’s Opinion in Banks), makes an interesting distinction between recovery of damages (risarcimento) and recoverability of damages (risarcibilità). According to this author, the latter should rather be a principle of Community law, since its basis lies directly in the rights that EC law confers on individuals. 159 See eg Maitland-Walker, ‘Editorial: A Step Closer to a Definitive Ruling on a Right in Damages for Breach of the EC Competition Rules’ (1992) 13 ECLR 3; D’Sa, above n 42, at 169–74; Shaw, above n 58 (ch 1), at 138 ff; Winterstein, ‘A Community Right in Damages for Breach of EC Competition Rules?’ (1995) 16 ECLR 49; Francis, ‘Subsidiarity and Antitrust: The Enforcement of European Competition Law in the National Courts of Member States’ (1995) 27 Law & Pol’y Int’l Bus 247, at 254, 273; Vaughan, above n 27 (ch 2), at 27; Lewis, above n 375 (ch 2), at 137–8; Weatherill, ‘Public Interest Litigation in EC Competition Law’ in Micklitz and Reich (eds), Public Interest Litigation Before European Courts (Baden-Baden, 1996) 185; Tickle and Tyler, ‘Community Competition Law, Recovering Damages in the English Courts: New Era? False Dawn’ in Lonbay and Biondi (eds), Remedies for Breach of EC Law (Chichester, 1997) 137 ff; Whish, above n 535 (ch 2), at 81–2; Hiljemark, above n 59 (ch 2), at 126 ff; Anderson, ‘Damages for Breach of Competition Rules’ in Andenas and Jacobs (eds), European Community Law in the English Courts (Oxford, 1998) 185 ff; Rodger and MacCulloch, ‘Community Competition Law Enforcement, Deregulation and Re-regulation: The Commission, National Authorities and Private Enforcement’ (1998) 4 Columbia JEL 579, at 599–600; Kerse, above n 25 (ch 2), at 439–41; Taylor, above n 28 (ch 2), at 267; Lane, above n 67 (ch 2), at 203–4; Bellamy & Child, above n 432 (ch 2), at 801–9; Wahl, ‘Damages for Infringement of Competition Law’ in Wahlgren (ed), Scandinavian Studies in Law, Vol. 41, Tort Liability and Insurance (Stockholm, 2001) 555. See also Green, ‘The Treaty of Rome, National Courts, and English Common Law: The Enforcement of European Competition Law after Milk Marketing Board’ (1989) 48 RabelsZ 509, whose views at that distant time, before Francovich and other cases on remedies had been decided by the ECJ, are very ‘modern’ indeed. 160 There is some uncertainty as to the exact nature of Mr Crehan’s claim for damages. The question is whether this was a claim in tort (breach of statutory duty) or in restitution. This uncertainty might be accentuated by the fact that the recovery Mr Crehan sought is limited in extent. He basically asked the national court to put him in the condition he would have been in had he not entered into the agreement. He did not, therefore, claim damages for consequential losses or lost profits. In this respect, his claim, albeit in tort, was of a merely restitutionary nature. See on the issue Gyselen, above n 157, at 139. Van Gerven speaks of ‘restitutionary damages’, which are on the borderline between damages (in tort) and unjustified enrichment (Van Gerven, above n 62, at 60). It seems, however, that the action in this case was, or in any case was stated by the referring national court to be, one in tort (breach for statutory duty).

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The Substantive Law Framework 169 third parties, ie competitors or consumers, but not co-contractors, ie parties to the illegal and void agreement.161 The second issue was that under English law a party to an illegal agreement, as this was considered to be by the Court of Appeal, could not claim damages from the other party. This was as a result of the strict construction English courts were giving to the nemo auditur turpitudinem propriam (suam) allegans or in pari delicto potior est conditio defendentis or ex dolo malo non oritur causa rule,162 which in essence meant that Mr Crehan’s claim in damages would fail, because he was co-contractor in an illegal agreement. That seems to explain the link between these two central issues.163 The Court of Justice, following word for word in some instances the ruling in Francovich which had recognised the principle of state liability as a principle of Community law, stressed the primacy of Article 81 EC in the system of the Treaty, since it ‘constitutes a fundamental provision which is essential for the accomplishment of the tasks entrusted to the Community and, in particular, for the functioning of the internal market’.164 It also stressed, with particular reference to ‘the possibility of seeking compensation for loss caused by a contract or by conduct liable to restrict or distort competition’, the task of national courts to ensure the full effect (plein effet) of Community rules and the protection of individuals’ rights conferred by those rules. The full effectiveness (pleine efficacité) of the Treaty competition rules and, in particular, ‘the practical effect [effet utile] of the prohibition laid down in Article [81(1)]’ would be put at risk if individuals could not claim damages for losses caused by the infringement of those rules. The instrumental character of such liability for the effectiveness of the law as such is more than evident in this passage, exactly as was the case with state liability in Francovich.165 And, finally, the Court dispelled any doubt as to its pronouncement: Indeed, the existence of such a right strengthens the working of the Community competition rules and discourages agreements or practices, which are frequently covert, which are liable to restrict or distort competition. From that point of view, actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the Community.166

This last quotation makes it clear that the meaning of effectiveness in Courage has a double facet.167 It refers not only to Community law in general, but also to the specific field of antitrust. This is clear from the Court’s use of the term ‘significant contribution’ to refer to the role of damages claims for the efficiency of antitrust enforcement in Europe, with a view to maintaining effective competition. More authoritative words in favour of private enforcement and the ‘private attorney-general’ role of the civil litigant could hardly be pronounced.

161 Gibbs Mew plc v Gemmell [1998] EuLR 588 (CA). The Court of Appeal in this case had proceeded in the interpretation of Art 81 EC ‘without considering it necessary to seek a ruling from the Court of Justice on the point’, as the ECJ explains in para 12 of its Courage ruling, thus implying a certain criticism of this unilateralist approach. 162 See on all these rules, with subtle distinctions, Virgo, ‘The Effect of Illegality on Claims for Restitution in English Law’ in Swadling (ed), The Limits of Restitutionary Claims: A Comparative Analysis (London, 1997) 150 ff. 163 See further Komninos, above n 53 (ch 1), at 462–3. The in pari delicto defence applies to restitutionary as well as to tortious claims and has invariably drawn strong criticism. 164 Courage, above n 53 (ch 1), para 20. 165 Ibid, para 26, very close to the text of para 33 of Francovich, above n 484 (ch 2). 166 Courage, above n 53 (ch 1), para 27 (emphasis added), another text that can be read in parallel with para 34 of Francovich. 167 See 3.I.(b) above on these two facets.

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170 Substantive and Procedural Law Aspects (v) Courage Seen between Community and National Law The importance of Courage is that it sets out the principle.168 This has both symbolic and practical consequences. The recognition of a right in damages by the Community judge eliminates a state of uncertainty and gives national courts an important signal.169 The saga on whether damages can be awarded for violation of the Treaty competition rules has now ended once and for all. Indeed, to use the example of English law, it was a very unfortunate situation to wonder at the end of the 1990s about the existence of a right in damages as such,170 and always to revisit the Garden Cottage 171 dicta.172 Although it is true that certain European legal systems have availed themselves of clear legal bases for damages claims in the case of antitrust-related harm,173 we fail to see how this reality could be an obstacle to the development of Community law, which has its own exigencies and aspirations. It has been rightly pointed out that even if there is no clear gap in the effective judicial protection of Community competition law-based rights in those legal systems, still the recognition of a Community remedy in damages makes a valuable contribution towards the uniformity, consistency and maximum effectiveness-efficiency of the application of EC (competition) law at the national level.174 The enunciation of a Community right in damages and, by implication, of a principle of civil liability of individuals for breach of Community law is a logical consequence of the Court’s abundant case law on state liability, and reflects a more general principle of Community law that ‘everyone is bound to make good loss or damage arising as a result of 168 See eg S Weatherill, Cases and Materials on EU Law (Oxford, 2003) 606, speaking of the Court’s ‘anxiety to promote the effectiveness of private enforcement’. 169 See Goyder, above n 10 (ch 2), at 560. 170 See eg M Coleman and M Grenfell, The Competition Act 1998, Law and Practice (Oxford, 1999) 288, who were still writing that ‘it is not absolutely certain that third parties do in fact have a right in damages in the English courts under Articles 81 and 82’. See also Beard, ‘Damages in Competition Law Litigation’ in Ward and Smith (eds), Competition Litigation in the UK (London, 2005) 257–8. 171 Garden Cottage Foods Ltd v Milk Marketing Board [1983] 2 All.ER 770 (HL). This case has been traditionally cited in England as the authority providing support—though not as a direct precedent—for the proposition that an infringement of Community competition law gives rise to tort liability. See also An Bord Bainne Co-operative Ltd (Irish Dairy Board) v Milk Marketing Board [1984] 1 CMLR 519 (QB); on appeal [1984] 2 CMLR 584 (CA); Bourgoin SA v Ministry of Agriculture, Fisheries and Food [1985] 3 All.ER 585 (QB), on appeal [1986] 1 CMLR 287 (CA). There has also been a long discussion about the relevant and appropriate cause of action in English law for claims based on Arts 81 and 82 EC. There were three main views: one was to rely on ‘economic torts’ such as conspiracy, inducing breach of contract, wrongful interference with one’s business and intimidation; another was to invent a sui generis tort involving breach of Community law; another was to categorise breaches of Arts 81 and 82 EC as breaches of statutory duty. For a description of these views see inter alia Shaw, ‘United Kingdom’ in Behrens (ed), EEC Competition Rules in National Courts, Vol. I, United Kingdom and Italy (BadenBaden, 1992), 74–6; Jones, above n 38 (ch 1), at 113 ff. This debate has finally ended, and most commentators and courts in England are now aware of the Community law requirements that damages be available to remedy harm caused by the violation of Community competition law. Commentators and courts now categorise such claims as breaches of statutory duty, but the legal categorisation nationally of the cause of action is no longer important. See presciently Jones, above n 38 (ch 1), at 148. See also Komninos, above n 53 (ch 1), at 480–1. 172 This state of uncertainty has been described and castigated in Jones, above n 38 (ch 1), at 97, 147. 173 A German commentator, while the Court’s judgment was awaited, had emphasised that the ‘invention’ of a Community right in damages would offer nothing at all in the German context, since German law already provided for appropriate remedies (see Basedow, above n 141, at 461–2). See also Mestmäcker, above n 33 (ch 1), at 426, who, arguing against the thesis of Clifford Jones on the Community nature of the right in damages considers that ‘new Community law remedies for a breach of competition rules are not self-explanatory nor self-executing and do not define themselves’. It is unclear, however, what this highly respected commentator means by this aphorism. He goes on to stress that the only way to provide for such remedies would be through approximation, in other words through a directive. 174 See Stillfried and Stockenhuber, above n 158, at 350. See also in this sense Kerse, above n 25 (ch 2), at 440–1.

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The Substantive Law Framework 171 his conduct in breach of a legal duty’ (neminem laedere).175 That principle is wholly connected with the very nature of the Community and actually reflects the ‘dogmaticdevelopmental history of the Community legal order’ (dogmatische Entwicklungsgeschichte der Gemeinschaftsrechtsordnung).176 The extension of this principle to the liability of individuals makes it possible to speak of a system of civil liability for Community law infringements,177 irrespective of their perpetrator. This has not been missed by the Commission, which in its new Cooperation Notice lists together the remedy of damages in case of an infringement by an undertaking, referring to Courage, and the remedy of damages in case of an infringement by a Member State or an authority which is an emanation of the state, referring to Francovich.178 This is exactly what Advocate General van Gerven had argued for in Banks and what has also been proposed by other authors in the past.179 Meanwhile, the Court’s approach in Courage of recognising this Community law principle in a non-consecrational way, and without, at least at that time, defining specific uniform conditions created some confusion. While the majority of commentators grasped the fundamental importance of this ruling,180 others failed to see the basic principle and merely 175 See Edward and Robinson, ‘Is there a Place for Private Law Principles in Community Law?’ in Heukels and McDonnell (eds), The Action for Damages in Community Law (The Hague/London/Boston, 1997) 341, referring to para 12 of AG Tesauro’s Opinion in Brasserie du Pêcheur/Factortame (III), above n 46. In that passage the AG had reached the conclusion that ‘in so far as at least the principle of state liability is part of the tradition of all the legal systems, it must be able to be applied also where the unlawful conduct consists of an infringement of a Community provision’ (ibid, para 13 of the AG’s Opinion). The AG had started from the premise that the idea of state liability formed part of a more general principle of non-contractual liability (neminem laedere). See also Stathopoulos, ‘The Court of Justice of the European Communities and the Unification of Civil Law’ (2003) 23 RHDE 511 (in Greek) 528. 176 See Metaxas, above n 627 (ch 2), at 23–4, with further references to German literature. 177 See also Drexl, ‘Do We Need “Courage” for International Antitrust Law? Choosing between Supranational and International Law Principles of Enforcement’ in Drexl (ed), The Future of Transnational Antitrust—From Comparative to Common Competition Law (Berne/The Hague/London/New York, 2003), 339. 178 Cooperation Notice, above n 208 (ch 2), para 10, n 26. 179 See in this sense Edward and Robinson, above n 175, at 340 ff; W van Gerven, J Lever and P Larouche, Common Law of Europe Casebooks: Tort Law (Oxford/Portland, 2000) 895. See also Saggio, ‘La responsabilità dello stato per violazione del diritto comunitario’, (2001) 6 Danno e Responsabilità 223, at 242, according to whom the exigency of effective judicial protection which to some extent forms the basis for the Community nature of the principle of state liability for violation of EC law must also apply to civil liability of individuals for Community law violations. See further Stathopoulos, above n 175, at 526, who stresses that there is nothing ‘exceptional’ about state liability. Indeed, the principle that lies behind state liability is the same as that lying behind individual liability. The author rejects the argument that state liability, contrary to individual liability, pertains to the public interest, since the public interest is also taken into account in the resolution of private disputes. 180 See eg Nowak (2001) 12 EuZW 717, who, after underlining the judgment’s similarities with Francovich, stresses the primary Community law basis of the right in damages, notwithstanding the fact that the Court did not explicitly speak of a Community principle (as in Francovich); Klages (2001) 2 RDUE 1003, at 1005; PoillotPeruzzetto (2002) 12(1) Contr Conc Consomm 28, at 29; Palmieri and Pardolesi (2002) 125 Il Foro Italiano IV, 76, at 77; Jones and Beard, ‘Co-contractors, Damages and Article 81: The ECJ Finally Speaks’ (2002) 23 ECLR 246, at 251 ff; Komninos, above n 53 (ch 1), at 466 ff; Stuyck and van Dyck, ‘EC Competition Rules on Vertical Restrictions and the Realities of a Changing Retail Sector and of National Contract Laws’, Paper presented at the Society of European Contract Law, London Conference (16–17 May 2002) 39–46; Alvizou, ‘Individual Tort Liability for Infringements of Community Law’ (2002) 29 LIEI 177, at 184 ff; Odudu and Edelman, ‘Compensatory Damages for Breach of Article 81’ (2002) 27 ELRev 327, at 334–6; R Hempel, Privater Rechtsschutz im Kartellrecht, Eine rechtsvergleichende Analyse (Baden-Baden, 2002) 98–101; S Amadeo, Norme comunitarie, posizioni giuridiche soggettive e giudizi interni (Milan, 2002) 299–303; Kremer, ‘Liability for Breach of European Community Law: An Analysis of the New Remedy in the Light of English and German Law’ (2003) 22 YEL 203, at 209 ff; N Reich, C Goddard and K Vasiljeva, Understanding EU Law, Objectives, Principles and Methods of Community Law (Antwerp/Oxford/New York, 2003) 315 ff; Mäsch, ‘Private Ansprüche bei Verstößen gegen das europäische Kartellverbot—“Courage” und die Folgen’ (2003) 38 EuR 825; Eilmansberger, above n 25, at 1226–7; C Joerges, Sur la légitimité d’européaniser le droit privé, Plaidoyer pour une approche procédurale, EUI Working Paper, Law No 2004/4, at 21–2, 36, speaking of the creation of a ‘new private law that the Member States must incorporate as their

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172 Substantive and Procedural Law Aspects spoke of national remedies which are adapted by having recourse to the classic minimum effectiveness proviso.181 Interestingly, this is also the express position of the German Bundeskartellamt, which in a recent Discussion Paper on private actions felt the need to take a position on this debate and sided with the view that considers the right to damages to be subject to national law.182 Such reluctance to accept the Community-law basis of the civil liability principle should not, however, come as a surprise, since in the past there have even been voices doubting the Community-law basis of the principle of state liability, notwithstanding the Court’s much clearer language in Francovich.183 Courage in this context is similar to restitution cases, where individuals claim recovery of charges for sums levied in violation of Community law by public authorities. After the outcome in Courage, it would not be difficult to say that under Community law there is also in “national law” ’; Stuyck, ‘La place des consommateurs dans le vouveau système d’application des articles 81–82 CE’ in Nihoul (ed), La décentralisation dans l’application du droit de la concurrence, Un rôle accru pour le practicien? (Brussels/Louvain-la Neuve, 2004) 208–9, 212 and ‘EC Competition Law after Modernisation: More Than Ever in the Interest of Consumers’ (2005) 28 Journal of Consumer Policy 1; at 16; Reich, ‘The Courage Doctrine: Encouraging or Discouraging Compensation for Antitrust Injuries?’ (2005) 42 CMLRev 35, at 37–9; B Markesinis, H Unberath and A Johnston, The German Law of Contract, A Comparative Treatise (Oxford/Portland, 2006) 41; C van Dam, European Tort Law (Oxford, 2006) 31–7; Lenaerts, Arts, Maselis and Bray, above n 42, at 108–15 and 114 in particular; Drake, ‘Scope of Courage and the Principle of “Individual Liability” for Damages: Further Development of the Principle of Effective Judicial Protection by the Court of Justice’ (2006) 31 ELRev 841, at 846 ff; Temple Lang, above n 374 (ch 2), at 310–11; D Chalmers, C Hadjiemmanuil, G Monti and A Tomkins, European Union Law (Cambridge, 2006) 968–71; Arnull et al, above n 39, at 1111–13; Gray et al, above n 457 (ch 2), at 258; Wachsmann, ‘Le développement des actions privées en droit de la concurrence: Un autre point de vue’ in Idot and Prieto (eds), Les entreprises face au nouveau droit des pratiques anticoncurrentielles: Le Règlement 1/2003 modifie-t-il les stratégies contentieuses? (Brussels, 2006) 193 ; Odudu, ‘Effective Remedies and Effective Incentives in Community Competition Law’ (2006) 5 Comp LJ 134, at 140 ff. Compare also para 53 AG Poiares Maduro’s Opinion in Case C–438/05 The International Tansport Workers’ Federation and the Finnish Seamen’s Union v Viking Line ABP and OU Viking Line Eesti, Judgment of 11 December 2007, not yet reported, which, referring to Courage, clearly speaks of a claim ‘based directly’ on Community law. 181 See eg Weyer (2002) 51 GRUR Int 57, at 58; Lettl, ‘Der Schadensersatzanspruch gemäß § 823 Abs. 2 BGB i.V. mit Art. 81 Abs. 1 EG’ (2003) 167 ZHR 473, at 477; Weyer, ‘Schadenersatzansprüche gegen Private kraft Gemeinschaftsrecht’ (2003) 11 ZEuP 318, at 323 ff; Schröter, above n 122 (ch 2), at 327; Dougan, above n 19, at 378 ff. and 394; Betlem, ‘Torts, a European ius commune and the Private Enforcement of Community Law’ (2005) 64 CLJ 126, at 142 ff; O’Donoghue and Padilla, above n 76 (ch 2), at 743, who see the whole case from a procedural autonomy-Community limits angle. See also in this sense Albors-Llorens, ‘Courage v. Crehan: Judicial Activism or Consistent Approach?’ (2002) 61 CLJ 38, at 40; Tesauro, above n 114, at 185, n 3; PJ Slot and A Johnston, An Introduction to Competition Law (Oxford/Portland, 2006) 207, who consider that the Court did not follow AG van Gerven’s Banks Opinion and that it confirmed that the right to compensation in EC competition law cases remains a matter of national law. Surprisingly enough, the same approach is followed by the CFI in Case T–395/94 Atlantic Container Line AB et al v Commission [2002] ECR II–875, para 414, where reference is made to para 29 of Courage, ie to the Rewe/Comet formula on national procedural autonomy and on its two Community provisos, nondiscrimination and effectiveness (see 3.I.(c) above): ‘the case-law establishes that the consequences in civil law attaching to an infringement of Article [81] of the Treaty, such as the obligation to make good the damage caused to a third party or a possible obligation to enter into a contract, are to be determined under national law . . . [references to para 29 of Courage and to para 50 of Automec II] subject, however, to not undermining the effectiveness of the Treaty’. This reference completely ignores the preceding paras of Courage and constitutes in our view a misreading of that fundamental judgment. The language of Courage—we should not forget—should be seen in the Art 234 EC context of ‘dialogue’ between the Community Court and the juges communautaires de droit commun, and it therefore serves the exigencies of its context, which the CFI—a court of a different context—may have missed. 182 See Bundeskartellamt, Private Kartellrechtsdurchsetzung: Stand, Probleme, Perspektiven, Diskussionspapier für die Sitzung des Arbeitskreises Kartellrecht am 26. September 2005, available at http://www.bundeskartellamt. de/wDeutsch/download/pdf/Diskussionsbeitraege/05_Proftag.pdf, at 6. See also WF Bulst, Schadensersatzansprüche der Marktgegenseite im Kartellrecht, Zur Schadensabwälzung nach deutschem, europäischem und US-amerikanischem Recht (Baden-Baden, 2006), 187 ff, and Säcker and Jaecks, above n 66 (ch 1), 731 ff, with detailed argumentation against the Community law basis. 183 See eg Nettesheim, ‘Gemeinschaftsrechtliche Vorgaben für das deutsche Staatshaftungsrecht’ (1992) 45 DÖV 999.

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The Substantive Law Framework 173 principle a right of individuals, as against other individuals, to restitution for sums paid in violation of Community law. This is so because the requirement of effective judicial protection should not have a different function in such private disputes.184 Exactly as in Courage, in these cases the Court follows a more reserved approach. It has stressed that repayment or restitution of unlawfully levied charges is required and that this right has a Community law basis.185 But it then delegates the issue and the conditions of the exercise of the right to restitution to national law, while stressing the Community law requirements of equivalence and effectiveness. In recent years, indeed, the Court has gradually laid down a growing number of uniform conditions, albeit in a negative way, ie by reading national provisions basically through the proviso of effectiveness of Community law.186 Furthermore, both in Francovich and in Brasserie du Pêcheur/Factortame III the Court introduced some flexibility by stressing that the conditions under which liability arises ‘depend on the nature of the breach of Community law giving rise to the loss and damage’.187 In reality, Courage is a Francovich and not a Brasserie du Pêcheur/Factortame III type of case. By this we mean that it was only the first case, setting out the principle. In other words, the Court left open the future possibility of proceeding in an appropriate way to set out the conditions of the remedy in greater detail,188 either positively by itself defining, to use former Advocate General van Gerven’s scheme,189 the pertinent ‘constitutive conditions’, or negatively, by checking whether the ‘executive conditions’ governed by national law offend against the principles of equivalence and effectiveness or adequacy. This is certainly a sign that the inter-relationship between Community and national law has reached maturity. It is also a sign of a more ‘deliberative’, rather than a hierarchical mode of interaction with national courts.190 As one author observes, ‘since the general principles of the 184

On restitution and Community law see A Jones, Restitution and European Community Law (London, 2000). Compare eg San Giorgio, above n 40, para 12; Joined Cases C–192/95 to C–218/95 Société Comateb et al v Directeur Général des Douanes et Droits Indirects [1997] ECR I–165, para 20; Case C–188/95 Fantask A/S et al v Industriministeriet (Erhvervministeriet) [1997] ECR I–9763, para 38; Joined Cases C–397/98 and C–410/98 Metallgesellschaft Ltd, Hoechst AG and Hoechst UK Ltd v Commissioners of Inland Revenue and HM Attorney General [2001] ECR I–1727, paras 82–86; Case C–147/01 Weber’s Wine World Handels-GmbH et al v Abgabenberufungskommission Wien [2003] ECR I–11365, para 93: ‘[i]ndividuals are entitled to obtain repayment of charges levied in a Member State in breach of Community provisions. That right is the consequence and the complement of the rights conferred on individuals by Community provisions as interpreted by the Court. The Member State in question is therefore required, in principle, to repay charges levied in breach of Community law.’ That the right of restitution is based directly on Community law is made clear by the following statement of the Court regarding the passing-on defence and the principle that unjust enrichment should be avoided: ‘[a]s that exception is a restriction on a subjective right derived from the Community legal order, it must be interpreted restrictively’ (para 95, emphasis added). On the Community principle and the national conditions (plus the Community provisos) in such cases see Dougan, ‘Cutting your Losses in the Enforcement Deficit: A Community Right to the Recovery of Unlawfully Levied Charges?’ (1998) 1 CYELS 233, at 235 ff; J Beatson and E Schrage, Casebooks on the Common Law of Europe, Unjustified Enrichment (Oxford/Portland, 2003) 10–11; Bouchayar, ‘Recovery of Illegally Levied Indirect Taxes that Have Been Passed on the Consumers under the New Case Law of the ECJ’ (2004) 10 Dikaio Epicheiriseon kai Etairion 519 (in Greek) 521 ff. 186 According to van Gerven, above n 30, at 517, although the remedy of restitution is in principle a matter of Community law, the Court has nevertheless left a lot of leeway to national law and courts, while imposing limits on the latter when Community requirements make it necessary. Interestingly enough, many recent judgments of the Court provide for increasingly detailed limitations on national procedural autonomy. See eg Case C–62/00 Marks & Spencer plc v Commissioners of Customs & Excise [2002] ECR I–6325, para 40 ff. 187 Francovich, above n 484 (ch 2), para 38; Brasserie du Pêcheur/Factortame (III), above n 46, para 38. 188 See van Gerven, above n 345 (ch 2), at 12 and ‘Bringing (Private) Laws Closer to Each Other at the European Level’ in Cafaggi (ed), The Institutional Framework of European Private Law (Oxford, 2006) 54. 189 See 3.I.(c) above. 190 On this point of the relationship between the ECJ and national courts, especially in private law cases, see Joerges, ‘The Bright and the Dark Side of the Consumer’s Access to Justice in the EU’ (2001) 1(2) Global Jurist Topics, Article 1, at 9. 185

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174 Substantive and Procedural Law Aspects law governing remedies have now been established, the Court can entrust national courts to apply those principles and be more selective with regard to the national rules with which it takes issue’.191 (vi) Manfredi Indeed, as predicted by commentators,192 in the recent Manfredi ruling193 the Court of Justice proceeded to deal further with the ‘constitutive’ and ‘executive’ conditions of the Community right in damages.194 This was a preliminary reference case from Italy, where insurance companies had been sued for damages by Italian consumers for prohibited cartel behaviour previously condemned by the Italian competition authority.195 The ECJ was basically called to decide: (a) whether consumers enjoy a right to sue cartel members and claim damages for the harm suffered when there is a causal relationship between the agreement or concerted practice and the harm; (b) whether the starting time of the limitation period for bringing an action for damages is the day on which the agreement or concerted practice was put in effect or the day when it came to an end; (c) whether a national court should also of its own motion award punitive damages to the injured third party, in order to make the compensatable amount higher than the advantage gained by the infringing party and discourage the adoption of agreements or concerted practices prohibited under Article 81 EC.196 The Court, building on Courage, and after making it clear that the basis for individual civil liabilities deriving from a violation of Article 81 EC indeed lies in Community law, seems to have followed former Advocate General van Gerven’s scheme of ‘constitutive’, ‘executive’ and simple ‘procedural’ conditions of the Community right in damages. Thus, the Court makes a fundamental distinction between the ‘existence’ and ‘exercise’ of the right in damages. That the ‘existence’ of the right is a matter of Community law is obvious 191 See Tridimas, above n 39, at 466 and ‘Judicial Review and the Community Judicature: Towards a New European Constitutionalism?’ in Wouters and Stuyck (eds), Principles of Proper Conduct for Supranational, State and Private Actors in the European Union: Towards a Ius Commune, Essays in Honour of Walter van Gerven (Antwerp/Groningen/Oxford, 2001) 77, speaking of ‘selective deference’ to national remedial and procedural autonomy. 192 Compare Komninos, above n 53 (ch 1), at 478. 193 Cited at n 63 above. 194 See also De Smijter and O’Sullivan, ‘The Manfredi Judgment of the ECJ and How It Relates to the Commission’s Initiative on EC Antitrust Damages Actions’ [2006–3] EC Competition Policy Newsletter 23, at 24, according to whom ‘the judgment in Manfredi has now crystallised—and effectively harmonised—the law on a number of salient points’. 195 Italian courts had earlier sent similar preliminary references to Luxembourg, but the ECJ had held them to be inadmissible because it thought that the referring courts had not included enough information as to the purpose of and necessity for the references: Case C–425/03 Provvidenza Regio v AXA Assicurazioni SpA, Order of 19 Oct 2004, unpublished; Joined Cases C–438/03, C–439/03, C–509/03 and C–2/04 Antonio Cannito et al v Fondiaria Assicurazioni SpA et al, Order of 11 Feb 2004 [2004] ECR I–1605. 196 The Court was also called upon to decide whether the nullity of agreements contrary to Art 81 EC can be relied upon by third parties (its answer was yes: see 3.II.(a).(ii) above), and whether Community law is contrary to a national rule which provides that plaintiffs must bring their actions for damages for infringement of Community and national competition rules before a court other than that which usually has jurisdiction in actions for damages of similar value, thereby involving a considerable increase in costs and time. Another preliminary question sent to Luxembourg in this case related to the applicability of Community law to the anti-competitive conduct.

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The Substantive Law Framework 175 from the fact that the Court solemnly reiterated the most important pronouncements of Courage.197 In this context, it is also clear that the Court proceeded to define, as a matter of Community law, what former Advocate General van Gerven calls ‘constitutive’ conditions of the right in damages: It follows that any individual can claim compensation for the harm suffered where there is a causal relationship between that harm and an agreement or practice prohibited under Article 81 EC.198

In other words, the right in damages is open (a) to ‘any individual’ as long as there is (b) ‘harm’, (c) a competition law violation, and (d) a ‘causal relationship’ between that harm and that violation.199 In thus defining the Community law constitutive conditions of the right in damages, the Court has produced a broad rule of standing, while at the same time omitting the requirement of fault, which means that national rules following more restrictive rules on standing or requiring intention or negligence for an action for damages to be successful are contrary to the constitutive conditions in Community law of the Courage/Manfredi right in damages.200 To mark the distinction between the existence of the right and its constitutive conditions, governed by Community law, and its exercise and executive conditions, governed by national law, the Court stresses again that ‘any individual . . . can claim compensation for [harm causally related with an Article 81 EC violation]’, but ‘in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to prescribe the detailed rules governing the exercise of that right, including those on the application of the concept of “causal relationship”, provided that the principles of equivalence and effectiveness are observed’.201 We submit that the Court refers here to the ‘executive’ rules of the Community right in damages. In van Gerven’s scheme these are separate from purely procedural rules, which are again a matter for national law. They are also subject to a higher standard of control under an ‘adequacy test’, rather than a mere ‘minimum effectiveness’ or ‘non-impossibility’ test, which may continue to apply for simple procedural rules. Indeed, the Court in Manfredi makes a clear distinction in its analysis between specific questions pertaining to the causal relationship between harm and antitrust violation and the availability of punitive damages, both seen as ‘executive’ conditions,202 and questions on limitation of actions and competent national tribunals, both seen as ‘detailed procedural rules’. In addition, the Court seems to share the former Advocate General’s conviction that the former affect the very core of the exercise of Community-based rights, and should therefore be subject to a more stringent test concerning the Community principle of 197 Manfredi, above n 63, paras 60, 61, 63, 89–91, citing paras 25–27 of Courage. In particular, para 91 of Manfredi, quoting para 27 of Courage, stresses that ‘the existence of such a right strengthens the working of the Community competition rules and discourages agreements or practices, frequently covert, which are liable to restrict or distort competition. From that point of view, actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the Community’ (emphasis added). 198 Manfredi, above n 63, para 61. 199 Compare also the recent ruling in City Motors which again refers to the constitutive conditions of the right to damages in the motor vehicle distribution context: Case C–421/05 City Motors Groep NV v Citroën Belux NV [2007] ECR I–659, para 33: ‘[i]n the event of a breach by a supplier of the condition for application of the block exemption set out in Article 3(4) of Regulation No 1400/2002, the national court must be in a position to draw all the necessary inferences, in accordance with national law, concerning both the validity of the agreement at issue with regard to Article 81 EC and compensation for any harm suffered by the distributor where there is a causal relationship between that harm and an agreement or practice prohibited under Article 81 EC’ (emphasis added). 200 On these issues see 3.II.(b).(xi) below. 201 Manfredi, above n 63, paras 63–64, emphasis added. 202 Ibid, paras 64 and 92 ff, as to causal relationship and punitive damages respectively.

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176 Substantive and Procedural Law Aspects effectiveness, while the latter can be subject to a more relaxed ‘non-impossibility’ test.203 It is thus no surprise that in Manfredi the Court uses the ‘non-impossibility’ language only in the context of mere procedural rules and not in the context of the ‘executive’ conditions.204 This means that questions such as causality, nature of harm and damages, and defences, which can be characterised as ‘executive’ conditions, will be subject to a more demanding test of effectiveness/adequacy, while questions such as competence of courts, limitation periods and rules on proof, which are more ‘procedural’ in nature, will be subject to a minimum effectiveness/non-practical impossibility test. (vii) The Importance of Courage for Community Law in General The result attained is undoubtedly a contribution towards a more consistent system of Community law. While the intermediate solitude of the principle of state liability might in the pre-Courage state of affairs have justified a reference to ‘bits and pieces’,205 its extension by the Courage/Manfredi rulings to individual civil liability presents a more homogeneous picture of the Community law of remedies. In addition, the final solution assures a certain degree of homogeneity and consistency in areas of EC law other than competition law,206 while ensuring full access to courts for individuals.207 The role of the Court of Justice in the formation through its case law of a ‘European private law’ is, of course, outside the scope of this study,208 but it suffices to stress here that competition law is by no means the only possible candidate for a Community law remedy in damages. Instead, it will also be a suitable remedy for all cases of harm caused by the violation of other horizontally directly effective EC provisions to persons who derive rights from those provisions. Provisions of horizontal direct effect are not numerous.209 One could conceivably speak of a Community right in damages in cases of harm caused as a result of discrimination on grounds of nationality (Article 12 EC), or sex discrimination by employers (Article 141 EC).210 203 Compare Case C–255/04 Commission v France [2006] ECR I–5251, para 40, which also makes a clear distinction between conditions affecting the very exercise of a Community right and ‘detailed procedural rules governing actions at law’. 204 Compare paras 64 and 92, which refer merely to effectiveness, with paras 71 and 78, which refer to effectiveness seen through the prism of ‘rendering practically impossible or excessively difficult the exercise of rights conferred by Community law’. 205 Such a situation of ‘bits and pieces’ in the area of liability for violation of EC competition law had already existed before Courage. In GT-Link (above n 142), the ECJ had held that in the case of violation of Arts 86 and 82 EC by a public undertaking, the Member State concerned must make reparation to individuals according to the Brasserie du Pêcheur/Factortame (III) conditions for any losses incurred as a result of the breach of the competition rules. A basic argument in favour of the recognition of Community individual liability has been that civil liability under Art 82 EC must be the same irrespective of whether the perpetrator of the anti-competitive act is a state or non-state entity. See eg Jones and Sufrin, above n 33 (ch 1), at 1330. 206 On the exigencies of consistency, harmonisation and homogeneity in the area of remedies for the protection of Community rights see van Gerven, ‘Toward a Coherent Constitutional System within the European Union’ (1996) 2 EPL 81, at 96–8. 207 See also Arts 6 and 13 ECHR; Art 47 of the EU Charter of Fundamental Freedoms; Art II-107 of the European Constitution Treaty. See further van Gerven, above n 345 (ch 2), at 3. 208 See eg Basedow, ‘Grundlagen des europäischen Privatrechts’ (2004) 44 JuS 89, at 93–5. 209 See Steindorff, above n 54, at 277 ff. 210 See Lever, ‘Mutual Permeation of Community and National Tort Rules’ in Wouters and Stuyck (eds), Principles of Proper Conduct for Supranational, State and Private Actors in the European Union: Towards a Ius Commune, Essays in Honour of Walter van Gerven (Antwerp/Groningen/Oxford, 2001) 107; van Gerven, ‘Courage v. Crehan and the Way Ahead’ in Johansson, Wahl and Bernitz (eds), Liber Amicorum in Honour of Sven Norberg, A European for All Seasons (Brussels, 2006) 489–93. See also in this direction Ryan, above n 32, at 154, according to whom ‘if an individual is protected against discrimination, then it might be thought that liability for an act of discrimination ought to lie with the discriminating employer’. Whether Art 12 EC can impose duties on individuals is

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The Substantive Law Framework 177 A more complex issue is whether the four freedoms can bind private individuals as well as the state.211 Until recently, the dominant view has been that these provisions, especially Articles 28 to 30 EC on the free movement of goods, cannot apply as such to outright private contractual relationships unless one party is a private regulatory body.212 Nevertheless, it is accepted that Article 39 EC on the free movement of workers, along with certain provisions of Regulation 1612/1968,213 should logically be applicable to and bind individual employers.214 The provisions on free movement of people are among the most fundamental principles of a constitutional nature for the Community, and the presumption is that in principle they also bind individuals.215 Indeed, in Angonese the Court of Justice recognised that the prohibition contained in Article 39 EC of discrimination on the basis of nationality is also applicable to individuals. The Court based this conclusion, inter alia, on the consideration that the non-discrimination principle is couched in general terms and is not specifically addressed to the Member States. As Advocate General Geelhoed puts it in Muñoz, ‘the fact that some Treaty provisions are formally addressed to the Member States [does not] preclude rights from being conferred on individuals who have an interest in seeking to ensure compliance with the obligations thus laid down’.216 Indeed, very recently in International Transport Workers’ Federation,217 the Court of Justice recognised in rather broad terms the horizontal direct effect of Article 43 EC on freedom of establishment and by implication of Article 49 EC on the freedom to provide services.218 Any other provision of primary or secondary Community law enjoying horizontal direct effect could, if violated, give rise to Community individual liability in the case of resulting damage.219 Regulations, in particular, would generally qualify as the basis for Community still debated. See the balanced approach followed by W Frenz, Handbuch Europarecht, Vol. I, Europäische Grundfreiheiten (Berlin/Heidelberg/New York, 2004) 1108–9. On Art 141 EC see Case 43/75 Gabrielle Defrenne v Société Anonyme Belge de Navigation Aérienne Sabena (II) [1976] ECR 455, para 39. 211 See van Gerven, Lever and Larouche, above n 179, at 952, n 232, who include Arts 28, 39, 43 and 49 EC in the Treaty provisions of horizontal direct effect that can give rise to a Community right in damages in case of their violation. See also Chalmers et al, above n 180, at 748–9; Arnull et al, above n 39, at 152–5; Reich, above n 48, at 724–5. 212 Case C–415/93 Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman, Royal Club Liégeois SA v Jean-Marc Bosman et al, and Union des Associations Européennes de Football (UEFA) v Jean-Marc Bosman [1995] ECR I–4921, para 82. See further Snell, ‘And then there Were Two: Products and Citizens in Community Law’ in Tridimas and Nebbia (eds), European Union Law in the Twenty-First Century, Rethinking the New Legal Order, Vol. II, Internal Market and Free Movement Community Policies (Oxford/Portland, 2004) 56–60. For a rare and perhaps exceptional case where the Treaty provisions of free movement of goods were considered horizontally directly effective see Case 58/80 Dansk Supermarked A/S v A/S Imerco [1981] ECR 181. 213 Council Reg 1612/1968 of 15 Oct 1968 on Freedom of Movement for Workers within the Community [1968] OJ L257/2. 214 See eg Ryan, above n 32, at 148. 215 Case C–281/98 Roman Angonese v Cassa di Risparmio di Bolzano SpA [2000] ECR I–4139. This was a case of possible discrimination stemming from a condition laid down by an individual employer for the recruitment of staff. 216 Case C–253/00 Antonio Muñoz y Cia SA and Superior Fruiticola SA v Frumar Ltd and Redbridge Produce Marketing Ltd [2002] ECR I–7289, para 43 of the AG’s Opinion. 217 Above n 180, paras 56–59. AG Poiares Maduro, in his Opinion, was even more unequivocal as to the horizontal direct effect of the four freedoms provisions of the EC Treaty and even cited, at para 39 of his Opinion, Dansk Supermarked, above n 212, for the proposition that even the free movement of goods provisions could be relied upon against private individuals, but the Court’s judgment was more reserved. 218 See also L Woods, Free Movement of Goods and Services within the European Community (Aldershot/Burlington, 2004) 185-7; Cherednychenko, ‘EU Fundamental Rights, EC Fundamental Freedoms and Private Law’ (2006) 14 ERPL 23, at 37–9. 219 See, thus, with reference to secondary Community legislation on consumer protection Hesselink, ‘The European Commission’s Action Plan: Towards a More Coherent European Contract Law? (2004) 12 ERPL 397, at 408–9, who, however, doubts whether the system of private remedies that the Court and the Commission will develop in the area of competition will be inspired by the acquis communautaire of the Community legal instruments pertaining to contract law (eg consumer protection directives).

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178 Substantive and Procedural Law Aspects tort liability claims. Indeed, soon after Courage, the Court in Muñoz held that generally and directly applicable Community regulations, ‘owing to their very nature and their place in the system of sources of Community law . . . operate to confer rights on individuals which the national courts have a duty to protect’.220 In fact, the Court’s reasoning in Muñoz echoes that in Courage.221 The Court stresses that the availability of tort claims strengthens the effectiveness of the rules on quality standards and, in particular, the practical effect (effet utile) of the obligations laid down therein. It must therefore be possible to enforce such obligations by means of civil proceedings instituted by traders against their competitors. The Court was very clear as to the instrumental nature of such claims: As a supplement to the action of the authorities designated by the Member States to make the checks required by those rules [they help] to discourage practices, often difficult to detect, which distort competition. In that context actions brought before the national courts by competing operators are particularly suited to contributing substantially to ensuring fair trading and transparency of markets in the Community.222

The same must be accepted for Community decisions that create rights for private individuals. In the competition enforcement area, commitment decisions adopted pursuant to Article 9 of Regulation 1/2003 would most likely pass this test.223 Whether directives can also be relied upon in such Community law-based tort actions is rather doubtful. It has been suggested that since in Francovich the absence of direct effect of the norm in question did not exclude state liability, the same should be accepted for individual liability. Therefore, the argument goes, the violation of an unimplemented directive by an individual can render the latter liable in tort against another individual.224 It seems, however, that to accept this would mean crossing too many artificial bridges. While state liability may also exist even if the substantive Community rules in question, for example some provisions of a non-implemented directive, do not have (vertical) direct effect, the case is different for the civil liability of individuals. Horizontal direct effect is a precondition for the Community principle of civil liability of individuals. Any other conclusion would be logically impossible, because the basis of such liability is the breach of the applicable Community rules. A relevant claim for damages in a civil action between two natural or legal persons presupposes the direct application by the national courts of the substantive provision in question. In other words, it is not logically possible to separate the enforceability of the Community rules from the question of liability for their breach.225 Thus, for example, when damages are awarded in order to remedy a harm caused through the breach of Article 82 EC, this presupposes that the national court must already have concluded that this provision applies as to the private parties in question, as a result of its having horizontal direct effect. Direct effect may not be conceptually the basis for the establishment of a general Community principle of civil liability for breach of EC competition rules, since the basis of this principle in the Court’s words is the full effectiveness of 220

Muñoz, above n 218, para 27. See in this direction van Gerven, ‘Harmonization of Private Law: Do we Need it?’ (2004) 41 CMLRev 505, at 522 and above n 123, at 22; Drake, above n 180, at 859. 222 Muñoz, above n 218, paras 30–1. See further Betlem, ‘Environmental Liability and Private Enforcement— Lessons from International Law, the European Court of Justice, and European Mining Laws’ (2004) 4 YEEL 117, at 130 ff; van Dam, above n 180, at 345. 223 See the discussion at II.3.(c).(i).d above. See also Temple Lang, above n 374 (ch 2), at 298. 224 See Betlem, above n 222, at 135 ff. 225 See in this direction Shaw, above n 58 (ch 1), at 145; Komninos, above n 53 (ch 1), at 471. 221

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The Substantive Law Framework 179 Community law.226 Direct effect is, however, a logical precondition, a necessary first step, before the question of damages arises. Finally, the fact that in certain cases directives may indirectly bind or impose burdens or obligations upon individuals under the principles of consistent interpretation227 and indirect effect228 does not suffice to lead to private enforcement of directives against individuals, since the provision of the directive in question is not in reality directly applied as between individuals. It is therefore not possible to speak of a Community right in damages in those cases. (viii) Post-Courage Developments: The Commission Green Paper on Damages As already mentioned, the Court of Justice’s Courage ruling provided the impetus for the Commission to adopt a more pro-active stance on the whole question of private enforcement. The opportunity was indeed unique. Modernisation was now a reality and there were, maybe for the first time, serious debates in Europe about the desirability of introducing further measures to enhance private antitrust enforcement. Soon after the Court of Justice delivered its Courage ruling, the Commission commissioned a study on the conditions for claims for damages in the Member States in the case of infringement of EC competition rules.229 The results of that study, known as the ‘Ashurst Study’ were published on the Commission’s website in 2004.230 Predictably, the study showed an ‘astonishing diversity and total underdevelopment’ of civil antitrust actions in the Member States. Up to mid-2004, there were apparently around 60 judgments as a result of damages actions (12 on the basis of EC law, around 32 on the basis of national law and six on both). Of these judgments, only 28 had resulted in a damages award (eight on the basis of EC competition law, 16 on national law and four on both).231 After digesting the results of the Ashurst Study and reflecting further on the appropriate way to move forward, the Commission on 19 December 2005 published for public consultation a Green Paper and a Commission Staff Working Paper on damages actions for breach of the EC antitrust rules.232 The purpose of the Green Paper, which sets out a number of possible options to facilitate private damages actions, is to stimulate debate and facilitate feedback from stakeholders. The public consultation ran until 21 April 2006 and all comments received were posted on the Green Paper’s webpage.233 226 The full effectiveness of Art 81 EC and, in particular, the practical effect of the prohibition laid down in Art 81(1) EC was considered by the Court to be the basis of the Community law principle of liability in Courage (above n 53 (ch 1), para 26), in the same way as the same full effectiveness of the Community rules formed the basis of state liability in Francovich (above n 484 (ch 2), paras 33–35). 227 See Case C–106/89 Marleasing SA v La Comercial Internacional de Alimentacion SA [1990] ECR I–4135. 228 CIA Security, above n 288 (ch 2). 229 Open Procedure COMP/2003/A1/22, available at http://ec.europa.eu/dgs/competition/proposals2/study_ tender_specifications.pdf. 230 The study is made up of a comparative report (Waelbroeck, Slater and Even-Shoshan, ‘Study on the Conditions of Claims for Damages in Case of Infringement of EC Competition Rules: Comparative Report’, 31 Aug 2004), a report on economic models for the calculation of damages and 25 national reports. See http://ec.europa.eu/comm/competition/antitrust/others/actions_for_damages/study.html. 231 See ibid, at 1. These statistics are only indicative, since in some Member States not all judgments are published and the comparative report necessarily relies on the national reports, the quality of which varies. One must also bear in mind that these statistics do not include cases that were settled with significant damages awarded to the plaintiffs. 232 Both cited at n 55 (ch 1) above. 233 See http://ec.europa.eu/comm/competition/antitrust/others/actions_for_damages/index_en.html.

