Private Antitrust Litigation In Germany
An extract from The 2009 European Antitrust Review - a
Global Competition Review special report - www.globalcompetitionreview.com
With the Seventh Amendment to the German Act against Restraints
of Competition (ARC), effective from 1 July 2005, the German
legislature amended the ARC with the specific intention to
facilitate private antitrust enforcement. Until then, private
antitrust enforcement focussed mainly on anti-competitive behaviour
by dominant undertakings, whereas hard-core cartels were rarely
subject to private-party claims. Although private damages actions
based on cartel infringements are still not widespread, they have
become more common and it is to be expected that in particular
follow-on actions will become well established within the German
civil law system.
This chapter deals with private actions in Germany based on
cartel infringements and on anti-competitive behaviour by dominant
undertakings. Since EC rules provide neither for private antitrust
claims as such nor for the relevant procedural rules for such
claims under articles 81 and 82 of the EC Treaty, private antitrust
litigation in Germany is governed by national provisions.
Types Of Action
Action To Refrain From A Certain Conduct
The party affected by the breach of competition law (the party
concerned) may apply to the relevant regional court for an order
that the party in breach refrains from such conduct.1
This applies to a breach of both national provisions and articles
81 or 82 of the EC Treaty. Applicants may also be associations with
legal capacity representing professional interests.2 The
party concerned has standing to sue and may require the party in
breach to refrain from taking certain action even when there is
only a threat that an infringement will take effect.
The most common causes of action for an injunction concern
abusive or discriminatory practices by dominant undertakings or by
undertakings with superior market power in relation to small or
medium-sized undertakings. The obligation to refrain from such
conduct can also include a positive obligation towards the party
concerned. If, for example, a dominant undertaking ceases to supply
a customer contrary to the prohibition preventing it from abusing
its dominant market position, the party concerned may insist on
being supplied.
Moreover, the party concerned may apply for interim measures.
This is, again, of particular importance in cases in which an
undertaking abuses its dominant market position. The court may
issue a preliminary injunction provided that the party affected by
the anticompetitive behaviour is able to provisionally substantiate
with evidence that the party in breach abused its dominant position
and, in addition, that there is a particular urgency which requires
interim measures. The injunction may be issued without an oral
hearing. In practice, in urgent cases the injunction may even be
issued on the same day as the application.
Damages Claims
Section 33(3) of the ARC provides that whoever commits an
infringement of the provisions of the ARC or articles 81 or 82 of
the EC Treaty shall be liable for damages arising therefrom. The
breach of competition law must have been committed intentionally or
negligently3. However, there is only very limited scope
to argue that an infringement was not committed in such a manner.
In particular, errors of law do not fall outside the scope of this
provision unless the defendant can rely on legal advice from a
specialist external competition lawyer.4
Damages claims may either be filed as an action for affirmative
relief or as an action for a declaratory judgment. The action for
affirmative relief may be the appropriate type of action if the
plaintiff ? at the time the claim is made ? is
able to calculate the exact amount of damages suffered as a result
of the infringement. If the plaintiff is not able to determine the
exact amount of loss suffered and the claim runs the risk of being
barred on limitation grounds, the plaintiff may apply for a
declaratory judgment, which if successful will give rise to the
opportunity to sue the defendant for the exact amount of money
corresponding to the loss at a later date. Moreover, a declaratory
judgment often forms the basis for a settlement.
Course Of Action
Cartel Infringement
A private action against members of a cartel may be based on
national competition law, section 33 of the ARC in conjunction with
section 1 of the ARC, or on European law, section 33 of the ARC in
conjunction with article 81 of the EC Treaty. In line with article
81 of the EC Treaty, section 1 of the ARC prohibits agreements
between competing undertakings, decisions by associations of
undertakings and concerted practices that have as their object or
effect the prevention, restriction or distortion of
competition.
Private actions in relation to cartel infringements, in
particular hard core cartels, will most often be damages actions.
However, the party concerned may also seek to prevent the party in
breach from applying the agreement, eg, the price
scheme.5 This will most likely be the case when there is
doubt as to whether section 1 of the ARC or article 81(1) of the EC
Treaty are applicable to the agreement in question.
Abuse By Dominant Undertakings Or Undertakings With
Superior Market Power
In line with article 82 of the EC Treaty, undertakings holding a
dominant market position must not abuse their dominant
position.6 The notion of dominance within the ARC
essentially follows the principles as set out by European
competition law. An abuse exists, inter alia, if a dominant
undertaking refuses to allow another undertaking access to its own
networks or other infrastructure facilities in return for adequate
remuneration. Moreover, it is prohibited for dominant undertakings
to discriminate against or hinder another undertaking in an unfair
manner.7
In addition to the prohibition laid down in article 82 of the EC
Treaty, the ARC contains even stricter rules on unilateral conduct
for undertakings. According to these rules, the concept of
dominance is extended to undertakings with superior market
power.8 Undertakings with superior market power are
undertakings on which small or medium-sized enterprises depend as
suppliers or purchasers of goods or services in such a way that
sufficient or reasonable possibilities of resorting to other
undertakings do not exist.
Violation Of The Boycott Prohibition
A further special provision in German antitrust law is section
21(1) of the ARC, which prohibits undertakings from requesting
another undertaking to refuse to sell or purchase goods or services
to or from third companies with the intention of unfairly harming
certain undertakings.
Parties Entitled To Claim
According to section 33(1), sentence 1 of the ARC, the party
entitled to claim is the party concerned. Sentence 3 of the same
provision defines the notion of the 'party concerned' as
the person who is affected by the breach as a competitor or as
another market participant. There is no statutory limitation on the
parties entitled to claim damages suffered as a consequence of a
competition law infringement. According to the legislative history,
even end-users are considered to be included in this definition.
Moreover, legislative history confirms that the legislator extended
the notion of a party concerned, pointing out that an action for
damages should not be excluded on the sole ground that the claimant
participated in the infringement.
Party Directly Affected By The Illegal Behaviour
It is undisputed that the party concerned includes any person or
undertaking directly affected by the illegal behaviour. In most
cartel cases, these are persons or undertakings which are either a
direct supplier or a direct purchaser of the undertaking in breach.
Competitors of the parties to an agreement which infringes section
1 of the ARC or article 81(1) of the EC Treaty can also be directly
affected if they might lose business due to the cooperation within
the cartel. In cases of discriminatory or abusive...
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