Deal struck on compensation claims for victims of cartels

Defendants must disclose hard-to-find evidence Commission imposed fines of €1.83bn in 2013

Cartel victims across Europe will have greater chances of obtaining compensation after MEPs and member state negotiators struck a deal on new legislation on Tuesday (18 March).

The new rules will make it easier for victims to win claims in court against infringers of antitrust legislation. In particular, courts across the European Union will gain the power to order defendants to disclose hard-to-find evidence, and will allow many victims more time to file their claims.

Action has been taken against offenders by competition authorities in Europe. In 2013, the European Commission imposed fines totalling €1.83 billion on 19 companies and associations. A further one hundred cartel infringements were punished at the national level. But victims seeking compensation from participants in cartels face obstacles in litigation. Reasons range from the difficulty of obtaining evidence to the time-barring of proceedings and the prohibitive costs of court cases. While a number of follow-on actions have been filed in the Netherlands, Germany, the United Kingdom and Spain, victims find it hard to assert their rights before courts in other member states.

Joaquín Almunia, the European commissioner for competition, said: “This directive will remove the barriers that currently prevent the victims of antitrust infringements in the EU from obtaining effective compensation. At the same time, it will ensure an adequate and balanced interaction between actions for damages and the effective public enforcement of competition law by the Commission and national competition authorities.”

Rights

But the arrangements do not go as far as some would have liked in bolstering victims’ rights. For example, MEPs’ pressure proved insufficient to overcome the Commission’s refusal to give victims access to all the documentation collected during the course of its antitrust investigations. The Commission was concerned this would constitute a major disincentive for companies in cartels to participate in the EU’s leniency programme, which has proved so successful in uncovering cartels since it was established in 1996. Member states also diluted a proposal by the Commission to require courts throughout the EU to recognise decisions by national competition authorities – which would have made it easier for victims to prove that a cartel existed.

Price-fixing

Two European and three Japanese suppliers of ball bearings were fined just under €1 billion by the European Commission yesterday (19 March) for fixing prices over a seven-year period.

German engineering firm Schaeffler picked up the largest fine at €370.5 million, followed by Swedish company SKF with €315m.

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The firms co-ordinated their responses to invitations to tender made by large car and truck manufacturers. Japanese firm JTEKT escaped a sanction as it revealed the cartel to the Commission.

The car parts sector currently faces a barrage of antitrust investigations. This is the second decision fining a cartel in this market, after the Commission fined wire-harness manufacturers €141m last year.

In addition, the Commission continues to investigate several alleged cartels affecting the supply of other car parts, such as airbags and lights. Car and truck manufacturers have already started to press claims for compensation against parts suppliers.