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180 Substantive and Procedural Law Aspects The Commission is in favour of increased private enforcement, as it believes that this will have a number of advantages for private parties, in particular: (a) victims of illegal anti-competitive behaviour are compensated for loss suffered; (b) deterrence of antitrust infringements and compliance with the law are increased; (c) a competition culture among market participants, including consumers, will develop further, and awareness of the competition rules will be raised; (d) the Commission and the national competition authorities do not have sufficient resources to deal with all cases of anti-competitive behaviour, and in any event administrative authorities have discretion to pursue other priorities.234 The Green Paper lists in some detail a variety of options for encouraging private actions and establishing a more litigation-based system of private antitrust enforcement in Europe. The Competition Commissioner has recently announced, as a follow-up to the Green Paper, the preparation of a White Paper on antitrust damages actions, in order ‘to take the debate forward with some concrete ideas on follow-up’.235 However, no official indication has yet been given about more concrete steps and the Commission insists that it has not yet decided how to proceed. There are three possible alternative options for the Commission: (a) to take no action at all and defer to the laws of the Member States, while hoping that the Green and White Papers will encourage initiatives by Member States; (b) to proceed to the adoption of a ‘soft law’ instrument at Community level, such as a notice, a communication or guidelines, that will not be legally binding; (c) to propose Community legislation (‘hard law’), in the form of a regulation or a directive (or both). It seems that the Commission will probably propose a hard law legislative measure at Community level, most likely a Community directive, perhaps coupled with a more general regulation. Indeed, former Advocate General van Gerven, who offered advice to the DGCOMP staff who worked on the Green Paper, has proposed that a regulation should be used to ‘set out the basic substantive conditions of the remedy in compensation’ and a directive should accompany the regulation by laying down ‘the procedural aspects of the remedy’.236 The Commission has not indicated what legal basis it may use to implement its proposal.237 This could be either Article 83(2) EC, which concerns measures to give effect to the competition law provisions of the EC Treaty, or Article 65(c) EC, which concerns measures in the field of judicial cooperation in civil matters having cross-border implica234 See Commission MEMO/05/489, above n 3 (ch 1), under the heading ‘What in the Commission’s view are the advantages of private actions for damages?’. 235 See Commissioner Kroes, ‘Competition Policy and Consumers’, Speech delivered at the General Assembly of Bureau Européen des Unions de Consommateurs (BEUC) (Brussels, 16 Nov 2006), available at http://ec.europa.eu/comm/competition/speechesindex_2006.html. The White Paper is to be produced during the first months of 2008. The Commission published in early January 2007 a call for tenders to provide a study related to the economic and social impact assessment of the envisaged White Paper. The Green Paper was received favourably by the European Economic and Social Committee (EESC) (see Opinion INT/306 of the European Economic and Social Committee on the Green Paper—Damages actions for breach of the EC antitrust rules COM(2005) 672 final, Brussels, 26 October 2006) and by the European Parliament (see European Parliament Resolution of 25 April 2007 on the Green Paper on Damages Actions for Breach of the EC Antitrust Rules, 2006/2207(INI)). 236 See van Gerven, above n 123, at 5. 237 On the appropriateness of and possibility to enhance private actions through secondary Community legislation see Eilmansberger, above n 2, at 438 ff.

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The Substantive Law Framework 181 tions. These are the two legal bases that best coincide with ‘the aim and the content of the measure’ that is contemplated, as the European Court of Justice requires for the adoption of Community legislative measures.238 Certain commentators contend that Article 83(2) EC would be the most appropriate legal basis for Community secondary legislation in these matters.239 This Article provides for the Council’s adoption of appropriate measures to ensure the enforcement of EC competition law. However, whether an Article 83 EC-based measure could impose changes on national remedies and procedures is open to question. Of course, the text of Article 83(2) EC is quite open-ended, in so far as it merely gives five examples of areas where the adoption of regulations or directives may be necessary to give effect to the principles set out in Articles 81 and 82 EC and does not set out an exhaustive list. As a result, while the Commission could to some extent rely on the wording of Article 83(2)(e) EC, which provides for the adoption of such regulations and directives ‘to determine the relationship between national laws and the provisions contained in this section or adopted pursuant to this article’, the open-ended nature of Article 83(2) EC means it is under no obligation to base its proposed measure on this specific subsection.240 Alternatively, the Commission could use as the legal basis Article 65(c) EC, which provides for measures ‘eliminating obstacles to the good functioning of civil proceedings, if necessary by promoting the compatibility of the rules on civil procedure applicable in the Member States’. This provision, the product of the Amsterdam Treaty of 1999, is sufficiently general to be an appropriate legal basis, but the Commission will doubtless choose its preferred legal basis mainly on strategic considerations, to ensure the final succesful adoption of a Community measure. It is more likely to opt for Article 83 EC because this provision requires only the support of a qualified majority in the Council, and the European Parliament is not brought into the legislative process with powers of co-decision, but must only be consulted. The use of this provision would also mean that the legislative measure would be adopted by the Council in a configuration that is more accustomed and friendlier to competition policy.241 However, apart from the strategic considerations which the Commission may have in mind, the choice of Article 83 EC and the presentation to the legal community of a more competition law-specific regulation or directive make better sense from a systematic point of view. Any envisaged measure in the area of competition law is bound to create a sectoral regime at national level, which in most cases will be quite separate from and lie outside the main body of national substantive and procedural civil law. While some commentators have criticised this rather inelegant state of disintegration and ‘bits and pieces’ at the national law level, especially with reference to continental legal systems that are invariably based on systematic pices of legislation like codes,242 this is unfortunately the necessary evil resulting from the supranational structure of the EU and the whole relationship between Community and national law. To the extent that Community law necessitates such inroads 238 Case C–300/89 Commission v Council (Titanium Dioxide), [1991] ECR I–2867, para 21; Case C–269/97 Commission v Council [2000] ECR I–2257, para 43; Case C–211/01 Commission v Council [2003] ECR I–8913, para 38. The Commission cannot base its proposal on a combination of the two because each legal basis provides for a different legislative procedure (co-decision under Art 65(c) EC, consultation under Art 83(2) EC). See Titanium dioxide, paras 17–21. 239 See van Gerven, above n 62, at 81–82 and above n 123, at 5. 240 Besides, Art 83(2)(e) refers to the relationship between national competition laws and Arts 81 and 82 EC. 241 Ministers of National Economy and Finance (ECOFIN) or Competitiveness. On the politics behind the choice by the Commission of the appropriate legal basis see further Basedow, above n 9 (ch 1), at 357. 242 See generally Joerges, ‘Economic Law, the Nation-State and the Maastricht Treaty’ in Dehousse (ed), Europe after Maastricht: An Ever Closer Union? (Munich, 1994) 29 ff.

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182 Substantive and Procedural Law Aspects into national legal systems, it becomes more legitimate, in our view, to use exactly those specific legal bases that refer to the exact area of Community law in question, rather than using general legal bases which are more vulnerable from a legitimacy point of view. In the particular area at stake, the introduction of a highly specific system of private antitrust enforcement will have profound consequences for national substantive and procedural laws. Especially with regard to substance, the Green Paper and the system it aspires to must be seen in the broader context of civil law harmonisation or unification in Europe, which has always existed as an over-ambitious aim but obviously cannot in the short or mid-term lead to any concrete results.243 However, it would not have been prudent for the Commission to defer to those developments as far as private antitrust enforcement is concerned. At the same time, the Green Paper must be seen as a follow-up to the Court of Justice’s recent case law on individual civil liability for antitrust violations. In Courage and Manfredi the Court clearly set the principle as to the existence of a right in damages and its basic ‘constitutive’ conditions, but deferred to secondary Community legislation in order to address the more detailed problems in a specific and systematic way.244 This is obvious from the Court’s language in Manfredi when dealing with the ‘executive’ and ‘procedural’ questions for the ‘exercise’ of the right in damages. These were to be subject to national law, but only ‘in the absence of Community rules governing the matter’.245 Of course, any secondary Community legislation that would provide expressly for the right in damages in cases of harm caused by EC competition law violations would not add much as far as the existence of the right itself is concerned, since according to Courage and Manfredi this right has a Treaty law basis, deriving from the principle of effectiveness of Community competition law.246 The main aim of such Community legislation would be to deal with the more specific issues of substance and procedure. Indeed, the Commission’s Green Paper on damages of December 2005, which may be a prelude to Community secondary legislation on this matter, must clearly be seen in the context described above.247 The Commission leaves no doubt that ‘the right to claim damages suffered from an infringement of Treaty competition law is . . . derived from the EC Treaty 243

See 3.I.(b) above. See van Gerven, above n 62, at 90–3, producing a draft of a possible regulation on the substantive law aspects of private enforcement before national courts and above n 345 (ch 2), at 12. See in addition, Forrester and Norall, above n 7 (ch 2), at 44–5, who alternatively proposed the publication by the Commission of a notice on this matter. The option of a notice on damages is supported by Siragusa, ‘Panel Two Discussion: Procedural Issues’, in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 178–9. 245 Manfredi, above n 63, para 64. 246 At this point a parallel can be drawn with Dir 89/665/EEC on public procurement, above n 10. Art 2(1)(c) of this Dir refers to the setting-up of national procedures that should lead to the award of ‘damages to persons harmed by an infringement’. However, it is rightly stressed that this provision of this rather advanced legislative instrument (in the sense of ‘intrusion’ into national procedural autonomy) ‘does in fact not add much to the principles expressed by the Court of Justice in Francovich, Brasserie du Pêcheur, and others, which laid down the principle that individuals are entitled to claim damages before their national courts for violation of Community law’, since this requirement derives ‘from the very essence of Community law and from its effet utile’ (see HG Schermers and DF Waelbroeck, Judicial Protection in the European Union (The Hague/London/New York, 2001) 214). The same holds true for an eventual secondary Community instrument dealing with EC antitrust private enforcement, as far as the Courage principle of civil liability itself is concerned. 247 See Basedow, above n 9 (ch 1), at 356, who identifies the teleology of Courage as the driving force behind the Commission’s follow-up with the publication of the Green Paper in 2005. See also van Gerven, ‘Private Enforcement of EC Competition Rules in the ECJ—Courage v. Crehan and the Way Ahead’ in Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, 2007), 30 ff. 244

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The Substantive Law Framework 183 directly’.248 The Green Paper on damages aims to build upon this principle of Community law and ‘render the exercise of that [Community law] right more effective’,249 by concentrating on ‘the detailed rules for bringing damages actions’, and by identifying and remedying, possibly through secondary Community legislation, the main obstacles to a more efficient system of damages actions.250 (ix) Post-Courage National Legislative Developments Modernisation and decentralisation of Community competition law enforcement and the related European debate on private enforcement, as well as the 2001 Courage ruling by the Court of Justice, led to important developments at national level. The UK and Germany completely overhauled their legislation and, among other reforms, introduced provisions aimed at enhancing private antitrust enforcement of national and Community competition law. Other recently amended or adopted national competition laws contained for the first time provisions on the availability of damages for violations of competition law.251 At the same time, there has been a recent surge of damages actions and awards in the national courts, most of them being cases of follow-on claims, ie actions relying usually on prior decisions by competition authorities. Whether this last development indicates increased awareness by plaintiffs or changing judicial attitudes is still unclear, but it certainly confirms that the European ‘wake-up calls’ are reaching the Member States. To start with the UK, the Competition Act 1998 did not contain any direct reference to civil actions or actions for damages, though the availability of such actions was implicit in some other provisions of the Act.252 The absence of an express right was explained by the fact that such a right was thought to exist under EC competition law, and to provide for it expressly in the Act might prevent private litigants from benefiting from possible future Community law developments in this respect.253 If that is indeed the explanation, then the choice of the legislator can be judged as wise a posteriori. Indeed, the EC interpretation clause of section 60 of the Competition Act, which aims at ensuring that UK authorities and courts apply the domestic law provisions in a manner consistent with the application of EC competition law, also refers specifically to Community decisions ‘as to the civil liability of an undertaking for harm caused by its infringement of Community law’.254 248 Commission MEMO/05/489, above n 3 (ch 1), under the heading ‘What has the European Court of Justice said in its case-law on the right in damages for breach of EC Treaty competition law?’. Compare, however, Moch, ‘Private Kartellrechtsdurchsetzung—Stand, Probleme, Perspektiven’ (2006) 56 WuW 39, at 40, who reports from a conference in Germany, organised by the Bundeskartellamt, that Director General Lowe thought that the Courage jurisprudence did not entail a requirement of uniform conditions for tort liability throughout the Community. This statement, if reported correctly, must refer to the detailed non-constitutive conditions of that liability and not to the principle itself, which emanates from Community law. 249 See Commission MEMO/05/489, above n 3 (ch 1), in fine, emphasis added. 250 See Green Paper, under sects 1.2 and 1.3, emphasis added. 251 See n 128 above. 252 Eg ss 55(3)(b) and 58(2) of the Competition Act 1998. 253 See Coleman and Grenfell, above n 170, at 286–7; P Freeman and R Whish, A Guide to the Competition Act 1998 (London/Edinburgh/Dublin, 1999), paras 4.72–4.73; MacCulloch, ‘Private Enforcement of the Competition Act Prohibitions’ in Rodger and MacCulloch (eds), The UK Competition Act, A New Era for UK Competition Law (Oxford/Portland, 2000) 100 ff; Middleton, above n 112 (ch 2), at 26–7. 254 S 60(6)(b) of the UK Competition Act 1998. Pre-Courage, some commentators had spoken of a ‘renvoi’ to which this provision led, assuming that Community law referred the whole question of the availability of civil damages back to national law (see eg J Flynn and J Stratford, Competition: Understanding the 1998 Act (Bembridge, 1999) 16–19; Turner, ‘The UK Competition Act 1998 and Private Rights’ (1999) 21 EIPR 181, at 183–4, 186). This is of course no longer an accurate statement.

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184 Substantive and Procedural Law Aspects The situation was about to change. In 2001 a consultation paper by the Department of Trade and Industry powerfully advocated the desirability of private damages actions as a ‘very important limb of an effective competition regime’.255 Such actions were seen as serving two basic aims: compensation for victims of anti-competitive practices; and drawing private resources into the enforcement process, thus allowing public authorities to pursue the most important cases. The proposals did not stop there, but included collective actions by representative bodies acting on behalf of named and identifiable consumers (representative claims); to be pursued before the CAT. These ideas were set in motion with the Enterprise Act 2002, which has transformed the UK system from a purely administrative enforcement system to a hybrid one with the private and criminal enforcement limbs far more developed than anywhere else in Europe.256 Of particular interest for private enforcement is the conferment on the CAT of jurisdiction to hear claims for damages in competition cases.257 This procedure is thought to make better use of existing judicial resources, thus reducing the costs for the parties.258 Damages claims before the CAT presuppose the establishing by either the OFT or the European Commission that an infringement of competition law has occurred.259 Such a finding of infringement is binding and cannot be re-litigated.260 These actions must be filed with the CAT within a period of two years, beginning at the time of the public enforcer’s final infringement decision or on the date when the cause of action accrued.261 In addition, UK 255 See HM Treasury, Department of Trade and Industry, Productivity in the UK: Enterprise and the Productivity Challenge, June, 2001; Department of Trade and Industry, Productivity and Enterprise, A World Class Competition Regime, July 2001. 256 See Middleton, ‘The Americanisation of UK Competition Law’ (2003) 8 Scottish Law and Practice Quarterly 27, at 29. That author expresses concern with regard to the UK system’s divergence from the Community model. However, the Enterprise Act 2002 does not affect substantive competition law and the new developments refer rather to institutional and procedural issues. At any rate, the introduction of private and criminal enforcement contributes to the more effective enforcement not only of national but also of Community competition law in the UK. 257 S 47A of the Competition Act 1998, as subsequently amended. 258 There are some disadvantages to this solution. Thus in many cases the CAT will be burdened with the quantification of damages, a task that, according to some commentators, would be more appropriate for ordinary civil courts than for a specialised competition tribunal. In addition, parties may rely on competition law by means of a counterclaim in an otherwise non-competition case, or, conversely, there may be a competition law claim but at the same time non-competition counterclaims. In such cases there are problems of conflicts of jurisdiction. See further on these problems Lever, ‘Restructuring Courts and Tribunals Hearing UK and EC Competition Law Cases’ (2002) 1 Comp LJ 47, at 54. 259 See Lever, above n 258, at 51, who approves of this ‘inelegant’ yet necessary solution. The right to bring such a claim is without prejudice to the existing right to bring damages claims in the ordinary civil courts (ie in the Chancery Division of the High Court). It should also be mentioned that the CAT may at any stage of the proceedings, at the request of a party or on its own initiative, direct that a claim for damages be transferred to the Chancery Division of the High Court in England or the Court of Session in Scotland. See para 48 of the Competition Appeal Tribunal Rules 2003, SI 2003/1372; Rule 8.7 of CPR Practice Direction 30—Transfer. 260 A damages claim cannot be commenced while an infringement decision is on appeal or the time limit for the appeal has not yet expired, unless the CAT gives its permission. See s 47A(7), (8) of the Competition Act 1998, as subsequently amended. See most recently Emerson Electric Co et al v Morgan Crucible Company plc et al, Case No 1077/5/7/07, Judgment of 17 October 2007, [2007] CAT 28, where the CAT decided, on a preliminary point, that the time for making a claim for damages pursuant to s 47A of the Competition Act 1998 had not yet begun to run, since appeals were pending before the Community Courts against the Commission’s decision which the plaintiffs sought to rely on in their follow-on claims. Eventually the CAT granted permission to the plaintiffs to proceed with their damages claims although the appeals were still pending before the CFI. See Emerson Electric Co et al v Morgan Crucible Company plc, Case No 1077/5/7/07, Judgment of 16 November 2007, [2007] CAT 30. 261 S 47A(7), (8) of the Competition Act 1998, as subsequently amended; para 31 of the Competition Appeal Tribunal Rules 2003, above n 259. See also Rayment, ‘Practice and Procedure before the Competition Appeal Tribunal’ in Ward and Smith (eds), Competition Litigation in the UK (London, 2005) 129 ff.

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The Substantive Law Framework 185 law provides for the possibility for ordinary civil courts to transfer to the CAT competition issues arising in private civil actions.262 Then, section 58A of the UK Competition Act aims at facilitating follow-on civil actions for damages brought before the ordinary civil courts. It provides that findings of infringement of UK or Community competition law by the OFT (or by the CAT on appeal) bind the courts deciding on follow-on civil claims for damages. It is noteworthy that this provision is different from section 47A of the Act. The former refers only to the UK competition authorities’ decisions, while the latter extends the binding effect of infringement findings to decisions of the European Commission. In addition, the provision of section 58A refers to follow-on civil proceedings for damages before the ordinary civil courts (the Chancery Division of the High Court), while section 47A refers to follow-on claims brought before or transferred to the CAT.263 By follow-on claims, the Act is meant to cover ‘proceedings before the court in which damages or any other sum of money is claimed in respect of an infringement of competition law’.264 Apart from section 47A on follow-on civil claims for damages, the new UK system provides for another novelty: Section 47B provides for claims for damages brought on behalf of consumers by representative ‘specified’ bodies.265 These are not meant as US-style class actions, and the follow-on claim must specify the consumers on whose behalf the claim is brought.266 Finally, the OFT has published a Discussion Paper on private actions, in which it brings forward several proposals to enhance such actions in the UK.267 It is noteworthy that the OFT Paper conspicuously avoids using the term ‘private enforcement’ and prefers instead to speak of ‘effective redress’ for consumers and businesses. This does not mean to say that private actions are seen only through their compensatory function, and indeed one finds many interesting ideas which, if ever put into effect, would definitely create a very strong system of 262 Para 49 of the Competition Appeal Tribunal Rules 2003, above n 259; Rule 8.3 of CPR Practice Direction 30—Transfer. See further Lever, ‘The Competition Appeal Tribunal and the Ordinary Courts’ in Hutchings and Andenas (eds), Competition Law Yearbook 2002 (London, 2003), at 33, approving of this solution. See also Gray et al, above n 457 (ch 2), at 248. 263 See also s 10 of the OFT Recommendations, above n 99 (ch 1), where the OFT proposes that UK courts and tribunals should be required to ‘have regard’ to UK NCAs’ decisions and general guidance. The OFT proposes, in particular, that departures or differences from policy statements or decisions by UK NCAs are adequately explained by the courts in the interest of legal certainty. The proposed rule would presumably apply to those decisions of the authorities that do not qualify as binding for the courts pursuant to ss 47A and 58A of the UK Competition Act 1998, as it currently stands. 264 See Explanatory Notes to the Enterprise Act 2002, above n 87 (ch 1), para 87. On the history of this provision see P Roth, ‘Panel Discussion: UK Competition Law’ in Hawk (ed), International Antitrust Law and Policy 2000, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2001) 122; Rodger, above n 88 (ch 1), at 108–9. 265 According to s 47B(9) of the Act, ‘specified’ means specified in an order by the Secretary of State. See further Specified Body (Consumer Claims) Order 2005, SI 2005/2365. So far, only one organisation (‘Which?’, formerly known as the ‘Consumers’ Association’) has been ‘specified’ and there is currently a collective civil claim pending before the CAT in a case involving the price-fixing of replica football kits: The Consumers Association v JJB Sports plc, Case No 1078/7/9/07, currently pending. See further Dayagi-Epstein, ‘Representation of Consumer Interest by Consumer Associations—Salvation for the Masses?’ (2006) 3(2) Comp L Rev 209, at 220–1. 266 Para 33 of the Competition Appeal Tribunal Rules 2003, above n 259. In addition to under s 47B of the Competition Act 1998, as subsequently amended, collective claims can also be brought in England before the ordinary courts. Rules 19.6 to 19.15 Civil Procedure Rules (CPR) 1998, SI 1998/3132 distinguish, in particular, between representative claims and group litigation. See also CPR Practice Direction 19b—Group Litigation. Note that the OFT, in its Recommendations, above n 99 (ch 1), proposes the introduction also of stand-alone representative claims on behalf of consumers (para 5.9). 267 OFT Discussion Paper, Private Actions in Competition Law: Effective Redress for Consumers and Business, Apr 2007.

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186 Substantive and Procedural Law Aspects private enforcement. Strengthening the rules on representative actions and perhaps introducing a form of opt-out class actions, more relaxed rules on contingency fees, reversal of the burden of proof in passing-on situations and proving options for settlements are some of these ideas. The Discussion Paper was very recently followed by Recommendations which pursue these ideas and make specific proposals to the UK government.268 The recent amendment of the German Competition Act makes another paradigm worth examining. German law has long provided for antitrust damages actions,269 but the new section 33 GWB marks important progress, in that it provides a legal basis for damages claims for violation not only of German but also of Community competition law. The new provision also abandons the previous rather restrictive condition for standing, which was conferred only on persons within the ‘protective scope’ of the statute, and stressed that any ‘person affected’, including competitors and ‘other market participants’ could sue for damages.270 The law now also gives standing to associations for the promotion of commercial or independent professional interests, including consumer associations.271 One novel feature is that it is now possible for the courts to calculate the damages taking into account the proportion of the profit which the defendant derived from the infringement.272 In addition, the passing-on defence is restrained, though not completely banned.273 Finally, German 268

OFT Recommendations, above n 99 (ch 1). On the situation in Germany before the latest GWB amendment see Baur, ‘Schadensersatz und Unterlassungsansprüche bei Verstößen gegen die Kartellrechtsvorschriften des EWG-Vertrags’ (1988) 23 EuR 257, at 260 ff; Braun, above n 138 (ch 2), at 431, 580–1; Schmidt, above n 158, at 57 ff; Dieckmann in Wiedemann (ed), Handbuch des Kartellrechts (Munich, 1999) 1271–2. Apart from few exceptions where national competition laws themselves contain express provisions on the availability of damages (see above n 128), national laws have usually referred to general provisions in their civil law for a legal basis for damages actions. For Austria see s 1311(2) ABGB; further Stillfried and Stockenhuber, above n 158, at 303 ff; Maitz-Strassnig, above n 158, at 35; Günther, above n 294 (ch 2), at 319. For Belgium see Art 1382 of the Civil Code; further Noirfalisse, above n 80, at 63; van Bael, above n 404 (ch 2), at 57. For Finland see the relevant provisions of the Compensation Act of 1974 (Vahingonkorvauslaki); further Erämetsä, above n 33 (ch 1), at 222. For France see Arts 1382 and 1383 CC; further Boulanger, above n 465 (ch 2), at 194–5 and 293–4; Fasquelle, ‘La réparation des dommages causés par les pratiques anti-concurrentielles’ (1998) 51 RTDComm 763, at 769 ff; Schapira, Le Tallec, Blaise and Idot, above n 15 (ch 2), at 299. For Greece see Art 914 of the Civil Code; further Iliopoulos, above n 294 (ch 2), at 251, 289–90 and 303–4; Koutsoukis, above n 68, at 336 ff; Liakopoulos, above n 66 (ch 1), at 498. For Ireland see Maher, above n 461 (ch 2), at 270–1 and above n 510 (ch 2), at 63–8, 143, 165, 293–6. For Italy see Art 2043 of the Civil Code; further Ligustro, above n 60, at 218; Tavassi and Scuffi, above n 25 (ch 2), at 301, 317 ff; Libertini, above n 75, at 452; Bastianon, above n 158, at 1073 ff; A Pera, Concorrenza e Antitrust (Bologna, 2001) 58. For the Netherlands see Art 6:162 of the Dutch Civil Code; further Sevinga, ‘The Netherlands’ in Behrens (ed), EEC Competition Rules in National Courts, Vol. II, Benelux and Ireland (Baden-Baden, 1994) 150; RT Ottervanger, J Steenbergen and SJ van der Voorde, Competition Law of the European Union, the Netherlands and Belgium (The Hague/London/Boston, 1998) 105; van Reeken and Noë, above n 112 (ch 2), at 457; Bos and Struijlaart, above n 80 (ch 2), at 353. For Portugal see Art 483 ff of the Civil Code; further Ruiz, above n 67 (ch 1), at 234, n 38. For Spain see Art 1902 of the Civil Code; further Navarro Varona and Rating, above n 21 (ch 1), at 76. Compare also the—now outdated— study commissioned by the European Commission and co-ordinated by A Braakman: European Commission, DG IV-Competition, The Application of Articles 85 and 86 of the EC Treaty by National Courts in the Member States (Brussels, 1997). 270 S 33(1) GWB. See further Hempel, above n 180, at 38 ff; Mestmäcker and Schweitzer, above n 270 (ch 2), at 522 ff; Miege, ‘Modernisation and Enforcement Pluralism—The Role of Private Enforcement of Competition Law in the EU and the German Attempts in the 7th Amendment of the GWB’, Paper presented in the Conference Organised by the Amsterdam Center for Law and Economics on Remedies and Sanctions in Competition Policy (Amsterdam, 17–18 Feb 2005) 18 ff; Drexl, ‘Le juge de droit commun, juge de la concurrence: Réalité des obstacles et adéquation des pouvoirs—La situation en Allemagne’ in Idot and Prieto (eds), Les entreprises face au nouveau droit des pratiques anticoncurrentielles: Le Règlement 1/2003 modifie-t-il les stratégies contentieuses? (Brussels, 2006) 148; Bunte in Langen and Bunte (eds), Kommentar zum deutschen und europäischen Kartellrecht, Vol. I, Deutsches Kartellrecht (Munich, 2006) 237 ff; Bulst, above n 182, 108 ff 271 See Stockmann, ‘La réforme du droit allemand de la concurrence’ 6/2006 RLC 106, at 112. 272 S 33(3) GWB. 273 See 3.II.(b).(xi).d below. 269

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The Substantive Law Framework 187 law goes even further than UK law by conferring a binding effect not only on the European Commission and the Bundeskartellamt, but also on all other EU Member States’ competition authorities infringement decisions. This binding effect is confined to follow-on civil litigation, basically aiming at offering incentives to claim damages from convicted cartelists.274 (x) Post-Courage National Case Law Developments As far as national case law is concerned, even before the latest developments, it would be exaggerated to deny the existence of tangible evidence referring to private enforcement through damages awards. As the Ashurst Study admits, there have already in the past been quite a few final judgments by national courts that awarded damages to victims of anticompetitive practices.275 More importantly, there have been cases, most of them unreported, where just before the final judgment the parties settled before quantum was determined.276 The actual extent of these settlements may be hard to realise.277 274

See Hempel, above n 90 (ch 1), at 371; Moch, above n 248, at 41. This appears to have been the case in France. See CA Paris, 30 Sept 1998, Mors [1998-12] Europe 17, where a damages award of FF 34.2 million was granted to the victim of an abuse of a dominant position under French and Community competition law. The case concerned exclusionary practices that resulted in deterring the plaintiff from supplying the braking system for certain Airbuses. For another case see T Com Paris, 22 Oct 1996, SA Automobiles Peugeot v Sté Ecosystem, commented on by Idot [1996-12] Europe 17, where the damages awarded amounted to a meagre FF 1.6 million. See further Idot, ‘La liberté de concurrence en France’, Petites Affiches, 23 Mar 2000, No 59, 5, at 7, who notes that French cases of non-contractual liability pertinent to violations of EC competition law have been rather rare, but seem to be developing; Momège and Idot, above n 473 (ch 2), at 234. See also the cases cited by Boulanger, above n 465 (ch 2), at 293; Fasquelle, ‘Les dommages et intérêts en matière anticoncurrentielle’ [2000–5/6] Rev Conc Consomm 14. For a Dutch example see Rechtbank Amsterdam, 14 May 1975, Wilkes v Theal and Watts, cited by Sevinga, above n 269, at 201, n 248. For an Italian case see Corte d’Appello, Milan, 24 Dec 1996, Telsystem v SIP-Telecom (1997) 2 Danno e Responsabilità 602, where Telsystem was awarded 3 billion lire in damages for harm it suffered as a result of violations of the Italian anti-monopoly legislation by Italia Telecom. Germany too has been a jurisdiction with a lot of success in private antitrust enforcement. See eg Bornkamm, ‘Panel Discussion: Administrative Antitrust Authorities: Adjudicative and Investigatory Functions’ in Hawk (ed), International Antitrust Law and Policy 2002, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2003) 422, alleging that the US and Germany were probably the jurisdictions with the most private antitrust actions in the world. See also Böge, ‘Panel Discussion: Enforcement Authorities Roundtable’ in Hawk (ed), International Antitrust Law and Policy 2005, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2006) 78, clearly contradicting the German Report of the Ashurst Study as to its findings with regard to private enforcement actions in Germany. The president of the Bundeskartellamt stresses that there were at least 80 cases of damages awards in Germany alone between 2000 and 2004, while the study commissioned by the Commission had found only 29 claims for damages brought between 1958 and mid-2004! Of course, it is open to discussion whether the many more cases referred to by the German official can properly be characterised as ‘sword’ litigation or even as ‘private enforcement’ (see 1.I above on definitions and delimitations); however, his data should be far more accurate, since under German law the courts are under a duty to notify to the Bundeskartellamt all legal actions arising from Arts 81 and 82 EC and the equivalent German provisions . 276 See Jones and Sharpston, above n 102 (ch 1), at 87; Kerse, ‘The Complainant in Competition Cases: A Progress Report’ (1997) 34 CMLRev 213, at 247; Green, ‘Rapport britannique’ in XVIII congrès FIDE (Stockholm, 3–6 juin 1998), Vol. II, Application nationale du droit européen de la concurrence (Stockholm, 1999) 61; K Jones, ‘Litigating Competition Cases in the UK’ in Lawyers’ Europe, Spring 2002, 2. The financial implications of settlements can be quite similar to damages awards. For an English example see Irish Dairy Board, above n 171, where a breach of Art 82 EC was alleged, but the matter was settled by the payment of a substantial amount to the plaintiff. For a German example see the Global One case, where after the national court had accepted a claim of damages in its merits the litigants settled: OLG Düsseldorf, 16 June 1998, British Telecommunications, above n 41 (ch 2). 277 In the US a study on private enforcement has found that between 1973 and 1983 more than 80% of cases were settled before any final damages award had been given by the courts. See Roach and Trebilcock, above n 45 (ch 1), at 466, referring to the Georgetown Private Antitrust Litigation Project. 275

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188 Substantive and Procedural Law Aspects Irrespective of the modesty or significance of these precedents, in recent years one has even been able to speak of a boom in private antitrust enforcement in Europe.278 As explained above, this is undoubtedly connected with the decentralisation of EC competition law enforcement and the more active role foreseen for national courts, but also with the more general drive in Europe for the enhancement of private enforcement. It thus seems that Regulation 1/2003, along with the Courage judgment of the Court of Justice, constituted the ‘wake-up call’ that many proponents of private enforcement were expecting.279 It is interesting to note that many of the recent cases, some of which are still pending, are follow-on cases. The Vitamins case is the most prominent source of such actions and there have already been damages awards and settlements in Germany, England, Sweden and other jurisdictions.280 A famous example is the Provimi judgment decided at the admissibility stage by the English High Court, where, as well as English parties, a German party was also claiming antitrust damages.281 Judgment was given only as to the jurisdictional issues and subsequently the parties settled. There, it was established that where there is an English connecting factor in the private international law sense, ie an English element to a cartel, other non-English claimants may also bring claims in London in respect of their nonEnglish-based losses, instead of having to pursue separate claims in other jurisdictions. The Vitamins litigation provided also for the first claims that were brought before the CAT as follow-on civil claims for damages under the special procedure of section 47A of the UK Competition Act 1998, as subsequently amended. These cases, however, did not lead to final judgments, since they were settled.282 Another recent follow-on action brought before the CAT, which was also settled, gave rise, however, to an interim award of damages, the first ever award of damages in England for a competition law infringement. This was based on previous infringement decisions by the OFT/CAT in an abuse of dominance case concerning margin squeeze and rebates in the pharmaceutical sector. Interestingly, the plaintiff also claimed exemplary damages. While the case was still pending, the CAT on 16 November 2006 awarded ‘interim damages’ of £2 million.283 That represented, in the

278 See eg Desai, ‘Antitrust Compliance Programmes: Act Now’ in The European Antitrust Review 2004, Global Competition Review Special Report (London, 2003) 11–12, who also stresses the importance of compliance programmes with a view to minimising claims for damages in increasing private lawsuits. 279 See Jones, above n 75 (ch 1), at 97; Goyder, above n 10 (ch 2), at 560. 280 See Braun and Bader, ‘German Competition Law: Overview and Recent Developments’ in The European Antitrust Review 2004, Global Competition Review Special Report (London, 2003) 98. 281 Provimi Ltd v Aventis Animal Nutrition SA et al [2003] ECC 353 (QB). 282 See Deans Foods Ltd v Roche Products Ltd, F Hoffmann-La Roche AG and Aventis SA, Case No 1029/5/7/04, CAT Consent Order of 11 Feb 2005; BCL Old Co Ltd, DFL Old Co Ltd and PFF Old Co Ltd v Aventis SA, Rhodia Ltd, F Hoffmann-La Roche AG and Roche Products Ltd, Case No 1028/5/7/04, CAT Consent Order of 24 Nov 2005. See further Randolph and Robertson, ‘The First Claims for Damages in the Competition Appeal Tribunal’ (2005) 26 ECLR 365. Interestingly, the CAT rejected the defendants’ applications for security for costs, because it thought that this was not appropriate in the circumstances. The risk that orders for security for costs might stifle private claims for damages was clearly taken very seriously by the court. Compare para 28 of the court’s Preliminary Judgment of 28 Jan 2005 on security for costs: ‘More generally, the Tribunal notes that this specialised jurisdiction under section 47A has been created by Parliament with a view to facilitating claims for damages or restitution on the part of those who have suffered loss as a result of infringements of domestic or European competition law’ (emphasis added). 283 Healthcare at Home Ltd v Genzyme Ltd, Case No 1060/5/7/06 [2006] CAT 29, commented on by Brown, Dec 2006, Vol. II, e-Competitions, available at www.concurrences.fr. The case was finally settled (see CAT Withdrawal Order of 11 Jan 2007). Under English law, interim damages can be an adequate provisional measure if there is a very good prima facie case and if damages appear to be an appropriate final remedy (see 3.II.(c) below).

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The Substantive Law Framework 189 court’s view, roughly 70 per cent of the likely final damages award.284 Meanwhile more actions for damages have been brought before the CAT.285 In Germany, the courts’ initial rejectionist approach has now changed and the first successful follow-on damages claims in the Vitamins litigation are a reality. It is noteworthy that certain German courts adjudicating claims for damages in the post-Courage era refused to grant damages to direct purchasers of vitamins on passing-on grounds, and because the cartel was not specifically directed at them but at all market participants.286 This built on a very restrictive reading of standing under German law that was certainly incompatible with Community law, in particular the Courage ruling, which accepted no such limitations but granted a right in damages to all individuals harmed by the anti-competitive conduct.287 Recent German judgments, however, have reversed this restrictive approach and have made the first damages awards.288 Important successful damages claims have also been reported in Austria, France,289 Denmark,290 Spain,291 Sweden292 and Italy, where the Corte di Cassazione after lengthy tribulations established that consumers could claim damages from a cartel of insurance companies previously convicted by the Italian competition authority.293 In short, the 284

See further the comment by A Jones, Jan 2007, Vol. I, e-Competitions, available at www.concurrences.fr. See eg JJB Sport, above n 265; Emerson Electric, above n 261; ME Burgess et al v W Austin & Sons (Stevenage) Ltd and Harwood Park Crematorium Ltd, Case No 1088/5/7/07, currently pending. See further Beal, above n 581 (ch 2), at 21. 286 LG Mannheim, 11 July 2003, 7 O 326/02, Vitaminkartell (2004) 106 GRUR 182; LG Mainz, 15 Jan 2004, 12 HK O 56/02 (Kart), Vitaminpreise (2004) 54 WuW 1179. 287 See 3.II.(b).(xi).a below on the issue of standing. 288 LG Dortmund, 1 Apr 2004, 13 O 55/02 (Kart), Vitaminpreise (2004) 54 WuW 1182. The damages awarded in this case amounted to the difference between the price paid as a result of the cartel and a hypothetical market price. In addition, the court ruled that the defendant had failed to prove that the plaintiff had passed on his loss to his customers. 289 CA Versailles, 24 June 2004, no 02/07434, SA Verimedia v SA Mediametrie et al. The court awarded €100,000 to the victim of an anti-competitive agreement (on the basis of French competition law). The damages awarded were rather low because inter alia of the plaintiff’s contributory fault. 290 Judgment of 20 Apr 2005, GT Linien A/S v DSB and Scandlines A/S, UfR 2005.2171 H. The award of damages amounted to DKr 10 million plus interest and was largely upheld by the Danish Supreme Court. See also Copenhagen Maritime and Commercial Court, Judgment of 3 Oct 2002, EKKO v Brandt Group Norden et al (EKKO I) [2004] UfR 2600 S, and Judgment of 15 Oct 2004, EKKO v Electrolux Home Products Denmark et al (EKKO II) [2005] UfR 388 S. 291 Juzgado de Primera Instancia no 4 de Madrid, 7 June 2005, no 125/2005, Antena 3 TV v LNFP. In this case, in a ‘follow-on’ civil action, the court awarded a record €25 million in damages because LNFP, the Spanish football league, had abused its dominant position by selling broadcasting rights on an exclusive basis to regional public broadcasters, thus foreclosing certain new entrants. The damages claim was based on an earlier national infringement decision, confirmed by the competent Spanish courts. See also Juzgado de lo Mercantil no 5 de Madrid, 11 Nov 2005, no 36/2005, Conduit Europe SA v Telefónica de España SAU, confirmed in Audiencia Provincial de Madrid (secc no 28), 25 May 2006, Conduit Europe SA v Telefónica de España SAU. In that case, the court awarded the plaintiff, an Irish communication services provider, €639,000 for losses incurred as a result of the defendant’s abuse of a dominant position, consisting of giving out defective and incomplete information in order to block the plaintiff’s entry into the market for subscriber directory enquiries. 292 See Mühlenbock, Salomon and Salwén, ‘Highlights and Trends in Swedish Competition Law’ in The European Antitrust Review 2007, Global Competition Review Special Report (London, 2006) 214. 293 Corte di Cassazione, 4 Feb 2005, no 2207 Compagnia Assicuratrice Unipol SpA v Ricciarelli (2005) 11 Danno e Responsabilità 495. This judgment was decided by the Sezioni Unite (a special chamber with an increased number of judges) of the Corte di Cassazione. It reversed a previous ruling by the same court that had denied standing to consumers in the same cartel (Corte di Cassazione, 9 Dec 2002, no 17475, Soc Axa Assicurazioni v Isvap and Larato (2003) 9 Danno e Responsabilità 390). See the heated debate in Italy between Libertini (in favour of consumers’ standing) and Castronovo (in favour of a restrictive reading of the competition rules’ protective scope): Castronovo, ‘Antitrust e abuso di responsabilità civile’ (2004) 10 Danno e Responsabilità 469; Libertini, ‘Ancora sui rimedi civili conseguenti a violazioni di norme antitrust’ (2004) 10 Danno e Responsabilità 933; Castronovo, ‘Responsabilità civile antitrust: Balocchi e profumi’ (2004) 10 Danno e Responsabilità 1165; Libertini, ‘Ancora sui 285

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190 Substantive and Procedural Law Aspects picture is changing, and the adoption of the Green and White Papers by the Commission is bound to raise further the awareness of courts, market participants and consumers. (xi) The Conditions of Civil Liability a. Standing The specific question of who has standing to sue for damages in case of harm caused by an EC competition law violation is fundamental. It is also closely connected with the broader question of the goals of competition law and policy, in particular whether competition law aims at safeguarding effective competition in the market or at protecting economic freedom. As explained above, although the main goal of the Treaty competition provisions is the protection of free and undistorted competition in the common market, this has an indirect bearing on private parties. At the same time, the Treaty competition rules are enshrined in a text of a constitutional nature and, together with the four freedoms, make up the Community’s ‘economic constitution’.294 Irrespective of what happens with the new Treaty that replaces the ill-fated Treaty Establishing a Consitution for Europe and the debacle with the withdrawal of a reference to the competition rules in the introductory provisions of the texts that deal with the Union’s objectives, the fact that the competition rules make up our unwritten economic constitution is well-anchored in the Community Courts’ case law.295

rimedi civili conseguenti ad illeciti antitrust (II)’ (2005) 11 Danno e Responsabilità 237. See also Giudici, ‘Private Antitrust Law Enforcement in Italy’ (2004) 1(1) Comp L Rev 61, at 73 ff. For other Italian competition law cases where damages have been awarded see Siragusa, Rizza and D’Ostuni, ‘Italy’ in Private Antitrust Litigation 2007, Global Competition Review Special Report (London, 2006) 51. See also indicatively Giudice di Pace, Bitonto, 21 May 2007, Vincenzo Manfredi v Lloyd Adriatico Assicurazioni SpA, where actually the Italian judge, who was empowered to calculate damages following rules of equity, awarded punitive (double) damages for the specific cartel infringement. Compare the critical comments of Nebbia, ‘. . . So What Happened to Mr Manfredi? The Italian Decision Following the Ruling of the European Court of Justice’ (2007) 28 ECLR 591. 294 See inter alia A Birk, Das Prinzip des unverfälschten Wettbewerbs und seine Bedeutung im europäischen Gemeinschaftsrecht (Baden-Baden, 1999) 149 ff; J Baquero Cruz, Between Competition and Free Movement, The Economic Constitutional Law of the European Community (Oxford/Portland, 2002); Azoulay, ‘L’ordre concurrentiel et le droit communautaire’ in L’ordre concurrentiel, Mélanges en l’honneur d’Antoine Pirovano (Paris, 2003) 280 ff. See also KT Yannakopoulos, The Opacity Required by the Effective Competition in EC Public Procurement Law (Athens/Komotini, 2003) (in Greek) 12; Oliver, ‘Les quatre libertés et les droits findamentaux’ in Vandersanden and de Walsche (eds), Mélanges en hommage à Jean-Victor Louis (Brussels, 2003), 357; Nowak, ‘Das Verhältnis des Wettbewerbsrechts und der Grundfreiheiten im Binnenmarkt’ in Hatje and Terhechte (eds), Das Binnenmarktziel in der Europäischen Verfassung (Baden-Baden, 2004) 82 ff; Briand-Mélédo, ‘Droit de la concurrence, droit constitutionnel substantiel de la communauté européenne’ (2004) 57 RTDComm 205, at 205–8. It is interesting to note that US antitrust, though formally not part of the US Constitution, is also considered to enjoy such ‘constitutional’ status by the US Supreme Court. Compare United States v Topco Associates Inc, 405 US 596 (1972), at 610, referring to the Sherman Act as ‘the Magna Charta of free enterprise’. 295 The European Constitution had listed competition law among the guiding principles and objectives of the Union. Art I–3(2) of the Constitution stressed that ‘the Union shall offer its citizens an area of freedom, security and justice without internal frontiers, and an internal market where competition is free and undistorted’. Including the principle of free competition among the Union’s paramount objectives certainly went further than the equivalent provision of Art 3(1)(g) EC. Further, the constitutional nature of competition law was celebrated in the primary principles of a formal constitution. In addition, that text referred to the principle of free competition positively (‘where competition is free and undistorted’), rather than negatively as in the current EC Treaty (‘a system ensuring that competition in the internal market is not distorted’). The Treaty of Lisbon, however, did not include competition in the introductory provisions of the Treaty on the Functioning of the European Union, which is going to replace the EC Treaty, but produced a seperate Protocol on the Internal Market and Competition which stresses the following: ‘[T]he internal market as set out in Article 2 of the Treaty on European Union includes a system ensuring that competition is not distorted’.

