The European Commission has published a report (http://tinyurl.com/yjdy33m) prepared by Oxera, an independent economics consultancy, on quantifying damages for breaches of the EU prohibitions on restrictive agreements/cartels and on abuse of dominance ("EU antitrust rules").
The report aims to assist the European Commission in its stated wish to develop guidance in relation to quantifying damages for national courts and for parties to claims regarding breaches of EU antitrust rules.
The European Commission expressed this wish in its April 2008 "White Paper on Damages Actions for Breach of the EC Antitrust Rules". This set out the principle, supported by case law, that any citizen or business suffering harm as a result of a breach of EU antitrust rules must be able to claim reparation from the party responsible for the breach. Victims are entitled to compensation for actual loss and for loss of profit, plus interest from the time the damage occurred until the capital sum awarded is actually paid.
Quantifying the amount of damages in claims based on breach of the EU antitrust rules has long been a very tricky task. The report sets out a framework which can be used both in cases involving hard-core cartels and cases involving exclusionary conduct.
The report considers economic methods and models which can be used. It identifies three different approaches. These are not mutually exclusive, but can often complement each other, depending on the case. These are:
- comparator based approaches;
- financial-analysis-based approaches;
- market-structure-based approaches.
The report does not recommend one method or model over another, rather it emphasises that the approach to take will depend on:
- the details of each case;
- the availability and quality of data and information; and
- applicable legal rules.
The report is realistic in that it notes that in any given case it is likely to be possible to apply more than one approach. It notes that the parties to a case may take differing views, such that ultimately the court would have to decide how to proceed.
The report maintains that the primary focus of any case would be normally be on whether specific methods or models have been applied reasonably and robustly, with the court then deciding either to select a preferred model or to "pool" a selection of reasonable and robust model results to arrive at a final damages value.
It will be interesting to see how and when this report will feed in to any guidance published by the European Commission itself on the subject of quantifying damages. It remains to be seen what prominence will be given to the encouragement of antitrust damages actions under the new European Commissioner for Competition, Joaquin Almunia, when the new European Commissioners take office shortly.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 20/01/2010.
