Harmonization of European Procedural Framework: Possible and Desirable?

1. Is Harmonization of the European ProceduralFramework Possible and Desirable? Christian Bergqvist, ph.d. (University of Copenhagen) cbe@jur.ku.dk

2. Wide support for private enforcement Fair to conclude that the Commission (and the NCAs) generally favors more private enforcement: Green paper (2005) and white paper (2008) outlining possible steps and initiative that could facilitate more private enforcement Draft directive intended to promote private enforcement (circulated in 2009 and still pending) Quantifying antitrust damages - Towards non-binding guidance for courts (December 2009) See further initiative on http://ec.europa.eu/competition/antitrust/actionsdamages/index.html

3. Wide support for private enforcement And consequently would like to promote initiatives facilitating further cases, including (but not limited to) harmonizing national procedural regulation And many such initiatives could be tabled cf. the green & white papers and draft directive Binding NCA’s decisions and mutual recognition Class actions and triple damage Advanced disclosure obligation Privileged access to information collected by the NCA Harmonized limitation periods

4. Wide support for private enforcement Would the Commission and the NCAs, however, also be willing to accept if more private enforcement comes at the price of public enforcement? In theory (and most likely also in practice) there is an inherent conflict between public and private enforcement And do competition infringements merit special considerations compared to other cross border infringements (as noted by the European Parliament)?

5. The conflict between public and private enforcement The prospect of follow on litigation creates an argument (with some legal validity) for not disclosing information The scope of the limitations in regulation 1049/01 (on public access to EU documents), article 4 is subject to some ambiguities in respect to follow on litigation as demonstrated by a recent Ombudsmand decision (3699/2006/ELB) Regulation 1/2003, article 15 (on the cooperation between the Commission and national courts is (according to my information) untested in respect to follow on litigation but the Commission (and the Ombudsmand) promotes it actively as an option (see Ombudsmand decision 3699/2006/ELB)

6. The conflict between public and private enforcement The prospect of follow on litigation creates an argument (with some legal validity) for not seeking leniency: The US “discovery rules” create “challenges” to leniency cases (see e.g. the leniency notice, recital 32) by limiting the ability to submit written statement Denying an infringement in latter cases is not an option following leniency

7. The conflict between public and private enforcement The prospect of follow on litigation (perhaps) also fuels the current tendency to challenge a large chunk of the Commission decisions before the EU Courts If not for other purposes to stall subsequent damage claims

8. The conflict between public and private enforcement Many of the tabled initiatives could entrench the conflict further: Privileged access to information collected by the NCA significantly limits the incentive to release these in the first place, creating new battlegrounds While class actions (and triple damage) would lower the barrier for initiating cases, it might also facilitate unwanted (“unserious US-style”) cases Binding effect of the NCA’s decisions makes it highly attractive to build your case upon a NCA’s decision, thereby de facto translating the NCA into a gatekeeper rather than a promoter of private enforcement

9. The conflict between public and private enforcement More private enforcement could also lower the quality of the decisions produced by the Commission and the NCAs In order to limit the exposure for follow on litigation, undertakings have a strong incentive to settle cases pursuant to article 9 of regulation 1/2003 Before hailing this as a unilateral positive development please bear in mind that it creates a (strong) incentive to accept the Commission and NCA’s conclusions and interpretation of current case law even when the undertakings (and their advisors) disagree, ultimately lowering the barrier for intervention and creating a risk of “bad case law” National Carbonizing Company, with its many unsettled questions and interpretations, is perhaps, a prime example hereof Statistically the high proportion of cases rendered subject to (some sort of) criticism by the EU Courts merits some cautiousness in accepting the Commission’s initial view

10. Other and more eminent requirements In my opinion there are other, and more imminent, harmonization requirements relating to public enforcement (Regulation 1/2003), that merits remedies Further, I have a strong perception that governing the current discussions is an underlying presumption of an enforcement gab to be remedied by increased private enforcement

11. The shortfalls of regulation 1/2003 The wide discretion vested the NCA (under 1/2003 and national procedural regulation) makes it worrying to stipulate mutual recognition or binding effect (in particular the latter might conflict with the European Convention on Human Rights) The uncoordinated procedural instruments makes it problematic to collect, use and rely on information collected by a court (or a NCA) of another jurisdiction

12. The shortfalls of regulation 1/2003 Uncoordinated decision is a real problem that not only opens for forum shopping but also indicates an unacceptable level of arbitrariness within the system In VISA International (COMP/29.373) and Michelin II (COMP/E-2/36041) “disagreements” between the NCAs and the Commission were e.g. demonstrated

13. The shortfalls of regulation 1/2003 How do we ensure an efficient allocation of cases enforced privately? While the Bruxelles Regulation (44/2001) (in theory) should prevent parallel litigation, it holds limitation affecting private enforcement: Only applicable to cases involving the same parties and the same material conflict Doesn’t guarantee allocation to an efficient court (measured in the ability to produce high quality decision within an acceptable timeframe) Doesn’t take into consideration that some jurisdictions might be more favorable to either plaintiff or defender Hence, it can be manipulated creating forum shopping

14. The shortfalls of regulation 1/2003 How do we allocate cases between NCAs and courts? The Commission “call in” remedy pursuant to article 11, section 6 can only be used against the NCA While most courts probably would be willing to stall a case pending a Commission decision, I’m not sure the same leniency would be demonstrated to a NCA How do we ensure a higher level of (cross border) transparency in relation to national decisions and cases? The National Court Cases Databaseand the ECN Brief are positive steps, that, nevertheless, also display some (a significant) delay in the reporting (latest Danish case is e.g. from 2004)

15. Why not use 1/2003, article 15 more actively? Regulation 1/2003 already provides a framework that could be used by the Commission (and the NCAs) According to article 15, section 3 the Commission (and the NCAs) can e.g. “…… submit written observations to courts of the Member States. With the permission of the court in question, it may also make oral observations.” Hence, the Commission (and NCAs) could, if relevant, intervene in private enforcement/damage cases on behalf of the plaintiff (or if relevant, the defender)

16. Or translate the instrument into domestic regulation? According to ECN Working Group on Cooperation Issues (as of April 2008) there is still substantial work to be done on convergence matters A substantial number of member states do, e.g. not have national provision identical to article 15 (3) facilitating intervention from the NCA in national cases involving competition law (including private enforcement) The NCA should have a (moral) obligation to defend their own decision in subsequent followed on litigation

17. Possible and Desirable? So while my initial response would be that harmonization is not only possible, but also desirable, Following some prudent considerations I’m, however, significantly less clear on the issues Remedying the shortfalls within 1/2003 should hold priority in particular, as some of them relate to private enforcement Further, 1/2003 already holds remedies that could be used more actively, e.g. intervention on behalf of the plaintiff in cases Best practice & recommendations, e.g. on the use (and misuse) of economic evidence would also be welcome