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The Substantive Law Framework 191 This short introduction to the constitutional parameters of EC competition law serves to define the rules on standing for damages claims. A restrictive view of standing would offend against the constitutional status of the Treaty competition rules, and would create obstacles to individuals’ reliance on rights derived from a constitutional text. Indeed, as Clifford Jones has persuasively explained, EC competition law is in this sense different from US antitrust law, and the latter’s prudential mechanisms and its restrictive rules on standing cannot be automatically transposed to the EC context.296 This is important because many national laws have contained restrictive rules on standing for competition law-related damages actions. We have already seen that English courts followed a rather restrictive approach to the persons who had such standing to sue. Cocontractors were excluded, and the position of consumers was equally unclear. In continental legal systems, the question of damages for competition law infringements has been more or less clear in jurisdictions following the unitary norm system of the French Civil Code (Article 1382),297 where the sweeping general nature of the national rule on civil liability allows for a liberal approach with regard to standing, but problems have existed in countries following the German doctrine of Schutznorm,298 whereby plaintiffs claiming damages have to belong to a group of persons whom the legislator intended to protect. In some other countries, notably Italy, courts had difficulties in granting standing to certain persons, in particular consumers, because of a distinction made between subjective rights (diritti soggettivi) and lawful interests (interessi legitimi). According to this approach, the competition rules protected only the latter and consumers could not avail themselves of this protective scope.299 Whether Articles 81 and 82 EC can be considered as statutes for the protection of individuals and private interests, or as analogous to them, has been decided in the affirmative by both courts300 and commentators.301 The real question is which persons fall under this 296 Indeed, that author would prefer national courts to engage in an approach which would follow the ‘legitimate interests’ test incorporated in the old Reg 17 with reference to complaints (Jones, above n 38 (ch 1), at 190). 297 The position of French law is unique because it provides for a separate specific legal basis for damages actions: Art L442-6 Code de commerce. This is of limited scope and is applicable to harm caused by the commission of certain enumerated acts. It is a rather atypical provision, since it gives title to sue for damages not only to the victims, but also to the public prosecutor, the Minister of the Economy and the president of the Conseil de la concurrence, acting on behalf of the victims. This extraordinary provision, which has been characterised as a ‘bizarrerie juridique’, nevertheless stresses the will of the French legislator to view damages actions as an instrument of market policing (see further Boulanger, above n 465 (ch 2), at 197; Claudel, ‘Concurrence: Projet de loi sur les nouvelles régulations économiques’ (2000) 53 RTDComm 606 and 877, at 896 and 898; Lucas de Leyssac and Parleani, above n 61 (ch 2), at 955, 975). Standing to sue for damages under this provision is available to any economic operator who has a legitimate interest (see Amadio, ‘Le ministre plaideur au titre de l’article 36* de l’ordonnance du 1er décembre 1986’, in Propos impertinents de droit des affaires, Mélanges en l’honneur de Christian Gavalda (Paris, 2001) 5). It is questionable whether these damages actions can be brought also in cases of harm caused by the violation of Community competition law, when the anti-competitive practice takes the form of one of the enumerated acts in Art L442-6. While Art L470-6 empowers the Minister of the Economy and the French competition authority to use all means provided for by the law to enforce Community law, it appears that the atypical action of Art L442-6 is not covered. 298 This doctrine is also followed by Austrian, Dutch and, to a certain extent, Italian and Greek law. The question concerning the protective scope (Schutzzweck) of Arts 81 and 82 EC is one of Community law, and the ECJ has the ultimate competence to interpret this. See in this direction Schröter, above n 122 (ch 2), at 328. 299 Reference is made to the insurance cartel litigation in Italy (see n 293 above). It is interesting to note that the diritto soggettivo–interesse legitimo distinction finds its historical explanation in the separation between civil and administrative courts. 300 In Germany see BGH, 23 Oct 1979, KZR 21/78, BMW-Importe (1980) 30 WuW 191. 301 See eg Baur, above n 269, at 260 ff; Temple Lang, above n 102 (ch 1), at 221 ff; Waelbroeck and Frignani, above n 83, at 529–30; Steindorff, above n 121 (ch 2), at 306–9; Maitz-Strassnig, above n 158, at 35; Günther, above n 294 (ch 2), at 320; Lever, ‘Substantive Remedies: The Viewpoint of an English Lawyer’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 109.

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192 Substantive and Procedural Law Aspects protective scope. While the position of competitors has been clear, some of the legal systems belonging to the Germanic legal family (as far as tort liability is concerned) have encountered difficulties with the position of purchasers and consumers. Thus until the latest amendment of the German Competition Act, standing to sue for damages was conferred only on persons within the ‘protective scope’ of the law.302 This was the case for both German and Community competition law.303 As already mentioned, the new section 33(1) GWB which now applies both to German and to Community competition law-based claims has relaxed the rules on standing by referring to ‘affected persons’, including competitors and ‘other market participants’. The new definition seems to cover consumers and endusers, at least according to the explanatory memorandum accompanying the German government’s draft bill that led to the reformed Act.304 As noted above, consumers were also until recently excluded from the category of persons having title to sue for antitrust damages in Italy, due to a restrictive reading of the protective scope of national tort law provisions, but this again has been remedied. Some other national laws contain equally restrictive provisions. Thus, Article 18a of the Finnish Act on Competition Restrictions, which since 2004 has also been made applicable to Article 81 and 82 EC infringements, gives standing to sue only to ‘business undertakings’, so consumers are excluded. Irrespective of these national provisions dealing with standing to sue, we submit that Community law in the post-Courage/Manfredi era itself defines the constitutive conditions of the right in damages. The rules on standing clearly fall under these conditions. Indeed, in Courage the Court had no difficulty in finding that Article 81 EC not only protected third-party competitors, in that case third-party beer suppliers foreclosed by a specific network of exclusive beer supply agreements, but could also be relied upon by ‘any individual’,305 including co-contracting parties, in that case tenants.306 In the UK Crehan case, Inntreprenneur had argued that Mr Crehan lacked standing to sue for damages because he was just a tenant and not one of the horizontal competitors of the former, whom Article 81 EC protected in this case.307 Inntreprenneur made, in particular, an argument similar to the US ‘antitrust injury’ doctrine308 and argued that Mr Crehan’s type of loss should have been one that Article 81 EC was intended to prevent. The English Court of Appeal did not, however, accept that argument and held that the Courage ruling of the ECJ made it clear that Mr Crehan was among the people enjoying standing to sue.309 302 See eg OLG Cologne, 21 Feb 2001, 28 O (Kart) 409/99 Zytostatika (2002) 52 WuW 390, for a German case where it was held that co-contractors (members of an association of undertakings in casu) did not have standing to sue for damages under Art 81(1) EC and s 823 BGB. 303 The old s 33 GWB provided for damages claims based on German competition law, while s 823(2) BGB led to the same result for claims based on Community competition law. 304 See Rinne and Walz, ‘Germany: Private Antitrust Litigation’ in The European Antitrust Review 2007, Global Competition Review Special Report (London, 2006) 127. 305 Courage, above n 53 (ch 1), para 26. 306 See Brealey, ‘Adopt Perma Life, but Follow Hanover Shoe to Illinois? Who Can Sue for Damages for Breach of EC Competition Law’ (2002) 1 Comp LJ 127, at 128. 307 See Green, ‘Will Modernisation Increase Litigation in National Competition Authorities and the National Courts?’ in Geradin (ed), Modernisation and Enlargement: Two Major Challenges for EC Competition Law (Antwerp/Oxford, 2004) 167. Compare also Monti, above n 271 (ch 2), 424–431, in particular 428. 308 See 3.II.(b).(xi).f below. 309 See further Holmes and Lennon, ‘The Crehan Judgment’ (2004) 25 ECLR 676, at 677; Robinson and Pimlott, ‘Damages Actions in the UK for Breaches of UK and EU Competition Law’ 4/2005 RLC 179, at 181. Such a defence would probably have also failed in the US. In Blue Shield of Virginia v McCready, 457 US 465 (1982), the Supreme Court made clear that ‘the remedy cannot reasonably be restricted to those competitors whom the

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The Substantive Law Framework 193 Manfredi, as already explained, built on Courage and defined in detail the Community law constitutive condition of standing, explicitly recognising that consumers enjoy standing to sue for harm caused to them by anti-competitive conduct.310 Such a principle can also be adduced from the letter of Article 81(3) EC, which speaks of ‘allowing consumers a fair share of the resulting benefit’.311 Therefore, if the unequivocal words used in Courage as to the very existence of a right in damages in Community law for all harmed individuals had rendered redundant 312 any effort to make a distinction, based on the ‘protective scope’ of Articles 81 and 82 EC, between co-contractors,313 competitors, consumers, purchasers (direct or indirect)314 and other third parties,315 following Manfredi, we can now indeed say that such distinctions are incompatible with Community law316 and, pursuant to the principle of supremacy, should be set aside.317 The current state of the law is that irrespective of the protective scope of the competition law provisions, all private parties who have been harmed by an anticompetitive practice enjoy a Community law-based right in damages. Indeed, the Court of Justice’s case law, starting from BRT v SABAM (I), does not allow for differentiations based on the protective scope of Articles 81 and 82 EC. According to the Court, individuals enjoy rights because such rights are conferred on them by the direct effect of the Treaty competition rules, and not because the pertinent provision is specifically designed to protect them.318 In other words, Community law itself elevates these private parties to the status of guardians of free competition in the European Union, ie ‘private attorneys-general’. Whether these persons will finally succeed in being awarded damages, however, ultimately depends on causation. Indeed, causation will eliminate any unmeritorious claims without it being necessary to establish restrictive rules on standing. conspirators hope to eliminate from the market’ and that there was a duty to remedy harm done as ‘a necessary step in effecting the ends of the illegal conspiracy’ (at 478–9). 310 Manfredi, above n 63, paras 60, 61 and 63. 311 Emphasis added. 312 See van Gerven, above n 123, at 8. 313 Bar cases where a co-contrator bears a significant degree of responsability for the violation of competition law (Courage, above n 53 (ch 1), para 31). This, however, is not a question of standing falling under the Community law-defined constitutive conditions of the right in damages, but rather one of contributory fault, falling under the—for the time being—national law-defined executive conditions of the right in damages. 314 As for the so-called ‘indirect purchasers’’ standing see 3.II.(b).(xi).e below. 315 Whether shareholders or other persons related to a company that has breached the antitrust rules, such as employees, can sue for damages is debatable. See Brealey, above n 306, at 134; Milutinovi´c, ‘Private Enforcement: Upcoming Issues’ in Amato and Ehlermann (eds), EC Competition Law: A Critical Assessment (Oxford/Portland, 2007), 734–5. In our view, the broad language in Courage should cover these persons too, assuming they can identify and prove harm and, more importantly, causation. Compare, however, indicatively Case T–12/93 Comité Central d’Entreprise de la Société Anonyme Vittel et al v Commission [1995] ECR II–1247, para 50, denying standing to challenge a merger clearance decision to the employees of an entity that would be divested by one of the merging parties as part of a structural commitment. According to the CFI, a decision authorising a merger on the basis of Community competition law, even if it makes that merger subject to the sale by one of the undertakings in question of part of its activities to a third undertaking, does not in itself have any effect on the rights of the employees’ representatives of the undertakings concerned. 316 See Komninos, above n 53 (ch 1), at 482; Eilmansberger, above n 25, at 1226 and above n 2, at 465. 317 We stress again that standing referring to the constitutive conditions of the Community right to damages, it should be the principle of supremacy rather than of effectiveness that is applicable to this conflict. 318 See also GT-Link, above n 142, para 57 and Guérin Automobiles, above n 142, para 39. See also Lewis, above n 375 (ch 2), at 77, according to whom ‘a person who has a directly effective right must be regarded as having standing to institute proceedings to protect that right’; M Brealey and M Hoskins, Remedies in EC Law, Law and Practice in the English and EC Courts (London, 1998) 122. See, in this direction, Steindorff, above n 54, at 307, who rightly stresses that Community law never centres on the protective scope of a provision, but rather on whether that provision has direct effect and gives rise to rights and obligations. On the broader question see Ruffert, ‘Rights and Remedies in European Community Law: A Comparative View’ (1997) 34 CMLRev 307.

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194 Substantive and Procedural Law Aspects b. Fault Another basic question is whether liability for damages for breach of Articles 81 and 82 EC presupposes fault or whether it is strict. The answer to this question is that in principle it is only strict liability that renders the prohibitions of those Articles meaningful.319 The Treaty rules on competition do not generally require subjective intent to contravene the relevant prohibitions,320 so civil liability for EC competition law breaches should not be based upon such a condition. Of course, we must distinguish conceptually between fault in the context of anticompetitive conduct and fault in the context of civil liability and civil damages. Although interconnected, the two questions are different. The Court of Justice in Courage stressed this conceptual difference in the following terms: Contrary to the submission of Courage, making a distinction as to the extent of the parties’ liability does not conflict with the case-law of the Court to the effect that it does not matter, for the purposes of the application of Article [81] of the Treaty, whether the parties to an agreement are on an equal footing as regards their economic position and function. That case-law concerns the conditions for application of Article [81] of the Treaty while the questions put before the Court in the present case concern certain consequences in civil law of a breach of that provision.321

It is the second context that we deal with here, ie whether culpability should play a role for the establishment of civil liability flowing from a proven antitrust violation, and the answer is that it should not. In all such cases, liability for EC competition law violations is strict. Indeed, the requirement of intention or negligence for the imposition of fines and periodic penalty payments by the Commission or national competition authorities in the context of administrative public enforcement 322 should be distinguished, because such penalties do not aim at compensating the victims of the anti-competitive practices, but rather at punishing and deterring their perpetrators.323 Civil liability, on the other hand, while also containing deterrence and punitive elements, predominantly compensates for the harm caused by anti-competitive conduct, and this harm should not be compensated for only in cases of the perpetrator’s fault.

319

See in this sense Temple Lang, above n 115 (ch 2), at 277; Jones and Sufrin, above n 33 (ch 1), at 1339. With regard to Art 81 EC, the critical factor is the objective meaning and purpose of the agreement in its economic context, while the subjective intention of the parties is immaterial. Vice versa, an agreement might not have as its object the restriction of competition merely because the parties subjectively aimed at this. In Art 82 EC, again, abuse is an objective concept and the intention of the dominant undertaking is irrelevant. However, exceptionally, intention may play a role in establishing an abuse of dominant position in predatory pricing cases, and in cases where the abuse takes the form of vexatious litigation which is part of a systematic campaign or strategy of the dominant undertaking to intimidate, harass and exhaust competitors by raising their costs unreasonably. For another recent Art 82 EC case where intention seems to play an important role as a constituent element of the abuse see Commission Decision of 15 June 2005 (AstraZeneca). 321 Courage, above n 53 (ch 1), para 35. The Court was of course dealing in that specific case with the issue of the plaintiff’s contributory fault (see 3.II.(b).(xi).c below), but its clear distinction between fault for the establishment of the antitrust violation and fault for the civil liability is of general importance. 322 See Art 23 of Reg 1/2003 with regard to fines. The same is also accepted for periodic penalty payments. 323 Compare Archer Daniels Midland, above n 104 (ch 1), para 351: ‘[i]n so far as the damages at issue amount to compensation for European Union purchasers, the Court considers that the proceedings at issue and the payments demanded by the Commission, on the one hand, and by the United States authorities on the other clearly do not pursue the same objectives. Whilst in the first case the Commission seeks to sanction an infringement of competition law in the Community or the EEA by means of a fine, in the second case the United States authorities seek to compensate victims of ADM’s dealings’ (emphasis added). 320

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The Substantive Law Framework 195 This differentiates individual civil liability for violation of Community competition law from its older sibling, state liability, which arises only where the Member State has committed a ‘sufficiently serious breach’ of Community law.324 There is, however, no compelling reason for accepting such a requirement in individual liability cases. Indeed, as some authors argue, there are inherent features in state liability which justify and necessitate the ‘sufficiently serious breach’ condition, but that cannot be transposed to individual liability for Community law violations.325 Such a limitation has been imposed on public policy grounds in order to limit the liability of Member States when acting in their sphere of legislative discretion. On the other hand, when Member States do not enjoy legislative discretion, liability according to the Court of Justice is strict.326 Therefore, strict liability is more appropriate for all breaches of the Treaty competition rules.327 The strict liability principle is followed in the Commission’s Green Paper328 and has recently been recognised by the Court of Justice in Manfredi, which enumerated the constitutive conditions of individual civil liability but left the requirement of fault out.329 This sits in stark contrast to some national laws, such as the German and Swedish Competition Acts, which require intention or negligence for a right in damages to arise.330 Some form of fault is also required in Finnish,331 Austrian,332 Danish and Greek law.333 While national law can provide for detailed ‘executive’ rules on the right in damages, these rules cannot go as far as to affect the constitutive conditions of individual civil liability, as set out in Courage and Manfredi, by adding stricter criteria based on the nature or degree of the infringement or fault. Such restrictive conditions are plainly incompatible with the specific constitutive conditions of the Community right in damages. This is not really a question of national

324

Brasserie du Pêcheur/Factortame (III), above n 46, paras 51 and 55 ff. See Brealey and Hoskins, above n 318, at 124; Saggio, above n 179, at 242. 326 Case C–5/94 Regina v Ministry of Agriculture, Fisheries and Food ex parte Hedley Lomas (Ireland) Ltd [1996] ECR I–2553, para 28. 327 See in this sense Mail-Fouilleul, above n 107 (ch 1), at 592; Winckler, above n 60, at 128; van Gerven, above n 221, at 522. See also T Com, Paris, 22 Oct 1996 Ecosystem, above n 275, where the existence of fault resulted from the mere fact that Art 81 or 82 EC was infringed. See also T Com, Nanterre, 11 May 2006 Arkopharma v Roche SA and Hoffmann-La Roche SA, no RG 2004F02643, reported by Debroux, Sept 2006, Vol I, e-Competitions, available at www.concurrences.fr; commented on also by Chagny 10/2007 RLC 62. The claim eventually failed because of the passing-on defence and the absence of a causal link, but it is interesting that the court considered the Commission’s infringement decision in the Vitamins cartel was enough to establish the defendant’s fault. It is not clear from this judgment whether the court merely confused the separate concepts of fault as to the infringement of the competition rules and fault as to the harm, or whether it implied that the second kind of fault was not one of the conditions for civil liability to arise in such cases. Compare also CA Paris, 28 June 2002 SARL P Streiff Motorsport v Sté Speedy France SAS, [2003] JCP G no 48, commented on by Claudel (2003) 56 RTDComm 78, where the Paris Court of Appeal found that the violation of the French competition rules sufficed by itself as ‘faute delictuelle’. Reference is also made to the Irish Supreme Court’s judgment in Donovan et al v Electricity Supply Board [1997] 3 IR 573, commented on by Lynskey, Damages Special Report, Vol III, e-Competitions, available at www.concurrences.fr, which awarded damages, though the abuse of dominance under the applicable Irish competition rules that had caused the plaintiff’s harm was unintentional. The Supreme Court drew a clear distinction between Reg 17, which required fault for a fine to be imposed, and the civil rules on damages, the rationale of which is not to punish the defendant but rather to compensate the victim. The situation would have been different if the plaintiff had claimed exemplary damages. 328 Staff Working Paper, above n 55 (ch 1), paras 101–8. 329 Manfredi, above n 63, para 61. See, however, contra Eilmansberger, above n 2, at 458, who thinks that Manfredi did not touch upon the question of fault. 330 S 33(3) GWB; Art 33(1) of the Swedish Competition Act. 331 Art 18a(1) of the Act on Competition Restrictions of 1992, as subsequently amended. 332 See Eilmansberger and Thyri, above n 79 (ch 1), at 54. 333 In English law, however, liability for breach of statutory duty is usually strict and absolute. 325

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196 Substantive and Procedural Law Aspects remedial/procedural autonomy, to be dealt with under the Community principle of effectiveness, but rather a direct question of supremacy of Community over national law.334 The recent Traghetti del Mediterraneo case, which deals with Member State liability for infringement of Community law by national supreme courts, is indicative of this important difference.335 There the Court of Justice had to decide on the compatibility with Community law of an Italian rule that limited state liability solely to cases of intentional fault and serious misconduct on the part of courts. Rather than examining the Italian rule though the dual system of national autonomy–Community law effectiveness, the Court stressed that national law could not interfere with the Community principle established by Köbler, according to which the manifest infringement of the applicable Community law by a national supreme court exceptionally leads to state liability for damage caused to individuals by reason of that infringement.336 Thus, according to the Court, ‘under no circumstances may [national] criteria impose requirements stricter than that of a manifest infringement of the applicable [Community] law, as set out in paragraphs 53 to 56 of the Köbler judgment’.337 In other words, when Community law itself defines the constitutive conditions of a specific Community right, it is not open to national law to restrict the exercise of that right.338 Transposing these principles to the case of individual civil liability for EC competition law violations, national requirements or conditions of fault are incompatible with Community law and must therefore be set aside by national courts. It is only exceptionally that some form of fault might still be required for civil liability to arise, in order to avoid excesses. This would be the case for example of conduct which is not clear to be a priori anti-competitive. A horizontal cooperation agreement whereby the parties genuinely believed that they were acting lawfully or the conduct of a dominant company that is considered to be abusive for the first time may be such exceptional cases. To apply an unqualified strict liability rule to those cases would not only be unfair but also risk stiffling healthy competition and innovation. The problem is how to arrive at a predictable rule that can on the one hand safeguard in its basics the strict liability principle, while allowing for its relaxation in cases such as the above. A solution would be to retain strict liability in principle but exclude it for certain specifically defined competition law infringements, such as for non-hard core horizontal and vertical agreements and for abuses of dominant position that are novel. In such cases, liability would be based on fault but it would be open to the defendant to show that—irrespective of the technical competition law violation— there was no fault on his part. That rule would essentially work in these narrowly-defined cases as a reversal of the burden of proof with regard to the perpetrator’s fault or as the introduction of an excusable error defence.

334 Compare Jacobs and Deisenhofer, above n 1 (ch 1), at 216, who make a distinction between substance and procedure. While, according to the authors, national substantive rules are vis-à-vis Community law subject to the principle of supremacy, procedural rules must only comply with the principles of equivalence and effectiveness. In our view, the constitutive conditions of individual civil liability, as defined by Community law itself, would fall under those authors’ ‘substance’ definition, and should thus supersede any contrary national rule, pursuant to the principle of supremacy, rather than the principle of effectiveness. 335 Case C–173/03 Traghetti del Mediterraneo SpA v Repubblica Italiana [2006] ECR I–5177. For a comment see Tietjen, ‘Die Bedeutung der deutschen Richterprivilegien im System des gemeinschaftsrechtlichen Staatshaftungsrecht—Das EuGH-Urtel “Traghetti del Mediterraneo” ’ (2007) 18 EWS 15. 336 Köbler, above n 4 (ch 2), paras 53–56. 337 Traghetti del Mediterraneo, above n 335, para 44. 338 See also Jans, ‘State Liability: In Search of a Dividing Line between National and European Law’ in Obradovic and Lavranos (eds), Interface between EU Law and National Law (Groningen, 2007) 283 ff.

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The Substantive Law Framework 197 A useful example is offered by the Defective Products Liability Directive,339 which introduces the principle of strict liability, but also includes in Article 7 exceptions to the rule under which the producer has the burden of proving certain exonerating facts.340 This shows that a rule of strict liability can accommodate a relaxation in order to comply with basic notions of fairness or some specified public policy. c. Defences A further issue that should be examined here is the extent to which individual civil liability may be blocked by having recourse to general principles which in all legal systems allow the defendants to invoke specific legal defences. Most of these legal defences have to do with the degree of the plaintiff’s contributory fault or with force majeure.341 As mentioned above, while neither anti-competitive conduct as such nor the establishment of civil liability is dependent on fault, in some cases the degree of the plaintiff’s culpability may affect the degree of the defendant’s civil liability. We stress again that whether the responsibility of a plaintiff (eg a co-contractor) is significant or otherwise for the assessment of his contributory fault in the context of liability in damages (a question of civil law), should not be confused with the question of each undertaking’s participation in an anticompetitive agreement (a question of competition law). Indeed, the fact that a party may claim damages from his co-contractor because he may not have the same degree of responsibility is immaterial for the establishment of a violation of Article 81 EC and the finding of an anti-competitive agreement.342 Of course, damages claims as between co-contracting parties have been made easier since the Court of Justice recognised in principle in Courage that under Community law there is a right in damages for any harm caused by anti-competitive conduct, notwithstanding the fact that plaintiff and defendant may have been parties to the illegal agreement. However, national laws may in this process take into account the plaintiff’s or a third party’s fault.343 339

Dir 85/374/EEC [1985] OJ L210/29. Art 7: ‘[t]he producer shall not be liable as a result of this Directive if he proves: (a) that he did not put the product into circulation; or (b) that, having regard to the circumstances, it is probable that the defect which caused the damage did not exist at the time when the product was put into circulation by him or that this defect came into being afterwards; or (c) that the product was neither manufactured by him for sale or any form of distribution for economic purpose nor manufactured or distributed by him in the course of his business; or (d) that the defect is due to compliance of the product with mandatory regulations issued by the public authorities; or (e) that the state of scientific and technical knowledge at the time when he put the product into circulation was not such as to enable the existence of the defect to be discovered; or (f) in the case of a manufacturer of a component, that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product.’ 341 This question is not usually addressed by the competition law literature. For a rare exception see Winckler, above n 60, at 130 ff. 342 Some commentators confuse these two questions and see Courage as incompatible with earlier case law on the concept of agreements. See eg Mertikopoulou, ‘The Shift of the Treatment of Cartel Participants Infringing Article 81 EC and the Recent Tendencies of the Fining Policy of the European Commission’ (2003) 9 Dikaio Epicheiriseon kai Etairion 43 (in Greek) 50. According to standard ECJ, CFI and Commission case law, an undertaking may bear responsibility (in the competition law sense) and form part of an anti-competitive agreement, irrespective of the degree of its participation in all or some cartel meetings or of its specific intention, as long as it took part in one or more of the cartel’s constituent elements, thus being part of an overall plan to restrict competition: see eg Joined Cases T–305/94, T–306/94, T–307/94, T–313/94 to T–316/94, T–318/94, T–325/94, T–328/94, T–329/94 and T–335/94 Limburgse Vinyl Maatschappij NV et al v Commission [1999] ECR II–931, paras 772–3; upheld on appeal in Joined Cases C–238/99, C–244/99, C–245/99, C–247/99, C–250/99 to C–252/99 and C–254/99 Limburgse Vinyl Maatschappij NV (LVM) et al v Commission [2002] ECR I–8375, paras 520–522, 586–587. 343 See eg on French law, Douvreleur, above n 405 (ch 2), at 211. 340

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198 Substantive and Procedural Law Aspects The victim of the anti-competitive behaviour must, therefore, diligently make an effort to minimise his damage.344 Contributory fault as a bar to civil liability is, indeed, a principle that already exists under Community law and also in most Member States’ legal systems.345 The Court of Justice in Courage made a reference to the legal systems of the Member States, to derive therefrom a common principle precluding a litigant from profiting from his own unlawful conduct. The Court stressed, however, that the responsibility for the violation of Community law of the person concerned must be ‘significant’.346 In assessing a party’s responsibility, the national court could, according to the Court of Justice, take into account a series of parameters: the economic and legal context of each case, the respective bargaining power and conduct of each of the co-contractors, whether a party is in such a substantially weak position that it cannot negotiate the contractual terms freely, and the cumulative effects on competition of any other similar contracts, if parts of a network.347 A similar claim that can be raised against an action for damages is set-off.348 That can be the case where the defendant is a creditor by means of another obligation. In such a case he should be able to set his claim off against the plaintiff’s claim for antitrust damages. The effectiveness of Community law and of the right to damages is not offended by this.349 Apart from cases of contributory fault, damages claims may in certain circumstances fail if they are exercised in an abusive manner. Indeed, the prohibition of abusive exercise of rights is a principle that is common among EU Member States in one form or another. On this issue, the Court of Justice was seised with a series of cases referred by Greek courts.350 The Court’s response was that, while a national doctrine of prohibition of the abusive exercise of rights must not be an obstacle to the exercise of Community law rights, the abuse of rights is also prohibited under Community law. In that sense, such a doctrine constitutes a general principle of Community law.351 Therefore, it is not appropriate in such cases to speak of a conflict between national and Community law, but rather of a conflict between two rules of Community law, ie the general principle of the prohibition of the abusive exercise of Community law rights and the specific Community rule at issue.352 344 Efforts to minimise damage must be distinguished from efforts to defend oneself against specific behaviour, as would be the case, eg, with a competitor that is being excluded from a specific market by a dominant undertaking. If such a successful defence were possible, this might mean that there was no dominant position in the first place, since the competitor could always use alternative channels to enter that specific market. 345 See van Gerven, above n 62, at 59. See also Brasserie du Pêcheur/Factortame (III), above n 46, para 84. In addition, the fact that the Köbler state liability principle is only limited to violation of Community law by supreme courts can also be seen as recognition by the ECJ of the principle of contributory fault, in the sense that individuals should not be able to seek damages in cases where they did not try to challenge the lower court’s violation of Community law in a higher court. 346 Courage, above n 53 (ch 1), para 31. 347 Ibid, paras 32–34. For a critical analysis of this part of the Court’s ruling see G Monti, ‘Anticompetitive Agreements: The Innocent Party’s Right to Damages’ (2002) 27 ELRev 282, at 288 ff. 348 See inter alia Beard, above n 170, 287 ff. 349 Case 177/78, Pigs and Bacon Commission v McCarren and Co Ltd [1979] ECR 2161, para 25. 350 See eg Case C–367/96 Alexandros Kefalas et al v Elliniko Dimosio and Organismos Oikonomikis Anasygkrotisis Epicheiriseon [1998] ECR I–2843; Case C–373/97 Dionisios Diamantis v Elliniko Dimosio and Organismos Ikonomikis Anasinkrotisis Epikhiriseon AE [2000] ECR I–1705. 351 See Anagnostopoulou-Yiannakou, ‘Supremacy of Community Law, National Substantive Rules and the Weakening of the Simmental II Ruling (Concentrive Circles of the ECJ’s Case Law on the Insolvent Enterprises)’, Special Issue of RHDE, Studies in the Memory of Krateros Ioannou (Thessaloniki, 2001) (in Greek) 60 ff; Stathopoulos, above n 175, at 523. 352 See in this sense AS Georgiades, General Part of Civil Law (Athens/Komotini, 2002) (in Greek) 270–1; Engsig Sørensen, ‘Abuse of Rights in Community Law: A Principle of Substance or Merely Rhetoric?’ (2006) 43 CMLRev 423, at 439–40.

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The Substantive Law Framework 199 A Community law-based right will be exercised in an abusive manner if the right holder has not acted in good faith and he disproportionately and unreasonably restricts other persons’ rights, and if the exercise of that right does not correspond to the objective pursued by the relevant Community provision (teleological interpretation).353 While the primary responsibility for the adjudication of this point remains in the hands of national courts, the latter cannot employ the abuse of rights doctrine in order essentially to weaken the effectiveness of Community law. In all such cases they are well-advised to seise the Court of Justice through an Article 234 EC preliminary reference, so that the supremacy of EC law is not impaired. A further defence that can be raised against an action for damages is that there may have been a national regulatory rule that approved of, encouraged or even imposed the problematic conduct in question. While the existence of such a national regulatory framework does not affect a finding of infringement under the Treaty competition rules, it certainly affects liability for losses incurred as a result of such anti-competitive conduct.354 In other words, interference by national regulatory rules does not mean that Articles 81 and 82 EC will not be applicable, possibly in combination with Article 10 EC, but national regulation can be a defence against actions for damages. d. The Passing-on Defence Certainly the most-discussed defence that can be put up against a damages action is the socalled passing-on defence,355 whereby the defendant claims that the plaintiff has passed his losses on to his customers and perhaps ultimately consumers, so an award for damages would amount to unjustified enrichment. The passing-on defence, if given a broad reading, can be a fatal blow to any private antitrust enforcement action,356 and some competition laws have taken the policy position to disallow or restrict it. This has been the case in US357 and recently in German law, although the German position is more nuanced.358 General Community law, for its part, is not particularly receptive to the passing-on defence. In cases concerning sums unduly paid by traders to Member States in violation of Community law, the national authorities invariably argue that a repayment order would amount to unjustified enrichment because the traders have passed these charges on to the consumer. Thus, the Court of Justice has held that although in principle the passing-on claim may indeed have sound grounds, ‘as that exception is a restriction on a subjective right derived from the Community legal order, it must be interpreted restrictively, taking 353 See I Karakostas and E Yannopoulou, Community Law Rules and National Civil Law, Problems-Legislation (Athens, 1997) (in Greek) 43–4. See also Case C–110/99 Emsland Stärke GmbH v Hauptzollamt Hamburg-Jonas [2000] ECR I–11569, which seems to require two elements for a finding of abuse of right: one objective (ie it must be evident that the intended objective of Community law cannot be achieved) and one subjective (ie subjective abusive intention). See further Weber (2004) 31 LIEI 43, at 51ff. 354 See in this sense Temple Lang, ‘European Competition Policy and Regulation: Differences, Overlaps, and Constraints’, Speech delivered at the 3rd Antitrust Conference Organised by Ecole des Mines de Paris (Cerna) and University of California at Berkeley School of Law (Paris, 12–13 Jan 2006) 31, n 43, stressing that no claim for damages can be made for loss caused by conduct that was not prohibited by a regulatory rule when it occurred. 355 See the analysis by Milutinovi´ c, above n 315, at 736 ff. 356 For recent French examples where follow-on civil actions failed at first instance because of the passing-on defence and its rather broad reading by the courts see T Com, Nanterre, Arkopharma, above n 327; T Com, Paris, 26 Jan 2007 Sté Laboratoires Juva Production and Sté Laboratoires Juva Santé—SED v SAS Roche and Sté Roche Vitamins Europe Ltd, no RG 2003048044. 357 See the US Supreme Court’s landmark judgment in Hanover Shoe v United Shoe Machines Corp, 392 US 481 (1968). 358 See below.

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200 Substantive and Procedural Law Aspects account in particular of the fact that passing on a charge to the consumer does not necessarily neutralise the economic effects of the tax on the taxable person’.359 Thus: the existence and the degree of unjust enrichment which repayment of a charge which was levied though not due from the aspect of Community law entails for a taxable person[,] can be established only following an economic analysis in which all the relevant circumstances are taken into account.360

Advocate General Tesauro has encapsulated the Community judicature’s negative predisposition towards this specific defence in the following terms: I do not in fact believe it can be right to describe as unjust enrichment the profit derived by an individual from the reimbursement of a charge unduly required and levied by the authorities. More especially, I do not believe that the State, which itself has actually obtained unjust enrichment by levying—for years, even—an unlawful charge, may then specifically rely on a principle of that kind to refuse to repay the sums unduly paid.361

The question of the link between the passing-on defence and unjustified enrichment was recently given a fresh look by Advocate General Geelhoed, again in a case involving restitution of unduly paid taxes and levies.362 The Advocate General followed an economic analysis and reached the conclusion that it is very difficult in a dynamic market environment to demonstrate a direct link between a charge increasing the cost price and the selling price. Besides, even if this were possible, it still would not mean that the taxpayer is compensated fully for the extra costs of the charge. In other words, passing on the charge is different from passing on the economic loss or damage caused to the trader as a consequence of the unlawfully imposed charge. Such a loss might relate, in particular, to loss of competitiveness, and to a drop in the volume of sales, and thus in market share and profit. According to the Advocate General, the degree to which amounts are passed on depends primarily on the price elasticity of demand. Only in the extreme event that the price elasticity of demand amounts to zero will it be possible to pass on the charge to the customer in full by means of a price increase. However, in the case of the vast majority of products, demand is more or less price-elastic. The Advocate General concluded: These considerations lead me to the conclusion that it will be virtually impossible to demonstrate the degree to which the economic burden resulting from the charge has been passed on. In order to do so it is necessary to conduct a thorough analysis of the market, taking into account a large number of variables such as the structure of the market concerned (more or fewer providers) and the availability of possible substitutes for the product affected by the charge. Account must also be taken of the fact that market conditions are dynamic in nature and that prices fluctuate according to changes in supply and demand. This makes it particularly difficult to establish what effect a charge has on the level of the retail price. In order to establish that effect it would ultimately be necessary to establish how the prices and the sales would have developed if no charge had been imposed.363

This analysis can easily be transposed to the situation where the passing-on defence is raised between private litigants in a private antitrust enforcement action. There is no reason to 359

Weber’s Wine, above n 185, para 95. Ibid, para 100. 361 Comateb, above n 185, AG’s Opinion, para 21. Compare also para 14 of AG Mancini’s Opinion in San Giorgio, above n 40. 362 Para 73 ff of the AG’s Opinion in Case C–129/00 Commission v Italy, above n 452 (ch 2). 363 Ibid, para 78. 360

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The Substantive Law Framework 201 protect the perpetrator of a serious competition law violation who has for some time enjoyed anti-competitive gains, to the detriment of the victim of the anti-competitive practices, just because the surcharge may have been passed on. There is an element of deterrence here that should not be missed.364 Besides, as Advocate General Geelhoed rightly stresses, ‘the fact that the causal link between recovery and enrichment is relative where an amount is passed on is also clear from the opposite situation, that is to say that it cannot be ruled out that the economic operator concerned will likewise be able to pass on the advantage of recovered charges to the final consumer by using the recovery to reduce prices with a view to maintaining or strengthening his market position’.365 However, the above does not in our view mean that the passing-on defence is or should be prohibited as a matter of Community law, or that the mere existence of such a defence runs counter to the principle of effectiveness of Community law generally, or of competition law enforcement specifically.366 Unlike in the US, where the passing-on defence is expressly barred by the Hanover Shoe line of cases,367 the—admittedly non-competition law-specific—case law of the European Court of Justice is more nuanced and prefers to deal with the issue on an ad hoc basis.368 In reality the Court’s approach is to refer to national law, while stressing that a general principle of prohibition of unjustified enrichment also exists under Community law, and to subject this defence to the demanding Community law limits of equivalence and effectiveness.369 In sum, the words of Advocate General Jacobs in Weber’s Wine can be transposed to this situation: Community law does not allow an unqualified passing-on defence, but for such a defence to be successful ‘it must also be established that unjust enrichment would ensue’.370 In the same direction, the Commission’s Green Paper on damages goes on to say: It can be said that there is no passing on defence in Community law; rather, there is an unjust enrichment defence which requires (1) proof of passing on (which can be difficult in itself) and (2) proof of no reduction in sales or other reduction to income.371

A similar approach is followed in the latest amendment of the German Competition Act. The new section 33(3) GWB, instead of totally excluding the passing-on defence, merely provides that ‘if goods or services are purchased at an excessive price, damages shall not be 364

See Jones, above n 38 (ch 1), at 196. Case C–129/00 Commission v Italy, above n 452 (ch 2), AG’s Opinion, para 79. 366 See in this direction Beard, above n 170, at 274. 367 The main reasons for the US Supreme Court’s rejection of the passing-on defence are: (a) the fact that private actions and litigation would be extremely complicated, since it would be an insurmountable task to trace the exact effects of the anti-competitive overcharge, and (b) the risk that the offender might, at the end of the day, retain its unlawful profits. 368 Compare Joined Cases 331/85, 376/85 and 378/85 SA Les Fils de Jules Bianco and J Girard Fils SA v Directeur Général des Douanes et Droits Indirects [1988] ECR 1099, para 17: ‘[e]ven though indirect taxes are designed in national law to be passed on to the final consumer and in commerce are normally passed on in whole or in part, it cannot be generally assumed that the charge is actually passed on in every case. The actual passing on of such taxes, either in whole or in part, depends on various factors in each commercial transaction which distinguish it from other transactions in other contexts. Consequently, the question whether an indirect tax has or has not been passed on in each case is a question or fact to be determined by the national court which may freely assess the evidence.’ 369 Compare Case 68/79 Hans Just I/S v Danish Ministry for Fiscal Affairs [1980] ECR 501, para 26: ‘[t]he protection of rights guaranteed in the matter by Community law does not require an order for the recovery of charges improperly made to be granted in conditions which would involve the unjust enrichment of those entitled. There is nothing therefore, from the point of view of Community law, to prevent national courts from taking account in accordance with their national law of the fact that it has been possible for charges unduly levied to be incorporated in the prices of the undertaking liable for the charge and to be passed on to the purchasers’. 370 Weber’s Wine, above n 185, AG’s Opinion, para 49. 371 Commission Staff Working Paper, above n 55 (ch 1), para 173. 365

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202 Substantive and Procedural Law Aspects excluded on account of the resale of the good or service’. In reality, German law provides that the burden of proof falls on the defendant. From the above it is clear that the recognition of the passing-on defence by national law, as a specific instance of the principle against unjustified enrichment, is not in itself incompatible with Community law and does not offend against its effectiveness. It is rather restrictive national rules which impose a heavy burden of proof on plaintiffs in this regard that may impair the effectiveness of Community law. More interesting is the question of the interrelationship between the possible permission of the passing-on defence and the standing of so-called ‘indirect purchasers’. e. Standing of Indirect Purchasers and Consumers The question of the standing of indirect purchasers372 is closely connected with the prohibition or permission of the passing-on defence. Indeed, standing of indirect purchasers is referred to at times as ‘offensive passing-on’.373 Under US antitrust law, indirect purchasers, for example traders that have purchased from retailers rather than from the manufacturer, cannot recover damages,374 notwithstanding the fact that the harm may have been passed on to them. US law clearly favours compensation only of direct purchasers and, indeed, it disallows the passing-on defence in this case.375 There is a powerful policy rationale behind this rule, that the direct purchaser is a more ‘efficient’ plaintiff, ultimately preferable to indirect purchasers as a private attorney-general’. In general terms, the US rule seems to take into account certain prudential considerations such as the burden on the judicial system that would result if the private right of action were available in an unlimited way to remotely injured plaintiffs.376 Denying indirect purchasers standing is also a direct consequence of the exclusion of the passing-on defence, since the defendant and perpetrator of the antitrust violation should not be vulnerable to multiple actions referring to the same acts, while at the same time it is not open to him to rely on the fact that the damage may have been passed on. In other words, the US system bans the defensive use of the passing-on principle by defendants, while at the same time banning its offensive use by indirect purchasers who base their claims precisely on the fact that the overcharge was passed on to them.377 372 A more basic distinction can be made between primary and secondary victims. A primary victim is a person who did not buy at all because the anti-competitive price was above his reserve price. A secondary victim is a person who did buy, albeit at the anti-competitive price. Any attempt to identify the first is futile, and it seems that even in the US there has never been a case where damages were awarded to a primary victim. Thus the question of compensation arises mainly with regard to secondary victims. Indirect purchasers belong to this second category. Finally, a further class of tertiary victims can be identified, including other parties who are injured as a result of an anti-competitive price, eg suppliers of the perpetrator of the anti-competitive act who suffer damage as a result of reduced sales. Compensation of these victims would probably fail because of the difficulty of proving causation. On these categorisations see Calvani, ‘Competition Penalties and Damages in a Cartel Context: Criminalisation and the Case for Custodial Sentences’, Paper presented in the Conference Organised by the Amsterdam Center for Law and Economics on Remedies and Sanctions in Competition Policy (Amsterdam, 17–18 Feb 2005) 18–22. 373 See Jones, above n 38 (ch 1), at 177 ff. 374 Note, however, that state antitrust laws in the US may allow for indirect purchaser suits. 375 See the Supreme Court’s judgments in Hanover Shoe, above n 357, and Illinois Brick Co v Illinois, 431 US 720 (1977). See further Rodger and MacCulloch, above n 159, at 602 ff. 376 See Davis, ‘Standing on Shaky Ground: The Strangely Elusive Doctrine of Antitrust Injury’ (2003) 70 Antitrust LJ 697. 377 See Jones, above n 38 (ch 1), at 178–9. It is noteworthy, however, that the bar to the indirect purchaser actions is not applicable to actions for injunctions and is also excluded in the following cases: (a) in cases of preexisting, cost-plus, fixed quantity contracts, and (b) in cases of vertical resale price maintenance, where the retailer has a claim for lost profits whereas the customer has a claim for the overcharge.

