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Finally Implemented! The Italian Council of Ministers Approves a Legislative Decree Implementing the EU Antitrust Damages Directive

On 14 January 2017, the Italian Council of Ministers approved the Legislative Decree implementing Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the “Directive”). The final version of the Legislative Decree has not been published yet on the Official Journal. However, the key points emerging from it include:

  1. A strengthened mechanism of evidence disclosure in actions for damages related to alleged infringements of competition rules. In fact, the judge will have the power to request the defendant or a third party, including the Italian Competition Authority (the “Authority”), to disclose relevant evidence which lies in their control.
  2. The extent to which Italian courts will be able to rely on decisions of the Italian Competition Authority or other national competition authorities. For instance, an infringement of competition law ascertained by a decision of the Italian Competition Authority (or appeal judgment), which is not subject to further means of appeal, will be deemed to be indisputably established for the purposes of an action for damages brought before the national courts under Article 101 or 102 TFEU or under national competition law.
  3. The rules applicable to limitation periods for bringing actions for damages, as well as how Italian courts shall assess the joint and several liabilities of companies which are found to have infringed competition rules, and how they shall quantify the harm suffered as a consequence of the alleged infringements.
  4. The business sections of the courts of Milan, Rome and Naples, identified as the only competent courts for such actions for damages, including class actions.

According to the established Italian case-law, in case of actions for damages regarding alleged violations of competition rules, the judge shall use all available investigation means in order to address the obstacles faced by the claimant to access the relevant evidence in antitrust cases, and therefore apply broadly the rules on the disclosure of evidence and information requests (Corte Suprema di Cassazione, judgment no. 11564 of 4 June 2015).

On 26 November 2014, the European Parliament and the Council of the European Union adopted the Directive, which entered into force 26 December 2014, setting 27 December 2016, as the deadline for its transposition at national level. On 27 October 2016, the Italian Council of Ministers approved an initial proposal for a Legislative Decree implementing the Directive and sent it to the relevant commissions of the Italian Parliament for their mandatory (non-binding) opinions. The Legislative Decree was therefore finally approved in the Council of Ministers’ meeting of 14 January 2017. Although it is difficult to predict the likely impact of the Legislative Decree, it will definitely provide a more certain legislative framework for companies and consumers interested in claiming damages on the basis of alleged antitrust infringements.

Gabriele Giunta contributed to this post. 

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The European Commission Fines Truck Manufacturers a Record €2.93 billion for Cartel Conduct

On 19 July 2016, the European Commission (Commission) imposed fines totaling €2,926,499,000 on four truck producers (39824 – Trucks). The fine is the highest ever imposed on members of a cartel by the EU competition regulator. The case is also noteworthy because it is the first Commission prohibition decision following “Brexit” and could thus become a test case to see whether the UK remains a jurisdiction of choice for follow-on damages actions.

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EU Court of Justice Reduces Cartel Fine: General Court of the EU Exceeded its Jurisdiction

The Court of Justice of the European Union (Court),the EU’s highest court, recently  issued a judgment in case C-603/13 P, Galp Energía España SA and others v Commission, reducing the fine imposed on certain companies that were found to have engaged in cartel behaviour. This decision overturned a decision of the General Court of the European Union (GCEU), and is notable because the Court found that the GCEU had exceeded its jurisdiction in the case by considering facts that had not been previously introduced. .

By way of background, in October 2007, the European Commission (Commission) fined several companies for their participation in the bitumen cartel, including Energía España, SA, Petróleos de Portugal (Petrogal), SA and Galp Energia, SGPS, SA (Appellants).  Among the infringing conduct, the Commission identified a monitoring system of the cartel and its compensation mechanism. When determining the fines, the Commission reduced the fine imposed on Appellants by 10% in light of their limited involvement in the infringement.

In response, Appellants challenged the Commission’s decision before the GCEU. The GCEU annulled the Commission’s decision as it applied to Appellants, because the Commission failed to establish that Appellants participated in both the monitoring system and the compensation mechanism. However, and critically, based on grounds and evidence that had not been included in the contested decision or on the appeal, the GCEU concluded on its own initiative that Appellants were aware of both the monitoring system and compensation mechanism. Consequently, even though the Commission failed to prove Appellants’ actual involvement in this conduct, the GCEU nevertheless held that the appellant companies could still be held liable because of their alleged awareness. Based on these findings, the GCEU decided to reduce the fine imposed on Appellants by an additional 4%.

Appellants challenged the GCEU’s ruling before the Court. Appellants claimed, among other things, that the GCEU exceeded its jurisdiction because it considered evidence, and substituted grounds for the decision, that had not been introduced in the Commission’s underlying proceedings. The Court agreed, finding that the GCEU exceeded its jurisdiction. The Court found that GCEU concluded that the Commission failed to establish that Appellants participated in the monitoring system and compensation mechanism of the cartel. Yet, the GCEU, based on arguments and facts not considered in the Commission’s proceedings or addressed in the GCEU appeal, continued to find that Appellants were aware of the infringing conduct and could still be held liable for the infringement.  Therefore, the Court concluded that the GCEU exceeded its authority by ruling on its own initiative, based on arguments and evidence not before it, that Appellants were liable based on different grounds than those used by the Commission in the contested decision or on the appeal.

The Court’s ruling further clarifies that the GCEU had unlimited jurisdiction in this case to review the matter brought before it i.e. the fine imposed by the Commission. But, this did not give the GCEU the authority to alter the basis for the contested decision. In other words, the Court [...]

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The EU Directive on Antitrust Damages Actions

The EU Directive on Antitrust Damages Actions requires the 28 EU Member States to adapt their laws and procedures to comply with the Directive by 27 December 2016 at the latest. It establishes a basic right to claim damages for loss caused by antitrust infringements, and establishes a minimum framework of rules concerning proof of the infringement, the measure of damages, the right to obtain document disclosure in support of a claim, the so-called passing-on defence, limitation periods, joint and several liability, and contributions among joint infringers. Read the full Special Report here.

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New German Cartel Fine Guidelines

by Martina Maier, Philipp Werner and Robert Bäuerle

The German Federal Cartel Office has just published new Guidelines on the Setting of Fines for antitrust law infringements.  With these guidelines, the German Federal Cartel Office departs from the method of setting fines used by the European Commission and other national competition authorities in Europe. As a result of the new guidelines, the potential liability for multi-product firms whose infringement concerned only a specific product in their portfolio and whose other products achieve significant turnover may increase.

Read the full article here.

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Parents Are Liable for Their Children: Presumption of Parental Liability Under EU Antitrust Law

by Philip Bentley QC, Philipp Werner and Christoph Voelk

Under EU antitrust law, parent companies are presumed liable for antitrust infringement of their wholly owned subsidiaries.  While this presumption is rebuttable, it is unclear what a company must do to rebut it successfully.  The recent Air Liquide judgment of the General Court of the European Union marks the first time that a company escaped the presumption of liability, if only for procedural reasons.  The judgment also sheds some light on the arguments that may work for a parent company.

To read the full article, click here.

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