The details regarding cartel conduct contained in the decisions of the European Commission and national competition authorities are highly relevant to the follow-on cartel damages litigation that are now so common in Europe. Until recently, cartelists have generally been able to persuade the European Commission to take an expansive view of what information should be treated as confidential and therefore kept out of any public version of the decision – normally, any information going to the actual effect of the cartel conduct and details of who suffered those effects. The European Commission’s approach seems to be shifting in favour of more public disclosure and last Wednesday’s judgments by the General Court of the European Community has confirmed the Commission’s power to release greater details of infringing conduct into the public domain.
In parallel to these developments at the European level, the English Courts have sided with claimants in a number of cartel damages claims, granting disclosure of confidential information redacted in the public version of a decision.
These recent developments will concern companies under investigation by competition authorities that are submitting material in the context of leniency applications. On the other hand, proponents of private enforcement and claimants in cartel damages claims should be further encouraged by these developments.
The significance of European Commission decisions
Whilst there has been a steadily increasing volume of cartel damages claims in Europe, for the most part they are “follow-on” claims that are brought on the back of findings of infringement by the European Commission or national competition authorities. In Europe today, nearly every decision by the European Commission finding an infringement of competition law results in cartel damages claims being issued in the national courts. These follow-on claims rely upon the findings of infringement in the European Commission decisions to establish liability of the cartelists for damages – national courts cannot make any findings that contradict the finding of infringement in a European Commission decision.
Claimants also rely on the details contained in the European Commission decisions to prove the loss caused by the cartel. However, traditionally, European Commission decisions have contained very little information of any use in proving the effect of a cartel. This is in part due to the fact that most of the European Commission’s cartel cases are based on there being an anti-competitive object and therefore there is no need for the Commission to consider and demonstrate that there has been any anti-competitive effect. However, claimants have not been helped by the Commission taking an expansive view of what material should be treated as confidential and therefore kept out of any public version of a decision. Cartelists have always been able to persuade the Commission that any details regarding pricing, customers or even employees involved in the unlawful conduct, merit confidential treatment. Therefore to the extent that European Commission investigations uncover any useful information regarding the effect of a cartel, this has usually been redacted in the public version of a decision.
Whilst claimants in follow-on cartel damages claims start off on the front foot as a result of the finding of infringement that proves liability, they are still left with the difficult task of proving their loss. This task is made all the more difficult by the fact that other than England, none of the national legal regimes provide for any wide ranging disclosure from cartelists. The European Commission experienced first-hand how difficult it can be proving loss in a cartel damages claim, when it unsuccessfully brought a claim for €6 million in the Belgian courts following on from its decision in respect of the elevators and escalators cartel. In November 2014, the Brussels Commercial Court dismissed the claim on the basis that the Commission failed to provide sufficient evidence that it had suffered any loss.
Consistent with its strong policy of encouraging private enforcement, there have been a number of recent cases in which the European Commission has started to take a tougher stance on what information merits confidential treatment in its decisions. In one such case, in respect of the bleaching chemicals cartel, the Commission decided to publish a more detailed non-confidential decision more than four years after it had published its original non-confidential decision. It was this decision by the Commission that resulted in appeals to the General Court.
The Hydrogen Peroxide and Perborate (chemical bleaching) cartel
In May 2006, the European Commission issued a decision finding that a number of companies, including Akzo Nobel NV and Evonik Degussa GmbH participated in a cartel in the markets for hydrogen peroxide and perborates. Over a year later, in September 2007, the Commission published a non-confidential version of the decision – the fact that it took the Commission more than a year to resolve the cartelists confidentiality claims in of itself shows the ability of cartelists to delay the bringing of cartel damages claims. A further four years on, in November 2011, the Commission informed the cartelists that, in the interests of transparency, it would publish a fuller non-confidential version of its decision. This fuller version was to contain a large amount of information that had been provided in the context of leniency applications.
Akzo Nobel and Evonik Degussa objected to this additional disclosure of information. Their initial request to the Hearing Officer seeking that the information continue to be treated as confidential was rejected. The Hearing Officer concluded that a company fined for infringing competition law did not have the benefit of any particular protection from the disclosure to the public of the details of their offending conduct. The Hearing Officer also commented that private damages actions were part and parcel of European competition policy and that companies could not claim to have a legitimate interest in being protected against the risk of having such actions brought against them because of their involvement in a cartel.