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The Substantive Law Framework 203 Irrespective of the critique that can be made of this rather inflexible US judge-made rule,378 in the European context of damages claims, the constitutional status of the Treaty competition provisions and the fact that they form the basis of rights for individuals mean that the US theories should not be adopted uncritically. This ‘Treaty right’ parameter of private EC antitrust enforcement means that compensation of victims of anti-competitive practices cannot be ignored as easily in Europe as in the US.379 The a priori exclusion of indirect purchasers and consumers from the ambit of the persons who can claim damages would therefore not be compatible with Community law,380 and in addition any allocative objectives of EC competition law would be undermined.381 At the same time, from a practical point of view, the US and Community systems of private antitrust enforcement are in quite different stages of development. Civil claims in the US make up the vast majority of antitrust enforcement, and private litigants, with the incentive offered by treble damages, act as ‘private attorneys-general’, thus increasing the deterrent effect of the law. While the compensatory function of such claims is not lost, it sometimes takes second place. On the other hand, in the Community system of competition law enforcement, civil claims—at least those where EC competition law is raised as a ‘sword’—have not been particularly numerous, and damages awards are extremely rare. Prudential mechanisms aimed at curbing private actions may therefore not represent the optimal solution from a policy perspective, at least at the current stage of development of private antitrust enforcement in Europe. Besides, the Court of Justice in Courage stressed that it is open to ‘any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition’.382 This was made clearer in Manfredi, where the Court of Justice rendered the debate about indirect purchasers obsolete by stressing, while defining the constitutive conditions of the right in damages, that all affected individuals enjoy standing to sue, derived directly from the Treaty.383 378 The problem with the total exclusion of indirect purchasers is that there may be times when the direct purchasers benefited from the infringement and are not at all inclined to sue. In this case the main victims remain the indirect purchasers. See eg Atwood, ‘Panel Discussion: Settlements of Government Civil Proceedings and Private Actions Roundtable’ in Hawk (ed), International Antitrust Law and Policy 2005, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2006) 347. 379 See Jones, above n 38 (ch 1), at 197, who also considers that the ban on the passing-on defence should not be thought as requiring the concomitant denial of standing to indirect purchasers. See also van Dijk and Niels, ‘The Economics of Quantifying Damages’ (2002) 1 Comp LJ 69, at 74. 380 See Jones, above n 38 (ch 1), at 186, 195; Temple Lang, above n 115 (ch 2), at 292; Brealey, above n 306, at 133. 381 See in this sense Toffoletto, above n 57 (ch 1), at 127–9. Compare paras 32–33 of AG Poiares Maduro’s Opinion in International Transport Workers’ Federation, above n 180, emphasis added: ‘[t]ogether with the provisions on competition, the provisions on freedom of movement are part of a coherent set of rules, the purpose of which is described in Article 3 EC. This purpose is to ensure, as between Member States, the free movement of goods, services, persons and capital under conditions of fair competition. The rules on freedom of movement and the rules on competition achieve this purpose principally by granting rights to market participants. Essentially, they protect market participants by empowering them to challenge certain impediments to the opportunity to compete on equal terms in the common market. The existence of that opportunity is the crucial element in the pursuit of allocative efficiency in the Community as a whole. Without the rules on freedom of movement and competition, it would be impossible to achieve the Community’s fundamental aim of having a functioning common market.’ Compare also the position taken by Norberg, above n 37 (ch 1), at 28, who stresses the importance of damages actions for the interests of consumers. 382 Courage, above n 53 (ch 1), para 26, emphasis added. AG Mischo had been even more specific on this point, stressing in para 38 of his Opinion that ‘the individuals who can benefit from such protection are, of course, primarily third parties, that is to say consumers and competitors who are adversely affected by a prohibited agreement’ (emphasis added). 383 See 3.II.(b).(vi) above.

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204 Substantive and Procedural Law Aspects The conferring by the Court of Justice of such standing on direct and indirect purchasers alike would not lead to the unjust enrichment of direct purchasers, since as Community law currently stands, the passing-on defence would still in principle be available to deal with problems posed by the defendant’s unjustified enrichment.384 It is nevertheless true that some form of compromise can be attained so that a multiplicity of actions and plaintiffs is avoided, thus safeguarding the efficiency of the whole system.385 The Green Paper seems conscious of this and stresses de lege ferenda the following: It is suggested that the determining factor could be the effective enforcement of Community law. If limiting the rights of certain individuals to claim is necessary to ensure a system which is more effective in safeguarding the enforcement of Articles 81 and 82, then it is submitted that such limitations should be acceptable under Community law. Therefore, it might be necessary to determine what rights must be facilitated to ensure an effective enforcement system rather than insisting on the absolute protection of all private rights. For the protection of the rights of consumers, a specific small claims procedure or collective action might be an efficient form of redress given the very low level of individual damage suffered in many of the cases.386

Interesting ideas also come from the OFT’s side. Its recent Discussion Paper and Recommendations make it clear that any limitation on the standing of consumers and other end-users would not be appropriate but defer on these broad issues to the Commission’s forthcoming White Paper.387 The OFT Discussion Paper, in particular, had proposed a simplified model relying on three simple principles: (i)

all persons harmed by cartels and other anti-competitive practices should have standing to bring an action, (ii) the defendant should only be liable for the loss he (individually or jointly with others) caused to each and every person who has suffered loss, and (iii) the burden of proof in respect of ‘passing-on’ should always lie with the defendant.388

Under this model, the plaintiff must prove that he has suffered loss, but it is open to the defendant to prove that the plaintiff mitigated the loss by passing on the whole or part of the overcharge to downstream purchasers. Other solutions have also been proposed, relying basically on case management and caseaggregation or consolidation,389 but such solutions are rather complicated and require increased judicial resources and specialisation. They may be possible in the US where courts are much more sophisticated in trying antitrust cases,390 but would perhaps be premature for Europe. An approach to concentrate on making a choice as to certain preferred plain384

Compare Option 21 of the Green Paper, above n 55 (ch 1). See eg Oliver, ‘Le règlement 1/2003 et les principes d’efficacité et déquivalence’ (2005) 41 CDE 351, at 385, according to whom a solution would be to accept indirect purchasers’ standing as a matter of principle but interpret strictly the causation requirements, thus essentially blocking most such claims. 386 Staff Working Paper, above n 55 (ch 1), para 180. 387 OFT Discussion Paper, above n 267, para 6.21; OFT Recommendations, above n 99 (ch 1), para 12.8 ff. 388 Ibid, para 6.22. 389 See eg Rüggeberg and Schinkel, Consolidating Antitrust Damages in Europe: A Proposal for Standing in Line with Efficient Private Enforcement, Amsterdam Centre for Law & Economics Working Paper No 2006–04, at 9 ff; van Gerven, above n 210, at 503–5, where the former AG proposes a four-stage case management solution which involves direct as well as indirect purchasers and aims at reaching a settlement. Compare also Option 24 of the Green Paper, which refers to the possibility of following ‘a two-step procedure, in which the passing-on defence is exclude, 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’. 390 Compare Antitrust Modernization Commission, above n 125, at 265 ff, with a proposed system to consolidate claims. 385

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The Substantive Law Framework 205 tiffs has the advantage of clarity and administrability. It would not be the first time, of course, that the principle of effective judicial protection might be at odds with the principle of effectiveness of Community law, and, indeed, commentators have long stressed that in such cases the instinctive approach of the Court of Justice would be to favour the latter over the former.391 Indeed, Community law has on occasions taken the policy decision to favour one particular plaintiff or defendant over another. The Court of Justice in a recent case, interpreting the Defective Products Liability Directive392 seemed aware of this problem.393 It held there that the Directive had made a conscious choice to allocate liability to the producer of the defective products rather than to suppliers. While acknowledging that the possibility of holding the supplier of a defective product liable in accordance with the provisions of the Directive would make it simpler for an injured person to bring proceedings, the Court felt that this would lead ‘to a multiplicity of actions, with the supplier seeking recourse in turn against his own supplier, back up the chain as far as the producer’. The Court defended the Community legislator’s choice, which concentrated liability for defective products on the producer ‘after weighing up the parts played by the various economic operators involved in the production and distribution chain’, since, in the great majority of cases, the supplier does no more than sell the product in the state in which he bought it, and only the producer is able to influence its quality. This shows that the allocation of liability can be quite a complex issue. It also shows that ‘weighing up the parts played by economic operators involved in the production and distribution chain’ is better performed by the legislator than by courts. In another recent case that again concerned the Defective Products Liability Directive, the Court of Justice was asked to provide guidance on defendant substitution, in particular whether in the case of an action brought against a company mistakenly considered to be the producer of a defective product, it is open to the national courts to view such an action as being brought against the real producer and to substitute the latter as defendant. The Court preferred to defer to the principle of procedural autonomy and to the national court’s assessment, but did specify that the national court, while examining the conditions governing such substitution, must ensure that due regard is had to the personal scope of the Community legislation in question.394 In the case of competition law-related actions, the courts would have to take into account the personal scope of Articles 81 and 82 EC with regard to both plaintiffs and defendants. From the above, it is obvious that, as Community law currently stands, it is open to any affected individual to bring a claim for damages on the basis of Articles 81 and 82 EC. That does not mean to say that the Community legislator could not make a policy decision and favour one particular class of plaintiffs over another if that would be beneficial to the effectiveness of the whole system of private antitrust enforcement.395 In so doing, however, the 391 See, in particular, Prechal, ‘EC Requirements for an Effective Remedy’ in Lonbay and Biondi (eds), Remedies for Breach of EC Law (Chichester, 1997) 13 and Directives in European Community Law (Oxford, 2005) 144. 392 Dir 85/374/EEC [1985] OJ L210/29. 393 Case C–402/03 Skov Æg v Bilka Lavprisvarehus A/S and Bilka Lavprisvarehus A/S v Jette Mikkelsen and Michael Due Nielsen [2006] ECR I–199, paras 28–29. 394 Case C–127/04 Declan O’Byrne v Sanofi Pasteur MSD Ltd and Sanofi Pasteur SA [2006] ECR I–1313, para 39. 395 If the Community legislator were to pursue such an option, it would inevitably have to deal also with the passing-on defence for those limited cases where a specific class of indirect purchasers will have been denied standing. In these circumscribed cases, the passing-on defence will have to be disallowed as against the preferred direct purchasers, otherwise the perpetrator would be able to retain his illegal profits.

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206 Substantive and Procedural Law Aspects legislator should bear in mind the personal scope and the ultimate objectives of Articles 81 and 82 EC, which specifically mention consumers as the ultimate beneficiaries of antitrust through the notion of consumer welfare.396 Indeed, we can even note a certain recent realignment of Community competition law around the notion of consumer welfare as an ultimate aim of antitrust and, in particular, around the importance of safeguarding the interests of the final consumers.397 It is encouraging that the Commission’s Green Paper itself has already made a clear policy choice in favour of consumers’ standing. Even under the most restrictive of the options that are considered, consumers are always given standing to sue,398 and the Commission clearly sees the development of private antitrust enforcement partly from the consumers’ perspective.399 A recent ruling of the Court of First Instance places particular emphasis on the importance of safeguarding the interests of final consumers through the competition rules.400 The Court chose its words wisely: It must be recalled that the rules ensuring that competition within the internal market is not distorted have as their ultimate objective to increase consumer welfare. This objective derives, in particular, from the terms of Article 81 EC. Indeed, if the prohibition established in paragraph 1 of that provision can be declared inapplicable in the case of agreements contributing to improving the production or distribution of goods or to promoting technical or economic progress, this possibility, provided for in Article 81(3) EC is subject to the condition that a fair share of the resulting benefit is reserved for the consumers of the specific products. Competition law and policy therefore have an undeniable effect on the specific economic interests of the final consumers of goods or services.401

It is noteworthy that this pronouncement is used by the Court to arrive at concrete procedural consequences in terms of recognition of a legitimate interest to file a complaint with the Commission: ‘[t]herefore, the recognition for such consumers—who allege that they have suffered economic harm as a result of a contract or conduct that restricts or distorts competition—of a legitimate interest to complain to the Commission about an infringement of Articles 81 and 82 EC, contributes to the realisation of the objectives of competition law’.402 This is definitely a finding that is perfectly transposable to the recognition of standing to sue for damages for end consumers; indeed one can even think that the Court might have had precisely that particular question in mind.

396 Of course, the concept of ‘consumer welfare’ is independent of ‘consumer protection’ but the analysis of these differences lies outside the scope of this study. 397 See eg Joined Cases T–213/01 and T–214/01 Österreichische Postsparkasse AG and Bank für Arbeit und Wirtschaft AG v Commission [2006] ECR II–1601, para 115; GlaxoSmithKline Services, above n 141 (ch 2), paras. 118, 119, 121–122, 171–172. 398 Staff Working Paper, above n 55 (ch 1), sect VI. This is also the case under US law where consumers are considered to be ‘preferred plaintiffs’. See Jones, above n 38 (ch 1), at 180–1. 399 See eg Wezenbeek, ‘Consumers and Competition Policy: The Commission’s Perspective and the Example of Transport’ (2006) 17 EBLR 73, at 82. 400 Joined Cases T–259/02 to T–264/02 and T–271/02 Raiffeisen Zentralbank Österreich AG et al v Commission, Judgment of 14 Dec 2006, not yet reported. 401 Ibid, para 99, emphasis added, author’s translation from the French original. 402 Ibid.

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The Substantive Law Framework 207 f. The Nature of Harm and Causation For a damages claim to be successful, the existence of harm must first be established. The harm must be certain, specific, proved and quantifiable.403 An intriguing question in competition law is how far certain harm can attract liability on antitrust grounds. In other words, should every kind of harm to the victim of an anti-competitive practice qualify under this specific liability in damages? In the United States the courts address this issue through the concept of ‘antitrust injury’.404 A private plaintiff must prove an injury caused by anti-competitive conduct of the type that the antitrust laws are designed to prevent. Such an antitrust injury does not exist if the party is damaged only by increased or continued rather than by reduced competition (for example, by aggressive non-predatory competition), or if the damage is the consequence of conduct to which antitrust law is indifferent.405 However, the introduction of such a theory in EC competition law would not be appropriate, and, indeed, the Commission’s Green Paper has preferred to ignore ‘antitrust injury’. This was a wise choice because that US theory would offer nothing at all in the European context. First, the theory was employed in the US to deal with conduct which under EC competition law would not amount to a violation of the rules in the first place. In other words, substantive law itself deals with the problem that the US doctrine was employed to address. A Brunswick kind of case in Europe would not have been dealt with as a competition law violation.406 Secondly, causation would block any remaining unmeritorious claims that could perhaps be based on a real violation of the competition rules, yet resulted in no harm connected with that violation. Rather than importing another foreign notion, it is therefore preferable to deal with such claims on the basis of the standard conditions of liability. Going back to the plaintiff’s burden to prove loss sustained as a result of the breach of the antitrust rules, one may distinguish between proving the extent of the damage itself and proving the causal link between the latter and the antitrust violation. The damage sustained by a victim of anti-competitive behaviour may first correspond to the difference between the price paid as a result of a cartel or an abuse of a dominant position, and the price that would otherwise be payable in the absence of the infringement (damnum emergens). Problems with the quantification of damages are more acute when a firm’s commercial reputation is damaged or when it has lost potential clients, owing for example to a refusal to supply or to a collective boycott, in which case this becomes a question of lost profits (lucrum cessans).407

403 See van Gerven, above n 123, at 9. Compare also AG van Gerven’s Opinion in Banks, above n 536 (ch 2), para 51: ‘[i]n the first place, there must be the fact of damage. Merely speculative damage is therefore inadequate although, in order to bring an action for a declaration of liability, “imminent damage foreseeable with sufficient certainty even if the damage cannot yet be precisely assessed” is enough’. 404 See further Jones, above n 38 (ch 1), at 173 ff; E Eilhauge and D Geradin, Global Competition Law and Economics (Oxford/Portland, 2007) 9 ff. 405 See the following Supreme Court cases: Brunswick Corp v Pueblo Bowl-O-Mat, Inc, 429 US 477 (1977); McCready, above n 309; Associated General Contractors of California v California State Council of Carpenters, 459 US 519 (1983); Cargill, Inc v Monfort of Colorado, Inc, 479 US 104 (1986); Atlantic Richfield Co v USA Petroleum Co, 495 US 328 (1990). 406 In Brunswick, above n 405, the owners of 3 bowling alleys sued for damage allegedly suffered because the defendant had acquired several competing bowling centres which, in the absence of the acquisitions, would have failed. Thus, the harm referred in reality to the fact that competition was maintained and not eliminated. 407 See also 3.II.(b).(xi).g below.

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208 Substantive and Procedural Law Aspects An interesting early proposal408 that aimed at overcoming this problem was to follow the example of the law of industrial property or unfair competition law in some legal systems (notably France and Germany), where the loss is usually identified by reference to criteria the objectives of which include making it easier for the plaintiff to prove his loss, while stripping the wrongdoer of any profit derived from the infringement. Similarly, restitutionary damages,409 which are known in some legal systems, can also be a useful remedy, especially in cases where large groups of consumers claim damages from a producer. These damages are calculated on the basis of the profits derived by the violating entities, rather than that of the actual harm caused to the victims of the anti-competitive practices. Such a remedy would better correspond to the Community principle of effectiveness.410 Indeed, the new Directive on the enforcement of intellectual property rights follows this path and provides for the possibility of damages to take into account ‘any unfair profits made by the infringer’ or to be set as ‘as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question’.411 This approach is also followed in the new section 33(3) of the German Competition Act, which provides that the award of damages for violation of German or Community competition law may take into account, in particular, the proportion of the profit which the undertaking has derived from the infringement. From the text employed, it seems that profit-skimming in this case does not refer to all the perpetrator’s profits, but only to that ‘proportion’ directly derived from and associated with the antitrust violation. Time will tell whether this new provision introduces a covert causal link which complicates rather than simplifies matters. Easing the burden of proof by means of Community legislation would certainly provide for an appropriate solution to all causation-associated problems. Thus, a drop in the plaintiff’s turnover in the relevant market and a simultaneous rise in the defendant’s turnover could be rebuttable evidence that the losses incurred were caused by the anti-competitive practice in question.412 Another idea is for the Commission to provide some guidance to national courts by publishing guidelines on damages that would define, for example, the core violations of EC antitrust rules and the types of loss incurred by third parties and consumers, and would also include model cases dealing with the causation problem. Indeed, causation is by far the most serious problem. It is worth noting that in most of the cases where damages actions were brought before national courts, the plaintiff has encountered grave problems in proving the causal link between the damage and the unlawful conduct. The most acute problem lies in determining lost profits (lucrum cessans), ie whether such losses are due to the anti-competitive practice of a competitor or to external conjectural economic factors.413 Likewise, it is also difficult to prove causation in actions 408 See Basedow, above n 345 (ch 2), at 142 and ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 34. 409 On restitutionary damages see van Gerven, Lever and Larouche, above n 179, at 872. 410 See C Jones, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 26. 411 Dir 2004/48/EC, above n 16, Art 13(1). See further Huniar, ‘The Enforcement Directive: Its Effects on UK Law’ (2006) 28 EIPR 92, at 98. It is true that these damages strongly resemble the notion of exemplary damages, although the deterrent-punitive element here recedes before the elements of ‘fairness’. 412 See Basedow, above n 141, 464. 413 See eg T Com Paris, 22 Oct 1996, Ecosystem, above n 275, where the plaintiff failed to prove his damage based on lost profits. See further Mail-Fouilleul, above n 107 (ch 1), at 609; Winckler, above n 60, at 134–6.

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The Substantive Law Framework 209 brought by consumers. This is so because the causal link between the anti-competitive conduct and the damage suffered by the end-consumer is usually considered tenuous. English law employs notions of foreseeability and remoteness and provides that the plaintiff bears the burden of proving that the defendant’s unlawful conduct caused the harm and is the predominant cause of the plaintiff’s loss.414 Other national laws follow similar notions, depending on the legal tradition to which they belong. By way of example, modern German civil law is based on three theories: the equivalent causation theory (causa adequata) referring to the normal course of events, the adequate causation theory resembling the English foreseeability notion, and the theory of imputation, referring to the protective scope of the law (Schutzzweck).415 According to the latter theory, in order to establish a causal link between the damage and the harmful event, one must refer to the purpose of the rule violated, and all possible consequences that are not covered by the protective scope of that rule must be eliminated.416 It is also worth mentioning that the protective scope theory for determining the causal link has not found favour in the state liability case law of the European Court of Justice, which follows the direct causal link theory.417 According to this theory the harm must be regarded as a normal or natural consequence of the anti-competitive conduct, based on common experience. Whether these notions are so different as to affect the effectiveness of Community law remains unclear. The Commission in its Green Paper appears to take a less interventionist approach and considers that all these various national notions of causation are equivalent.418 A similar approach was taken by the European Court of Justice in Manfredi, which mentioned the causal link as one of the constitutive conditions of individual civil liability, but deferred to the national laws for the more detailed or ‘executive’ conditions of that causal link. In other words, the Court in Manfredi stresses that as a matter of Community law causal link is one of the conditions of civil liability for antitrust-related injuries,419 while at the same time accepting that it is for the domestic legal system of each Member State to prescribe ‘the detailed rules governing the exercise of that right, including those on the application of the concept of “causal relationship”, provided that the principles of equivalence and effectiveness are observed’.420 This is also in line with the Francovich and Brasserie du Pêcheur/Factortame(III) case law on state liability, where again the Court of Justice referred to causation between a Member State’s breach of Community law and the damage suffered as a condition for state liability to arise, but for the rest deferred to national law.421

414 Compare Arkin v Borchard Lines Ltd et al (IV) [2003] EWHC 687 (QB), a case concerning liner conferences and the alleged violation of Arts 81 and 82 EC, where the court decided that the plaintiff’s own irrational pricing policy was the predominant cause of his business failure. This case, however, raises some concerns about the effectiveness of the right in damages in Community competition cases, since the UK court found that the conduct of a plaintiff who continues trading wrongfully, although he knows that his business is evaporating, may break the chain of causation and thus exclude the defendant’s liability. 415 See inter alia Kremer, above n 180, at 220–1. 416 See Mestmäcker, above n 59 (ch 1), at 235, with references to case law. 417 See eg AG van Gerven’s Opinion in Banks, above n 536 (ch 2), para 52; Joined Cases C–178/94 to C–179/94 and C–188/94 to C–190/94 Dillenkofer et al v Germany [1996] ECR I–4845, para 21. See further Stathopoulos, above n 175, at 532; van Gerven, above n 123, at 8; Lenaerts, Arts, Maselis and Bray, above n 42, at 402–3. 418 Staff Working Paper, above n 55 (ch 1), para 273 ff. 419 Manfredi, above n 63, para 61. 420 Ibid, para 64, emphasis added. 421 See Dougan, above n 19, at 246.

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210 Substantive and Procedural Law Aspects g. Nature and Measure of Damages For a private action for damages to lead to effective antitrust enforcement, the assessment of the damages must be such that it can have a deterrent effect for the perpetrator of the anti-competitive acts and represent a credible remedy for all future victims. Thus, damages must cover not only the direct injury, but also any indirect injury suffered, in such a way that the damages award contributes to deterrence.422 In this respect, it is first of fundamental importance that the victim is compensated in full. This may not be evident, because many EU Member States’ legal systems do not allow for tort claims for pure economic loss. Yet this kind of loss is very likely to result from an anti-competitive action. It is true that, depending on the legal system, damages may sometimes be sought according to the law of contract (contractual liability) if a contractual relationship exists between the perpetrator of the anti-competitive act and the victim.423 In such cases, and unlike the case of tortious liability, damages would in principle also cover pure economic loss.424 However, the exclusion of the reparation of pure economic loss, be it under tort or under contract, is certainly not compatible with the Community law basis of the right in damages. As rightly pointed out, ‘if tortious liability for breaches of Community law is to have any meaning, such losses must be eligible for compensation’.425 Indeed, the Court of Justice in Brasserie du Pêcheur/Factortame (III) stressed that ‘total exclusion of loss of profit as a head for damage for which reparation may be awarded in the case of a beach of Community law cannot be accepted. Especially in the context of economic or commercial litigation, such a total exclusion of loss of profit would be such as to make reparation of damage practically impossible.’426 The Court of Justice placed particular emphasis on these principles again in Manfredi, and although it was not specifically requested by the referring courts to decide this particular issue, it held: It follows from the principle of effectiveness and the right of any individual to seek compensation for loss caused by a contract or by conduct liable to restrict or distort competition that injured persons must be able to seek compensation not only for actual loss (damnum emergens) but also for loss of profit (lucrum cessans) plus interest . . . Total exclusion of loss of profit as a head of damage for which compensation may be awarded cannot be accepted in the case of a breach of Community law since, especially in the context of economic or commercial litigation, such a total exclusion of loss of profit would be such as to make reparation of damage practically impossible . . . As to the payment of interest, . . . an award made in accordance with the applicable national rules constitutes an essential component of compensation.427

A further issue of some complexity is quantification of damages.428 The Commission in its Green Paper presented certain econometric models that aim in one way or another to restore the plaintiff to the situation he would have been in ‘but for’ the illegal conduct (the 422

See Canivet, above n 41 (ch 1), at 26. This, however, is only possible in those legal systems, typically continental ones, where contractual liability is wide enough to encompass such claims. Common law, on the other hand, treats such claims under tort. 424 This is the case eg under Austrian (see Günther, above n 294 (ch 2), at 319) and Finnish law (see Erämetsä, above n 33 (ch 1), at 222, n 257). 425 See van Gerven, Lever and Larouche, above n 179, at 893. 426 Brasserie du Pêcheur/Factortame (III), above n 46 para 87. 427 Manfredi, above n 63, paras 95–97. On the requirement to include compensatory interest in the damages award see also van Gerven, above n 123, at 10, and paras 122–124 of the Commission’s Staff Working Paper, above n 55 (ch 1). 428 See van Dijk and Niels, above n 379, at 71 ff. 423

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The Substantive Law Framework 211 counterfactual). In this context the plaintiff’s current situation is taken into account, and the difference between the two covers actual losses and lost profits.429 Whether such models can be helpful, however, is unclear. In Arkin 430 the court was provided with detailed expert econometric evidence as to the position the plaintiff would have been in but for the anti-competitive conduct of the defendants, but apparently it was not enthusiastic about that evidence and adopted what can be called a ‘common sense approach’. In addition, in certain situations national courts may be better advised to award damages on an ex aequo et bono basis.431 This will most likely be the approach of other national courts, and indeed it is preferable for the Commission not to proceed in an eventual legislative proposal to such complex econometric models, at least in the short and mid-term, but rather to wait for national judges to acquire acquaintance with and experience of this area. An overoptimistic set of guidelines with complex models might alienate national judges and give rise to defensive attitudes.432 h. Punitive Damages With regard, finally, to the nature of damages, the absence of punitive damages in Europe means that the primary function of civil claims remains compensatory, and only indirectly does deterrence play a part. While awards of purely compensatory damages certainly also create a psychological impact,433 it is also true that the solely compensatory character of damages does not constitute a sufficient incentive for the victim of the breach to bring a private action, or a sufficient deterrent for the tortfeasor not to engage in anti-competitive practices.434 As rightly pointed out, this deficit has a negative impact upon compliance incentives and, ultimately, upon the efficiency of EC competition law enforcement itself.435 Thus, while the introduction in Europe of all the incentives used by US law in private antitrust enforcement, such as pre-trial discovery, class actions, and contingency fees,436 429

Staff Working Paper, above n 55 (ch 1), para 125 ff. Cited at n 414 above. 431 This is the position adopted by the Italian Corte di Cassazione in a recent case in the long line of follow-on claims in the insurance cartel case: Corte di Cassazione, 15 Dec 2006, no 2305 Fondiaria Società Assicuratrice Industtriale (SAI) v Nigriello, reported by Nebbia, Mar 2006, Vol II, e-Competitions, available at www. concurrences.fr. 432 See also Jones, above n 39 (ch 1), at 377, favouring a flexible approach to the quantification of damages. 433 In the words of a commentator ‘the single most useful event might be for some bold Community plaintiff to win a significant damages judgment which really “bangs the bell” ’ (see Jones, above n 75 (ch 1), at 106). This view is also expressed by Faull, ‘Future Competition Law—Working Paper II’ in Ehlermann and Laudati (eds), European Competition Law Annual 1997: The Objectives of Competition Policy (Oxford, 1998) 508. 434 Staff Working Paper, above n 55 (ch 1), para 112. 435 See Norberg, above n 37 (ch 1), at 28. 436 Other incentives for more private enforcement include one-way fee shifting, according to which if the plaintiff prevails the defendant must pay the plaintiff’s costs, but if defendant prevails the plaintiff is not required to pay the defendant’s costs; and joint and several liability of each defendant for the whole amount of trebled damages, combined with the ‘no contribution rule’, according to which a defendant who has paid all the damages cannot seek indemnity from other co-defendants. See further Wood, above n 42 (ch 1), at 402; Venit, above n 30 (ch 2), at 572. See, however, Antitrust Modernization Commission, above n 125, at 251 ff, where it is proposed to enact a statute applicable to all antitrust cases involving joint and several liability that would permit non-settling defendants to obtain a reduction of the plaintiffs’ claims by the amount of the settlements or the allocated shares of liability of the settling defendants, whichever is greater. The recommended statute should also allow claims for contribution among non-settling defendants. This proposal aims at responding to the criticism that the rule of joint and several liability coupled with the no-contribution rule is prone to abuse by a plaintiffs’ lawyers, who put pressure on defendants to settle antitrust claims, even those claims of questionable merit, simply to avoid the risks of litigation before juries and thus the potential of excessive liability. 430

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212 Substantive and Procedural Law Aspects would neither be possible in the short run437 nor indeed desirable (especially with regard to class actions and contingency fees), a considerable number of commentators increasingly view the possibility of recovering punitive damages, at least in cases of egregious violations of the competition rules, in particular cartel cases, as the only alternative that would energise private antitrust enforcement in Europe and would really transform the private litigant into a ‘private attorney-general’.438 Punitive damages, however, have traditionally been viewed unfavourably in European jurisdictions,439 while the sole compensatory function of civil damages has been considered a general principle permeating private law as a whole. According to this line of thinking, the punitive or penal character of damages offends against the principle of proportionality, leads to the enrichment of the victim and encroaches upon the value of human dignity of every person, in casu of the debtor.440 Indeed, the recent Discussion Paper on private actions of the Bundeskartellamt considers punitive damages contrary to the German Constitution.441 In addition, foreign judgments or arbitral awards that have awarded punitive damages in contractual or non-contractual liability cases have been denied enforcement in Europe on grounds of violation of public policy,442 although there are many signs that this negative approach may be slowly changing.443 Surprisingly, the utterly negative European predisposition against punitive damages was echoed in the original Commission Rome II Regulation proposal on the law applicable to non-contractual obligations,444 which included an express provision in Article 24 on punitive damages awards, considered to be against the ‘Community public policy’.445 This text 437

See Norberg, above n 37 (ch 1), at 29. See Basedow, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 35; Siragusa, ‘Panel Discussion: Modernization of EC Competition Law’ in Hawk (ed), International Antitrust Law and Policy 1999, Annual Proceedings of the Fordham Corporate Law Institute (New York, 2000) 326. Compare also the public statements of Commissioner Kroes on 17 Oct 2005 foreshadowing the Green Paper on private enforcement. See, however, Jones, above n 38 (ch 1), at 229 ff and above n 75 (ch 1), at 102–5, according to whom, while treble damages are a powerful incentive for private enforcement in US law, their non-availability in European law might have been overstated by European lawyers. According to this author, whose proposals have proved very influential in EC competition circles, the European legal systems provide for a very useful alternative that US law lacks: pre-judgment interest, which could in many cases reach the level of trebled damages. 439 See eg van Caenegem, ‘The Long Arm of the US Courts: The Empagran Decision’ in Liber Amicorum JeanPierre de Bandt (Brussels, 2004), at 637, who refers to the US ‘monstrous’ damages awards in antitrust cases. 440 See eg Stamatis, ‘Recognition of a Foreign Judgment Awarding Punitive Damages’ (2003) 51 Nomiko Vima (in Greek), 1553 at 1554–7. 441 Bundeskartellamt Discussion Paper, above n 182, at 28. 442 See eg in Italy a recent judgment of the Supreme Court which upheld a lower Italian court’s denial to enforce in Italy an award of damages considered punitive: Corte di Cassazione, 19 Jan 2007, no 1183, Judy Parrott v Fimez SpA. 443 In Greece, eg, the Supreme Court (Areios Pagos) has lately accepted, as a principle, that foreign punitive damages awards are not per se incompatible with public policy (ordre public international), but it has invited lower courts to check on an ad hoc basis the disproportionate character of such awards, which under certain circumstances may be unacceptable (Areios Pagos no 17/1999, (2000) 6 Koinodikion 69, (2000) 48 Nomiko Vima 461; Areios Pagos no 1260/2002 (2003) 51 Nomiko Vima 1020). While this jurisprudence is certainly the sign of a less dismissive attitude towards punitive damages as such, the minimum proportionality control amounts to a révision au fond, prohibited under private international law. See further Panagopoulos, ‘Punitive Damages and Greek Public Policy (or towards a Reevaluation of the Objectives of Civil Liability)’ [2000–2] Kritiki Epitheorisi 195, 207 ff (in Greek). On the more restrictive attitude of German courts see Zekoll and Rahlf, above n 33 (ch 1), at 387 ff; P Müller, Punitive Damages und deutsches Schadensersatzrecht (Berlin/New York, 2000) 17 ff; Wurmnest, ‘Recognition and Enforcement of US Money Judgments in Germany’ (2005) 23 Berkeley J Int’l L 175, at 196–7. 444 Commission Proposal for a Reg of the European Parliament and the Council on the Law Applicable to Noncontractual Obligations (‘Rome II’), COM(2003)427 final. 445 According to the Explanatory Memorandum to the draft Reg, ‘Article 24 is the practical application of the Community public policy exception provided for by the third indent of Article 23(1) in the form of a special rule . . . The effect of Article 24 is accordingly that application of a provision of the law designated by this Regulation 438

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The Substantive Law Framework 213 was, however, abandoned and the modified Commission proposal was milder and included changes to make clear that punitive damages are not ipso facto contrary to public policy.446 Finally, Article 26 of the new Regulation447 no longer refers to punitive damages awards in the provision about the public policy exception and the matter is only referred to in Recital 32 in the following terms: The application of a provision of the law designated by this Regulation which would have the effect of causing non-compensatory exemplary or punitive damages of an excessive nature to be awarded may, depending on the circumstances of the case and the legal order of the Member State of the court seised, be regarded as being contrary to the public policy (“ordre public”) of the forum.

This final text means that on the one hand punitive damages awards are not considered per se contrary to public policy but only to the extent they are ‘excessive’, and on the other hand that it is not a matter of a common Community public policy, but rather of the equivalent notions of the Member States, which can indeed vary on the specific matter of punitive damages. In any event, it has been persuasively argued that there is already Community legislation, the Late Payments Directive,448 which establishes a legal interest rate of a punitive nature to deter late payment.449 Punitive or exemplary damages for competition law violations are also available under certain national laws,450 and this means that they must also be available for violations of EC competition law, further to the principle of equivalence.451 It is noteworthy that the Court of Justice in Manfredi did not rule out the possibility of awarding punitive damages. The Court clearly saw a possibility for the Community legislator to adopt rules on such damages, and did not follow the approach of the then Rome II Regulation proposal to consider such awards contrary to Community public policy. Indeed, the Court stressed that: as to the award of damages and the possibility of an award of punitive damages, in the absence of Community rules governing the matter, it is for the domestic system of each Member State to set the criteria for determining the extent of the damages, provided that the principles of equivalence and effectiveness are observed.452 which has the effect of causing non-compensatory damages, such as exemplary or punitive damages, to be awarded will be contrary to Community public policy.’ For critical comments on this unfortunate text see Stone, ‘The Rome II Proposal on the Law Applicable to Non-Contractual Obligations’ (2004) 4 ELF 213, at 222. 446 See Commission Amended Proposal for a European Parliament and Council Reg on the Law Applicable to Non-contractual Obligations (‘Rome II’), COM(2006)83 final. Rather than proposing a self-standing provision on punitive damages, the modified proposal merged the language that refers to punitive damages with the more general text on the public policy exception and went as follows: ‘[t]he application of a rule of the law of any country specified by this Regulation may be refused only if such application is manifestly incompatible with the public policy (“ordre public”) of the forum. In particular, the application under this Regulation of a law that would have the effect of causing non-compensatory damages to be awarded that would be excessive may be considered incompatible with the public policy of the forum.’ 447 European Parliament and Council Reg 864/2007 of 11 July 2007 on the Law Applicable to Non-contractual Obligations (‘Rome II’) [2007] OJ L199/40. 448 Dir 2000/35/EC [2000] OJ L200/35. 449 According to Art 3(1)(d) of the Dir, the debtor is obliged to pay as interest the sum of the interest rate applied by the European Central Bank—or the national central bank in the case of non-EMU Member States—to its most recent main refinancing operation, plus at least 7 percentage points, unless otherwise specified in the contract. See Basedow, ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 35. 450 See s 14(5)(b) of the Irish Competition Act. 451 Brasserie du Pêcheur/Factortame (III), above n 46, paras 89–90; Manfredi, above n 63, para 93. 452 Ibid, para 92, emphasis added.

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214 Substantive and Procedural Law Aspects If the Court had shared the view of the drafters of the then Rome II Regulation proposal that such damages awards are contrary to Community public policy, it would have said so expressly, and, in any event, it would certainly have avoided using the expression ‘in the absence of Community rules governing the matter’, which implies that Community law can indeed proceed to the introduction of such awards without running the risk of legislating against a fundamental principle of Community public policy.453 At any rate, if punitive damages were to be introduced by Community legislation, this would render obsolete the discussions as to their compatibility, not only with Community public policy, but also with the public policy notions of the Member States, and the principle of supremacy of Community law would apply in full.454 It is interesting that for the 2001 Florence Workshop on private enforcement, former Advocate General van Gerven had drawn up a draft regulation that contained a rule on exemplary damages, according to which recoverable damages could exceed the compensation payable to the person harmed, though not by more than half.455 The Green Paper follows this course and includes as one of its options the possibility to award double damages ‘in case of the most serious antitrust infringements, i.e. horizontal cartels’.456 It is interesting that the Commission, perhaps being prudent in an over-sensitive area, does not view such damages awards in their punitive aspect, but rather as ‘a clear incentive for claimants to bring antitrust damages cases’. While the introduction of double damages will indeed be a powerful incentive for plaintiffs, it would make better sense if the Commission abandoned its timidity and openly declared the punitive nature of those awards. Such an approach would enhance the deterrent effect and effectiveness of this instrument. If the Community judges in Manfredi did not shy away from addressing this question, the Commission should not feel constrained either.457

(c) Permanent Injunctions Apart from damages, other civil remedies may prove equally efficient from a plaintiff’s perspective in an EC competition private action. Injunctions, ie court-ordered measures requiring the defendant to cease any anti-competitive conduct and desist from such conduct in the future, are the most important, especially when anti-competitive behaviour would be better fought with an injunction rather than with an eventual damages award.458 453 In our view, if not Manfredi, the reactions of DG-COMP may indeed have been the reason for the radical departure from the original relevant text of the ‘Rome II’ Reg proposal. 454 Such Community legislation may have the indirect consequence of shifting the perception of public policy in the Member States with regard to foreign judicial and arbitral decisions that award punitive damages, since such decisions will no longer offend against the fundamental values of those legal systems. 455 See van Gerven, above n 62, at 90–3. 456 Option 16 of the Green Paper, above n 55 (ch 1). The specific text seems to refer to horizontal cartels in an indicative manner, thus leaving it theoretically possible to introduce such punitive damages for other serious infringements of competition law, eg for serious abuses of dominant position. Public statements by Commission officials indicate, however, that double damages are considered, if at all, only for horizontal cartels. Such an option would make better sense in terms of legal certainty and predictability, since it is not always easy to categorise an abuse of dominance as ‘serious’, while horizontal cartels are clearly identifiable as such. 457 There may be strategic concerns behind this ‘timidity’ of the Commission, having to do with the legislative process. In other words, presenting double damages as an ‘incentive’ rather than as ‘punitive’, may enhance a potential Community measure’s chances in the Council and the Member States, and may, indeed, even affect the choice of the appropriate legal basis (see 3.II.(b).(viii) above). 458 It should be stressed that s 4 of the US Clayton Act, apart from damages, also provides for injunctive relief for anyone injured by a violation of the antitrust laws. However, the common law principle that an injunction cannot be obtained if the plaintiff can be fully compensated by damages applies to that case, too.

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The Substantive Law Framework 215 An injunction can contain detailed negative and positive orders aiming at changing the competition law infringer’s conduct in the market generally, and vis-à-vis the victim of the anti-competitive conduct specifically.459 Although the recent Commission Green Paper regrettably does not deal with all remedies pertaining to private enforcement, including injunctions, but is limited to damages, there is no doubt that injunctions should also be seen as part of private antitrust enforcement.460 An injunction may prove a particularly valuable remedy in Article 82 EC cases and in cases involving intellectual property rights.461 Usually the victim of abuse of a dominant position seeks to enjoin the dominant undertaking to cease the abusive behaviour, through a positive or negative act. A positive act can be the continuation of contractual relationships (in case of a refusal to supply) or even the conclusion by the dominant undertaking of a new contract with the victim of the abuse (Kontrahierungszwang). Most legal systems recognise the remedy of injunction in competition law cases,462 but inconsistencies do exist. Thus, under English law an injunction will only be granted if damages are unlikely to be an adequare remedy.463 This principle, however, seems to be at variance with Community law if applied as an absolute bar to the right to an injunction. Continental legal systems, for their part, make injunctions available irrespective of the availability of damages.464

459 See Ritter and Braun, above n 42 (ch 1), at 1173, and the cases cited in n 1150. According to those authors, injunctions represent the most common civil remedy in national court proceedings for violation of competition law. See also Claudel, above n 79 (ch 1), at 302. 460 Indeed, the Green Paper sees interim and permanent injunctive relief as one of the different forms that private enforcement of EC competition rules can take (Staff Working Paper, above n 55 (ch 1), paras 16–17). 461 Eg in a Dutch case a patent holder was ordered, against payment of royalties, to refrain from measures which could impede the use of its patent by a third party (Gerechtshof’s Hertogenbosch, 18 Jan 1977, Heidemij v Bronbemaling [1977] NJ 463; [1978] 1 CMLR 36, cited by Sevinga, above n 269, at 177–8, 200). 462 A direct national legal basis for injunction claims is provided for by s 14(5)(a) of the 2002 Irish Competition Act and s 33(1)(2) of the German Competition Act, as recently amended. Other legal systems arrive at the same result by employing non-competition law-specific provisions in their civil laws. 463 See generally American Cyanamid Co v Ethicon [1975] AC 396 (HL), and specifically with regard to EC competition law Garden Cottage, above n 171. The other requirements are that there must be a serious question to be tried and the balance of convenience must favour the granting of the injunction. See further Brealey and Hoskins, above n 318, at 150–1. In England it seems that no permanent injunction has ever been ordered by the courts, possibly as a result of litigants’ tendency to settle, but there is no reason to doubt that English courts would deal with a claim for a permanent injunction differently from a claim for an interlocutory injunction. See Kerse, above n 25 (ch 2), at 436; Lane, above n 67 (ch 2), at 203; Tritton et al, above n 59 (ch 2), at 939. On interlocutory injunctions in English courts see 3.II.(d) below. 464 Under German and Greek law, the violation or the risk of violation of a specific right means that the court can make a cease and desist order, notwithstanding the possibility of a damages claim. In Greece, where there is no specific provision in the Competition Act on injunctions, unlike the new s 33(1)(2) of the German Competition Act, an injunction for specific performance (including the conclusion of a new contract) can have the form of in natura compensation and may find its legal basis in Arts 914 and 297, or alternatively Arts 914, 281 and 288 of the Greek Civil Code. On German law see Braun, above n 138 (ch 2), at 431, 580, with references to case law, and on Greek law see Koutsoukis, above n 68, at 343; Iliopoulos, above n 294 (ch 2), at 251–2, 289; Liakopoulos, above n 66 (ch 1), at 499. In France it is accepted that injunctions are possible (see Boulanger, above n 465 (ch 2), at 196), even injunctions ordering the conclusion of a contractual relationship (see A Tercinet, Droit européen de la concurrence, Opportunités et menaces (Paris, 2000) 121). See also the sui generis provision of Art L442-6(3)(b) Code de commerce, which also gives the public prosecutor and the Minister of the Economy locus standi to request an injunction. In Belgium an injunction (action en cessation) can be based upon unfair competition law (Art 54 of the 1971 Act on Commercial Practices); see Noirfalisse, above n 80, at 63, with references to case law. The same is accepted in Austrian law, where anti-competitive conduct is also considered to fall under s 1 of the Unfair Competition Act (UWG) (see Maitz-Strassnig, above n 158, at 34; Günther, above n 294 (ch 2), at 320), and in Italian law, where parties can rely on Art 2599 of the Civil Code (see Ligustro, above n 60, at 219–21).

