12/06/2017

Belgium introduces victim-friendly rules on damages claims for competition law infringements

On 18 May 2017, the Belgian Federal Parliament adopted a new Act on actions for damages for competition law infringements (the “Competition Law Damages Act”).[1] The Competition Law Damages Act transposes  Directive 2014/104/EU (the “EU Damages Directive”) into Belgian law, which aims to make it easier for victims of competition law infringements to claim damages for the harm they suffered.[2] The Competition Law Damages Act was published in the Belgian Official Gazette on 12 June 2017 and will enter into force on 22 June 2017.

Competition law enforcement has two main prongs: public and private enforcement. The public enforcement is observed by the European Commission and the National Competition Authorities, such as the Belgian Competition Authority (“BCA”), which investigate alleged competition law infringements, on their own initiative, following a complaint, or following a leniency application or whistle-blower declaration. The competition authorities may impose heavy administrative fines on violators. The Competition Law Damages Act on the other hand, deals with private enforcement. This is the right of victims of competition law infringements to claim for damages against violators for the harm they allegedly suffered. In the United States victims are very active in private enforcement. In Belgium and in most other EU member states there have been relatively few actions for damages from competition law infringements up to date. The European Commission ascribes this inter alia to the fact that private parties have difficult access to proof obtained by competition authorities, to the legal uncertainty resulting from fragmented national rules and to the difficulties concerning quantification and attribution of damages, which often requires an in-depth economic analysis.

The EU Damages Directive seeks to remedy those issues and enable victims of competition law infringements in their efforts to seek damages. The Competition Law Damages Act transposes the directive into Belgian law by introducing, inter alia, the following rules:

– it stresses the right of a victim to full compensation of the harm done. While this is not a departure from general Belgian civil law, the explicit mention of this principle stresses the importance of victim indemnification;

– it facilitates private parties’ burden of proof by introducing several presumptions, including:

    • a finding by the BCA or the Brussels Court of Appeal of a competition law infringement irrefutably proves the existence of the infringement (a similar presumption already exists with respect to decisions of the European Commission).[3]
    • the Competition Law Damages Act also introduces the refutable presumption that a cartel caused harm.

– it introduces rules concerning private parties’ access to proof. In particular, the Competition Law Damages Act introduces the possibility for private parties to gain limited access to the BCA’s dossier, under certain conditions and exceptions (it is e.g. not possible to gain access to leniency or settlement applications).

– undertakings who together have committed a competition law infringement are jointly and severally liable. Exceptions to this principle apply e.g. to small and medium-sized enterprises.

– the Act contains provisions on the so-called “passing on” of overcharges (i.e. the difference between the price actually paid and the price which would have been paid without infringement). Passing on means that the direct customer of a cartel member has passed on the overcharges to its customer (the indirect customer). In that respect, the Act provides the following:

    • in a claim between a direct customer and a cartel member, the latter may rely on passing on in defence to a claim for damages.
    • in a claim between an indirect customer and a cartel member, passing on is presumed to have occurred if (i) the defendant has committed a competition law infringement, (ii) the infringement has led to overcharges for the direct customer and (iii) the direct customer provided goods or services covered by the infringement to the indirect customer. The presumption does not, however, apply if the cartel member makes a reasonable case that the surcharges were not passed on to the indirect customer.

– it provides for a favourable regime regarding amicable settlements between competition law infringers and victims. In this respect, the Competition Law Damages Act allows the BCA e.g. to take into account the fact that an undertaking has indemnified victims when calculating fines under a public enforcement procedure.

– it declares the new provisions applicable to the Belgian class action procedure for consumers, the so-called “action for collective recovery”. In practice, this will mean that consumers who are the victim of a competition law infringement may pool their claims and jointly file for damages.

Three things one should take away from this new Act:

    1. The new Act is victim-friendly and will likely lead to more claims for damages against undertakings who have been found guilty of competition law infringements by the European Commission or a National Competition Authority;
    2. The provisions also apply to the Belgian class action procedure, allowing consumers to pool their claims and jointly file for damages.
    3. Leniency or settlement applications remain confidential and victims are not allowed access to those documents. It is therefore likely that leniency or settlement applications will remain an option companies must take into account.

 The Competition Law Damages Act was published in the Belgian Official Gazette on 12 June 2017 and will enter into force on 22 June 2017. For the full text of the Act, see here (Dutch) and here (French).

[1]     Wet van 6 juni 2017 houdende invoering van een Titel 3 “De rechtsvordering tot schadevergoeding wegens inbreuken op het mededingingsrecht” in Boek XVII van het Wetboek van economisch recht, houdende invoeging van definities eigen aan Boek XVII, Titel 3 in Boek I en houdende diverse wijzigingen in het Wetboek van economisch recht / loi du 6 juin 2017 portant insertion d’un Titre 3 “L’action en dommages et intérêts pour les infractions au droit de la concurrence” dans le Livre XVII du Code de droit économique, portant insertion des définitions propres au Livre XVII, Titre 3 dans le Livre Ier et portant diverses modifications au Code de droit économique, Belgian Official Gazette 12 June 2017.

[2]     Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules for governing actions for damages under national law for infringements of the competition law provisions of Member States and of the European Union [2014] OJ L349/1.

[3]     Article 16(1) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty [2003] OJ L1/1.