They then appealed to the General Court, getting an initial order in November 2012 suspending any publication by the Commission until the appeals were heard. The General Court delivered its judgments on 28 January 2015, dismissing the appeals.
Relevantly, the General Court stated in the Akzo Nobel judgment (Case T-345/12 – Akzo Nobel NV & Ors v European Commission), that:
“…it must be pointed out at the outset that the interest of an undertaking which the Commission has fined for breach of competition law in the non-disclosure to the public of details of the offending conduct of which it is accused does not, in principle, merit any particular protection, give, first, the public interest in knowing as fully as possible the reasons for any Commission action, the interests of economic operators in knowing the sort of behaviour for which they are liable to be penalised and the interest of persons harmed by the infringement in being informed of the details thereof so that they may, where appropriate, assert their rights against the undertakings punished…
It follows that the applicants cannot legitimately oppose the publication, by the Commission of information revealing the details of their participation in the infringement penalised in the [bleaching chemicals] decision on the ground that such publication would expose them to an increased risk of having to bear the consequences, in terms of civil liability, of their participation in that infringement.”
The General Court also addressed a common argument that is raised by defendants in cartel damages claims when seeking to persuade English courts not to order disclosure of confidential information contained in a European Commission decision – namely, that it would undermine the leniency regime. The General Court held that there is no rule of law that the Commission would infringe if a proposed publication of material provided through a leniency application could have an impact on the leniency regime for future investigations. The Court then went on to point out that it is for the Commission to make the relevant balancing exercise between the interests of protecting the leniency regime on the one hand, and the interests of the public in knowing the content of the decision and taking action to protect their rights.
The General Court concluded that parties that submit information in order to benefit from the leniency programme, cannot consider that this information has been used for a reason other than that for which it was obtained by the Commission when it is published in a non-confidential version of a decision.
Developments in English cartel damages claims
There have been a number of cases before the English courts where, applying the principles set out in the European Court of Justice decision in Case C-360/09 Pfleiderer  ECR I-5161, that have undertaken a balancing of the various interests and granted disclosure of confidential information, which was redacted from the public version of a decision, including documents provided in support of leniency applications: see National Grid Electricity Transmission plc v ABB Ltd & Ors  EWHC 869 (Ch) and Emerson Electric Co & Ors v Morgan Crucible Company plc.
Perhaps the most significant development in this regard has been in the air cargo cartel damages court currently before the English High Court (Emerald Supplies v British Airways plc  EWHC 3515 (CH)). Despite issuing a decision in 2010 finding that twelve airlines were involved in a global cartel affecting air freight services, the European Commission has been unable to issue a public version of the decision because of disputes with a number of the airlines about confidentiality. Faced with a cartel damages claims that has been frustrated through delays, in November 2014, the English High Court ordered that the entire confidential version of the Commission decision be disclosed to the claimants, albeit subject to a confidentiality ring and the claimants having undertaken not to use any information in the decision to commence new proceedings against any airlines without permission of the Court. This bold and radical step will now be the subject of consideration by the Court of Appeal.
The European Commission has strongly promoted its policy of private enforcement of competition law, culminating with the signing in November 2014 of the Directive on Antitrust Damages Actions. However, the European Commission’s practice in dealing with confidentiality claims by the companies under investigation and the information it puts in to public versions of its decisions, have not always assisted private enforcement.
The Directive, when implemented into national law by the Member States in 2016, will facilitate the bringing of cartel damages actions. However, if the decision by the European Commission in respect of the bleaching chemicals cartel is indicative of a willingness on the part of the Commission to place more information into the public domain that could be of assistance in private damages actions, then this will have significant implications not only for claimants bringing damages claims but also companies under investigation that are assessing whether to opt for leniency. Companies considering leniency, and knowing that any civil damages exposure will be outside of England and therefore not subject to an extensive disclosure, will need to assess what information the Commission may put into the public domain. Whilst for claimants, the General Court’s approval of the European Commission’s approach in the bleaching chemicals cartel and the comments about cartelists having no legitimate expectations about being protected from civil claims, opens the possibility of persuading the European Commission that it should adopt this approach for other historical cartel decisions.
On the same day that the General Court issued its judgment on the bleaching cartel, car glass manufacturer Pilkington appeared before the General Court to argue against the European Commission’s proposal to publish a further public version of its decision on the car glass cartel containing customer lists, price calculations and names of employees involved. Should the General Court rule in the same manner as it did in the bleaching chemicals cartel, the potential risks and exposure to damages claims in Europe may grow even further for cartelists.
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