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216 Substantive and Procedural Law Aspects The position in German law has been until recently that a duty to contract (Kontrahierungszwang) and a claim to be supplied (Belieferungsanspruch) exist only in abuse of dominance cases, since these remedies are considered incompatible with the protective scope (Schutzzweck) of Article 81 EC.465 German courts seem to feel entitled to detect the Schutzzweck of that provision in excluding the possibility of injunctions ordering positive measures, although such an authoritative and final interpretation is clearly reserved only to the Community Courts.466 It is unclear whether the new text of section 33(1) GWB, which makes injunctions available also in Article 81 EC cases, is a departure from that approach. It is interesting that this question has also arisen in the context of administrative enforcement by the Commission. The Court of First Instance was confronted with this question in Automec (II),467 where the complainant had been refused an injunction by the Commission requiring BMW to supply it with vehicles. According to the Court, freedom of contract was the basic rule, so the Commission could not order a party to enter into a contractual relationship ‘where as a general rule the Commission has suitable means at its disposal for compelling an enterprise to end an infringement’.468 In the Commission’s view such purely positive measures may be more justifiable in Article 82 EC cases.469 These Community pronouncements, however, are not conclusive for the proposition that a duty to contract can never be a remedy in Article 81 EC private enforcement cases.470 First, the Court of First Instance and the Commission qualify their position by stating that such measures are excluded ‘in principle’, thus leaving the possibility of exceptions. Secondly, they both refer to Community administrative and not to national civil proceedings. Indeed, the Court of First Instance specifies that it is incumbent upon the national 465 See the judgment of the Federal Supreme Court in the Depotkosmetik case, BGH, 12 May 1998, City Parfümerie Jürgen Rathjen GmbH v Deutsche Lancôme GmbH (1998) 53 BB 2332. See further on this issue Bornkamm, ‘Anwendung europäischen Kartellrechts durch die Gerichte und die Behörden der Mitgliedstaaten’ in Schwarze (ed), Neuere Entwicklungen auf dem Gebiet des europäischen Wettbewerbsrechts (Baden-Baden, 1999) 52–3; Birk, ‘Belieferungsansprüche bei Verstoß gegen Art. 81 EG?’ (2000) 11 EWS 485, at 486 ff; W-H Roth, ‘Europäisches Kartellrecht—Terra Incognita?’ (2000) 53 NJW 1313, at 1314; Rheinländer, ‘Belieferungsanspruch eines diskriminierten Händlers aus Art. 81 II EC’ (2007) 109 GRUR 383, at 384. In Greece, too, the equivalent national provision of Art 81 EC, Art 1 L. 703/1977, is thought not to provide for a right to be supplied or a duty to contract, unlike the provision of Art 2 L. 703/1977, equivalent to Art 82 EC. See eg Monomeles Protodikeio Athens no 18743/1992 in D Koutsoukis and D Tzouganatos, The Application of L. 703/1977 ‘on the Protection of Free Competition’, Vol. III, 1990–1995 (Athens, 1996) (in Greek) 323 ff. 466 See the critical comments of von Winterfeld, ‘Zum Schutzzweck des Art. 81 EG-Vertrag und zu den Rechtsfolgen eines Verstoßes nach nationalem deutschen Recht’ in Bradner, Hagen and Stürner (eds), Festschrift für Karlmann Geiß zum 65. Geburtstag (Cologne/Berlin/Bonn/Munich, 2000) 669, as to the national court’s usurpation of the ECJ’s exclusive competence to interpret the protective scope of Treaty rules. 467 An argument against the possibility of an injunction ordering the continuation of a contractual agreement under Art 81 EC is also sometimes derived from the ECJ judgment in Joined Cases 228/82 and 229/82 Ford of Europe Incorporated and Ford-Werke AG v Commission [1984] ECR 1129, where the Court annulled the Commission’s interim measures decision (Commission Dec 82/628/EEC of 18 Aug 1982 (Distribution system of Ford Werke AG—interim measure) [1982] OJ L256/20) ordering Ford to supply its distributors in Germany with right-hand drive cars. However, this happened as a result of procedural irregularities and not because such a positive measure cannot be ordered in principle in Art 81 EC cases. See further on this case Idot, ‘Les mesures provisoires en droit de la concurrence: Un nouvel exemple de symbiose entre le droit français et le droit communautaire de la concurrence’ (1993) 29 RTDE 581, at 595. 468 Automec (II), above n 59 (ch 1), para 51. The other means are presumably the prohibition of an agreement, the withdrawal of the benefit of an individual or block exemption, and fines and/or periodic penalty payments. 469 See the Commission’s arguments in ibid, para 43. 470 See the critical comments of Idot, ‘La situation des victimes de pratiques anticoncurrentielles après les arrêts Asia Motor et Automec II’ [1992-12] Europe 1, at 3–4. For a more general view of the injunctive remedies granted by the Commission see Mail-Fouilleul, above n 107 (ch 1), at 85–100.

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The Substantive Law Framework 217 courts, where appropriate, in accordance with the rules of national law, to order one trader to enter into a contract with another.471 A duty to contract as a civil remedy in Article 81 EC cases should therefore not be excluded. Indeed, national courts in many jurisdictions have been accustomed to such remedies, which may contradict the nineteenth century concept of freedom of contract, but have been readily available in the last century.

(d) Preliminary Injunctions An injunction may be an efficient remedy not only in its permanent but also in its preliminary form. Such preliminary injunctions can be granted by national courts,472 notwithstanding any parallel competence of the Commission473 or national competition authorities to take similar provisional measures. The former are of a civil nature and are aimed at the protection of private interests by provisionally securing civil claims, such as a claim for damages in case of alleged anti-competitive harm,474 whereas the latter are of an administrative nature and are basically aimed at safeguarding the public interest—at least as far as the Commission is concerned475—avoiding the continuation of the illegal practice and restoring the status quo ante. However, it is true that in some cases this distinction becomes less apparent, with both kinds of interim measures leading to the same result. Interim measures have been ordered on many occasions by national courts in EC competition law cases.476 In some jurisdictions the judge enjoys wide powers and may order ad 471

Automec (II), above n 59 (ch 1), para 50. See generally J Cavallini, Le juge national du provisoire face au droit communautaire, Les contentieux français et anglais (Brussels, 1995) 71 ff. See also Canivet, ‘Aspects stratégiques du procès en droit de la concurrence’ in Les aspects contemporains du droit de la distribution et de la concurrence, Actes du colloque de l’Université de Toulouse I (24 et 25 mars 1995) et conférences de doctorat (Paris, 1996) 104. For the position of French law see Momège and Idot, above n 473 (ch 2), at 240–3. 473 Reg 17 had no explicit reference to the ability of the Commission to take interim measures. This gap was filled by the ECJ in Case 792/79 Camera Care Ltd v Commission [1980] ECR 119, para 19. The Commission could adopt interim or interlocutory measures in urgent cases, in order to avoid a situation likely to cause serious and irreparable damage to a complaining party or harm to the public interest. However, Art 8(1) of Reg 1/2003 excludes the protection of private interest as such from the scope of Commission-ordered interim measures (see the reference to ‘serious and irreparable damage to competition’). Interim measures with the sole aim of protecting the private interest of a complainant or plaintiff can only be adopted either by NCAs, if their national law so provides, or by national courts. Of course, it is very likely that an anti-competitive practice which damages a specific person will harm the public interest in general. For a critical comment on this restriction of the conditions for the granting of provisional measures by the Commission see Idot, above n 4 (ch 1), at 125–6. Compare also the Greek Competition Committee Press Release of 24 Oct 2005 on the availability of interim measures, where the Greek authority makes clear that it will follow the EC approach, referring to Art 8(1) of Reg 1/2003, and will no longer entertain interim measures applications by private parties. 474 See eg Koutsoukis, ‘The New Institution of Interlocutory Relief in Competition Law Cases (L. 703/77)’ (1997) 48 Epitheorisi Emporikou Dikaiou 153 at 161 (in Greek), on the discussion of the relationship between interim measures in the Greek Competition Act—that can be taken only by the Competition Committee—and ordinary interim measures of civil procedural law—that are ordered by civil courts. 475 On the new text of Art 8(1) of Reg 1/2003; see n 473 above. 476 For a Dutch preliminary injunction to resume supply in an Art 82 EC case see Pres. Rechtbank Amsterdam, 5 Apr 1979, van Gelderen Import BV v Impressum Nederland BV [1981] NJ 129, discussed by Visser ’t Hooft, ‘Japanese Law and the Unilateral Termination of Distribution Agreements: A Comparison with Dutch Law’ in Grosheide and Boele-Woelki (eds), Europees Privaatrecht 1995 (Lelystad, 1995) 194. See also the Irish case, Patrick Dunlea & Sons v Nissan (Ireland) Ltd, [1992] ECC 169, cited by Maher, above n 510 (ch 2), at 293, where the defendant had terminated its distribution agreement with the applicant, who had started to sell imported second-hand cars of the same brand. The latter alleged that the notice for the termination of the agreement was too short and that the conduct of the defendant amounted to an abuse of a dominant position. The Irish High Court granted the injunction as requested. For English cases see Garden Cottage, above n 171; Cutsforth v Mansfield Inns [1986] All.ER 577 (QB); Holleran v Daniel Thwaites plc [1989] 2 CMLR 917 (ChD). See also Shaw, above n 171, at 85. For 472

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218 Substantive and Procedural Law Aspects hoc measures, such as an announcement in the press or to the victims of an anticompetitive practice regarding the illegality of that practice.477 In some legal systems it is even possible for a court to award ‘provisional or interim damages’ if it already appears certain at a preliminary stage that an unlawful act has taken place which has causally led to harm being inflicted upon another.478 Problems may be encountered in legal systems where courts are not willing to undertake the assessment of very complicated factual circumstances at such an early stage of the trial, without entering into the substance of the case.479 However, the task of a national court may be far easier if the illegality of a certain practice has already been established by the Commission or the Court of Justice. In such circumstances there is no doubt that at least a prima facie case exists as to the anti-competitive nature of the practice in question.480 Irrespective of the legal bases for permanent and interim injunctions provided by national laws, Community law has now progressed sufficiently to provide such a remedy itself. Thus, an injunction on grounds of violation of Community competition law is based on Community law itself, exactly as the right in damages derives from the Treaty. The Court of Justice has in the past dealt with the case of preliminary injunctions vis-à-vis the Member States in Factortame (I),481 but this principle is considered to apply to permanent injunctive relief too.482 Thus, returning to the scheme of former Advocate General van Gerven on the existence of Community law remedies, injunctive relief is one of the specific remedies that are available to individuals for violations of Community law.483 It is, indeed, expected that the Community Courts’ jurisprudence will build further on the Courage principles, and recognise the Community law basis not only for a damages claim, but also for injunctive relief claims as between private individuals, as expounded by former Advocate General van Gerven.484 Advocate General Jacobs followed this course in a recent Opinion. In AOK Bundesverband the Advocate General stressed that ‘both damages and injunctive relief would as a matter of Community law be available to anyone suffering loss as a consequence of [anti-competitive] conduct, subject to such national procedural rules as were compatiFrench precedents see Douvreleur, above n 405 (ch 2), at 206, and for Belgian early cases see Picañol, ‘Remedies in National Law for Breach of Articles 85 and 86 of the EEC Treaty: A Review’ (1983) 10(2) LIEI 1, at 8–9. 477 For a Dutch case see eg Pres Rechtbank Utrecht, 11 Feb 1992, FNK/SCK, cited by Sevinga, above n 269, at 200–1. 478 See eg Healthcare at Home Ltd v Genzyme Ltd, above n 283, discussed above. See also Braakman, above n 58 (ch 1), at 171. 479 This is the case eg in Denmark (see Fejø, ‘Denmark’ in Behrens (ed), EC Competition Rules in National Courts, Vol. VI, Denmark, Sweden, Finland and Austria (Baden-Baden, 2001) 63), in France (see Boulanger, above n 465 (ch 2), at 226 ff), and in Holland (see Sevinga, above n 269, at 153). On some weaknesses of such provisional measures of a civil nature, in particular with regard to specific areas of competition law, such as to essential facilities, see Hatzopoulos, above n 57 (ch 1), at 170–2. 480 See Boulanger, above n 465 (ch 2), at 228, referring to the requirement in French law of a trouble manifestement illicite. It appears that the Cour de Cassation has adopted a less restrictive interpretation of the above criterion with regard to Community law (see Cass com, 10 July 1989 Bodson v PFRL [1989] IV Bull Civ, no 216). 481 It should not be overlooked that the juge-rapporteur in Factortame (I) was Judge Kakouris, who has argued against the existence of a principle of national procedural autonomy. See further Diez de Velasco, ‘L’acquis communautaire: La contribution de Monsieur le Juge Kakouris à son développement’ in Problèmes d’interprétation à la mémoire de Constantinos N. Kakouris (Athens/Komotini/Brussels, 2004) 96–7. 482 See in this sense Beneyto, above n 29 (ch 2), at 312. Compare, in that context, the existing Community legislation on injunctive relief in consumer protection (Dir 98/27/EC). For a critical overview of that Dir see van Gerven, above n 345 (ch 2), at 13. 483 See 3.I.(c) above. 484 See van Gerven, above n 62, at 63–6.

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The Substantive Law Framework 219 ble with the principles of equivalence and effectiveness’.485 According to the Advocate General, the Courage principle would equally apply to injunctive relief.486 This is now also accepted in the Commission Green Paper, which stresses: Whereas nullity as a sanction for infringements of Article 81 EC has been explicitly foreseen by the EC Treaty itself (Article 81(2) EC), damages actions or actions for injunctive relief can be deduced from Article 10 EC. In addition, according to the case-law of the Community Courts, the full effectiveness of directly applicable Community law requires national courts to have jurisdiction to grant interim relief.487

(e) Restitution and Declaratory Actions Other civil remedies for the purposes of private antitrust enforcement include restitution and declaratory actions. Restitution may be a convenient remedy for the victim of the anticompetitive conduct, because rather than proving the harm and the causal link between harm and prohibited conduct, which can be too onerous a task for a private litigant, it is enough to prove that a company has become richer in an unjustified manner, to the detriment of the plaintiff. Most legal systems provide for such a remedy,488 although relevant court decisions are quite rare.489 In competition law, this specific remedy takes the form of a claim aimed at the restitution of a benefit that is passed on to and enjoyed by the defendant because of his anti-competitive behaviour. The recent Luftfartsverket case in Sweden is perhaps the most well-known example of a successful restitution claim on EC competition law grounds. There, the airline SAS obtained restitution of sums close to €100 million for losses caused by the Swedish Board of Civil Aviation’s abuse of dominance through discriminatory pricing.490 As mentioned above, restitution is, in the current stage of development of Community law, a remedy provided in principle by Community law itself.491 There is abundant Community case law that refers to restitution of charges and taxes levied in violation of Community law by public authorities. The Court has stressed in all these cases that repayment or restitution of unlawfully levied charges is required as a matter of Community law,492 while delegating the conditions of the exercise of this right to national law, subject to 485 Para 104 of the AG’s Opinion in Joined Cases C–264/01, C–306/01, C–354/01 and C–355/01 AOK Bundesverband et al v Ichthyol-Gesellschaft Cordes et al [2004] ECR I–2493. 486 See also Oliver, above n 385, at 380–1. 487 Staff Working Paper, above n 55 (ch 1), para. 17, with references to AG Jacobs’s Opinion in AOK Bundesverband, above n 485. See also in this sense Stuyck, ‘The Specificity of Consumer Law in the Process of Europeanization of European Contract Law’, Paper presented at the EUI Conference on the Europeanisation of Private Law (Florence, 24–25 Oct 2003) 2. 488 For Greece see Art 904 of the Civil Code; further Iliopoulos, above n 294 (ch 2), at 303–4. In France compare the specific and atypical provision of Art L442-6(3)(b) Code de commerce, according to which restitution may be claimed by the public prosecutor and the Minister of the Economy on behalf of the victim of certain anticompetitive practices. 489 For a Greek case see Eirinodikeio Thessaloniki no 722/1983 (1984) 4 RHDE 187, where the court considered that a dominant undertaking (Olympic Airways, a legal monopolist at that time) had abused its dominant position by imposing an unfairly high cancellation fee covering the whole price of an air ticket on an individual. The court ordered Olympic Airways to repay its client a certain percentage of the ticket price corresponding to the amount constituting unjustified enrichment. For further national cases see Ritter and Braun, above n 42 (ch 1), at 1174, n 1151. 490 On this case, see Bernitz, above n 117, at 198. 491 See 3.I.(c) above on former AG van Gerven’s system of Community law remedies. 492 See n 185 above.

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220 Substantive and Procedural Law Aspects the Community law requirements of equivalence and effectiveness. Post-Courage/ Manfredi, it is not a novelty to say that under Community law there is also in principle a right of individuals as against other individuals to restitution for sums paid in violation to Community law. This is so because the requirement of effective judicial protection should not have a different function in such private disputes. Finally, as to the remedy of declaratory action (Feststellungsklage), most national legal systems recognise the possibility of a judicial declaration of the legality or illegality attached to certain facts that the plaintiff alleges.493 A declaratory judgment may be quite useful for a litigant, because it clearly states the legal situation at a specific point in time with a res judicata effect inter partes. In the context of competition law, such judgments may declare that a certain agreement or conduct is legal or illegal according to the Treaty competition provisions.494 To give an example, under the new system of enforcement they may declare that an agreement is legal, either because it does not fall under Article 81(1) EC or because it satisfies the conditions of Article 81(3) EC.495 More specifically, they may also declare the validity or nullity of an agreement on the basis of Article 81(2) EC.496 In this context, reference is made to the actions en nullité recognised in some Roman legal systems.497

II. THE PROCEDURAL LAW FRAMEWORK

(a) National Procedural Divergences and the Challenge for an Effective System of EC Private Enforcement As mentioned above, Community law does not in principle deal with the detailed procedural questions pertaining to its application by national courts. Those questions are subject to national procedural laws, pursuant to the principle of the institutional or procedural autonomy of the Member States.498 Yet, this reference to national law does not mean carte blanche delegation. Again, national procedural autonomy finds its limits in the Community law principles of equivalence or non-discrimination and effectiveness. 493

Declaratory claims are always filed against a specific defendant, ie they introduce inter partes proceedings. See on such declaratory civil claims Erämetsä, above n 33 (ch 1), at 220; Gröning, above n 355 (ch 2), at 582. See also s 14(5)(a) of the Irish Competition Act 2002, which explicitly refers to such civil claims. 495 It should be stressed that in the public enforcement context, such a declaratory ‘positive’ decision can only be taken by the Commission and not by NCAs. This, however, does not affect national courts’ power to do so under their national procedural laws (see also Ehlermann, above n 257 (ch 2), at 3). It should be stressed that such civil proceedings presuppose the existence of a genuine dispute between the parties and should not be considered as ex parte. Nor should they be seen as alternative to the old system of notification and exemption; in other words, it is not possible for undertakings to seek declaratory judgments on the application or non-application of Art 81(3) EC. This concern has been raised by Whish and Sufrin, above n 142 (ch 2), at 151. As already explained, the concepts of negative clearance and exemption are obsolete in the new system of enforcement. Thus, courts will simply apply Art 81 EC as a whole to a dispute before them and declare inter partes the applicability or inappicability of that provision to an agreement. To speak of a competence to apply Art 81(3) EC distinctively no longer makes sense. 496 On Austrian law see Günther, above n 294 (ch 2), at 319; Reidlinger and Thalhammer, ‘Austria’ in Modernisation in Europe 2005, Global Competition Review Special Report (London, 2005) 13. On Potuguese law see Ruiz, above n 67 (ch 1), at 237. See also the national cases cited by Ritter and Braun, above n 42 (ch 1), at 1173, n 1147. 497 On Belgian law see Noirfalisse, above n 80, at 62–3; on French law see Boulanger, above n 465 (ch 2), at 193–4. 498 See above. 494

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The Procedural Law Framework 221 National procedures may differ widely between the EU Member States, especially between civil and common law systems. Indeed, there is not always even agreement as to what constitutes substance and what constitutes procedure.499 Such divergences are quite familiar to comparative lawyers, though not always apparent to EU lawyers.500 The most relevant procedural questions that arise in the enforcement of the EC competition concern the following areas: • Ex officio raising of Community law issues during the proceedings: this is another example of how national procedural rules may facilitate or hinder the enforcement of Community rights. It is also an area which EC competition law has already confronted with a certain degree of success. • Rules of evidence: these may vary considerably in each national procedural system. Such provisions are usually the product of the historical development of a given legal system, and though domestic lawyers may feel at ease with them, Community lawyers may find them inadequate for such complicated issues as proof of antitrust injuries. Such rules are of utmost importance for civil antitrust cases, where complex factual situations have to be dealt with. • Rules on time limits: such procedural rules usually limit the time in which an action or a third-party intervention is made or an argument may be raised before current civil proceedings, or an appeal may be filed, etc. • Rules on collective or representative claims: this is a question of particular importance for private antitrust enforcement, because antitrust violations usually affect a multiplicity of market participants, and indeed, at times, large classes of consumers. It must therefore be possible for such claims to be brought in an efficient way for the judicial system, in order to serve the effectiveness of private enforcement as a whole. • Procedural rules on third party interventions or on the filing of amicus curiae briefs, etc. can also have a great impact on effective enforcement. While difficulties arising from such disparities or divergences can to a certain extent be dealt with by having recourse to the Community law principles of equivalence and effectiveness under the guidance of the Court of Justice (negative integration), there are problems that necessitate some form of sectoral procedural harmonisation (positive integration). Equivalence, effectiveness and the ‘reactive’ approach of the Court of Justice have their limits and cannot guarantee a level playing field in private antitrust enforcement in Europe. A more ‘pro-active’ approach is therefore necessary in order to ensure the more balanced, consistent and effective enforcement of EC competition law in national courts.

(b) The ex officio Application of EC Competition Law A specific principle of procedural law that has long attracted attention in the decentralised enforcement of Community law by national courts is the principle of ‘party initiative’ in a civil case, which prescribes a rather passive role for the judge, as the civil procceedings are 499 See Picañol, above n 476, at 24; Jacobs and Deisenhofer, above n 1 (ch 1), at 187–8. The problem is treated from a private international law angle by Panagopoulos, ‘Substance and Procedure in Private International Law’ (2005) 1 JPIL 69. 500 To give an example, provisions on prescription or extinction of rights are considered to form part of substantive law in civil law countries and are usually included in Civil Codes. In common law, on the other hand, such provisions are thought of as procedural.

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222 Substantive and Procedural Law Aspects based on the parties’ initiative and they have the task of putting forward their case.501 Pursuant to this principle, a court cannot raise points not raised by the parties, and cannot grant relief different from what they have asked for. Another similar principle of procedural law which affects the judicial protection of Community rights before national courts is the limited degree of review in appeal proceedings. These principles are invariably present in all Member States’ judicial systems and their aim is to provide for the overall sustainability of the judicial system. National principles on the party-initiative principle and on the passivity of the judge in civil proceedings seem to constitute a more serious obstacle for the application of EC competition law in common law jurisdictions, where the adversarial system of adjudication functions in such a way as to make counsel the dominant figure who raises all the relevant issues. Thus, English and Irish502 courts have proved quite reluctant to raise Community law points ex proprio motu.503 On the other hand, continental courts may find it easier to raise the EC competition law point ex officio, because of the more active role of the judge throughout the proceedings, which, though in principle adversarial, follow the principle iura novit curia. Thus, it is increasingly accepted that courts should take up EC competition issues even ex officio, in the same way as they are entitled or even obliged to do with equivalent national rules of a binding nature.504 There is rather well-developed case law of the Court of Justice on this question. The Court has recognised on numerous occasions that there are situations where the function of such national principles may be an obstacle to the effectiveness of Community law and to effective judicial protection. Starting with Verholen,505 the Court initially followed a rather reserved approach.506 Dealing with whether Community law precludes a national 501

See Braakman, above n 58 (ch 1), at 169. See Maher, above n 461 (ch 2), at 276. 503 Compare, however, Bim Kemi AB v Blackburn Chemicals Ltd [2004] EWHC Comm 166, (QB) where the English High Court exceptionally allowed a party to advance an Art 81 defence, although English law precluded the raising of pleas at a late stage of the proceedings (principle of concentration in continental countries). The court did so because of the public policy character of Art 81 EC. 504 On the situation in Italy see Ligustro, above n 60, at 256. On Austrian law see Günther, above n 294 (ch 2), at 354 ff. In France courts have often reached inconsistent decisions on the extent of the judge’s duties to take up questions of EC competition law that have not been raised or proved by the parties, though in general it is accepted that such questions constitute moyens d’ordre public, and that, while the courts cannot rely on facts not brought forward by the litigants, they still have the power to raise legal issues ex proprio motu, pursuant to the principle iura novit curia. See further Boulanger, above n 465 (ch 2), at 224–6. Belgian law, for its part, imposes upon judges the duty to raise legal questions pertaining to ordre public of their own motion (Art 774 Code judiciaire). EC competition law would fall under the definition of such public policy, so it is accepted that Belgian courts would have to raise such issues even ex officio. See further Spiritus Dassesse, ‘On the Modernisation of EC Antitrust Policy’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2000: The Modernisation of EC Antitrust Policy (Oxford/Portland, 2001) 615, n 5. In Greek law the position is that national courts are under a duty to apply Community law as a whole even ex officio, in the same way as they are under such a duty where mandatory national law is concerned. See Georgiades, above n 352, at 85. In Danish law it is accepted that Community law principles have limited the scope of certain principles of Danish civil procedural law concerning ultra petita, the passivity of the civil judge, and party initiative. While under s 338 of the Administration of Justice Act the court can only consider arguments relied upon by the parties, s 339 mitigates this rule by allowing for the court to invite parties to express their position as to legal or factual questions of relevance. It is accepted that Danish judges are now under a duty to draw the parties’ attention to and give them guidance onarguments based on Community law. See Biering, ‘The Application of EU Law in Denmark: 1986 to 2000’ (2000) 37 CMLRev 925, at 966, who, however, acknowledges that Danish judges are not particularly accustomed to this more active role. For a recent comparative analysis, see Herb, above n 39, 35 ff. 505 Joined Cases C–87/90, C–88/90 and C–89/90 Verholen et al v Sociale Verzekeringsbank Amsterdam [1991] ECR I–3757, paras 12–16. 506 See Vilaras, above n 39, at 44. 502

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The Procedural Law Framework 223 court from assessing of its own motion whether national rules are in conformity with a directive the implementation period of which has expired, when the person concerned has not relied on that directive before the court, the Court, perhaps due to the formulation of the preliminary question itself, adopted a rather negative and defensive formula. It held that the recognised right of an individual to rely before a national court on a directive when the period for transposition had expired did not preclude the power for the national court to take that directive into consideration, even if the individual had not relied on it.507 This question was further clarified in van Schijndel 508 and Peterbroek.509 In the former case the Court of Justice distinguished three situations under national procedural law: duty, discretion and prohibition of national courts to apply ex officio binding rules of national law.510 The Court held that in the first two situations national courts are under a duty to apply binding rules of EC law, such as competition law, even ex officio. Only in the third case are they exempt from such a duty. Perterbroeck, decided on the same day as van Schijndel,511 emphasised an additional element to be taken into account: access by a national court to the preliminary reference procedure. This possibility was indeed treated by the Court as an additional criterion for the effective judicial protection of rights conferred by Community law. In Peterbroeck, it was stressed that if a national court is the first court or tribunal that can refer a preliminary question on Community law to the Court of Justice, then that court must raise questions of Community law of its own motion, even if the parties failed to raise such questions before a lower instance which is, however, not considered as a ‘court or tribunal’ under Article 234 EC.512 It should be mentioned that van Schijndel did not directly touch on whether the EC competition rules are ‘binding rules’ that must presumably be taken into account ex officio under the majority of national procedural laws. Most civil law systems consider that courts can raise such binding rules ex proprio motu as a matter of public policy (moyens d’ordre public). The Court’s hesitance to touch upon this question may be explained by the absence of similar notions in the much more ‘adversarial’ common law systems. Indeed, Advocate General Jacobs did not favour the invariable recognition of the EC competition rules as moyens d’ordre public under Community law, especially as there was no agreement between the legal systems of the Member States as to what constitutes a matter of public policy.513

507

Verholen, above n 505, para 15. Cited at n 266 (ch 2) above. 509 Case C–312/93 Peterbroeck, van Campenhout & Cie SCS v Belgian State [1995] ECR I–4599. 510 Van Schijndel, above n 266 (ch 2), paras 13, 14 and 22. 511 On the two judgments see Canivet and Huglo, ‘L’obligation pour le juge judiciaire national d’appliquer d’office le droit communautaire au regard des arrêts Jeroen van Schijndel et Peterbroek’ [1996–4] Europe 1; Pliakos, above n 23, at 227–9. 512 Peterbroeck, above n 509, paras 11–21. 513 Van Schijndel, above n 266 (ch 2), AG’s Opinion, para 37. Compare Lenaerts, ‘De quelques principes généraux du droit de la procédure devant le juge communautaire’ in Vandersanden and de Walsche (eds), Mélanges en hommage à Jean-Victor Louis (Brussels, 2003), 246, who, while recognising that the notion of moyens d’ordre public is not well-defined in Community law, stresses that the conditions for the admissibility of direct actions for annulment, flaws or gaps in the reasoning of Community acts, and infringements of essential procedural requirements and certain fundamental principles of Community law are usually raised ex officio by the Community Courts and can well be considered to be such moyens d’ordre public. See eg Case T–243/94 British Steel plc v Commission [1997] ECR II–1887, para 68, where the CFI considered that the principle of the protection of legitimate expectations is ‘a matter of Community public policy’. See further Vesterdorf, ‘Le relevé d’office par le juge communautaire’ in Colneric, Edward et al (eds), Une Communauté de droit, Festschrift fur Gil Carlos Rodriguez Iglesias (Berlin, 2003) 551 ff. 508

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224 Substantive and Procedural Law Aspects That issue was not clarified in Kraaijeveld,514 although it may appear that the Court of Justice considers all Community law rules ‘binding’, therefore giving rise to a duty for national courts to raise them ex officio when there is a similar duty or even a discretion under their national law. Such an inference, however, ought to be resisted, because the question thus far put to the Court of Justice by these preliminary references was not whether and which Community rules are ‘binding rules’, but rather whether national judges must raise Community law questions ex officio when there is a discretion under national law to do so with regard to certain categories of national law. In other words, what can be attributed to the Court is not so much a finding that all Community rules are ‘binding rules’, but rather a sort of ‘most favoured treatment’ for Community law in the procedural context of the EU Member States’ courts.515 However, the explicit recognition in Eco Swiss of the competition rules as public policy (ordre public)516 and the powerful statements in both Eco Swiss and Courage as to the constitutional importance of those rules 517 lead to the conclusion that the Court of Justice does indeed now see the EC competition rules as pertaining to public policy.518 Reading the van Schijndel and Peterbroeck judgments in the light of Eco Swiss and Courage means that those national legal systems that recognise the raising ex officio of moyens d’ordre public should do exactly the same with regard to EC competition law, without it being necessary to refer to the three situations of van Schijndel.519 This approach was followed very recently by the Court of Justice in Manfredi, which stressed that ‘Articles 81 EC and 82 EC are a matter of public policy which must be automatically applied by national courts’.520 In so holding, the Court referred only to Eco Swiss, and not to van Schijndel and the latter ruling’s more elaborate conditions on the ex officio application of Community competition law by national courts. Indeed, Manfredi seems to go even further in recognising an unqualified duty for national courts to raise EC competition law questions ex proprio motu, even if the legal system in question is not familiar with the concept of moyens d’ordre public or follows a very strict view of the judge’s power to raise legal questions ex officio. Before concluding on this question, we should mention that Regulation 1/2003 has affected the van Schijndel state of affairs only slightly, although other commentators are of the view that Article 3(1) of the new Regulation, which deals with the relationship between Community and national competition laws, now imposes a general duty upon national courts to apply Articles 81 and 82 EC, and thus by implication to raise these provisions ex officio.521 We respectfully disagree, and stress that Article 3, a provision that must be seen 514 Case C–72/95 Aannemersbedrijft PK Kraaijeveld BV v Gedeputeerde Staten van Zuid-Holland [1996] ECR I–5403, paras 55–62. 515 See also the latest ECJ pronouncement in van der Weerd, above n 82, paras 30–32, supporting the proposition that only some and not all of Community law rules can be considered as rules of public policy. 516 Eco Swiss, above n 55, para 39. Admittedly, the Court refers here to a different notion of ‘public policy’, to ordre public international for the purpose of enforcement of foreign arbitral awards. Yet the reasoning used to reach that conclusion means that EC competition law also pertains to public policy when that notion is used in different contexts. 517 See 3.II.(b).(iv) above. 518 See in this sense Nyssens and Pecchioli, above n 81 (ch 1), at 368. 519 See further Ehlermann and Komninos, above n 300 (ch 2), at 780, n 90; Niboyet, ‘La réception du droit communautaire en droit judiciaire interne et international’ in Bergé and Niboyet (eds), La réception du droit communautaire en droit privé des Etats membres (Brussels, 2003) 176; Broomhall and Goyder, ‘European Union’ in Modernisation in Europe 2005, Global Competition Review Special Report (London, 2005), at 6. 520 Manfredi, above n 63, para 31. 521 See Idot, above n 4 (ch 1), at 39; Blaise and Idot, above n 4 (ch 1), at 296; Poillot-Peruzzetto, ‘Mise en œuvre des articles 81 et 82 sur le fondement du règlement no 1/2003’ (2004) 14(6) Contr Conc Consomm 29, at 31; Paulis, above n 537 (ch 2), at 45. Compare also para 28 of AG Geelhoed’s Opinion in ASNEF-EQUIFAX, above n 274

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The Procedural Law Framework 225 in its particular context, aims primarily at imposing a duty upon national competition authorities and national courts to apply EC competition law cumulatively—even ex officio—only when they apply their national competition law to conduct falling under Articles 81 and 82 EC. The ultimate aim of this provision is to ensure the supremacy of EC competition law, and not to regulate the procedural conditions for the application of that law by national courts. Thus, the van Schijndel principles continue to be relevant 522 if a national court is not applying its national competition law. In this case, if national procedural law allows, the national court in question would be under a Community law duty to raise EC competition law ex officio. In addition, it is possible that national competition rules may not be considered public policy rules,523 unlike the Community competition rules. In such a case Article 3 of Regulation 1/2003 would not, by itself, impose a duty on the courts to apply EC competition law if those courts do not have to apply national competition law of their own motion. Yet this may not necessarily be so under the van Schijndel case law, which may lead to the ex officio application of Community competition law. Article 3, however, may provide a solution and fill a gap if the national court applies its national but not EC competition law, and if van Schijndel cannot help, because the national procedural principles (such as the principle of passivity of justice in civil litigation) prescribe a very limited role for the judges in handling the proceedings, and thus do not allow for the ex officio application of EC law. In any event, as we mentioned above, if the van Schijndel principles are supposed to have been rendered obsolete, this is so not because of Article 3 of Regulation 1/2003, but rather as a result of the latest developments of the Court of Justice’s case law in Eco Swiss, Courage and Manfredi, which point to an unqualified duty for national courts to apply the Treaty competition rules ex officio, because of the Community public policy nature of these rules.

(c) Rules of Evidence (i) Inherent and Systemic Difficulties of Proof in Europe One of the most important limitations of litigating antitrust disputes is that litigation follows the adversarial system, unlike administrative authorities who follow the inquisitorial system. This means that civil courts rely on the information provided by the parties and have no means of obtaining access to information held by third parties such as the Commission or administrative authorities have. In addition, competition law disputes are characterised by wide information inequalities and asymmetries between the litigants. Usually most of the inculpatory information will be in the hands of the defendant while the plaintiff will be merely relying on indications. These problems are particularly grave for stand-alone actions. Indeed, many actions fail because the plaintiff cannot have access to information held by the defendant or sometimes by third parties, and because he essentially (ch 2), which seems to consider that Art 3(1) of Reg 1/2003 has changed the legal reality and the ‘the right to apply Community law has become an obligation’. 522 This appears to be the view of the Commission, which restates the van Schijndel principles in para 3 of its new Cooperation Notice, above n 208 (ch 2). 523 As was the case in Eco Swiss with the previous Dutch Competition Act which, according to the Hoge Raad, did not qualify as a matter of public policy (Eco Swiss, above n 55, para 24).

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226 Substantive and Procedural Law Aspects has the unenviable task of proving a competition law infringement in the slightest detail.524 Thus the problem of proof can be a serious obstacle to effective private enforcement.525 This becomes more evident as some national courts may require a high standard of proof in competition cases.526 The situation becomes even more complicated because of the fundamental differences between the common law (in particular the US) and civil law systems. In common law jurisdictions based on “notice pleading”, discovery is much more substantial.527 There, the plaintiff must only give the defendant notice of the nature of his claim, and this will be enough for the former to require the discovery of evidence by the latter. In civil law jurisdictions, on the other hand, civil procedure is based on the system of “fact pleading” (this is also the case in English law), which means that parties must set out in reasonable detail the relevant facts of their case and describe the specific evidence to be offered in support of their allegations. There is of course generally no pre-trial discovery and the most a plaintiff can hope to achieve is to persuade the court to order the production of certain evidence. Of course, unduly restrictive national rules of evidence can always be set aside by Community law if they make the exercise of Community rights practically impossible or excessively difficult.528 There is indeed a long line of case law dealing with this matter in particular in the broad area of repayment by the state of charges levied in breach of Community law. Thus, presumptions or rules of evidence intended to place upon the taxpayer the burden of establishing that the charges unduly paid have not been passed on to other persons or special limitations concerning the form of the evidence to be adduced, such as the exclusion of any kind of evidence other than documentary evidence, have been considered incompatible with Community law.529 The Court of Justice has also held that 524 See eg Efeteio Athens no 1572/2006 (2006) 12 Dikaio Epicheiriseon kai Etairion 760, where the Athens Court of Appeal summarily rejected an action brought against an allegedly dominant company that discriminated against some of its wholesalers because the plaintiff, although arguing that the dominant company charged him and some other wholesalers prices higher by roughly 3%, had not substantiated in a detailed manner the criteria used by the defendant to choose its wholesalers and the qualities of the dominant company’s most-favoured wholesalers. 525 See Wißmann, above n 128, at 132. 526 This is the case in England, where the High Court has suggested that a high degree of probability should be required in Art 81 EC cases. That fell short of the criminal standard, ie proof beyond reasonable doubt, but was certain higher than the civil standard, the balance of probabilities. See Shearson Lehman Hutton Inc v Maclaine Watson & Co Ltd [1989] 3 CMLR 429 (QB); contra Panayiotou (George Michael) et al v Sony Music Entertainment (UK) Limited [1994] ECC 395 (ChD). The CAT has confirmed, however, that the civil standard, ie the balance of probabilities, remains the applicable standard in cases of infringements of the Competition Act (Napp Pharmaceutical Holdings Ltd v DGFT [2002] ECC 177). See also Attheraces Ltd & Anr v The British Horseracing Board & Anr [2005] EWHC 3015 (ChD). In interlocutory proceedings the balance of convenience remains the required test (see Easyjet v British Airways [1998] EuLR 350 (QB)). In Ireland the standard of proof is the balance of probabilities (see Maher, above n 510 (ch 2), at 81). It is noteworthy that the notion of ‘standard of proof ’ is not very developed in some continental jurisditions. Thus, eg, the notion does not exist in Greek procedural law. See further Marinos, ‘The Burden of Proof in Community Competition Law (Article 2 Reg. 1/2003)—Impact on Greek Law’ (2006) 6 Chronika Idiotikou Dikaiou 481, at 483, n 26 (in Greek). 527 See Riley, ‘Beyond Leniency: Enhancing Enforcement in EC Antitrust Law’ (2005) 28 World Competition 377, at 383–4; Stürner, ‘Private Enforcement of Competition Law—Recommendations Flowing from the French Experience’ in Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, 2007), 170 ff. Compare, however, the recent US Supreme Court’s judgment in Bell Atlantic Corp et al v Twombly et al, 550 US __ (2007), where a certain shift towards a fact pleading system can be identified. There, the US Supreme Court held that plaintiffs bringing antitrust conspiracy claims must allege more than that the defendants have engaged in ‘parallel’ conduct and cannot hope that more will turn up in discovery. 528 See generally Pliakos, above n 23, at 204 ff. 529 See eg San Giorgio, above n 40, para 14; Case C–343/96 Dilexport Srl v Amministrazione delle Finanze dello Stato [1999] ECR I–579, para 48.

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The Procedural Law Framework 227 national rules on the burden of proof in Article 82 EC cases cannot render virtually impossible or excessively difficult the exercise of rights conferred by that provision.530 A recent ruling of the Court of Justice in a state aid case that can easily be transposed to competition law adjudication reconfirms that line of case law and actually goes even further. In that case, a French pharmaceutical laboratory specialising in the production of homeopathic medicines which it distributed in France through a system of direct sales or through wholesale distributors had declared for the purpose of taxation its turnover from direct sales to pharmacies but not that achieved through wholesale distributors. The French authorities took the view that this latter turnover also should be counted in calculating the tax, and made an adjustment. The laboratory paid the amount claimed but challenged its legality before the courts, claiming that to exempt the wholesale distributors from the disputed tax was unlawful state aid. A particular issue was that the success of the claim for repayment depended on evidence produced by the claimant that the advantage received by the wholesale distributors exceeded the costs which they bore in discharging the public service obligations imposed on them by the national legislation. According to the referring court, French procedural law allowed the court adjudicating on the substance to order of its own motion all lawful measures of inquiry, but that provision only empowered the national court to act and did not require it to make good any shortcoming in the information held by the claimant. The Court of Justice held that national courts must, in order to respect the principle of effectiveness of Community law, use all procedures available to them under national law, including that of ordering the necessary measures of inquiry, in particular the production by one of the parties or a third party of a particular document.531 The Court was indeed mindful of information asymmetries in this case and duly took into account the fact that the requisite evidence related to data which the claimant would not have. Another issue is that competition law presupposes an extensive degree of market information. This is true of Articles 81(1) and 82 EC, and still more so of Article 81(3) EC. The four conditions of the last provision may be particularly demanding and require a substantial degree of market intelligence. The two positive conditions, ie the improvement of the production or distribution of goods or the promotion of technical or economic progress, and the allowance of a fair share of the resulting benefit to consumers, are particularly difficult to apply and the courts have to rely heavily on the parties for the necessary information and evidence.532 Of course, competition law is not unique in this regard, and other areas of law that pertain to the public interest such as corporate or labour law are routinely adjudicated before civil courts and are also dependent on market information.533

530 GT-Link, above n 142, paras 22–27; Case C–340/99 TNT Traco SpA v Poste Italiane SpA et al [2001] ECR I–4109, para 60. See also Joined Cases C–427/93, C–429/93 and C–436/93 Bristol-Myers Squibb et al v Paranova A/S [1996] ECR I–3457, Opinion of AG Jacobs, paras 102–103; Case C–276/01 Proceedings against Joachim Steffensen [2003] ECR I–3735, paras 62–63. 531 Case C–526/04 Laboratoires Boiron SA v Union de recouvrement des cotisations de sécurité sociale et d’allocations familiales (Urssaf) de Lyon [2006] ECR I–7529, para 55. 532 See Hirsch, above n 149 (ch 2), at 239. 533 See Burrichter, above n 144 (ch 2), at 541. See also Baudenbacher, ‘Judicialization of European Competition Policy’ in Hawk (ed), Annual Proceedings of the Fordham Corporate Law Institute, International Antitrust Law and Policy 2002 (New York, 2003) 361.

