The Passing-on Defence Should be Recognised in Legislation

(by Peter Whelan) The recent publication by the Department of Business, Innovation and Skills of Private Actions in Competition Law: A Consultation on Options for Reform acknowledges that considerable legal issues remain to be resolved concerning private enforcement of competition law in the United Kingdom. One of these issues is the exact status of the passing-on defence (i.e., the defence that allows an infringer to escape liability in a damages action by a given purchaser to the extent of any pass-on by that purchaser). The lack of certainty concerning the status of this defence acts as an obstacle to the initiation of private actions. This problem should be overcome by the express acknowledgment of the passing-on defence in legislation.

An Unpopular Solution to the Private Enforcement Problem

(by Andreas Stephan) The UK’s Department for Business is currently consulting on a package of reforms aimed at making it easier to bring private actions for damages against firms engaged in anti-competitive behaviour. Compensating consumers harmed by cartels and abuse of dominance is something competition authorities throughout Europe feel is important. However, the price to pay for private actions is the potentially enormous transaction costs of legal representation and economic evidence, coupled with the danger of scuppering public enforcement by undermining the leniency programme. One solution not considered in the current debate is to internalise compensation claims within competition authorities, drawing awards from public fines.

Breaking the deadlock? Private antitrust enforcement in the UK

(by Sebastian Peyer) Private antitrust enforcement in the UK has never got off the ground, even after the Competition Act of 1998 introduced enforceable antitrust provisions. Plaintiffs have not been able to secure a final judgment awarding damages for anticompetitive conduct, and very few injunctions based on competition law have been successful before UK courts. The consumer organisation Which? brought the only consumer group action joining fewer than 0.1 percent of the affected consumers and before settling the case with JJB Sports. An attempt by Emerald Supplies to establish a representative action under the existing Civil Procedure Rules failed.  Against this background of unsuccessful private enforcement, the UK Department for Business Innovation and Skills (BIS) this week launched its consultation on private actions in competition law.  Reform is long overdue, but have they got it right?

A Rebuttable Presumption of 20% Price Rise for Damages against Proven Cartels?

(by Bruce Lyons)  The UK Government yesterday published a consultation on private actions in competition law.  It includes a suggestion that there should be a rebuttable presumption that the cartel has resulted in higher prices.  20% is offered as a possible presumed increase due to the cartel.  This is an excellent idea and should be widely supported.  The only room for debate should be over the precise presumption to adopt and whether to extend this approach beyond cartels.

ECJ Ruling in Pfleiderer Heightens Concerns about Encouraging Private Enforcement

(by Andreas Stephan) The European Court of Justice (ECJ) has ruled that EU Law does not prohibit access to leniency documents by third parties seeking damages. Access should be determined according to national law, which must weigh the interests arguing in favour and against a disclosure of documents received under leniency.  The possibility of such access being granted is a further way in which private enforcement could undermine public enforcement, raising the question of whether competition authorities are shooting themselves in the foot by encouraging such actions.