2012 Conference Review – Fifth Session

(Review written by Burcak Yalcin, CCP PhD Student)

What is driving private antitrust enforcement? The German approach

Sebastian Peyer (Post doctoral research fellow at the ESRC Centre for Competition Policy)

In this paper the author aims to briefly clarify antitrust litigation in Germany and to point out some features of it that might facilitate private actions, such as low litigation costs and predictability of outcomes.

Due to this aim the paper employs data on 368 private cases which were concluded between 2005 and 2007. The data set shows that the vast majority of actions were stand-alone claims. Almost 60% of them were filed by consumers, whereas 18% were filed by competitors. Most of the allegations were about the abuse of market power (58%). However, there were also vertical restraints and some anticompetitive horizontal agreements (10%). Remedies utilised in the cases point to the fact that the plaintiffs preferred diverse civil law remedies. For instance, injunctions were the most popular remedies, whereas damage claims were the fourth most common ones after, respectively, voidness, and interim relief. The author suggests that the tendency that nullity applications are behind many antitrust actions in Europe seems to be followed in Germany with regard to the high ratio of voidness. With regard to the time that the plaintiffs spent in the court to obtain a decision, the data set indicates that the minimum time was one month, while the greatest time was 175 months. Besides, the data are spread around a mean of 17.01 months. On average, the time needed to complete the cases was roughly a year. Nevertheless, damage actions and claims for permanent injunctive relief took generally more time to be resolved.  

After this statistical knowledge the paper attempts to clarify several factors which might encourage individuals to take part in the private antitrust actions. These factors are:

  • Ex-ante predictable litigation cost: Litigation costs are low and predictable because of fixed recoverable lawyer fees and court fees which are calculated based on the value of the dispute or amount in questions.
  • Relatively quick decisions: On average all types of cases are concluded in 17 months, but generally damage actions take longer.
  • Alternative remedies: The existence of varies remedies that can be used by the plaintiffs may facilitate private enforcement. For example, damage actions are not cheap and simple remedies and might reduce the effectiveness of private actions. In contrast, injunctions which seem to be one of the key elements of the German system are easier and cheaper to be enforced by the court.[1] In addition, plaintiffs could ask the court to order a contract or contract clause if there is an infringement of competition law.[2] 

In the final stage, in order to improve the effectiveness of private enforcement, the paper suggests that first the process of judgements should be quicker and cheaper. Second, more attention should be given to the procedural framework, and the scope of reforms and the primary objective of private actions should be reconsidered. Third, alternative remedies to damage claims should be enacted.

 

Panel discussion: BIS Consultation on private antitrust enforcement

Anna Morfey (Freshfields Bruckhaus and Deringer LLP), John Holmes (Which?),[3] Iain Mansfield (BIS) and Sebastian Peyer (CCP)

After the presentation of Sebastian Peyer the Conference continued with a panel discussion on ‘BIS Consultation on private antitrust enforcement’. The first talk was given by Iain Mansfield (Assistant Director for Competition Policy at the Department for Business, Innovation and Skills). He briefly clarified the scope of the consultation on private antitrust enforcement[4] and talked about the aim of the reforms as well as the role of the Competition Appeal Tribunal (CAT). At the end of the speech he encouraged the delegates to share their ideas to effectively improve the reforms. He was followed by John Holmes (Principal Economist for Which?) who approached the reforms from the consumers’ point of view. The discussion session was closed with comments from Anna Morfey. She stressed the introduction of an opt-out collective actions regime for competition law to allow consumers and business to collectively bring a case to obtain redress for their losses.  

 


[1] Section 33 of the Act Against Restrictions of Competition

[2] Section 134 of the German Civil Code

[3] Which? İs an independent, non-for-profit consumer organisation and is the largest consumer organisation in Europe.

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