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228 Substantive and Procedural Law Aspects (ii) Institutional Responses An institutional approach to that problem would be to introduce specific competition courts whose members would possess the requisite expertise to deal with the relevant disputes.534 Specialisation may entail a certain degree of centralisation, in the sense that only a certain number of national courts may be designated as competent to hear competition law disputes. This is a course that has to a certain extent been taken up in some countries. Thus, in France an Ordonnance of 4 November 2004 allocated competition law-related civil claims to specialised courts of first instance, commercial courts and courts of appeal.535 The list of these courts was recently determined by decree. On 1 January 2006 there were only eight civil courts of first instance with competence to hear French and EC competition law cases, while all appeals are handled by the Paris Court of Appeal. The recent amendments to Spanish competition legislation have also introduced specialist commercial tribunals to hear inter alia competition law-related disputes.536 In Sweden the new Article 33(3) of the Competition Act provides that the Stockholm City Court shall always be competent to decide cases relating to competition law-related damages claims. A certain degree of specialisation is also attained in England, where plaintiffs in Articles 81 and 82 EC cases are required to bring their claims or apply for the transfer of existing claims to the Chancery Division of the High Court.537 It is also noteworthy that the Chancery Division judges have been appointed to the panel of the CAT’s chairmen, so it can be expected that these judges will gain competition law expertise. Such specialised courts must be distinguished from the ‘market courts’ of some Scandinavian countries, which should be seen more as judicial review courts or even as forming part of the competition authorities themselves, and not as specialised civil courts of private enforcement. The case is different with regard to courts which, apart from having judicial review tasks, are also competent to hear civil actions for damages. To our knowledge, the only such example is the CAT in the UK. Specialisation and centralisation may sit oddly with the overall aim of decentralisation538 and bringing competition law closer to the citizen, but it is sometimes seen as a necessary evil in order to ensure quality and consistency of enforcement. The introduction of specialised courts would entail high costs and might give rise to problems of conflicts of competence,539 but it appears to be an appropriate long-term solution. In this regard there is, of course, a certain contradiction between the recent drive for modernisation and private enforcement, if the most effective way to enhance the latter is by centralising courts and competition law-related litigation. Another institutional solution would be to have the Commission fill this gap through the cooperation mechanism of Article 15 of Regulation 1/2003, whereby national courts ask the 534 See Goyder, above n 69 (ch 1), at 575–6; Gröning, above n 355 (ch 2), at 588; Canivet, ‘Concurrence: entre droit et poltique’, Les Annonces de la Seine, 13 June 2002, No 36, 1, at 5. 535 See now Art L420-7 Code de commerce. 536 See further Brokelmann, ‘Enforcement of Articles 81 and 82 EC under Regulation 1/2003: The Case of Spain and Portugal’ (2006) 29 World Competition 535, at 546. 537 See Rule 30.8 CPR, above n 266. 538 On the recent French measures see the criticism by Idot, ‘Nouvel épisode de l’adaptation du droit français au règlement no 1/2003: Convergence confirmée, mais surtout centralisation surprenante!’ [2006–2] Europe 2. 539 For an example of such conflicts of competence, compare the state of affairs in the UK with regard to the right to bring a claim for damages before the CAT and the existing right to bring similar claims before the ordinary courts (ie in the Chancery Division of the High Court of Justice in England and the Court of Session in Scotland). See, in particular, Gray et al, above n 457 (ch 2), at 275–6.

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The Procedural Law Framework 229 Commission for information in its possession or its opinion.540 However, such an option would in essence result in overburdening the Commission and thus in cancelling out the basic stated aim of the recent reforms, to enable the Commission to use its limited resources for pursuing the most flagrant violations of the Treaty competition rules.541 In addition, the cooperation mechanism of Article 15 of the new Regulation has a different rationale from transforming the Commission into an investigator for the benefit of national litigation at the request of national courts.542 Similarly, an unqualified proposal to use the national competition authorities in the above sense should be rejected, although their proximity to civil litigation and the fact that the civil action may be more useful for the public interest at national than at Community level mean that such possibilities of assistance do exist.543 The problems relating to proof of the anti-competitive conduct in question may recede if there is already a Commission or national competition authority decision dealing with the facts of an antitrust infringement. We have already explained in detail that such findings do not produce a positive binding effect on national civil proceedings, and that Article 16(1) of Regulation 1/2003 and Masterfoods merely establish a negative duty not to contradict, and not a positive duty to follow, Commission decisions. In any event, there are already precedents where national courts have treated the findings of the Commission as conclusive evidence. Thus, in Iberian, the English High Court held that if the same parties have disputed an issue before the Commission and have had a reasonable opportunity to challenge the Commission’s decision, they are estopped from pleading that issue anew and contradicting the Commission’s view in the civil proceedings.544 We stress again that such pronouncements were based on the principles of procedural economy and prohibition of abuse of process by parties rather than on a Community law obligation to blindly follow the findings of the Commission. Of course, national law may itself introduce such a binding 540 See above on the possibilities for private litigants to request the disclosure of information held by the Commission in order to facilitate their civil claims before national courts. 541 See also Case T–77/95 Syndicat Français de l’Express International et al v Commission [1997] ECR II–1, para 58, where the CFI upheld the Commission’s decision not to pursue a complaint and accepted that in this case the only reason for the Commission to pursue the matter would be ‘to make it easier for the complainant to prove fault in an action for damages in a national court’. The CFI’s judgment was further reversed in Case C–119/97 P UFEX (ex SFEI) et al v Commission [1999] ECR I–1341, although the ECJ did not refer explicitly to that point made by the CFI. It appears in fact that the CFI is reluctant to see the Commission as having any role in pursuing cases in order to make it easier, by establishing the facts, for private parties to file follow-on claims for damages. Recently, in Sumitomo, above n 71 (ch 1), it annulled a Commission decision adopted against an alleged cartel participant when the infringement had already come to an end and the limitation period referred to in Art 1(1) of Council Reg 2988/1974 had expired. The Court held that the Commission had failed to demonstrate a legitimate interest justifying the adoption of the decision, and rejected the argument that its adoption would facilitate followon damages claims, as the Commission had ‘not given any indication, relating to the particular circumstances of the present case, of legal proceedings undertaken or even capable of being envisaged by third parties injured by the infringements’ (ibid, para 138). However, this ruling does not rule out the existence of a legitimate interest for the Commission to act in order to facilitate private enforcement, when civil actions for damages are either pending or very seriously envisaged, which was not the case here. See in this regard the comment by Barbier de la Serre 5/2006 RLC 69, at 70; Vesterdorf, ‘Reflections on the Role of the Community Courts in the EC System of Competition Law Enforcement Post-modernization’ (2006) 9 Europarättslig Tidskrift 473, at 478–80. 542 See in this sense Kinini, ‘Issues Arising from the System Change in Community Competition Law for National Courts’ (2006) 57 Epitheorisi Emporikou Dikaiou 219, at 227 (in Greek). Compare, however, the interesting reference to the Commission as ‘resource-centre for the national courts’ by former Commissioner Monti, above n 59 (ch 1), at 4. See also Temple Lang, above n 66 (ch 1), at 133, arguing that the Commission may be under an Art 10 EC duty to provide information for national civil proceedings, especially in the case of consumer plaintiffs, when it has already adopted a formal decision (presumably finding illegal behaviour). 543 See eg Canivet, above n 472, at 107. 544 See the English Iberian case, above n 82 (ch 1).

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230 Substantive and Procedural Law Aspects effect, and this is indeed the solution adopted by the new UK and German Competition Acts.545 These rules, which do not establish a general principle of precedence of public over private enforcement, are meant only to provide an incentive for follow-on civil actions for damages when there is already a final Commission or national competition authority infringement decision.546 The Commission views such solutions positively,547 but in our view the Commission would be well advised not to propose secondary Community legislation conferring a positive binding effect on such public enforcement decisions, because in the long run this would create a philosophy of dependence of private on public enforcement, and would lead to the mistaken belief that private antitrust enforcement is just about follow-on actions. Conferring a positive binding effect on infringement decisions of all Member States competition authorities would also be problematic since there are different traditions of administrative authorities and procedures and indeed of degree of judicial review of such decisions. An unqualified duty to consider all such decisions binding on all civil courts within the EU would not make sense. At the same time, to qualify such a duty, thus allowing exceptionally the courts to make distinctions between national competition authorities’ decisions, would be inelegant, to say the least. The Commission could, on the other hand, consider proposing the reversal of the burden of proof in such cases, which would still be an important incentive for plaintiffs, without affecting the current status in the relationship between private and public enforcement. (iii) Other Concrete Procedural Solutions A radical solution to addressing the problem of proof before national courts would be simply to follow the US model and introduce a system of pre-trial discovery, at least with regard to pre-trial oral testimony. Such an option is not realistic, however, in view of the particular features of civil procedure, especially in continental countries where proceedings do not terminate in one trial that has to be prepared in advance. In addition, such an innovation cannot be sector-specific, but would have to apply to the whole of civil procedure.548 The 545

See 1.III.(b) and 3.II.(b).(ix) above. See van Gerven, above n 247, 37, viewing positively these developments. Likewise, in the US s 5(a) of the Clayton Act allows private litigants to rely on a judgment or decree in a preexisting civil or criminal action by the government and use it as prima facie evidence of an antitrust violation. The text of the provision reads as follows: ‘[a] final judgment or decree heretofore or hereafter rendered in any civil or criminal proceeding brought by or on behalf of the United States under the antitrust laws to the effect that a defendant has violated said laws shall be prima facie evidence against such defendant in any action or proceeding brought by any other party against such defendant under said laws as to all matters respecting which said judgment or decree would be an estoppel as between the parties thereto’. 547 Option 8 of the Green Paper, above n 55 (ch 1). It must be noted that the Commission has recently adopted a policy of referring expressly in its press releases to the possibility of victims relying upon its cartel infringement decisions and bringing actions for damages in national courts. See indicatively Commission Press Release IP/06/1527, Competition: Commission Re-adopts Steel Beams Cartel Decision and Fines Arcelor €10 million, 8 Nov 2006: ‘[a]ny person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages, submitting elements of the published decision as evidence that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without these being reduced on account of the Commission fine’. See also Commission MEMO/07/544, above n 101 (ch 1), under the heading ‘What action is open to consumers and companies who feel that they have been victims of such illegal agreements?’. 548 See Basedow, above n 345 (ch 2), at 141 and ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 34. It should be noted here that English law allows for ‘pre-action disclosure applications’ in certain limited circumstances. 546

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The Procedural Law Framework 231 Commission’s Green Paper has recognised the difficulties of introducing pre-trial discovery, and places emphasis on effective case management on the part of the national courts, through the organisation of case management conferences or pre-hearing reviews.549 A possibility examined by the Green Paper is a form of court-ordered discovery based on factpleading, whereby the plaintiff sets out the relevant facts in detail and presents reasonably available evidence in support of his allegations.550 This proposal finds support in the recent Community Directive on the enforcement of intellectual property rights, which provides for a degree of discovery based on fact-pleading by reference to evidence that lies in the control of one of the parties.551 A slightly more advanced proposal is a form of mandatory disclosure of classes of documents by court order.552 Both of these proposals are interesting and may indeed be opted for by the Commission, but the main remaining question is the degree of prima facie persuasiveness of the facts pleaded by the plaintiff in order for the court to proceed to the appropriate disclosure order. Another possible way of remedying information asymmetries, could be to introduce by means of Community legislation a procedural duty on the defendant (in a case where EC competition law is pleaded as sword) to bear the burden of proof of facts that have occurred in his sphere of influence. Thus, if the plaintiff advances prima facie evidence of an anticompetitive practice, it would be for the defendant to prove the lawfulness of the practice in question by providing precise information.553 Reversal of the burden of proof is not unknown in Community law. Indeed, it has been adopted by Community Directives in the area of sex discrimination.554 The recent Directive on the enforcement of intellectual property rights also provides for a presumption of authorship/ownership for the author of a literary or artistic work if his name appears in that work, in the absence of proof to the contrary.555 In the competition field, it is even more interesting that the Commission has increasingly solicited and accepted commitments by private parties, usually in merger cases,556 but also in some Article 81 and 82 EC cases, where one of the commitments essentially refers to a shift in the burden of proof in favour of third parties wishing to challenge certain conduct by the undertaking that has offered the commitment. To give an example, in the German book price-fixing case, an Article 81 EC case, the Commission decided to terminate proceedings and granted negative clearance through a comfort letter,557 after accepting commitments by German booksellers and publishers that guaranteed the freedom of direct 549

Staff Working Paper, above n 55 (ch 1), para 56. Option 1 of the Green Paper, above n 55 (ch 1). 551 Dir 2004/48/EC, above n 16, Art 6(1). See also, in the area of consumer protection, Council Dir 84/450/EEC of 10 Sept 1984 Relating to the Approximation of the Laws, Regulations and Administrative Provisions of the Member States Concerning Misleading Advertising [1984] OJ L250/17 (as subsequently amended by Dir 97/55/EC), Art 6, according to which Member States’ courts must have the power to require the advertiser to furnish evidence as to the accuracy of factual claims in advertising if, taking into account the legitimate interest of the advertiser and any other party to the proceedings, such a requirement appears appropriate on the basis of the circumstances of the particular case. 552 Option 2 of the Green Paper, above n 55 (ch 1). 553 See Basedow, above n 345 (ch 2), at 141–2 and ‘Panel One Discussion: Substantive Remedies’ in Ehlermann and Atanasiu (eds), European Competition Law Annual 2001: Effective Private Enforcement of EC Antitrust Law (Oxford/Portland, 2003) 34. 554 Dir 97/80/EC, above n 11, Art 4. 555 Dir 2004/48/EC, above n 16, Art 5. 556 See eg Commission Dec of 25 Aug 2005 (M.3687—Johnson&Johnson/Guidant), sect F, para 37(vi) of the attached commitments. 557 This took place in 2002, ie long before Art 9 of Reg 1/2003 was applicable. 550

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232 Substantive and Procedural Law Aspects cross-border selling of German books to final consumers in Germany. The commitments also established an exclusive list of conditions under which German booksellers and publishers could exceptionally stop such cross-border sales if they were found to circumvent the book price-fixing agreements. The listed categories of circumvention were to be interpreted restrictively and the burden of proof lay with the booksellers and publishers invoking circumvention.558

(d) Collective and Representative Claims A more pro-active private enforcement of the Treaty competition rules at the national level depends on the possibility for classes of market participants and consumers to pursue their Treaty-based rights collectively. This also serves the efficiency of the judicial system well and avoids costs and the waste of judicial resources. The recent litigation in Italy against the members of a cartel of insurance companies, where individual consumers separately brought hundreds of costly civil actions eventually leading to damages awards of sums close to €20 for each plaintiff, is an example neither of efficient use of judicial resources, nor of deterrence for cartel members.559 The introduction of US-style class actions does not find favour in Europe. US class action lawsuits are usually brought in the federal court560 if the claim arises under federal law (as US antitrust law is), or if any member of the potential plaintiff class and the defendant are from different states. Nationwide plaintiff classes are possible, but such suits must have a commonality of issues across state lines. This may be difficult, as the civil law in the various states has significant differences and thus the set of claims may have to be handled separately in each state or through the device of multi-district litigation (MDL). It is also possible to bring a class action under state law, and in some cases the court may extend its jurisdiction to all the members of the class, including out of state (or even internationally), as the key element is the jurisdiction that the court has over the defendant. In US class actions, one or more persons belonging to a broad class of persons that have been harmed by anti-competitive practices bring an action on behalf of the unidentified class of persons, although the former may not have asked for the permission of those persons individually. An injured party is thus assumed to be included in the class unless he chooses not to be (opt-out). The judgment, however, has res judicata effect for all members of the class, even for those who did not take part in the process, after some formalities are seen to.561 Of particular importance are lawyers’ fees. Class actions are usually coupled with contingency fee arrangements and can lead to substantial sums being awarded to the plaintiff 558 On this case see Nehl and Nuijten, ‘Commission Ends Competition Proceedings Regarding German Book Price Fixing Agreements Following Acceptance of an Undertaking on Cross-border Sales’ [2002–2] EC Competition Policy Newsletter 35, at 36–7. 559 See 3.II.(b).(x) above. 560 Such class actions must meet the requirements of Rule 23 of the US Federal Rules of Civil Procedure. In particular, (a) the class must be so numerous that joinder of all members is impracticable, (b) there are questions of law or fact common to the class, (c) the claims or defences of the representative parties are typical of the claims or defences of the class, and (d) the representative parties will fairly and adequately protect the interests of the class. See Victor and Roberts, ‘Consumer Enforcement of Federal and State Antitrust Laws in the United States’ in Raffaelli (ed), Antitrust between EC Law and National Law, VI Conference (Treviso, 13–14 May 2004) (Brussels/Milan, 2005) 360. 561 See further Ebbing, ‘Class Action, Die Gruppenklage: Ein Vorbild für das deutsche Recht?’ (2004) 103 ZVgl R Wiss 31, at 35 ff.

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The Procedural Law Framework 233 lawyers. Under US law, there are two main formulas for calculating legal fees: (a) one is to rely on a percentage of the sum awarded, in ‘common fund’ cases, and (b) another is to rely on the ‘lodestar’ formula and calculate the number of hours reasonably spent on the case multiplied by an hourly rate, in ‘fee-shifting’ cases.562 Since section 4(a) of the Clayton Act provides for one-way fee shifting in antitrust cases, courts employ the latter formula. In civil settlement cases, which are frequent results of class actions, the above provision does not apply and the first formula can apply, thus leading to fees calculated as a substantial share of the settled damages.563 US class actions, coupled with pre-trial discovery and contingency fees, have indeed led to excesses in the US. They can lead to blackmailing and the extortion of huge sums by class action lawyers from companies that wish to avoid the costs and uncertainties (not least because of the jury trial system) of protracted litigation.564 There is no doubt that such a development in Europe must be avoided at all costs.565 Indeed, the Commission has made clear in its Green Paper that ‘the ultimate objective should be to foster a competition culture, not a litigation culture’.566 This bad precedent, however, should not stand in the way of efforts to encourage collective or representative claims, basically brought by consumers’ unions.567 While there are of course valid questions with regard to the efficiency and legitimacy of consumer group action,568 it remains the case that such collective claims are more appropriate than US-style class actions. Indeed, some commentators consider that national courts are already under a duty based on Article 10 EC to allow such class actions for injunctions or damages by consumers’ organisations.569 Collective claims have also found favour with a recent Opinion of Advocate General Jacobs:

562 See C Lang, ‘Class Actions and the US Antitrust Laws: Prerequisites and Interdependencies of the Implementation of a Procedural Device for the Aggregation of Low-Value Claims’ (2001) 24 World Competition 285, at 289. 563 See ibid. 564 See generally Buxbaum, ‘Private Enforcement of Competition Law in the United States—Of Optimal Deterrence and Social Costs’ in Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, 2007), 48 ff. To give a telling example, as a result of the Microsoft settlement in Minnesota, customers got vouchers worth up to $29 to buy new products, while the class action lawyers cashed $59.4 million. It is also noteworthy that in the Californian class action against Microsoft the plaintiffs’ lawyers were awarded over $100 million in fees. Note, however, that the US Class Action Fairness Act of 2005 aims at curbing some of the excesses associated with class actions. Thus, it shifts many large class-action lawsuits involving parties from state courts that historically have been more receptive to plaintiffs to federal courts. Business groups had lobbied for the legislation, arguing that class-action lawsuits enriched trial lawyers. The Act reduces the likelihood that out-of-state defendants will be subject to excessive verdicts, by reducing settlements that may occur in plaintiff-friendly local venues such as California. It also enacts procedures for the review of coupon settlements, to reduce lawyers’ fees that are deemed excessive relative to the benefits actually passed on to the class members. 565 See, however, C Jones, ‘Private Antitrust in the Global Market: An Essay on “Swimming without getting wet” ’ in Monti, Prinz Nikolaus von und zu Liechtenstein et al (eds), Economic Law and Justice in Times of Globalisation, Festschrift for Carl Baudenbacher (Baden-Baden/Vienna/Berne, 2007), 453, who refers to a very recent study in the US that contradicts the bleak picture of the ‘US excesses’. According to the authors of this study, as cited by Jones, ‘[n]egative assertions about the efficacy of private litigation have been very well publicized. This might be due in part to the powerful economic interests that stand to benefit from a curtailment of private antitrust enforcement and, ultimately, from lax enforcement of the antitrust laws. The benefits of private antitrust litigation, by contrast, tend to be underappreciated. They deserve much more public attention and acknowledgement’. 566 Green Paper, above n 55 (ch 1), para 12. 567 Compare the public statements of Commissioner Kroes on 17 Oct 2005 referring to the desirability of collective claims in antitrust cases. 568 See eg Dayagi-Epstein, above n 265, at 222 ff. 569 See Temple Lang, above n 66 (ch 1), at 133 and above n 431 (ch 2), at 1917.

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234 Substantive and Procedural Law Aspects Collective rights of action are a . . . common feature of modern judicial systems. They are mostly encountered in areas such as consumer protection, labour law, unfair competition law or protection of the environment. The law grants associations or other representative bodies the right to bring cases either in the interest of persons which they represent or in the public interest. This furthers private enforcement of rules adopted in the public interest and supports individual complainants who are often badly equipped to face well organised and financially stronger opponents.570

The Commission’s Green Paper proceeds to make a useful distinction between (a) ‘representative claims’, brought by a representative natural or legal person, such as a consumers’ organisation, on behalf of a group of identified individuals and aimed at protecting the individual rights of those represented, (b) ‘collective claims’, brought on behalf of a group of identified or identifiable individuals and aimed at protecting the interests of those represented, and (c) ‘public interest litigation’, aiming at the benefit of the public at large and resulting in an award to the natural or legal person who brought the action or to those who suffered the damage.571 The choice of an appropriate model for such claims can be influenced by already existing or proposed mechanisms in Community and national law. One of the Community mechanisms is the European small claims procedure, albeit not expressed in terms of collective or representative claims, which aims at simplifying and speeding up litigation concerning small claims and at reducing costs.572 Another, albeit quite specific, example is offered by the new Directive on the enforcement of intellectual property rights, which designates as persons entitled to seek protection under the terms of the Directive intellectual property collective rights-management bodies and professional defence bodies which are regularly recognised as having a right to represent holders of intellectual property rights.573 At the national level,574 the recently amended UK Competition Act provides for claims for damages brought on behalf of consumers by representative groups ‘specified’ by order of the Secretary of State.575 Sweden, on its part, ‘the only country that has dared to implement a group action based on the Americal model’, as some commentators put it,576 has introduced opt-in representative claims while at the same time extending the time limits for the filing of such collective claims from five to 10 years from the time the damage occurred. Italy has also very recently introduced opt-in class action legislation (azioni collettive risarcitorie a tutela dei consumatori), while the only example of a European opt-out system appears to be the Portuguese, but the very recent OFT Recommendations do propose an opt-out

570 Para 48 of AG Jacobs’s Opinion in Case C–195/98 Österreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst v Austria [2004] ECR I–10497. 571 Staff Working Paper, above n 55 (ch 1), para 192. 572 European Parliament and Council Reg 861/2007 of 11 July 2007 Establishing a European Small Claims Procedure [2007] OJ L199/1. This procedure applies to EC competition law infringements too and covers claims for sums not exceeding €2,000 in cross-border cases. See further Kramer, ‘Harmonisation of Procedures in Europe: The Proposal for a European Small Claims Procedure’, 3–4 Int’l Lis (Autunn 2006) 109; Jahn, ‘Das Europäische Verfahren für geringfügige Forderungen’ (2007) 60 NJW 2890 ff. 573 Dir 2004/48/EC, above n 16, Art 4(c),(d). 574 See also Brkan, ‘Procedural Aspects of Private Enforcement of EC Antitrust Law: Heading Toward New Reforms?’ (2005) 28 World Competition 479, at 498–502. 575 See 3.II.(b).(ix) above. 576 Micklitz and Stadler, ‘The Development of Collective Legal Actions in Europe, Especially in German Civil Procedure’ (2006) 17 EBLR 1473, at 1481. Note, however, that the 2002 Swedish Group Proceedings Act is not competition law-specific. See further Staff Working Paper, above n 55 (ch 1), para 196; Pettersson, Carle and Perván Lindeborg, ‘Sweden’ in Cartel Regulation 2007, A Global Competition Review Special Report (London, 2007) 205. So far, it seems that courts have not certified class proceedings in competition law matters.

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The Procedural Law Framework 235 system of representative claims and it remains to be seen whether the UK will follow suit.577 These are all useful examples of how collective or representative claims could be introduced at Community or national level in antitrust-related cases. If the option of representative claims is taken up, an interesting and complicated issue will certainly be whether and how a ‘specified’ or ‘recognised’ body in one Member State will be able bring a claim in another Member State. An interesting highly publicised case is the recent aggregation of claims brought against three French mobile operators (Orange France, SFR and Bouygues Telecom), previously condemned by the French Competition Council for illegal collusive behaviour,578 by the French consumers’ group Association de défense des consommateurs UFC-Que Choisir.579 The association filed not just one action but 12,530 actions for damages, requesting €750,000 (roughly €60 per individual client). The case was publicised in France as a most regrettable consequence of the absence of a collective claim mechanism that would have allowed the consumers’ association to act on behalf of the consumers, rather than spending 10 months putting together the various individual claims and having to use four lorries to carry the documents to court. It was also part of a campaign to offer support to a draft law that was then pending and that would introduce class actions in France, albeit of a more restrictive nature than in the US. The draft law, which was not intended to apply only to competition law-related claims, was welcomed in an Opinion by the French Conseil de la concurrence,580 but was finally postponed because of the reactions it created within the industry.

(e) Costs The existence or absence of rules on costs has significant repercussions for private actions. This is of course a matter of national law, while Community law intervenes only to the extent that the principles of equivalence and effectiveness allow.581 A first issue is that contingency fees, at least in continental Europe, are viewed with hostility because of 577 In Italy, see Disegno di Legge n. 1817 (‘Legge finanziaria 2008’), approved in December 2007. The Portuguese actio popularis itself covers all persons that are concerned by the opt-out class action, unless there is a specific will by each of them to the contrary. For the OFT proposals, see OFT Recommendations, above n 99 (ch 1), s 6. For a positive view on the introduction of opt-out class actions in England inter alia for competition law violations see Mulheron, ‘Justice Enhanced: Framing an Opt-Out Class Action for England’ (2007) 70 MLR 550. For collective claims in the context of German consumer and unfair competition law see E Schaumburg, Die Verbandsklage im Verbraucherschutz- und Wettbewerbsrecht, Ansprüche auf Unterlassung, Widerruf, Beseitigung und Gewinnabschöpfung (Baden-Baden, 2006). See also generally Stadler, ‘Collective Action as an Efficient Means for the Enforcement of European Competition Law’ in Basedow (ed), Private Enforcement of EC Competition Law (Alphen aan den Rijn, 2007), 201 ff. It should also be noted that the Commission has very recently been examining the problems that consumers face in obtaining effective redress in a much broader context. One problem which it has identified is that EU consumers who have small or scattered claims refrain from bringing an individual court action because the cost of bringing the action is likely to outweigh the amount of damages claimed. According to the Commission, collective redress, both judicial and non-judicial, could be a means of addressing this problem. For an overview of these Commission initiatives see http://ec.europa.eu/consumers/redress/collect/ index_en.htm. 578 Conseil de la concurrence, Decision no 06-D-65 of 30 Nov 2005. 579 See also Paulis, ‘Remarks on What Are the Problems with EC Antitrust Damage Actions in Europe: Does the Private Pillar Require Reinforcement?’, Speech delivered at the Joint IBA and European Commission Conference on Cartel Enforcement and Antitrust Damage Actions in Europe (Brussels, 7–9 Mar 2007) 7. 580 Conseil de la concurrence, Avis du 21 septembre 2006 relatif à l’introduction de l’action de groupe en matière de pratiques anticoncurrentielles. The Opinion was drafted in general terms to express broad support for private enforcement, thus strengthening the effectiveness of competition law enforcement. 581 See Case C–472/99 Clean Car Autoservice GmbH v Stadt Wien and Austria [2001] ECR I–9687, paras 27–30.

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236 Substantive and Procedural Law Aspects long-standing beliefs that such arrangements are unethical or contrary to public policy. The US excesses are also an argument usually employed to resist contingency fees. In English law, ‘conditional fee agreements’ are possible, but within certain limits. Under a conditional fee agreement, solicitors and counsel may agree to receive no payment or less than normal payment if the case is lost but normal or higher than normal payment if the case is won. Currently, the percentage increase on the normal fees if the case is won can be no more than 100 per cent. An additional serious disincentive is certainly the ‘loser pays’ principle, which means that the unsuccessful litigant must bear the costs of the whole of the civil action. This rule is considered to be problematic in antitrust-related claims, certainly in the current stage of the meagre development of the latter in Europe. As mentioned above, the US rules provide for strikingly powerful incentives in this regard. Contingency fees are of course allowed and section 4 of the Clayton Act permits successful plaintiffs to recover reasonable attorneys’ fees and costs. A plaintiff is considered to be ‘successful’ and an award of attorneys’ fees is mandatory, whenever any damages are awarded.582 The purpose of awarding attorneys’ fees to prevailing plaintiffs is to help ensure that plaintiffs with meritorious claims will have access to counsel to redress antitrust violations. A successful defendant, however, is not entitled to recover attorneys’ fees. This is known as ‘one-way fee shifting’. There are some interesting legislative developments or initiatives at Community level, notably in the area of legal aid, but these are rather specific and refer either to cross-border disputes583 or to certain aspects of secondary Community law on consumer protection.584 A more systematic approach would therefore be necessary. A distinction could also be made between cost rules for collective claims and cost rules for individual actions. The availability or the introduction of a system of collective claims is likely or would certainly alleviate the problem of costs for the group. More problematic would appear to be the position of individual plaintiffs. The Green Paper has not been bold in this respect and does not propose to introduce a fully-fledged US solution of one-way fee shifting. Instead, it is proposed to give the court the power to grant a ‘cost-protection’ order, protecting the plaintiff from recovery even if he fails to win the case on the merits.585 This aims at providing a safety valve against the proliferation of unmeritorious claims.586 The recent OFT Discussion Paper and Recommendations on Private Actions go a bit further and considers modifying the form of permissible conditional fee arrangements by allowing an uplift of more than 100 per cent, subject to judicial supervision.587 Another idea is to provide for cost-capping, whereby in an appropriate case the court could cap a party’s liability for the other side’s costs.588

582 In addition, a plaintiff seeking injunctive relief under s 16 of the Clayton Act may, if he ‘substantially prevails’, recover attorneys’ fees. 583 See Dir 2002/8/EC on legal aid for citizens involved in cross-border cases, mentioned at n 17 above. 584 See eg Commission Green Paper on the Review of the Consumer Acquis, above n 18, para 4.8.3. 585 Option 27 of the Green Paper, above n 55 (ch 1). 586 See Woods, ‘Remarks on How to Incentivise Claimants to Start an Action, while Focussing the Incentives on Meritorious Litigation’, Speech delivered at the Joint IBA and European Commission Conference on Cartel Enforcement and Antitrust Damage Actions in Europe (Brussels, 7–9 Mar 2007) 7. 587 OFT Discussion Paper, above n 267, para 5.6 ff.; OFT Recommendations, above n 99 (ch 1), paras 8.1–8.10. The percentage increase in excess of 100 per cent could be deducted from the damages recovered, but the court could be given the power to order that it should be paid by the defendant in appropriate cases. 588 OFT Discussion Paper, above n 267, paras 5.10 ff; OFT Recommendations, above n 99 (ch 1), paras 8.11–8.18. See also Collins, above n 37 (ch 1), at 11.

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The Procedural Law Framework 237 Finally, the State may attempt to find specific ways to ensure financial support for collective claims by consumers, possibly through the fines paid to competition authorities. For example, the Italian Budget Act of 2001 (Legge Finanziaria 2001) provides that the amounts paid by companies as fines for antitrust infringments must be used to finance initiatives in favour of consumers, but there is no evidence of that provision ever being put into effect.

(f) Other Procedural Questions Other procedural rules such as rules on time limits and third-party interventions may also be critical for the effectiveness of private antitrust enforcement. Such rules are subject to national law and can give rise to divergences or inconsistencies. The Court of Justice has on numerous occasions in the past dealt with such rules, and has followed an ad hoc approach in determining whether they offend against the Community principles of equivalence and effectiveness. Since these are merely ‘detailed procedural rules’ not affecting the core of the exercise of Community rights,589 the Court follows a more relaxed standard of effectiveness, which former Advocate General van Gerven describes as ‘non-impossibility’.590 This has also been termed a ‘procedural rule of reason’.591 According to this test, which was first pronounced in van Schijndel and Peterbroek,592 ‘each case which raises the question of whether a national procedural provision renders application of Community law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its progress and its special features, viewed as a whole, before the various national instances. In the light of that analysis the basic principles of the domestic judicial system, such as protection of the rights of the defence, the principle of legal certainty and the proper conduct of procedure, must, where appropriate, be taken into consideration.’593 It should be noted that in holding national procedural rules, such as provisions on limitations, compatible with the Community requirement of effectiveness, the Court has in reality compared those rules with equivalent rules in other Member States. Thus, following a sort of ‘majoritarian rule’, it has found limitation periods ‘not excessively short compared with those prescribed in the legal systems of the other Member States’.594 Such a criterion, which necessitates a degree of comparative research of the Member States’ legal systems, forms part of a ‘reasonableness’ test to be applied in such cases.595 In addition, although the van Schijndel and Peterbroeck test may not admit this expressly, the Court, in balancing national procedural rules against the effectiveness of Community law, often attributes a high degree of deference to Community rules of a higher rank in the

589

See Case C–255/04 Commission v France, above n 203, para 40; Manfredi, above n 63, para 62. See 3.I.(c) above. See also Pliakos, above n 23, at 209 ff. 591 See Prechal, ‘Community Law in National Courts: The Lessons from Van Schijndel’ (1998) 35 CMLRev 681, at 690 ff. See also Dougan, above n 19, at 27. 592 Van Schijndel, above n 266 (ch 2), para 19; Peterbroeck, above n 509, para 14. 593 See also Case C–63/01 Samuel Sidney Evans v The Secretary of State for the Environment, Transport and the Regions and The Motor Insurers’ Bureau [2003] ECR I–14447, para 46; Steffensen, above n 530, para 66. 594 Eg Eco Swiss, above n 55, para 45. 595 That such a criterion may, at least implicitly, be decisive, may be adduced from Peterbroek, above n 509, where the Belgian procedural rule in question was extrajudicially described by AG Jacobs as ‘rather restrictive by comparison with equivalent rules in other Member States’. See Jacobs, ‘Enforcing Community Rights and Obligations in National Courts: Striking the Balance’ in Lonbay and Biondi (eds), Remedies for Breach of EC Law (Chichester, 1997) 32. 590

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238 Substantive and Procedural Law Aspects constitutional scheme of the Treaty, such as the competition rules.596 Both in Eco Swiss and Courage there were emphatic references to Article 3(1)(g) EC, which elevates Article 81 EC to a fundamental provision, ‘which is essential for the tasks entrusted to the Community and, in particular, for the functioning of the internal market’.597 This means that the Community law requirement of effectiveness may be much more demanding when national procedural rules create obstacles to the effectiveness and efficiency of private antitrust enforcement. With regard to limitation periods for bringing actions for damages for violation of the Community competition rules, such periods vary considerably between the Member States. Indeed, it cannot be ruled out that a very short limitation period may offend against the principle of effectiveness and make the exercise of the Community right in damages excessively difficult. Such cases could be dealt with on an ad hoc basis by the national courts under the possible guidance of the Court of Justice. More important than the period itself, however, is its starting point.598 This specific question was among the many issues dealt with by the Court of Justice in Manfredi. The Court held that ‘a national rule under which the limitation period begins to run from the day on which the agreement or concerted practice was adopted could make it practically impossible to exercise the right to seek compensation for the harm caused by that prohibited agreement or practice, particularly if that national rule also imposes a short limitation period which is not capable of being suspended’.599 According to the Court, where there are continuous or repeated infringements, such a limitation period may expire even before the infringement is brought to an end, in which case it would be impossible for any individual who has suffered harm after the expiry of the limitation period to bring an action. The Commission Green Paper has identified this particular problem and goes even further by including an option to suspend the limitation periods from the moment proceedings are instituted by the Commission or national competition authorities.600 Such a rule would greatly facilitate follow-on civil claims for damages. There are indeed many examples of claims brought following a public enforcement decision that have failed because they were time-barred pursuant to national rules on prescription periods.601

596 See de Búrca, ‘Differentiation within the Core: The Case of the Common Market’ in de Búrca and Scott (eds), Constitutional Change in the EU, From Uniformity to Flexibility (Oxford/Portland, 2000) 149. 597 Eco Swiss, above n 55, para 36; Courage, above n 53 (ch 1), para 20. 598 See Staff Working Paper, above n 55 (ch 1), para 261 ff. The Green Paper has not included an option to harmonise limitation periods, but deals only with the question of their starting point. This means that time limits are most likely to continue being subject to national law in the foreseeable future. 599 Manfredi, above n 63, para 78. 600 Option 36 of the Green Paper, above n 55 (ch 1). Compare also s 33(5) of the German Competition Act, as recently amended, which provides that the initiation of public proceedings automatically suspends the running of prescription for private claims. It is noteworthy that under US law a plaintiff must commence proceedings within 4 years after the cause of action accrued, but if any civil or criminal proceedings are instituted by the US government, the running of the statute of limitations is suspended during the pendency of that proceeding and for one year thereafter. See ss 4B and 5(i) Clayton Act. 601 See eg Rechtbank Rotterdam, 7 Mar 2007, LJN: BA0926.

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Private International Law Aspects 239

IV. PRIVATE INTERNATIONAL LAW ASPECTS

(a) Applicable Law In most cases EC civil antitrust litigation in Europe will not be purely national. For Community competition law to apply, there must be an effect on trade between Member States, which means that there is usually a transnational element602 and thus issues regarding the law applicable to the civil dispute. This is a question to which the 2005 Green Paper of the Commission paid particular attention. However, before addressing the question of the law applicable to a civil claim for damages, injunction or otherwise arising from a Community competition law violation, a few words should be said concerning the applicability of Community competition law in the first place to a particular case with transnational elements. This question is dealt with neither by the Commission in its Green Paper, nor by the commentators who are interested in private enforcement in general. (i) EC Competition Law as Applicable Law In a situation where the law applicable (lex causae) to the specific contractual, tortious or restitutionary legal relationship between the parties is the national law of an EU Member State, there will be no specific problem as to the applicability of Community competition law, since it is an integral part of the Member States’ laws. The issue arises only when the lex causae is the law of a third country, for example Swiss law. In such cases there are two specific mechanisms in private international law which lead to the application of Community competition law to certain conduct. Under the first mechanism, and if the parties to the specific legal relationship have not chosen an applicable law, so that it is necessary to refer to the forum’s conflicts rules, Articles 81 and 82 EC are considered to contain an indirect unilateral conflicts rule which defines the cases that are subject to the Community competition legislation.603 The rule is unilateral, because Community law itself demands its application if there is a sufficiently close connection with the territory of the EU:604 this is a characteristic not only of EC competition law, but also of a wide range of Community Directives.605 It is indirect because the relevant provisions do not spell this out expressly; rather, the conclusion is reached by interpreting those specific norms.606 The criterion for application of the EC competition rules is whether the object or effect of 602 Of course, as explained at 2.III.(a).(i) above, Community competition law may also apply to infringements covering the territory of a single Member State. 603 See AS Metallinos, The Prohibition of Collusion of Firms under the Law of the European Economic Community (Athens, 1968) (in Greek) 93 ff; R Schaub, ‘Grundlagen und Entwicklungstendenzen des europäischen Kollisionsrechts’ (2005) 60 JZ 328, at 329–30. 604 On these unilateral rules (einseitige Kollisionsregel) in the context of EU law see Magnus and Mankowski, ‘The Green Paper on a Future Rome I Regulation—On the Road to a Renewed European Private International Law of Contracts’ (2004) 103 ZVgl R Wiss 131, at 133. 605 See eg Council Dir 86/653/EEC of 18 Dec 1986 on the Coordination of the Laws of the Member States Relating to Self-employed Commercial Agents [1986] OJ L382/17. 606 See in that respect Magnus and Mankowski, above n 604, at 139–42, who emphasise the difference between the indirect unilateral conflict of laws rules of pre-1993 Community Dirs and the direct unilateral conflict of laws rules of post-1993 Community Dirs. The judgment of the ECJ in Case C–381/98 Ingmar GB Ltd v Eaton Leonard Technologies Inc [2000] ECR I–9305, should be seen in the former framework. See further C von Bar and P Mankowski, Internationales Privatrecht, Vol. I, Allgemeine Lehren (Munich, 2003) 271.

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240 Substantive and Procedural Law Aspects a certain agreement, practice or behaviour is to prevent, restrict or distort competition in the common market in a causal and appreciable way. Such an effect constitutes a sufficiently ‘close link’ with the EU Member States to justify the application of the EC competition rules.607 It should be stressed that the crucial criterion as far as private international law is concerned is not the actual or potential effect on trade between Member States, which is only a jurisdictional rule defining the applicability of EC or national competition law.608 In other words, the ‘connecting link’ (facteur de rattachement) between the foreign conduct and EU law is the anticompetitive effect on EU territory and not the fact that inter-state trade is affected, though the latter inherent condition must always be fulfilled for EC competition law to apply.609 In the past it has been doubted whether the conflict of laws rule of Article 81 EC in particular covers agreements or practices that merely have the object of restricting competition.610 According to that view, Community competition law can only claim to apply when there is an actual restrictive effect on competition in the common market. However, the view must be refuted, as the fundamental public interest expressed in Article 81 EC is violated in the case of both anti-competitive object and anti-competitive effect. The critical question for the application of EC competition law, therefore, is whether it is foreseeable or granted that certain anti-competitive conduct has an immediate and substantial effect in the Community.611 If it does, then EC competition law unilaterally asserts its application. Such a conflicts rule exists in most national competition laws, which also use as a connecting link (facteur de rattachement) the impact of the anti-competitive conduct in their market.612 German competition law offers an example in section 130(2) GWB, which pro607 In the context of Art 6(2) of Dir 93/13/EEC, above n 9, on unfair terms in consumer contracts, which establishes a unilateral conflict of laws rule, the ECJ has interpreted the requirement of a ‘close connection with the territory of the Member States’ widely. According to the Court, ‘that general expression seeks to make it possible to take account of various ties depending on the circumstances of the case’. See Case C–70/03 Commission v Spain [2004] ECR I–7999, para 32. 608 See Atlantic Container, above n 181, where the CFI distinguishes clearly the object and effect of the concertation to restrict competition within the common market as a criterion of Community jurisdiction in the international law sense (para 72) from the inter-state trade effect which, according to the Court, ‘is intended to define the scope of Community law in contrast to that of the laws of the Member States’ (para 80). Compare also the distinction made in para 16 of the Notice on the effect on trade between Member States: ‘[i]t is not necessary, for the purposes of establishing Community law jurisdiction, to establish a link between the alleged restriction of competition and the capacity of the agreement to affect trade between Member States. Non-restrictive agreements may also affect trade between Member States. For example, selective distribution agreements based on purely qualitative selection criteria justified by the nature of the products, which are not restrictive of competition within the meaning of Article 81(1), may nevertheless affect trade between Member States.’ 609 Compare Schwartz and Basedow, ‘Restrictions on Competition’ in Lipstein (ed), International Encyclopedia of Comparative Law, Vol. III, Private International Law, Ch. 35 (Tübingen/Dordrecht/Boston/Lancaster, 1995) 54–5, speaking of the ‘outer boundaries’ of EC competition law, when referring to the anti-competitive effect within the common market. 610 See E Homburger and H Jenny, Internationalrechtliche Aspekte des EWG-Wettbewerbsrechts (Berne, 1966) 75 ff. These authors also argued that there should be an actual effect on inter-state trade, as opposed to a merely potential one. 611 See the European Courts’ case law with regard to the so-called ‘extraterritorial application’ of EC competition law, in particular Gencor, above n 78 (ch 2), para 90, which proved more ‘daring’ in asserting jurisdiction over foreign conduct than its ECJ predecessors that followed the ‘economic entity’ and ‘place of implementation’ theories. See Case 48/69 Imperial Chemical Industries Ltd v Commission (Dyestuffs), [1972] ECR 619, and Joined Cases 89/85, 104/85, 114/85, 116/85 to 117/85 and 125/85 to 129/85 A Ahlström Osakeyhtiö et al v Commission (Woodpulp I) [1988] ECR 5193, respectively. In any event, it is now fair to say that the EU follows a pure effects doctrine. 612 See, in the context of Greek competition law (Art 32 L 703/1977) Liakopoulos, ‘The Question of Private International Law in the Control of Concentrations’ in The Control of Concentrations of Undertakings in Competition Law (Athens, 1998) (in Greek) 38–9.

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Private International Law Aspects 241 vides that the German competition law provisions apply if there are effects in German territory.613 In fact, such rules may exceptionally be universal or bilateral as well as unilateral. In such cases the national conflicts rule refers to the applicability not only of domestic competition law, but also of the competition laws of third countries. Swiss law follows this approach. Article 137 of the Swiss Act on Private International Law lays down that when anticompetitive conduct affects or refers to a specific foreign market, the competition rules of that jurisdiction should be applicable to that conduct with regard to related tortious claims.614 There is, however, a second mechanism whereby the Treaty competition rules will be applicable. Antitrust measures, as pertaining to the public policy of the forum, are considered to fall under the category of mandatory norms (lois d’application immédiate), in the sense that they are applicable notwithstanding the lex causae and irrespective of whether the parties have chosen a certain applicable law.615 Mandatory rules usually aim to protect the general political, social, economic or cultural interests of a specific country.616 Rules protecting free competition are generally accepted to constitute such mandatory norms, irrespective of their Community or national provenance.617 Indeed, private parties cannot set the antitrust rules aside or exclude their applicability. First, internally, in an intra-EU context, the Treaty competition rules constitute mandatory public law provisions618 aimiing primarily at safeguarding the public interest and thus restricting freedom of contract (ius cogens, dispositions impératives, zwingende Bestimmungen). The Court of First Instance has stressed that ‘the public policy nature of competition law is specifically designed to render its provisions mandatory and to prohibit traders from circumventing them in their agreements’.619 As a result, private parties in an intra-EU context 613 For a jurisprudential example see LG Düsseldorf, 31 July 2002, 12 O 415/98, Lüneburger Quick-Service (2003) 53 WuW 71. 614 See further M-A Renold, Les conflits de lois en droit antitrust, Contribution à l’étude de l’application internationale du droit économique (Zurich, 1991) 193 ff; Esseiva, ‘L’application du droit européen des cartels par le juge civil sur la base de l’article 137 LDIP’ [1996] Aktuelle Juristische Praxis/Pratique Juridique Actuelle 694, at 696 ff. For a critique of the universal bilateral method see Idot, ‘Les conflits de lois en droit de la concurrence’ (1995) 122 JDI (Clunet) 321, at 325–7; Schwartz and Basedow, above n 609, at 118 ff; Hellner, ‘Private International Enforcement of Competition Law: The Application of Foreign Competition Law’ (2002) 4 YPIL 257, at 293. 615 Note that the public polcy exception in the context of conflict of laws, to be found in Art 16 of the Rome Convention, is a methodologically different instrument of negative rather than positive function from mandatory norms, though the two concepts broadly refer to the same interests that are deemed fundamental. In other words, the public policy exception merely safeguards that a certain provision of the specified law does not lead to consequences contrary to the public policy (ordre public) of the forum. It does not, however, lead to the positive application of the forum’s mandatory norms. This result is attained only through the compulsory application of these rules through their being considered as internationally mandatory norms (lois d’application immédiate). 616 See von Bar and Mankowski, above n 606, at 262 ff. Compare Joined Cases C–369/96 and C–376/96 Criminal Proceedings against Jean-Claude Arblade et al [1999] ECR I–8453, para 30, where the ECJ refers to the notion of internationally mandatory norms in the following terms: ‘[c]oncerning the classification of the provisions at issue as public-order legislation under Belgian law, that term must be understood as applying to national provisions compliance with which has been deemed to be so crucial for the protection of the political, social or economic order in the Member State concerned as to require compliance therewith by all persons present on the national territory of that Member State and all legal relationships within that State’. 617 See von Bar and Mankowski, above n 606, at 256; Idot, ‘Le droit de la concurrence’ in Fuchs, Muir Watt and Pataut (eds), Les conflits de lois et le système juridique communautaire (Paris, 2004) 278. See also the Giuliano/ Lagarde Report on the Convention on the Law Applicable to Contractual Obligations [1980] OJ C282/1, at 28. 618 See eg Schröter, above n 122 (ch 2), at 98, referring to ‘zwingendes öffentliches Recht’. 619 Fiatagri, above n 203 (ch 2), para 39, where it is stressed that ‘Article [81(1)] of the Treaty lays down a fundamental prohibition of agreements which are anti-competitive in character. That provision, adopted as a matter of public policy, is therefore binding on the applicant undertakings’ (emphasis added). See also Case T–128/98 Aéroports de Paris v Commission [2000] ECR II–3929, para 241. It is noteworthy that this general statement seems to attribute a public policy nature to any competition norms, national or Community. Compare now the express provisions of Eco Swiss, above n 55, para 39; Manfredi, above n 63, para 31.

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242 Substantive and Procedural Law Aspects cannot explicitly or implicitly decide that the contract they conclude will not be subject to EC competition law. The application of the prohibitory provisions of Articles 81 and 82 EC is obligatory, automatic, and independent of the parties’ will.620 Secondly, internationally, ie in an extra-EU context, the Treaty competition rules cannot be set aside by the parties’ choice of a foreign law,621 since they are mandatory in the private international law sense (lois de police, lois d’application immédiate, Eingriffsnormen).622 The very existence of a mandatory norm preempts any other applicable law, whether as a result of the parties’ choice or of the operation of the forum’s conflicts rules. It is this second characteristic of the EC competition rules that becomes particularly important in a transnational context. Such mandatory norms are recognised by most legal systems, as well as by the Rome Convention623 and by the recent Rome II Regulation. These mandatory norms may belong to the law of the forum624 or even to that of a third country.625 The Community rules on competition are regarded as mandatory norms of the forum, since EC law is an integral part of the national laws of the EU Member States.626 It is interesting to note that not only the EC competition rules fall under the category of internationally mandatory norms. The Court of Justice in Ingmar decided that Articles 17 to 19 of the Commercial Agents Directive, which specify the circumstances under which a commercial agent is entitled on termination of his contract to an indemnity or compensation for the damage he suffers as a result of the termination of his relations with the principal, are of such a mandatory nature as to preempt the parties’ choice of a foreign, in particular a non-EU Member State’s law.627 Thus, attempting to arrive at some practical conclusions in this highly complicated area, we can make a first differentiation on the basis of whether the forum is an EU Member State, ie when the dispute involving EC competition law arises in one of the national courts of the 27 EU Member States. In such a case a further distinction can be made: if the lex 620 Compare also Commission Dec 2002/759/EC of 5 Dec 2001 (Luxembourg Brewers) [2002] OJ L253/21, para 62. 621 In this case, foreign law means the law of a country that is not an EU Member State, since Community competition law is an integral part of all EU Member States’ laws; therefore the choice of any national law within the EU would not lead to an application of ‘foreign’ law with respect to the Treaty competition rules. 622 See eg Schröter, above n 122 (ch 2), at 99; von Bar and Mankowski, above n 606, at 256. See also para 50 of AG Darmon’s Opinion in Woodpulp (I), above n 611. 623 1980 Rome Convention on the Law Applicable to Contractual Obligations, Consolidated Version [2005] OJ C334/1. The Commission has recently proposed the comunitarisation of the Convention through a regulation. See Commission Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Contractual Obligations (‘Rome I’), COM(2005)650 final. 624 Art 7(2) of the Rome Convention and Art 16 of the Rome II Reg (Reg 864/2007), above n 447. 625 Art 7(1) of the Rome Convention. This is a rather exceptional provision in that it departs from the classical approach of the territoriality of mandatory norms and proceeds instead on the existence of a specific link between the third country and the legal relationship in question. 5 contracting parties have opted out of that provision: Germany, Ireland, Luxembourg, Portugal and the UK. The opt-out possibility is given by Art 22(1)(a) of the Convention. 626 National competition rules could nevertheless be taken into account under Art 7(1) of the Rome Convention. It has been argued that Community law may indeed impose a duty upon Member States to be more deferential towards other EU Member States’ mandatory norms than towards the mandatory laws of a third country. See on this question von Bar and Mankowski, above n 606, at 282–3. 627 Cited at n 606 above. The Ingmar ruling probably represents a rather excessive and unilateralist attitude on the part of the ECJ. The Court, perhaps accustomed always to defend Community law vis-à-vis national law in preliminary reference proceedings, was unfortunately carried away and adopted a solution that is not in conformity with the internationally more multilateralist attitude of private international law. The criterion used to attribute a mandatory nature to the Commercial Agents Dir is far too broad and would mean that all secondary legislation adopted to pursue the aims of the European Community Treaty would also be mandatory. See the criticism in Jobard-Bachellier, ‘L’acquis communautaire du droit international privé des conflits de lois’ in Bergé and Niboyet (eds), La réception du droit communautaire en droit privé des Etats membres (Brussels, 2003) 202–4.

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Private International Law Aspects 243 causae is one of the laws of the EU Member States, there is no problem and EC competition law is fully applicable, since it is an integral part of these national laws; on the other hand, if the lex causae is the law of a third country, the forum court will again apply the EC competition rules, either following a unilateral conflicts rule approach or considering the Treaty competition rules as mandatory norms of the forum. The observations about the duty of national courts to raise EC competition law ex officio are valid here too. Going back to the basic differentiation, the case becomes more problematic if the forum is a third country, ie not an EU Member State, or if a dispute is submitted to international commercial arbitration, which has no forum and thus no lex fori.628 Again, a distinction has to be made here as to whether the lex causae is the law of an EU Member State or of a third country. In the first case, it is accepted that the foreign court or the international arbitral tribunal would have to apply EC competition law, for the reason explained in the preceding paragraph.629 however, if the lex causae is the law of a third country, the foreign court is not under any duty to apply EC competition law, unless the forum in question exceptionally possesses a universal bilateral conflicts rule applicable to competition law, or its conflict of laws rules allow foreign mandatory norms to be taken into account under certain exceptional conditions. Switzerland is a country where this is possible. First, Article 137 of the Swiss Act on Private International Law has introduced a general and universal connecting factor for competition law-related torts; secondly, Article 19 allows Swiss courts to ‘take into account’ foreign mandatory norms if the interests of one party advocate this, and if there is a close connection between the facts of the case and the specific legal system to which the mandatory norms belong.630 (ii) Law Applicable to the Civil Claim—Intra-EU Context If Community competition law is applicable to conduct affecting EU territory, that leaves the question of which law will be applicable to the civil claims deriving from EC competition law violations. This issue is distinct from the earlier discussion of the applicability of the substantive EC competition provisions themselves. In other words, the question here is which law will apply to contractual, tortious or restitutionary claims and, particularly, under which law questions pertaining to civil liability for damages are to be decided.631 The author advocates that Community law itself provides directly for the constitutive conditions of individual civil liability for EC competition law violations, while the national 628 See inter alia Idot, above n 101 (ch 2), at 313. The question of the application of EC competition law by arbitrators falls outside the scope of this book. 629 This is not without controversy, however, since some commentators doubt whether rules of the lex causae that are of a public law nature can be included as such in the applicable law. See further Schwartz and Basedow, above n 609, at 115 ff and the bibliography cited in n 670. See also eg BGH, 27 Feb 2003 (2003) 56 NJW 2020, where the German Supreme Court held that the conflicts rules refer only to the private law and not also to the public law elements of the lex causae. Compare, however, Art 13 of the Swiss Act on Private International Law, which provides that ‘the reference of this law to a foreign law includes all provisions that under this law are applicable to the situation’ and that ‘the applicability of a provision of foreign law is not excluded simply because it is characterised as a rule of public law’. See generally on this problem Hellner, above n 614, at 264 ff. 630 See also Art 7(1) of the Rome Convention, although its relevance to the situation here is purely theoretical, since if the Rome Convention were applicable, the forum court would have been a court within the EU and the application of EC competition law therefore mandatory pursuant to Art 7(2). In our view, the only exception where Art 7(1) of the Rome Convention would be relevant here is a hypothetical situation where the foreign forum’s conflicts rules allow for renvoi. 631 We refer here mainly to damages claims, but our observations are also valid mutatis mutandis for claims for injunctive, restitutory and declaratory relief.

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244 Substantive and Procedural Law Aspects laws (of the EU Member States) deal with the executive and procedural conditions of such liability.632 Mutatis mutandis, the same approach is advocated for civil claims for injunctions and restitution, while it is also clear that the nullity sanction of Article 81(2) EC is a Community concept. Taking as our model the civil claim in damages, this approach means that in the intra-EU context, with regard to the fundamental and constitutive conditions of individual civil liability, it will not matter whether the applicable law is French, German or Latvian, or that of any other EU Member State, since Community law, thus including the Community law principle of individual civil liability, will be an integral part of that law.633 This is a good example of the function of Community law, the continuous development of which gradually eliminates the function of private international law. If the Community were to adopt common or harmonised rules on damages liability for EC competition law violations, obviously such Community rules would render the identification of the applicable law meaningless in an intra-EU context. At the current stage of development of Community law, post-Courage and Manfredi, the identification of the applicable law will be important only for the executive and procedural conditions of that claim. In other words, pursuant to Courage and Manfredi, Community law itself states uniformly within the EU that the right in damages is open to any individual as long as there is (a) harm, (b) a competition law violation, and (c) a causal relationship between that harm and that violation. There is thus a broad Community rule of standing and a Community rule that in principle liability is strict. On the other hand, specific questions pertaining to the causal relationship between the harm and the antitrust violation and the availability of punitive damages (executive conditions), and questions on limitation of actions (procedural conditions) are subject to national law, and the solution may vary according to the applicable national law. Community law, through the principles of equivalence and effectiveness, intervenes on some occasions, but it remains true that the identity of the applicable law is an important issue affecting the final outcome of a civil antitrust action in Europe. Recourse to national provisions of private international law or to international conventions or secondary Community law, to the extent that such instruments exist, will be necessary to identify that law. For tortious claims, most legal systems adhere to the principle of lex loci delicti. This is the general conflicts rule, but it is not particularly convenient for competition law-related tort cases because they usually have a transnational element, and the place where the damage occurred may be different from the territory where the anti-competitive behaviour had its effects on competition. Some countries therefore prefer an effects-based approach, whereby the law applicable to civil claims derived from competition law infringements is the law of the country in whose territory there are anti-competitive effects.634 This is, for example, the German approach: section 130(2) GWB applies not only to the substantive provisions of the German Competition Act, but also to German civil law, which is considered applicable to civil claims based on that law.635 The recent amendment of the Competition Act which extends the 632

See 3.I.(c) and 3.II.(b).(iv) ff above. See in this direction, though not completely sharing the view that Community law itself defines the conditions of damages liability, Idot, above n 617, at 278. 634 See Ashton and Vollrath, ‘Choice of Court and Applicable Law in Tortious Actions for Breach of Community Competition Law’ (2006) 4 ZWeR 1, at 15 ff. 635 See eg M Martinek, Das internationale Kartellprivatrecht (Heidelberg, 1987) 13 ff. 633

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Private International Law Aspects 245 scope of damages liability to violations of EC competition law means that section 130(2) GWB defines German law as also applicable for violations of Community competition law producing effects in German territory.636 However, the situation will change radically from 11 January 2009, when the new Rome II Regulation on the law applicable to non-contractual obligations, which ‘communitarises’ this area, starts to apply.637 The new Regulation, which does not apply to Denmark, includes a revolutionary specific, direct and unilateral conflicts rule (Sonderanknüpfung), Article 6(3), which applies to non-contractual claims arising from restrictions of competition. According to Article 6(3)(a), ‘the law applicable to a non-contractual obligation arising out of a restriction of competition shall be the law of the country where the market is, or is likely to be, affected’. The real revolutionary provision is Article 6(3)(b), which provides: When the market is, or is likely to be, affected in more than one country, the person seeking compensation for damage who sues in the court of the domicile of the defendant, may instead choose to base his or her claim on the law of the court seised, provided that the market in that Member State is amongst those directly and substantially affected by the restriction of competition out of which the non-contractual obligation on which the claim is based arises; where the claimant sues, in accordance with the applicable rules on jurisdiction, more than one defendant in that court, he or she can only choose to base his or her claim on the law of that court if the restriction of competition on which the claim against each of these defendants relies directly and substantially affects also the market in the Member State of that court

According to Recital 22, ‘the non-contractual obligations arising out of restrictions of competition in Article 6(3) should cover infringements of both national and Community competition law’.638 Finally, it is interesting to note that according to Article 6(4) of the new Regulation, ‘the law applicable under this Article may not be derogated from by an agreement pursuant to Article 14’; in other words, the parties cannot decide to submit a dispute to the law of their choice.639 The new Regulation has the benefit of simplicity and certainly appears to be plaintifffriendly. First, the effects-based conflicts rule of Article 6(3)(a) is greatly preferable to the general rule of Article 4(1), which refers to the ‘law of the country in which the damage occurs’. This rule has been criticised as being unclear for competition law cases. Indeed, this was perceived as a serious gap in the original Commission proposal, which did not include a specific conflicts rule for competition law claims.640 In particular, it was persuasively argued that the damage itself cannot be confused with the anti-competitive effects on a specific market. While the two usually coincide locally, there are cases where there is an anti-competitive effect in one country, but an individual suffers harm in a different one. 636

See Ashton and Vollrath, above n 634, at 17. Art 32 of Reg 864/2007, above n 447. According to Art 31, ‘this Regulation shall apply to events giving rise to damage which occur after its entry into force’. 638 Rec 23 of the new Reg further clarifies that ‘for the purposes of this Regulation, the concept of restriction of competition should cover prohibitions on agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition within a Member State or within the internal market, as well as prohibitions on the abuse of a dominant position within a Member State or within the internal market, where such agreements, decisions, concerted practices or abuses are prohibited by Articles 81 and 82 of the Treaty or by the law of a Member State’. 639 This can happen either after the dispute has arisen or even before, but only if both parties are pursuing a commercial activity (B2B). See also Art 14(2). 640 See eg Zimmer and Leopold, ‘Private Durchsetzung des Kartellrechts und der Vorschlag zur “Rom II-VO” ’ (2005) 16 EWS 149, at 150 ff. 637

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246 Substantive and Procedural Law Aspects According to this line of argument, the public interest inherent in the competition rules, the aim of which is to safeguard effective competition in a specific market, means that the law the competition rules of which were violated, and not the victim’s law, should govern the related civil claims.641 The new solution adopted by the Rome II Regulation was clearly the preference of the 2005 Green Paper, which states that ‘an effects-based test would link the civil remedy (damage claim) to the market affected by the conduct on which the remedy/claim is based’. According to the Commission, this would be ‘in line with general competition policy’.642 Moreover, the option to allow the plaintiff to claim damages for the whole of his harm and have the choice of law in cases where the markets of more than one state are affected and, in particular, the choice of lex fori, is again a clear preference of the Commission’s 2005 Green Paper, and will definitely facilitate the bringing of private claims.643 A final observation to be made here is that, in the present author’s view, the Rome II Regulation has not introduced a universal bilateral conflicts rule which would also apply for tortious claims that arise from violations of the competition laws of third countries (non-EU Member States). This is clear from the overall text, and in particular from Article 6(3)(b), which uses the terminology ‘the market in the Member State’, and from Recitals 22 and 23 of the Regulation, which refer only to Community competition law and to the competition laws of the Member States. In other words, the Regulation has followed the more established policy of introducing a unilateral conflicts rule and has stayed clear of the Swiss example. Finally, one must not ignore here, as the Commission has done in its Green Paper on damages actions, that private antitrust claims may not be tortious in the private international law sense, in which case the 1980 Rome Convention on the law applicable to contractual obligations may also come into play. Within the EU, the Rome Convention determines the law applicable to claims that are contractual in nature. This is primarily the case of claims between co-contractors or claims that a contract is anti-competitive and therefore null and void. The Convention recognises freedom of choice of the applicable law as the basic principle.644 It can indeed be assumed that international commercial contracts will quite often include choice-of-law clauses. In the absence of such choice, Article 4(1) of the Convention provides that the contract shall be governed by the law of the country most closely connected with it. This is further determined by reference to the ‘characteristic performance’ presumption, under which it is presumed ‘that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporate, its central administration’.645 The Convention also includes protective rules for weaker parties: of interest is the rule that governs consumer contracts and protects the consumer against a disadvantageous choice-of-law clause by stipulating that the consumer cannot be deprived of the protection afforded to him by the domestically mandatory rules 641

See eg Idot, above n 614, at 331. See Commission Staff Working Paper, above n 55 (ch 1), Option 32 and para 245 ff. 643 Ibid, Option 34. 644 Art 3(1) of the Convention. The Convention also recognises dépeçage, ie the possibility to choose different laws as applicable to different parts of one contract. 645 Art 4(2) of the Convention. However, if the contract is entered into in the course of that party’s trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other than the principal place of business, the country in which that other place of business is situated. 642

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Private International Law Aspects 247 of the law of the country of his habitual residence. Then, in the absence of a choice-of-law clause, there is a conflicts rule referring to the law of the consumer’s habitual residence.646 Finally, as far as the nullity of anti-competive agreements is concerned, Article 8(1) of the Rome Convention provides that ‘the existence and validity of a contract, or of any term of a contract, shall be determined by the law which would govern it under this Convention if the contract or term were valid’. In other words, material validity is determined according to the lex causae. The same is true of the consequences of the nullity of the contract.647 (iii) Law Applicable to the Civil Claim—Extra-EU Context It is interesting to address the issue of the law applicable to the civil claims derived from Community law violations in an extra-EU context. By ‘extra-EU context’, we refer to cases which include foreign elements, ie elements referring to a third country, a non-EU Member State. For example, a dispute may be pending before a national court in the EU but there is a query as to whether the law of a third country or that of one of the 27 Member States is the applicable law to the civil law obligation. Alternatively, the dispute may be pending before a non-EU court and the lex fori is that of a third country. In these cases we assume that Articles 81 and 82 EC apply, either as a result of the operation of the unilateral conflicts rules inherent therein, or as internationally mandatory norms. The question here arises only for the law applicable to the civil law aspects of the dispute. a. First Hypothesis: EU Forum First of all, if the forum is an EU Member State and the claim in question is noncontractual, the national court will have to apply the conflicts rules of the forum, in this case the Rome II Regulation and in particular the unilateral conflicts rule of Article 6(3). We therefore see that the situation here would be no different from the case of the intra-EU context described above. We again stress that this conflicts rule cannot be contracted out by the parties to the non-contractual dispute.648 It would therefore not be necessary here to start enquiring whether the Community principle of liability in damages pursuant to Courage and Manfredi or the Community law constitutive conditions of that liability, or even national law provisions that deal with these and other aspects of antitrust-related civil claims, should be considered internationally mandatory norms (lois d’application immédiate) of the forum. Nevertheless, we could perhaps pursue this question a bit further, as although it will be moot once the Rome II Regulation starts to apply, it will remain with regard to civil claims which are not tortious in nature and therefore are not covered by the Rome II Regulation. The question is therefore whether the national court of an EU Member State can designate the law of a third country as the law applicable to civil claims (except for tortious ones) involving a violation of EC competition law (which itself is applicable), or whether the parties can agree on the law of such a third country. The Rome Convention, which would be applicable here if the obligation concerned were contractual in nature, allows the parties to choose the law of their liking, irrespective of whether that law is of an EU Member State or not. For instance, could an English court apply—as it should—Article 81 EC to a contract governed by Swiss 646 647 648

See further Art 5 of the Convention. Art 10(1)(e) of the Convention. Art 6(4) of Reg 864/2007, above n 447.

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248 Substantive and Procedural Law Aspects law and consider it unlawful, but apply Swiss law to questions pertaining to the contract’s nullity?649 As explained above, a foreign (extra-EU) applicable law does not oust the substantive EC competition rules, which in any event are mandatory norms (lois d’application immédiate) of the forum. But is this mandatory nature a characteristic only of the purely substantive provisions of Articles 81 and 82 EC, or does it also cover the private law consequences of the prohibitions? In other words, is the Article 81(2) EC nullity covered, and, if so, what about other civil consequences which may be important for the full effectiveness of Article 81 EC and the practical effect of the prohibition it contains? This problem, which was identified in legal writing very early on,650 does not have an easy solution. We submit that at least the nullity provision of Article 81(2) EC is an internationally mandatory norm, because it forms an integral part of the prohibition of anti-competitive agreements, not so much as a result of its place in the relevant Treaty provision, but rather because the nullity is a necessary corollary to the prohibition enshrined in Article 81(1) EC.651 Since the nullity is a Community law sanction, if Community competition law is applicable in the private international law sense, it would be paradoxical to deprive it of the civil sanction it provides for itself. Thus the result will be that irrespective of the specific lex causae (that of an EU Member State or a third country), the agreement in question will be void.652 The same should be accepted for agreements that are prohibited by Article 82 EC, even though the Treaty is silent on the issue. Again, the argument that there is no equivalent paragraph (2) in Article 82 EC is not decisive. Rather, the nullity is an inextricably connected civil consequence of the substantive law prohibition of Article 82 EC and has also to be viewed in this way in private international law. We submit that the same conclusion ought to be reached regarding the Courage/ Manfredi Community right in damages: it too should be seen as a mandatory norm which would supersede the application of foreign private law. In Ingmar, the provisions of the Commercial Agents Directive which the Court of Justice considered mandatory defined the array of possible remedies that national law may grant commercial agents for the damage they suffer as a result of the termination of their relations with the principal. The point that the Court attributes a mandatory nature to the existence of such remedies should not be missed. The Court relied basically on the fundamental role of these remedies for the attainment of the Directive’s basic objectives, ie ‘to protect, for all commercial agents, freedom of establishment and the operation of undistorted competition in the internal market’.653 This reasoning may be transposed to EC competition law.654 In Courage and Manfredi the Court went to some lengths to 649 Pursuant to Art 8(1) of the Rome Convention, the material validity of a contract is determined by the lex causae. Therefore the normal conflicts rules would point to the application of a third country’s law if that law was chosen by the parties or identified by the court as lex causae. The only possibility of applying Art 81(2) EC would be through the lois d’application immédiate designation (Art 7(2) of the Rome Convention). 650 See eg W van Gerven, Principes du droit des ententes de la Communauté économique européenne (Brussels, 1966) 112. 651 According to Société La Technique Minière, above n 58, at 250, the Art 81(2) EC provision is only interpreted with reference to its purpose in Community law, to ensure compliance with the Treaty. See Hubeau, above n 62, at 102, who stresses the inseparable character of the nullity provision with regard to the other provisions of Art 81 EC. 652 See eg in this sense Lane, above n 67 (ch 2), at 198. Liakopoulos, above n 612, at 40, seems to go in the opposite direction by accepting that all civil consequences of the anti-competitive agreement may be governed by a different law from the mandatorily applicable competition law, most likely by the lex causae. 653 Ingmar, above n 606, paras 23–25. 654 Admittedly, Art 19 of the Commercial Agents Dir, above n 605, confirms the mandatory nature of the relevant provisions on remedies by providing that the parties may not derogate from them to the detriment of the commercial agent before the contract expires. However, the Court adduces only a supplementary argument from

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Private International Law Aspects 249 stress the importance of the right in damages for the effective and efficient enforcement of the Treaty competition rules. Therefore, irrespective of the future application of Article 6(3) of the Rome II Regulation, the existence of such remedies should also be considered a mandatory norm, a certain minimum which the foreign non-EU law cannot oust. Should this conclusion be extended to cover also the non-fundamental, merely ‘executive’ or ‘procedural’ conditions of the damages liability, which would normally be subject to national law in an intra-EU context? Our reply is, probably not. For these aspects the otherwise lex causae of the third country could be applicable. However, the national court of the EU Member State would be under the Community law duty, pursuant to Article 10 EC, to ensure that the effectiveness of Community competition law is safeguarded. This is a direct duty imposed by Community law on all state organs of the Member States, including the national courts, and there is no difference whether the national court applies its own national law or the law of a third country. b. Second Hypothesis: Non-EU Forum If the forum is a foreign non-EU court (or an international arbitral tribunal), a distinction should be made. If the law applicable to the dispute is one of the national laws of the EU, that court or arbitrator will also have to apply Community law, which is an integral part of EU national laws, in the same way as an EU national court. This means that the foreign court or international or foreign arbitration tribunal would naturally have to apply the substantive norms of Articles 81 and 82 EC,655 including the nullity sanction of Article 81(2) EC, as well as the Community principle of damages liability.656 In other words, that foreign court would have to apply these Community law principles as integral parts of the national law that is applicable to the dispute. That national law would also govern the more procedural and technical aspects of the above-mentioned Community-based rights. The important difference from a domestic court, however, is that a foreign court or international arbitrator would not be bound by Community law to respect the requirements of equivalence and effectiveness in its application of that national law, since Article 10 EC naturally does not apply to non-EU courts and arbitrators. If, on the other hand, the applicable law is a non-EU one, the foreign court or arbitral tribunal might apply or take into account the substantive competition rules of Articles 81 and 82 EC, as mandatory norms of a third country with a sufficient link to the facts of the dispute.657 It might even consider the nullity provision of Article 81(2) EC in the same way,658 this provision (Ingmar, above n 606, para 22), as opposed to the more substantive arguments already mentioned. Furthermore, an express no-derogation provision is not a prerequisite for a certain legal rule to be considered a mandatory norm in the sense of private international law. Indeed, the great majority of such mandatory norms have been assigned this nature rather as a result of interpretation and because of their fundamental inherent qualities within a specific legal order. 655 For an example from the arbitral practice see the judgment of 28 Apr 1992 of the Swiss Federal Tribunal in G SA v V SpA, (1992) 118 II ATF 193; [1996] ECC 1, where it was stressed that an arbitral tribunal based in Geneva applying Belgian law had to apply Art 81 EC. 656 To which we should add that the other Community principles on the rights to an injunction and to restitution—accepting their Community law basis—should also be applied by the foreign court or by the international or foreign arbitral tribunal. 657 See 3.IV.(a).(i) above, in particular on the Swiss case. 658 For a Swiss perspective see Rigozzi, L’art. 85 du Traité CE devant le juge civil suisse: Les contrats de distribution à l’égard de l’art. 19 LDIP et la nouvelle loi fédérale sur les cartels, Swiss Papers on European Integration, No 2/96 (Berne/Zurich, 1996) 55. See ibid, at 53, for references to other Swiss commentators who do not share the view that the Art 81(2) EC nullity provision should be so considered.

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250 Substantive and Procedural Law Aspects but in our view it would be extremely unlikely for that body also to consider the Community principle on the right in damages or other Community rules pertaining to the civil claim at issue as mandatory norms. In such a case, if—and sometimes this is a big if—that court or arbitral tribunal were to apply Articles 81 and 82 EC themselves, it would still resolve all other issues according to the lex causae, which could well differ from the national laws in the EU or from the principles established by the Court of Justice in Courage and Manfredi.

(b) Jurisdiction and Enforcement (i) Jurisdiction In a transnational context, a private civil claim for damages or any other civil remedy because of a violation of the EC competition rules must be brought before the appropriate forum, pursuant to the forum’s rules of international jurisdiction. If the forum is a third country outside the EU, the whole question will be dealt with under that country’s applicable procedural rules, unless it is party to a bilateral or international treaty covering jurisdiction in civil and commercial matters. There is currently no universal treaty in force on international jurisdiction. Efforts to produce a global Hague Convention on jurisdiction and enforcement failed, and the 2005 Hague Convention, which covers only choice of forum agreements,659 has not yet entered into force and in any event does not apply to competition (antitrust) law matters.660 At EU level jurisdiction is governed by the Brussels I Regulation,661 which has now communitarised the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by Conventions on the accession of the new Member States to the Convention.662 Private antitrust claims are definitely within the scope of the Brussels I Convention and Regulation, which applies to ‘civil and commercial matters’ but excludes ‘administrative matters’.663 These are, of course, autonomous Community law concepts, independent of the definitions that national legal systems may use.664 The fact that private antitrust claims also have a public interest element or may include punitive elements (when punitive damages are available) does not blur their predominantly civil and commercial nature,665 ‘whatever the nature of the court 659 2005 Hague Convention on Choice of Court Agreements, available at www.hcch.net. No state has yet signed the Convention, which also covers recognition and enforcement of foreign judgments. The Hague Conference on Private International Law is the world organisation for cross-border cooperation in civil and commercial matters. It should be noted that on 3 April 2007 the European Community became a member by depositing its instrument of acceptance of the Statute of the Hague Conference. 660 Art 2(2)(h) of the Convention. For the history and a critique of this exclusion see Radicati di Brozolo, ‘Antitrust Claims: Why Exclude them from the Hague Jurisdiction and Judgments Convention?’ (2004) 25 ECLR 780. 661 Reg 44/2001, above n 647 (ch 2). Not applicable to Denmark. For matters involving Denmark the Brussels Convention remains applicable. 662 [1972] OJ L299/32; [1978] OJ L304/1; [1982] OJ L388/1; [1989] OJ L285/1; [1997] OJ C15/1. For a consolidated text see [1998] OJ C27/1. 663 On the applicability of the Brussels Convention and the Brussels I Regulation to private antitrust claims see Nourissat, ‘Livre vert sur les actions en dommages-intérêts: Questions de droit judiciaire privé européen’ 7/2006 RLC 45, at 46. 664 See Case C–172/91 Volker Sonntag v Hans Waidmann, Elisabeth Waidmann and Stefan Waidmann, [1993] ECR I–1963, para 20, where it is made clear that the Brussels Convention does not apply only to cases where one of the litigants is essentially ‘a public authority which [acts] in the exercise of public powers’. 665 See also 1.II.(a) above.

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Private International Law Aspects 251 or tribunal’666 that decides the case. Thus in our context the Regulation only excludes cases before national competition authorities and public enforcement proceedings, even if the latter take place before ordinary courts and not administrative authorities. Indeed, it can be said that Regulation 44/2001 cannot cover public antitrust enforcement proceedings before courts that have been designated as competition authorities pursuant to Article 35 of Regulation 1/2003. Under the Brussels I Regulation, persons domiciled in a Member State may be sued in that State irrespective of their nationality,667 although the Regulation also provides for a series of alternative bases for jurisdiction which the plaintiff can choose. Thus according to Article 5(1) of the Regulation, in matters relating to contracts an action can be brought in the courts of the place of performance of the contractual obligation in question. The Regulation itself defines that ‘place of performance’. In contracts for the sale of goods, it is the place ‘where, under the contract, the goods were delivered or should have been delivered’, and in contracts for the provision of services the place ‘where, under the contract, the services were provided or should have been provided’. Whether this can be a basis for jurisdiction in the case of antitrust-related civil claims depends on the detailed facts of each case. Certainly a claim that a contract is null and void because it violates Article 81 or 82 EC would be a matter related to contract.668 The same can be said of other civil claims that are wholly connected with a pre-existing contract even if they may not a priori have evident contractual cloth.669 In matters related to tort, Article 5(3) provides that the action can be brought in the courts of the place where the harmful event occurred or may occur. According to the Court of Justice, a ‘matter related to tort’ is an autonomous Community law concept covering all actions which seek to establish a defendant’s liability and are not related to a ‘contract’ within the meaning of Article 5(1).670 The place where the harmful event occurred can be either (a) the place where the event giving rise to the damage occurred or (b) the place where the damage itself occurred, at the choice of the plaintiff.671 While the Court of Justice has since narrowed down this choice somewhat,672 some scope for forum shopping remains. 666

Art 1(1) of Reg 44/2001, above n 647 (ch 2). Art 2 of Reg 44/2001, above n 647 (ch 2). 668 See Poillot-Peruzzetto, ‘Le juge de droit commun, juge de la concurrence: Réalité des obstacles et adéquation des pouvoirs—Présentation générale’ in Idot and Prieto (eds), Les entreprises face au nouveau droit des pratiques anticoncurrentielles: Le Règlement 1/2003 modifie-t-il les stratégies contentieuses? (Brussels, 2006) 109–10. 669 Thus even claims between co-contractors could be matters related to contract. See contra Withers, ‘Jurisdiction and Applicable Law in Antitrust Tort Claims’ (2002) 46 JBL 250, at 260. 670 Case 189/87 Athanasios Kalfelis v Bankhaus Schröder, Münchmeyer, Hengst and Co et al [1988] ECR 5565, para 18. 671 Case 21/76 Handelskwekerij GJ. Bier BV v Mines de potasse d’Alsace SA [1976] ECR 1735, para 19. For a competition case see BGH, 23 Oct 1979, KZR 21/78, BMW-Importe (1980) 30 WuW 191. 672 See Case C–220/88 Dumez France SA and Tracoba SARL v Hessische Landesbank et al [1990] ECR I–49, para 20, emphasis added: ‘[a]lthough . . . the expression “place where the harmful event occurred” contained in Article 5(3) of the Convention may refer to the place where the damage occurred, the latter concept can be understood only as indicating the place where the event giving rise to the damage, and entailing tortious, delictual or quasidelictual liability, directly produced its harmful effects upon the person who is the immediate victim of that event’. Compare also Case C–364/93 Antonio Marinari v Lloyds Bank plc and Zubaidi Trading Company [1995] ECR I–2719, paras 14–15: ‘[t]hat term [“place where the harmful event occurred”] cannot be construed so extensively as to encompass any place where the adverse consequences can be felt of an event which has already caused damage actually arising elsewhere. Consequently, that term cannot be construed as including the place where, as in the present case, the victim claims to have suffered financial damage following upon initial damage arising and suffered by him in another Contracting State’. 667

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252 Substantive and Procedural Law Aspects An interesting ECJ ruling that can be transposed to the context of private antitrust claims is Shevill.673 This case concerned a claim for damages for a libel published in a French newspaper distributed in several Member States and with a small circulation in England. The Court of Justice resolved the conflict of jurisdictions by holding that the plaintiff could bring an action either in the courts of the defendant’s domicile, which have general jurisdiction in respect of all of the harm suffered as a result of the libel, or before the courts of each Member State in which the victim claimed to have suffered injury to his reputation, but those courts would have jurisdiction to rule only on the injury caused in that State to the victim’s reputation.674 This means that in the antitrust context, depending on the offending anti-competitive conduct, the victim will have a choice between (a) the perpetrator’s domicile, under Article 2 of the Regulation which is the general basis for jurisdiction, or (b) the place where the harmful event occurs, which may or may not coincide with the place where the perpetrator is domiciled, or (c) the place or places where the victim suffers direct harm. Of the three options, only the first two entail jurisdiction to rule on the claim for all the harm, while the third will lead to jurisdiction to rule solely in respect of the harm caused locally. All the above provisions are subject to the general and universal principle of the parties’ freedom to select a forum by agreement. This principle is common to most legal systems and is also sanctioned by Article 23(1) of the Brussels I Regulation. Such jurisdiction will be exclusive unless the parties have agreed otherwise. In commercial relationships of a transnational nature, the existence of a choice-of-forum or, indeed, of an arbitration, clause is a near-certainty, so it is likely that a considerable number of antitrust-related civil claims will have to be filed with the specifically-chosen forum or submitted to arbitration.675 The fact that a claim is of a tortious or restitutionary nature will not be decisive if there is a preexisting contractual relationship between the parties including a choice-of-forum clause. This is of course a question of the interpretation of the choice-of-forum clause itself, and the state of affairs may vary according to judicial attitudes. English precedents exemplify the likelihood of divergent interpretations. Thus in Provimi, the English High Court decided that damages claims brought by the direct purchasers of members of the Vitamins cartel, being tortious in nature, were not covered by the French, German and Swiss choice-of-law clauses of the specific contracts. In that case the court applied Swiss and German law respectively to the interpretation of these clauses, and held that they could not cover even tortious claims relating to the contracts in question. The case was decided at an interlocutory stage and was later settled, but the court held that the plaintiffs had ‘by far the better of the argument’, that it was not the underlying intention of the parties ‘that a claim based on excessive prices resulting from a cartel should be within the scope of [the] jurisdiction clause’.676 By contrast, in another case677 the High Court held that an arbitration clause in a contract, by its true construction, covered all potential disputes concerning the performance, non-performance or interpretation of the contract in question, and as such included antitrust claims, even if they were said to be of a tortious nature.

673 674 675 676 677

Case C–68/93 Fiona Shevill et al v Presse Alliance SA [1995] ECR I–415. Ibid, paras 24–30. Arbitration lies outside the scope of this book. Provimi, above n 281, paras 86–87. ET Plus SA & Ors v Welter & Ors [2005] EWHC 2115, para 51 (QB).

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Private International Law Aspects 253 A choice-of-forum clause is less likely to exist in a purely tortious legal relationship where there is no existing contract between the parties. This is the case for indirect purchasers’ or consumers’ claims where, save for the exceptional hypothesis that the litigants agree ex post to submit their dispute to a specific forum, jurisdiction will have to be determined pursuant to the Regulation’s provisions referred to above. Regulation 44/2001 also allows for consolidation of claims. First, under Article 6(1), a person domiciled in a Member State where he is one of a number of co-defendants may also be sued in the courts of the place where any defendant is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments arising from separate proceedings.678 It is not clear whether the term ‘irreconcilable’ should be understood narrowly, as pointing to judgments giving rise to mutually exclusive legal consequences, or broadly, as pointing to conflicting or contradictory judgments where there is no mutual exclusion, but merely a divergence in the outcome of a dispute arising in the same situation of law and fact.679 This is certainly an important possibility, especially in cartel cases. In Provimi the English High Court followed a more permissive approach on jurisdiction than that adopted by the US Supreme Court in Empagran,680 and considered that Article 6(1) of the Brussels I Regulation could also be relied on to establish English jurisdiction for non-UK co-defendants. Secondly, under Article 6(3) a person may also be sued in the court where a claim is pending on a counterclaim arising from the same contract or facts as those on which the original claim was based. This provision will be important for cases involving a co-contracting party making a private antitrust counterclaim for damages against a 678 Note that in Case C–103/05 Reisch Montage AG v Kiesel Baumaschinen Handels GmbH [2006] ECR I–6827, paras 32–33, the ECJ held that Art 6(1) of Reg 44/2001 ‘may be relied on in the context of an action brought in a Member State against a defendant domiciled in that State and a co-defendant domiciled in another Member State even when that action is regarded under a national provision as inadmissible from the time it is brought in relation to the first defendant’, unless it is obvious that the plaintiff makes a claim against a number of defendants ‘for the sole purpose of removing one of them from the jurisdiction of the courts of the Member State in which that defendant is domiciled’. 679 Case C–539/03 Roche Nederland BV et al v Frederick Primus and Milton Goldenberg [2006] ECR I–6535, paras 22–26. 680 This case has a long history. In follow-on private antitrust litigation cases the District of Columbia and the Second Federal Circuits had held that under some conditions foreign plaintiffs could seek treble damages in US courts, even though injured exclusively outside the US: Empagran SA et al v F Hoffmann La Roche, Ltd et al, 315 F 3d 338 (DC Cir 2003); Krugman v Christie’s International plc, 284 F 3d 384 (2d Cir 2002). The main policy argument behind the granting of jurisdiction and standing in these two cases was the need to guarantee efficient deterrence. This was criticised as another example of US antitrust extraterritoriality. It was also viewed negatively in Brussels because it would not leave room for the development of a European system of private enforcement. See eg Palmieri, ‘Tribunale mondiale antitrust a Washington?’, 3–4 Int’lLis (Autunn 2003) 140, at 143–4; van Caenegem, above n 439, 645 ff; Guersent, above n 444 (ch 2), at 56. Other US Circuits had given conflicting judgments. Thus the 5th Circuit in Den Norske Stats Oljeselskap AS v HeereMac vof et al, 241 F 3d 420 (5th Cir 2001) denied US forum access to foreign plaintiffs, the 3rd Circuit in Turicentro SA et al v American Airlines Inc et al, 303 F 3d 293 (3rd Cir 2002) held that they even lacked standing to file the action in the first place, while according to the 7th Circuit in United Phosphorus Ltd et al v Angus Chemical Company et al, 322 F 3d 942 (7th Cir 2003), US courts lacked subject-matter jurisdiction unless the anti-competitive conduct had a direct, substantial and reasonably foreseeable effect on domestic commerce. See on all these cases Hay and Krätzschmar, ‘Neue Unsicherheiten um die extraterritoriale Anwendung US-amerikanischen Antitrust-Rechts’ (2003) 49 RIW 809, at 811–13; Pallek, ‘L’avenir de la coopération Euro-américaine dans le domaine de la concurrence’ (2004) 40 CDE 95, at 103–4. The US Supreme Court eventually resolved this question by finding against US jurisdiction. According to the Supreme Court’s ruling in F Hoffmann La Roche Ltd et al v Empagran SA et al, 542 US 1 (2004), US courts lack jurisdiction over antitrust civil damages claims involving foreign injuries which are not related to domestic injuries arising out of the same anti-competitive act. The critical point is whether the foreign anti-competitive conduct causes independent foreign harm, and whether that foreign harm alone results in the damage to the plaintiff.

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254 Substantive and Procedural Law Aspects Courage-style breach of contract claim, or a defendant making a counterclaim based on the nullity of an anti-competitive contract. The Regulation includes special rules for ‘protective jurisdiction’, ie matters where there is an imbalance of power between the litigants, which aim to protect the weaker party. This applies to insurance, consumer and employment contracts.681 Of relevance to private antitrust enforcement is the exception that governs consumer contracts: consumers themselves can as a rule only be sued in the courts of the State where they are domiciled, but they can sue either in the courts of the defendant’s domicile or those of their own domicile.682 Finally, there are rules on lis pendens. The aim is to avoid concurrent proceedings and thus the risk of inconsistent judgments. Under Article 27 of the Regulation, if proceedings concerning the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised must of its own motion stay its proceedings until the jurisdiction of the court first seised is determined. If the jurisdiction of the court first seised is established, any other court must decline jurisdiction in favour of that court. Under Article 28, when related actions are pending in the courts of more than one Member State, the court seised later may stay proceedings and may further, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction and is able under its own law to consolidate the claims. Actions are deemed to be related where they are ‘so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings’.683 (ii) Enforcement—Full Faith and Credit A judgment delivered by the national court of an EU Member State may have to be recognised or enforced outside the territory of that Member State. If the country of recognition/enforcement is a non-EU country, the whole question will be dealt with under the applicable procedural rules of that country, unless there is a bilateral treaty covering recognition/enforcement of judgments between that country and the EU Member State in which the specific judgment was delivered. There is currently no universal treaty on the recognition and enforcement of foreign judgments in force, and, as we have seen, the 2005 Hague Convention on Choice of Court Agreements, which also deals with jurisdiction and enforcement of foreign judgments, has not yet entered into force, and, in any event, does not apply to competition (antitrust) law matters. If, on the other hand, the country of recognition/enforcement is another EU Member State, this is an issue that has long been governed by common European rules, the Brussels Convention, and has been ‘communitarised’ by Regulation 44/2001, the Brussels I 681

See Arts 3, 4 and 5 of Reg 44/2001, above n 647 (ch 2), respectively. Art 16 of Reg 44/2001, above n 647 (ch 2). Consumers are also protected under Art 17 in that choice-offorum agreements are only valid if entered into after the dispute has arisen, allow the consumer access to further fora besides those specified, or give jurisdiction to the courts of the state in which both parties habitually reside or are domiciled. 683 See also Art 30 of Reg 44/2001, above n 647 (ch 2), which defines when proceedings are pending in another Member State: ‘[a] court shall be deemed to be seised: 1. at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have service effected on the defendant, or 2. if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps he was required to take to have the document lodged with the court.’ 682

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Private International Law Aspects 255 Regulation. The whole rationale of the new Brussels I Regulation is that judgments delivered in civil and commercial matters by a national court of an EU Member State should be easily enforceable within the EU, pursuant to the principles of ‘free movement of judgments’ and ‘full faith and credit’ or ‘mutual trust’.684 The fact that the original Treaty of Rome included a specific provision, Article 220 EEC, currently Article 293 EC, which envisages ‘the simplification of formalities governing the reciprocal recognition and enforcement of judgments’ is proof of that powerful rationale. Indeed, free movement of judgments has been considered instrumental for the accomplishment of the common market. It is also considered to be the cornerstone of the European area of freedom, justice and security.685 It has been termed a federating instrument 686 and generally reflects the ‘federal’ principle of full faith and credit687 and, more specifically, the country of origin principle,688 which applies particularly to the recognition of judicial decisions Union-wide, irrespective of the Member States of origin and enforcement. The Court of Justice has held in particular that the purpose of Article 293(d) EC, on the basis of which the Member States concluded the Brussels Convention, is ‘to facilitate the working of the common market through the adoption of rules of jurisdiction for disputes relating thereto and through the elimination, as far as is possible, of difficulties concerning the recognition and enforcement of judgments in the territory of the Contracting States . . . In fact it is not disputed that the Brussels Convention helps to ensure the smooth working of the internal market.’689 The Court has further recognised that the Brussels Convention is necessarily based on the trust which the Contracting States accord to each other’s legal systems and judicial institutions. It is that mutual trust which has enabled a compulsory system of jurisdiction to be established, which all the courts within the purview of the Convention are required to respect, and as a corollary the waiver by those States of the right to apply their internal rules on recognition and enforcement of foreign judgments in favour of a simplified mechanism for the recognition and enforcement of judgments.690

The full and formal communitarisation of this matter through the Brussels I Regulation has of course strengthened these principles, in particular that of full faith and credit. The new Regulation provides for automatic recognition of a foreign judgment (res judicata) without following any special procedure, unless the judgment is disputed by 684

Compare Rec 16 of Reg 44/2001, above n 647 (ch 2). See Art 65 EC. See also F Rigaux and M Fallon, Droit international privé (Brussels, 2005) 433; Kohler, ‘Das Prinzip der gegenseitigen Anerkennung in Zivilsachen im europäischen Justizraum’ (2005) 124 ZSR/RDS II 263, at 264 ff. 686 See Goldman, ‘Un traité fédérateur: La convention entre les Etats membres de la CEE sur la reconnaissance et l’éxécution des décisions en matière civile et commerciale’ (1971) 7 RTDE 1. 687 See P Biavati, Europa e processo civile, Metodi e prospettive (Turin, 2003) 11; Wittwer, ‘Die EuGHRechtsprechung zum Europäischen Zivilprozessrecht aus den Jahren 2003 und 2004’ (2005) 13 ZEuP 868, at 869. 688 See Bariatti, ‘La futura disciplina delle obbligazioni non contrattuali nel quadro della comunitarizzazione del diritto internazionale privato’ (2005) 41 Riv Dir Int Priv Proc 5, at 15 ff. 689 Case C–281/02 Andrew Owusu v NB Jackson, trading as ‘Villa Holidays Bal-Inn Villas’ et al [2005] ECR I–1383, para 33. See the comment by Idot [2005–5] Europe 29, at 30. 690 Case C–116/02 Erich Gasser GmbH v MISAT Srl [2003] ECR I–14693, para 72. This was a case raising very sensitive issues, since the referring Austrian court implicitly called into question the judicial practices of another Member State (Italy). The particular question was whether Art 21 of the Brussels Convention (lis pendens) applied fully to a case where the duration of proceedings before the courts of the Contracting State in which the court first seised was established was excessively long. The Court’s approach was one of principle. It relied heavily on the internal logic and the objectives of the Brussels Convention in order to exclude any possibility of parallel proceedings in Europe. See further the balanced critique of Fentiman (2005) 42 CMLRev 241. See also Case C–159/02 Gregory Paul Turner v Felix Fareed Ismail Grovit et al [2004] ECR I–3565, para 24. 685

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256 Substantive and Procedural Law Aspects the party against whom enforcement is sought, in which case the competent court of the country of recognition will declare the judgment’s res judicata.691 As to enforcement, while the Regulation continues to provide for the procedure of exequatur, whereby a foreign judgment must still be declared enforceable by the courts of the country of enforcement, it has considerably simplified the whole procedure. Enforcement has become virtually automatic, with the exequatur court making a purely formal scrutiny of the documents produced by the party requesting the foreign judgment’s execution.692 The Regulation makes it clear that if the exequatur court establishes that the documents are in order, it declares the enforceability of the judgment in question without examining whether there are any grounds for non-enforcement. Such grounds can only be pleaded on appeal by the party against whom enforcement is sought.693 This is a marked departure from the Brussels Convention procedure, under which the exequatur court examined the non-recognition grounds at the stage of the declaration of enforceability as well as at the appeal stage. The grounds for non-recognition and non-enforcement remain very narrow. Under Article 34, a foreign judgment will not be recognised and/or enforced: • if such recognition is manifestly contrary to public policy in the Member State in which recognition is sought; • where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or an equivalent document in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant failed to commence proceedings to challenge the judgment when it was possible for him to do so; • if it is irreconcilable with a judgment given in a dispute between the same parties in the Member State in which recognition is sought; • if it is irreconcilable with an earlier judgment given in another Member State or a third State involving the same cause of action and between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in the Member State addressed. These are somewhat exceptional circumstances that are bound to arise very rarely.694 The only cases in which recognition and enforcement may still encounter obstacles concern protective jurisdiction in insurance, consumer contracts and exclusive jurisdiction.695 In all cases the Brussels I Regulation stresses that ‘under no circumstances may a foreign judgment be reviewed as to its substance’. The prohibition of révision au fond is of particular importance in the case of judgments that have applied the EC competition law provisions. Finally, the new ‘communitarised’ instruments that aim to give full effect to the principle of free movement of judgments include a specific procedure for judgments that refer to uncontested claims. Regulation 805/2004 creates a European Enforcement Order for uncontested claims which leads to automatic enforcement in another Member State, dispensing with exequatur. This Regulation is optional in character, and in a cross-border context within the EU the creditor can choose either to use the Brussels I Regulation or to 691

Art 33 of Reg 44/2001, above n 647 (ch 2). See Arts 38, 41, 53 of and 54 and Annex V to Reg 44/2001, above n 647 (ch 2). These documents are a copy of the judgment satisfying the conditions necessary to establish its authenticity and a certificate issued by a competent court in the country of origin. 693 See Arts 41 and 45 of Reg 44/2001, above n 647 (ch 2). 694 See Pocar, ‘Brussels I’ in Council of the European Union (ed), Civil Law, European Judicial Cooperation 2004 (Luxembourg, 2005) 23. 695 Art 35 of Reg 44/2001, above n 647 (ch 2). 692

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Private International Law Aspects 257 apply for the specific judgment to be certified as a European Enforcement Order and thus seek its automatic enforcement throughout the Union.696 This new instrument should not go unnoticed in the competition law area. (iii) Enforcement—Public Policy Violation as ultimum refugium Of the few grounds for non-recognition/non-enforcement of foreign judgments admitted by the Brussels Convention and now the Brussels I Regulation, the most important and interesting in the context of this book is the first one, violation of public policy (ordre public) of the EU Member State where recognition or enforcement is sought. The Court of Justice stressed in Eco Swiss697 that the EC competition rules form part of the public policy (ordre public) of the EU Member States and can thus lead to the non-recognition/ non-enforcement of an offending foreign judgment. The case concerns arbitration and an action for annulment of an arbitral award, but establishes a principle that is also relevant generally for the recognition and enforcement of both foreign arbitral awards and judgments. The Court in Eco Swiss clearly deduced the ordre public character of the competition rules from their fundamental standing in the EC Treaty, in particular Article 3(1)(g) EC. It stressed their fundamental significance ‘for the accomplishment of the tasks entrusted to the Community and, in particular, for the functioning of the internal market’.698 The Court also relied on the absolute nullity of Article 81(2) EC.699 While Eco Swiss clearly stated that the Treaty competition rules pertain to public policy, it left the scope of the public policy exception open. In other words, the Court of Justice did not give a measure of exactly what constitutes a violation of public policy. It is not clear whether, for the Court, any violation or misapplication or ignorance of EC competition law would amount to a public policy violation. In any event, apart from what the Court of Justice thought about this matter, which in the end is only an ad hoc issue with which national courts are better equipped to deal, deciding what constitutes a public policy violation must take various requirements into account. Effectiveness of Community law is one, efficiency of competition law enforcement and deterrence another, but there are also other conflicting interests and principles. Thus the principle of free movement of judgments and the effectiveness of the Brussels Convention and the Brussels I Regulation are also factors that must be taken into account. It should not be overlooked that the communitarisation of the Brussels Convention through the adoption of Regulation 44/2001 has further reduced the scope of the public policy exception by adding an important qualification to the text of Article 27(1) of the Convention. While that provision provides that ‘a judgment shall not be recognised if such recognition is contrary to public policy in the State in which recognition is sought’, Article 34(1) of the new Regulation stresses that the recognition of the foreign judgment must be ‘manifestly’ contrary to the public policy of the forum. This is indicative of the exceptional character of this provision,700 which in the past has apparently led to the non696 See further on this instrument Zilinsky, ‘Abolishing exequatur in the European Union: The European Enforcement Order’ (2006) 53 Neth Int’l LR 471. 697 See the comment by Komninos (2000) 37 CMLRev 459. 698 Eco Swiss, above n 55, paras 36 and 37. 699 Ibid, para 36. 700 See in this regard Tagaras, ‘The Revision of the Brussels Convention by Regulation 44/2001’ (2004) 52 Nomiko Vima 1143, at 1162 (in Greek), who stresses that this amendment of the Brussels Convention text carries only symbolic weight, since in any event the European and national courts had interpreted this exception very restrictively.

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258 Substantive and Procedural Law Aspects recognition/non-enforcement of judgments on only a handful of occasions.701 It is also noteworthy that the Court of Justice, when interpreting the concept of public policy in the context of the 1968 Brussels Convention, has invariably followed a very restrictive interpretation because it has considered free movement of judgments an important principle for European integration. The Court of Justice has consistently stressed in a series of cases that the public policy exception in that provision is meant to operate only in ‘exceptional cases’.702 In a later case than Eco Swiss,703 the Court of Justice had to examine whether a French judgment that allegedly violated Community law could be resisted in Italy and thus be refused recognition on public policy grounds. The case was the latest episode in a long-standing controversy surrounding protective rights in respect of an ornamental design for automobile bodywork parts.704 Renault had sought to enforce in Italy a judgment by a French court ordering the Italian defendants to pay Renault damages for loss incurred as a result of activities found to constitute forgery. The Italian defendants alleged that the exercise of these exclusive rights was contrary to the free movement provisions of the EC Treaty and to Article 82 EC; the judgment of the French court could therefore not be declared enforceable in Italy because it was contrary to public policy. Advocate General Alber in his Opinion705 explicitly stressed that the free movement provisions of the EC Treaty and Article 82 EC pertain to the public policy notion of Article 27(1) of the Brussels Convention, and the Court implicitly accepted this.706 The Court, however, made it clear that a public policy violation was to operate in very exceptional circumstances, and that an alleged violation of fundamental provisions of Community law did not suffice as such. The Court observed:707 Recourse to the clause on public policy in Article 27, point 1, of the Convention can be envisaged only where recognition or enforcement of the judgment delivered in another Contracting State would be at variance to an unacceptable degree with the legal order of the State in which enforcement is sought inasmuch as it infringes a fundamental principle. In order for the prohibition of any review of the foreign judgment as to its substance to be observed, the infringement would have to constitute a manifest breach of a rule of law regarded as essential in the legal order of the State in which enforcement is sought or of a right recognised as being fundamental within that legal order. In this case, what has led the court of the State in which enforcement was sought to question the compatibility of the foreign judgment with public policy in its own State is the possibility that the court of the State of origin erred in applying certain rules of Community law . . . The fact that the alleged error concerns rules of Community law does not alter the conditions for being able to rely on the clause on public policy. It is for the national court to ensure with equal diligence the protection of rights established in national law and rights conferred by Community law. The court of the State in which enforcement is sought cannot, without undermining the aim of the Convention, refuse recognition of a decision emanating from another Contracting State solely on the 701 For a German example see BGH, 16 Sept 1993 (1993) 46 NJW 3269; for a French one see Cass civ, 16 Mar 1999, Pordea v Sté Times Newspapers Ltd (1999) 126 JDI (Clunet) 773; for an English case, see W Maronier v B Larmer [2002] ILPr 39 (CA). 702 Hoffmann v Krieg, above n 643, para 21; Hendrikman and Feyen, above n 643, para 23; Krombach v Bamberski, above n 643, para 21. 703 Case C–38/98 Renault, above n 643. 704 See Case 53/87 Consorzio Italiano della Componentistica di Ricambio per Autoveicoli and Maxicar v Régie Nationale des Usines Renault SA [1988] ECR 6039. 705 Renault, above n 643, paras 66–67 and 86 of AG Alber’s Opinion. 706 Ibid, paras 31–32. 707 Ibid, paras 30–34, emphasis added.

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Private International Law Aspects 259 ground that it considers that national or Community law was misapplied in that decision. On the contrary, it must be considered whether, in such cases, the system of legal remedies in each Contracting State, together with the preliminary ruling procedure provided for in Article [234] of the Treaty, affords a sufficient guarantee to individuals.

Thus, while the EC competition rules pertain to public policy, in practice a foreign judgment can be refused recognition or enforcement only in extreme cases, ie when the national court has sanctioned hard-core horizontal restrictions of competition that are flagrantly anti-competitive, or when EC competition law has been entirely ignored. In all other cases there should be no public policy violation. Reviewing another Member State’s judgments for errors clearly amounts to révision au fond, which is in all cases prohibited by the Brussels I Regulation.708

708

Art 36 of Reg 44/2001, above n 647 (ch 2).

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BIBLIOGRAPHY BOOKS AND MONOGRAPHS Albors-Llorens, A, EC Competition Law and Policy (Cullompton/Portland, 2002). Amadeo, S, Norme comunitarie, posizioni giuridiche soggettive e giudizi interni (Milan, 2002). Anagnostopoulou, D and Kleftodimou, E, Know-how Licensing Contracts in Community Law (Athens/Komotini, 1992) (in Greek). Arnull A, The European Union and its Court of Justice (Oxford, 1999). —— Dashwood, A, Dougan, M, Ross, M, Spaventa, E and Wyatt, D, Wyatt & Dashwood’s European Union Law (London, 2006). Baquero Cruz, J, Between Competition and Free Movement, The Economic Constitutional Law of the European Community (Oxford/Portland, 2002). Beatson, J and Schrage, E, Casebooks on the Common Law of Europe, Unjustified Enrichment (Oxford/Portland, (2003). Beauchesne, B, La protection juridique des entreprises en droit communautaire de la concurrence (Paris, 1993). Beutler, B, Bieber, R, Pipkorn, J, Streil, J and Weiler, JHH, L’Unione europea, Istituzioni, ordinamento e politiche (Bologna, 2001). Biavati P, Europa e processo civile, Metodi e prospettive (Turin, 2003). Brealey, M and Hoskins, M, Remedies in EC Law, Law and Practice in the English and EC Courts (London, 1998). Brinker, I, Mißbrauchsaufsicht auf der Grundlage der Gruppenfreistellungsverordnungen, Die Bedeutung des Widerrufsrechts der EG-Kommission im Rahmen der Gruppenfreistellungs-verordnungen nach Artikel 85 Absatz 3 EG-Vertrag, Dissertation, Ludwig-Maximilians-Universität München (Munich, (1994). Bulst, WF, Schadensersatzansprüche der Marktgegenseite im Kartellrecht, Zur Schadensabwälzung nach deutschem, europäischem und US-amerikanischem Recht (Baden-Baden, 2006). Caspar, U, Wettbewerbliche Gesamtwürdingung von Vereinbarungen im Rahmen von Art. 81 Abs. 1 EGV (Cologne/Berlin/Bonn/Munich, 2001). Cavallini, J, Le juge national du provisoire face au droit communautaire, Les contentieux français et anglais (Brussels, 1995). Chalmers, D, Hadjiemmanuil, C, Monti, G and Tomkins, A, European Union Law (Cambridge, 2006). Chiti, MP, Diritto amministrativo europeo (Milan, 2004). Christianos, VA, Overruling of Prior Judgments in the Case Law of the Court of Justice of the European Communities (Athens/Komotini, 1998) (in Greek). —— Dynamics in the Relations between Judiciary and Legislature in the European Community (Athens/Komotini, 2005) (in Greek). Coleman, M and Grenfell, M, The Competition Act 1998, Law and Practice (Oxford, 1999). Craig, PP, EU Administrative Law, Collected Courses of the Academy of European Law, Vol. XVI/1 (Oxford, 2006).

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INDEX Introductory Note References such as ‘178–9’ indicate (not necessarily continuous) discussion of a topic across a range of pages, whilst ‘186n269’ indicates note 269 on page 186 and ‘233nn’ multiple notes on page 233. Wherever possible in the case of topics with many references, these have either been divided into sub-topics or the most significant discussions of the topic are indicated by page numbers in bold. Because the entire volume is about competition law and private enforcement, and certain other terms occur constantly throughout the work (notably the titles of the main institutional players, Commission and Court of Justice), the use of these terms as entry points has been minimized. Information will be found under the corresponding detailed topics.

à titre incident, 3–5 à titre principal, 3–5 absolute nullity see nullity abstention, duty of, 115–17 abusive exercise of rights, 198 administrative authorisation system, 25–38, 40, 48, 50, 53n158, 55, 77n297, 86, 135 see also notification system administrative courts, 4n12, 17n82, 118n550, 191n299 administrative enforcement see public enforcement administrative leniency see leniency advantages of private enforcement, 8–11 allocation of cases, European Competition Network, 81–2 amicus curiae mechanism, 2, 16n77, 80, 92n388, 104–8, 127–8, 135, 221 United States, 91, 101–2n444 amnesty see immunity; leniency antitrust damages actions see damages actions applicability decisions, 89, 116n538, 125, 128–35, 137 see also positive decisions, inapplicability decisions; negative decisions applicable law, 239–50 civil claims EU forum, 247–9 extra-EU, 247–50 intra-EU, 243–7 non-EU forum, 249–50 Community competition law as, 239–43 arbitral tribunals, 94n398, 130n620, 243, 249–50, 257 arbitration agreements/clauses, 94n398, 157, 243, 252, 257 Austria: applicable law, 255n690 application of Community competition law, 222n504 Commission assistance, 97n412 damages actions, 186n269, 189, 210n424 ex officio application of Community competition law, 154n80

fault, 195 injunctions, 215n464 nullity, 151n60 standing, 191n298 suspension of proceedings, 16n79 authorisation system see administrative authorisation system autonomy, 147–9 Belgium: application of Community competition law, 45n112, 222n504 Commission assistance, 94n398 damages actions, 186n269 deference, 119–20 ex officio application of Community competition law, 154n80 injunctions, 215n464 nullity, 156n93, 220n497 public policy, 241n616 questions to competition authorities, 95–6, 99 and Regulation 1/2003, 92n389 block exemptions, 33–6, 40n87 as ‘block negative clearances’, 70 Denmark, 66n240 Greece, 73n277 and legal certainty, 52–3 new generation, 34, 42, 68 and new system, 49–53, 57–8, 61, 70–1 as ‘positive’ measures, 68 and severability, 156n95 United Kingdom, 66n240 vertical agreements/restraints, 33, 42, 74, 75n286, 95n404 withdrawal of benefit, 61, 80, 87–8, 116–17, 128–9, 131–2, 216n468 ‘block negative clearances’, 70, 75n283 Brussels Convention, 134–5, 250, 254–8 see also Brussels I Regulation Brussels I Regulation, 134, 250–7, 259 see also Brussels Convention

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308 Index burden of proof: see also proof problems Art 81 EC, 43, 60n203 Art 82 EC, 60n203, 226–7 easing, 18, 208 follow-on litigation, 7, 18 and Green Paper, 18 and ‘passing-on’, 186, 204 reversal, 18, 186, 196, 230–2 business secrets, 99–100, 102 CAT see Competition Appeal Tribunal (CAT) causal link see causation causation, 166n154, 174–6, 195n327, 201, 207–9, 218–19, 240.244 cause of action estoppel see res judicata centralisation, 25, 27, 45, 73, 92n384, 129, 228 centralised decentralisation, 63–139 centralised enforcement, original system, 25–7 certainty see legal certainty choice-of-forum clauses/agreements, 88n366, 250, 252–3 civil courts: see also national courts new institutional position, 84–111 civil enforcement see private enforcement civil procedure see procedural law framework class actions, 10, 185–6, 211–12, 234, 235n577, 282–3 see also collective claims; representative claims co-contractors, 151, 169, 192–3, 197–8, 246, 253 coherence, 56–7 collective claims, 185n266, 232–7 comfort letters, 31n38, 34–6, 231 and legal certainty, 58 and national competition law, 68–9, 74 and negative clearances, 34–5 and new system, 57, 109–10 commercial agents, 239n605, 242, 248 Commission see Introductory Note and detailed entries Commission assistance to national courts, strengthening of existing mechanism, 94–6 commitments decisions, 20n92, 62n216 national court enforcement, 89–90 and resolution of conflicts with national court proceedings, 137–9 communitarisation, 63–5, 72, 79n307, 144n19, 245, 256 Brussels Convention, 135n647, 250, 254–5, 257 Community interest, 10, 65, 83, 113n511, 127–8, 145 Community right to damages, 167–70 compensatory damages, 22 compensatory function, 9, 185, 203, 212 competence of civil courts: and Art 81(1), (2) and 82 EC, 27–9 and Art 81(3) EC, 29–33 merger cases, 36–8 Competition Appeal Tribunal (CAT), 3n11, 18, 19n87, 118, 184–5, 188–9, 226, 228 complementarity with public enforcement, 8–11 conflicts between Commission and national civil court proceedings, 119–39 commitments decisions, 137–9

‘conflict’ concept, 119–24 Crehan case, 122–4 final national inapplicability judgments, 128–35 final national judgments finding violation, 135–6 non-final national judgments, 126–8 pending national proceedings, 124–6 resolution, 124–39 United Kingdom, 122–4 consistency, 56–7 constitutive actions, 4n14 constitutive conditions of civil liability, 173, 175, 182, 190–209, 243–4, 247 consumer welfare, 13n65, 206 consumers, standing, 202–6 contested judgments, 132–3, 136 contingency fees, 161, 186, 211–12, 232–3, 235–6 contractual obligations, 56n177, 69n256, 157, 168, 242, 246 contributory fault, 161, 189, 193n313, 194n321, 197–8 cooperation mechanisms: between civil courts and Commission, 90–4, 96n405, 108–11, 228–9 European Competition Network, 78–80 costs, 235–7 Courage: Commission approach, 162–5 and Community law in general, 176–9 Court of Justice approach, 165–7 and relationship between Community and national law, 170–4 Court of Justice see Introductory Note and detailed entries Crehan case, 122–4 damages actions, 160–214 causation, 208–9 Community right to damages, 167–70 compensatory damages see compensatory damages conditions of civil liability, 173, 175, 182, 190–209, 243–4, 247 Courage Commission approach, 162–5 and Community law in general, 176–9 Court of Justice approach, 165–7 and relationship between Community and national law, 170–4 defences, 197–9 passing-on defence, 199–202 early development, 160–2 exemplary damages see exemplary damages fault, 194–7 Green Paper, 179–83 harm, 207–8 and independence of private enforcement, 22 Manfredi, 174–6 measure of damages, 210–11 nature of damages, 210–11 passing-on defence, 199–202 post-Courage developments Green Paper, 179–83 national case law, 187–90 national legislation, 183–7

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Index 309 punitive damages see punitive damages restitutionary damages see restitutionary damages standing, 190–3 consumers, 202–6 indirect purchasers, 202–6 de minimis rules, 14, 42, 57, 66, 74–5 decentralisation, 42–5 and move to private enforcement, 141–9 decentralised enforcement and Green Paper, 11 declaratory actions, 4, 220, 228–9 defences, damages actions, 197–9 deference: to comfort letters, 35 to Commission decisions, 119–23, 125, 132 to Community rules of higher rank, 237–8 and independence, 17 to national courts, 91, 115n531 to res judicata, 129 United States, 16, 91 Delimitis case, 28n19, 29–31, 34–5n56, 49n130, 68n251, 91n382, 94, 112–14 Denmark, 218n479 Brussels I Regulation, 250n661 and ex officio application of Community competition law, 222n504 and exemptions, 66n240 and fault, 195 individual exemptions, 66n240 and Rome II Regulation, 245 and unjust enrichment, 201n369 deterrent effect, 3, 8–9, 11, 16, 160, 210–11, 214 direct effect, 4–5, 10, 27, 72n273, 145–8, 193 Art 81(3), 49, 84, 141 and directives, 178 and ECSC Treaty, 116, 166 horizontal, 26, 89–90, 176–9 and legal certainty, 112–13 and nullity, 152, 160 and regulations, 32, 36–7, 87, 89–90, 92n289 disclosure, 100, 110–11, 229n540, 230n548, 231 discovery, 101, 102nn, 211, 226, 230–1, 233 dominant position, abuses of, 38, 50, 71, 86, 130, 141, 158–60, 196, 207, 215 double damages, 21n98, 190n293, 214 see also punitive damages duty of abstention, 115–17 economic freedom goal, 12–13, 43, 190 effective competition goal, 12–14, 39n81, 87, 190, 246 and private damages actions, 6, 14, 162, 169, 175n197, 184 see also ‘private attorney-general’ function effective judicial protection, 82, 143n10, 145, 148–50, 165n146, 166, 170–3, 205, 220, 222–3 efficiency of enforcement and new system, 54–6 enforcement objectives, 7–8 estoppel, 7, 230 cause of action see res judicata issue, 17n82, 119 European Cartel Office, 42 European Civil Code, 142, 144

European Competition Network: allocation of cases, 81–2 cooperation mechanism, 78–80 exchange of information, 82–3 European Enforcement Orders, 144n20, 256–7 evidence rules, 225–32 ex ante enforcement, 55n172 ex officio application of Community competition law, 221–3 ex post enforcement, 55n172 ex proprio motu, raising of legal issues by national courts, 13, 222–4 executive conditions, 173–6, 193n313, 209, 244 exemplary damages, 22n102, 188, 195n327, 208n411, 213–14 see also punitive damages exemption monopoly, 26, 29–30, 32, 40–1, 43, 87, 113 abolition, 45, 56, 58 as obstacle to private enforcement, 85, 141 exemptions see block exemptions; individual exemptions exequatur, 134, 256 faith and credit see full faith and credit fault, damages actions, 194–7 final injunctions see permanent injunctions fines and independence of private enforcement, 21–2 Finland, 96n405, 151n60, 162n128, 186n269, 192, 195, 210n424 follow-on litigation, 6–7, 17–19, 21, 118, 183–9, 230, 238 foreclosure, 3, 73, 122, 134, 189n291, 192 foreign judgments, 134–6, 212, 250n659, 254–9 forum, 88n366, 247–50, 252–3 France: amicus curiae mechanism, 105n465 application of Community competition law, 222n504 class actions, 235 Commission assistance, 94n398 damages actions, 163n128, 186n269, 187n275, 189 injunctions, 215n464 judicial review, 4n12 nullity, 156n93, 220n497 provisional measures, 218n479 public policy, 159n114 questions to competition authorities, 96n405 restitution, 219n488 secrecy of investigation, 100 specialised courts, 228 suspension of proceedings, 16n79 ‘friend of the court’ mechanism see amicus curiae mechanism full faith and credit, 254–7 Germany: amicus curiae mechanism, 105n465 applicable law, 243n269, 244–5 application of Community competition law, 45n112, 68n250 burden of proof, 7 causation, 209

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310 Index Germany (cont.): and comfort letters, 69n256 Commission assistance, 94n398 competition authority decisions, 19, 118, 202, 229 conflicts rule, 242n625 damages actions, 162n128, 186–9 exemptions, 32n41, 38n80 fault, 195 information requirements, 103n456 injunctions, 215–16 judicial review, 4 legislative developments post-Courage, 183 limitation periods, 238n600 nullity, 151n60, 159 passing-on defence, 199, 201 punitive damages, 212 quantification of damages, 208 restitution, 155n86 severability, 158n106 standing, 191–2 and unilateral conduct, 71 goals of EC competition law, 7–15 Greece, 14n67, 186n269 abuse of dominant position, 219n489 abusive exercise of rights, 198 administrative authorisation system, 77n297 application of Community competition law, 45n132, 73n277, 222n504 application of national competition law, 5n21 block exemptions, 73n277 Competition Committee, 73n277, 96n405, 155n89, 156n91 conflict of decisions, 132n633 cooperation with Commission, 96n405, 98n414 fault, 195 foreign judgments, 212n443 individual exemptions, 73n277 injunctions, 104n461, 215n464, 217n473 judicial review, 4n12, 17n82 notification system, 77n297 nullity, 155n89, 159 proof problems, 226n526 public interest, 14n67 res judicata, 118n550 restitution, 219n488 right to be supplied, 216n465 severability, 156n91 unjustified enrichment, 155n86 Green Paper on damages actions, 1n3, 9n42, 15n70, 102n446, 179–83 and antitrust injury, 207 and applicable law, 239 and burden of proof, 7 and causation, 209 and collective claims, 234 and consumers’ standing, 206 and contractual obligations, 246 and decentralised enforcement, 11 and discovery, 231 and double damages, 214 and effective enforcement, 204 and fee shifting, 236

and independence of private enforcement, 17–18 and injunctions, 215, 219 and leniency, 20–1 and limitation periods, 238 and passing-on defence, 201 and public/private enforcement distinction, 6 and quantification of damages, 210 and representative claims, 234 and Rome II Regulation, 246 and strict liability, 195 Green Paper on vertical restraints, 35n60, 40, 42 guidance letters, 60n208, 97, 108–10 harm, damages actions, 207–8 hierarchical relationships, absence of, 15–16, 78, 120, 173 horizontal agreements, 21n98, 66, 88n366, 129, 214 horizontal cartels see horizontal agreements horizontal direct effect, 26, 89–90, 176–9 immunity, 20–2, 29, 83, 101, 146 inapplicability decisions, 65n235, 77, 89, 116n538, 125, 135–8 see also positive decisions incident, à titre, 3–5 independence of private enforcement, 15–22 indirect cooperation mechanisms: guidance letters, 108–10 Regulation 1049/2001, 110–11 indirect purchasers, 193, 202–6, 253 individual exemptions, 25–6, 29–30, 32–5, 88, 132n628, 152 Denmark, 66n240 Greece, 73n277 and new system, 42, 55n170, 132n629 as ‘positive’ measures, 68–9 individual liability, 11, 148, 162, 166, 176–8, 182, 195–7, 209, 243–4 information exchange: European Competition Network, 82–3 between national courts and Commission, 99–102 injunctions, 3–4, 8, 137, 244, 249n656 and class actions, 233 final see permanent injunctions and indirect purchasers, 202n377 interim see preliminary injunctions permanent, 130–1, 214–18 preliminary, 96n408, 104, 217–19 injunctive objective, 7–8 injunctive relief see injunctions institutional law, 38–139 instrumental role of private enforcement, 9, 12–13, 145, 160, 169, 178 intellectual property rights, 150, 208, 215, 231, 234 inter-state trade effects, 37, 64nn, 65–7, 69n255, 70–1, 74–5, 240 interim injunctions see preliminary injunctions investigatory powers, 12, 27, 78n205 Ireland: see also Masterfoods courts as national competition authorities, 124n586 damages actions, 162n128, 186n269

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Index 311 declaratory actions, 220n494 ex officio application of Community competition law, 222 injunctions, 215n462, 217n476 interim measures, 104n461 proof problems, 226n526 issue estoppel, 17n82, 119 see also res judicata Italy: application of Community competition law, 66n240, 222n504 application of national competition law, 67n249 class actions, 232, 234, 235n577 convergence, 45n112 damages actions, 163n128, 186n269, 189 deference, 17n81 fines, 237 injunctions, 215n464 judicial review, 4n12 nullity, 159, 160n115 procedural inadequacies, 80n320 public policy, 151n60, 258 quantification of damages, 211n431, 212n442 questions to competition authorities, 97n411 standing, 189n293, 191–2 state liability, 196 suspension of proceedings, 16n79 violation of Community law, 136n655 joint and several liability, 20–1, 211n436 judgments of national courts: transmission to Commission, 102–4 and resolution of conflicts with Commission proceedings, 124–39 judicial review, 4, 52n150, 73n274, 80, 228, 230 jurisdiction, 250–4 legal certainty: see also res judicata and block exemptions, 40n87, 52–3 and double damages, 214n456 and guidance letters, 108 and new system, 57–9, 70, 84, 92n389, 108 and procedural questions, 237 staying of proceedings, 28–9 and substantive rules, 154n79 and supremacy of Community proceedings, 112–14, 122, 125, 131, 135, 138 United Kingdom, 185n263 legal exception system, 32, 37, 39–62, 70, 77, 86–7, 135, 153 leniency, 20–1 see also immunity lex causae see applicable law limitation periods, 154n84, 161, 174, 176, 237–8 lost profits, 168n160, 202n377, 207–8, 211 loyal cooperation, 120, 123 lucrum cessans see lost profits main issue see à titre principal Manfredi, 174–6 market foreclosure see foreclosure

Masterfoods, 16n77, 29–30, 78n305, 97n411, 112–18, 120–4, 126–30, 135–9, 229 merger cases, competence of civil courts, 36–8 modalities of private enforcement, 2–7 national autonomy, 147–9 national competition authorities, 6n26, 12n59, 26, 34 and amicus curiae mechanism, 104–8, 135 and Art 81(1) EC, 41 and Art 81(3) EC, 40–2, 62, 85 block exemptions, 34 and civil litigation, 18, 229 commitments decisions, 20, 89 cooperation with Commission, 45, 100, 114 Germany, 19 imposition of fines, 194 judicial review, 3–4 and limitation periods, 238 and mergers, 36 and national competition law, 70–2, 225 new position, 75–84 and nullity under Art 81(2) EC, 155–6 powers under new system, 76–7 provisional measures, 217 and Regulation 1/2003, 47n125, 62, 103 resources, 180 and supremacy of Community proceedings, 117–18 national competition law and independence of private enforcement, 18–19 national courts: and amicus curiae mechanism, 104–8 Commission assistance, 94–9 procedural questions, 96–9 competence in merger cases, 36–8 competence to apply Art 81(1), (2) and 82 EC, 27–9 competence to apply Art 81(3) EC, 29–33, 84–5 competence to apply Commission commitments decisions, 89–90 cooperation mechanisms between civil courts and Commission, 90–4 indirect cooperation with Commission, 108–11 information exchange with Commission, 99–102 judgments copied to Commission, 102–4 powers under new system, 84–90 and Regulation 1/2003, specific language, 85–7 national judgments see judgments of national courts NCAs see national competition authorities negative clearances, 28n16, 231 ‘block’, 70, 75n283 and block exemptions, 49 and comfort letters, 34–5 declaratory character, 70, 74 and legal certainty, 59 and national competition law, 68–9, 74 and national courts, 114n523, 116n538 and NCAs, 77

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312 Index negative clearances (cont.): and new system, 70, 77, 86, 89, 132n629 and ‘rule of reason’, 41 negative decisions, 61, 129 see also applicability decisions negative duty of abstention, 115–17 Netherlands: application of Community competition law, 45n112, 150n57 Commission assistance, 94n398 convergence, 45n112 damages actions, 186n269, 187n275 injunctions, 215n461, 217n476 preliminary measures, 17n79 provisional measures, 218n479 public policy, 225n523 questions to competition authorities, 96n405, 99 standing, 191n298 new system, 63–139 non-contractual obligations, 212, 213nn, 245 non-opposition, 35–6, 69n253 non-rebuttable presumptions, 208 notification system, 25–38, 69n253 abolition, 40–1, 43, 56, 58–9, 62, 70, 84 Greece, 77n297 manipulation, 53n158 national, 77 and new system, 54–5, 58n191, 62, 83, 109, 153, 220n495 and uncertainty, 58, 108 United Kingdom, 77 nullity, 2–4, 31–2, 38, 149–60 Art 81(2) EC, 32, 58, 149–58, 158–60, 219–20, 244, 248–50, 257 and competition authorities, 155–6 legal consequences, 156–8 nature, 150–5 related contracts, 157–8 severance, 156–7 and Eco Swiss, 257 and EU forum, 248 and non-EU forum, 249–50 and Rome Convention, 247 twilight zone, 30, 85 objectives of EC competition law, 7–15 offensive ‘passing-on’, 202–3 Office of Fair Trading (OFT), 18, 19n87, 103n457, 110, 118, 184–5, 204 proposals/recommendations, 21n99, 185–6, 204, 234–6 OFT see Office of Fair Trading (OFT) opposition procedure, 35–6, 69n253 ‘passing-on’: and burden of proof, 186, 204 defence, 161, 173n185, 186, 195n327, 199–205 German courts, 189 offensive, 202–3 permanent injunctions, 130–1, 214–18 Portugal, 186n269, 234, 235n577, 242n625

positive binding effect, 115–17 positive decisions, 62, 86n354, 110n494, 125, 132n629, 136–7, 220n495 see also inapplicability decisions pre-trial discovery see discovery preliminary injunctions, 96n408, 104, 217–19 preliminary issue see à titre incident preliminary rulings procedure, 116, 118, 128, 133n636, 259 prescreening, 55n172 primacy, 15–19, 69n251, 118, 123 of Art 81 EC, 150, 169 of Commission/Court of Justice, 16, 113, 115, 118, 120, 139 principal, à titre, 3–5 principal issue see à titre principal ‘private attorney-general’ function, 9–11, 14–16, 145–6, 169, 193, 202–3, 212 see also effective competition goal private damages actions see damages actions private enforcement: see also Introductory Note and detailed entries definition, 1–2 and public enforcement, 6 private interest, 11–15 private international law, 188, 212n443, 221n499, 239–59 applicable law Community competition law as, 239–43 extra-EU civil claims, 247–50 intra-EU civil claims, 243–7 enforcement full faith and credit, 254–7 public policy violation, 257–9 jurisdiction, 250–4 privately triggered public enforcement, 1 procedural autonomy, 147–9 procedural divergences, 220–1 procedural law framework, 220–38 ‘procedural rule of reason’, 237 professional secrecy see business secrets prohibition decisions, 34, 36 and new system, 54–5, 61n216, 77, 80, 89, 128–30 proof problems, 225–8 see also burden of proof institutional responses, 228–30 other procedural solutions, 230–2 public enforcement: see also Introductory Note and detailed entries original system, 25–7 and private enforcement, 6 remnants of monopoly, 87–8 public interest, 11–15 public policy, 13, 92n387, 159, 195, 197, 223, 235 competition rules as pertaining to, 151n62, 154, 222nn, 224–5, 241 violation, 134–5, 154, 212–14, 257–9 punitive damages, 6, 22, 45–59, 161, 174–5, 211–14, 244, 250 see also double damages; treble damages

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Index 313 punitive objective, 7–8 rebuttable presumptions, 18, 208 Regulation 1/2003, 59–63 Regulation 17, 4–5, 25, 27–37, 46, 162–3 and new system, 39, 42, 53–4, 59, 79, 92n384 Regulation 44/2001 see Brussels I Regulation Regulation 1049/2001, 110–11 related contracts and nullity, 157–8 remedial autonomy, 147–9 representative claims, 184, 221, 232–5 res judicata, 4, 30–1, 119, 126–38, 156, 255–6 see also legal certainty erga omnes, 17n82, 20n92, 118n550, 129 inter partes, 7n27, 17n82, 20n92, 129, 135–6, 138, 220 United States, 232 restitution, 148, 155, 168n160, 172–3, 200, 219–20 restitutionary damages, 168n160, 208 restorative objective, 7–8 Rome II Regulation, 212–14, 242, 245–7, 249 ‘rule of reason’, 41, 43n98, 44, 69n254, 237 rules of evidence, 225–32 selective distribution, 69n256, 71, 240n608 self-assessment, 41, 58, 62 separability see severability separation of powers, 15, 114nn, 115n529, 138 settlements, 86n255, 100n437, 186–7 as extenuating circumstances, 22 and independence of private enforcement, 19–20 and new system, 54–5 severability, 156–8 severance and nullity, 156–7 shield litigation, 2–4, 149 Spain: Commission assistance, 94n398 damages actions, 186n269, 189 preliminary/main issues, 5 private enforcement, 14n67 quantification of damages, 96n405 questions to competition authorities, 99 restitution, 155n86 specialised courts, 228 stand-alone litigation, 6–7, 18, 185n266, 225–6 standing, 161, 175, 244 consumers, 202–6 damages actions, 190–3 Germany, 186 indirect purchasers, 202–6 Italy, 189n293 United States, 253n680 state liability, 131, 165–7, 169–72, 176, 178, 195–6, 198n345, 209 strict liability, 194–7 subsidiarity, 46–8, 127n605, 147n37 subsidiary issues see à titre incident substantive law framework, 149–220 supremacy of Community competition law, 63–75

and effect on trade among Member States, 64–6 preceding unsatisfactory state of law, 66–9 Regulation 1/2003, 69–75 supremacy of Community proceedings: conflicts between Commission and national civil court proceedings, 119–39 non-applicability to national competition authority decisions, 117–18 scope of rule, 115–18 strengthening, 112–39 suspension of proceedings, 27–9 Sweden, 99, 188–9, 219, 228, 234 sword litigation, 2–4, 187n275, 203, 231 technology transfer block exemption, 33n50, 34n51, 35–6, 42, 69n253, 108n489, 156n95 third party civil claims, 2 titre incident, à, 3–5 titre principal, à , 3–5 treble damages, 8n33, 10, 20, 22, 146n33, 203, 211n436, 212n438, 253n680 see also punitive damages unilateral conduct, 71–2, 79 United Kingdom: application of Community competition law, 45n112 Commission assistance, 94n398 Competition Act 1998 and independence of private enforcement, 18–19 Competition Appeal Tribunal (CAT), 3n11, 18, 19n87, 118, 184–5, 188–9, 226, 228 competition authority decisions, 118, 185 conditional fee arrangements, 236 conflicts between Commission and national civil court proceedings, 122–4 convergence, 45n112 Crehan case, 122–4 damages actions, 184–5, 188 deference, 17n82 information requirements, 103n457 leniency, 21n98 notification system, 77 Office of Fair Trading (OFT), 18, 19n87, 103n457, 110, 118, 184–5, 204 proposals/recommendations, 21n99, 185–6, 204, 234–6 questions to competition authorities, 110 representative claims, 185–6, 234–5 United States: and administrative authorisation, 53n157 amicus curiae mechanism, 91 ‘antitrust injury’, 192, 207 class actions, 185, 232–3 constitutional status of antitrust law, 190n294 contingency fees, 236 court system, 142, 162 deference, 16, 91 discovery, 101–2, 230 forum, 253 injunctions, 214n458

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314 Index United States (cont.): jurisdiction, 253 legal certainty, 58 leniency, 20–1 limitation periods, 238n600 passing-on defence, 201 and private enforcement, 8–9 private enforcement, 8–11, 91, 161, 166–7, 187n277, 203, 211 res judicata, 232 ‘rule of reason’, 44

standing, 191, 202–3, 253n680 treble damages, 8n33, 22, 146n33, 212, 253 unjustified enrichment, 136, 142, 155, 168n160, 173n185, 199–202, 204, 219n489 vertical agreements/restraints, 40–1, 44n103, 50n136, 66, 129, 196 block exemptions, 33, 42, 74, 75n286, 95n404, 156n95 White Paper (Modernisation), 39–42, 45–59