Private enforcement is an important issue in the development of EC competition law. On 19 December 2005, the European Commission published a Green Paper and a Working Paper on actions for damages for breach of the EC competition rules. The Commission is now preparing a White Paper that will set out, in definite terms, some ideas for the follow-up to this Green Paper. Commissioner Neelie Kroes recently noted that “Businesses and consumers in Europe have a right to damages if they have lost out as a result of the anti-competitive behaviour of others”. This, in turn, begs the question: what are the possibilities for private enforcement and joint action in The Netherlands?
Private enforcement can be defined as enforcement by means of legal action brought by the victim(s) of anti-competitive behaviour before a court. If there are several consumers or companies in The Netherlands affected by a cartel or an abuse of a dominant position, they may decide to "join forces" in a joint or collective action. A collective action can be advantageous to claimants as it can spread the costs, risks and effort over several parties instead of one single claimant.
Article 3:305a of the Dutch Civil Code (“the Civil Code”) permits a foundation or association with full legal capacity to commence proceedings to protect the interests of other organisations or individuals. For example, a branch organisation might commence a collective claim in the civil courts requesting a declaration that the members of a cartel have infringed Article 81 of the EC Treaty and its Dutch equivalent, Article 6 of the Competition Act (the “Act”).
A significant limitation to such action is that these organisations may not claim damages - although they can seek a declaration from the courts that the undertakings in question have infringed EC and/or domestic competition law, which the claimants can then use in individual actions for damages.
As an alternative, affected companies or individuals may commence collective actions either by instructing the same lawyer or by assigning the individual claims to a particular legal entity. The result is that a collection of claims is brought by one authorised legal person.
In such an action, the claimants can request that a cartel agreement be declared void and, at the same time, claim damages for loss suffered as a consequence of the infringement.
Grounds for claims
In cases where there is both infringement of Article 81 EC (Article 6 of the Act) and infringement of Article 82 EC (Article 24 of the Act), the claimants need to show that the infringement of the competition rules constitutes a breach of a duty imposed by law and is therefore an unlawful act under Article 162, Book 6 of the Civil Code. (A breach of competition law automatically implies there must be an unlawful act)
The claimants need to prove that the defendant has infringed the competition law and that, as a result, the claimants have suffered losses. A decision by the Dutch Competition Authority, or another authority such as OPTA (the Dutch Post and Telecommunications Regulatory Authority), that states that the defendants have infringed the competition rules (or telecommunication rules) is not, in itself, conclusive but the Dutch courts are unlikely to ignore any such decision.
Another ground for a claim is where the members of the cartel or the dominant undertaking have been unjustly enriched.
An obstacle to private enforcement is the lack of disclosure procedures under Dutch law. The claimant cannot rely on a disclosure obligation of the defendant to obtain the evidence needed to prove the claim and there are only limited possibilities to obtain evidence from the other party (e.g. if the judge orders that the defendants make their books available for inspection and/or the Claimant is permitted to inspect their records).
Based on Article 843a of the Civil Code, claimants may request the disclosure of a specific document by the other party. A request for specific disclosure is only justified where the claimants know of the existence of the document and if the document is relevant to the legal relationship between the parties.
Claimants can also ask the Dutch Competition Authority, as an administrative body, to provide all the information it holds about the parties being investigated. Further, evidence from disclosure in other countries can be recognised by Dutch courts unless this would result in an unfair trial.
Damages are assessed ‘in a manner most appropriate to its nature’. In principle, this is on the basis of the loss suffered by the claimants. However, it is possible that at the specific request of the claimants, the court will assess damages based on the profit made by the defendant(s). The damages will include full compensation of actual damage which means that the amount of the damages awarded should put the claimant in the position they would have been in had the infringement not occurred.
There is no maximum limit to the damages that can be awarded but the court can limit the amount of damages. Fines levied by the Competition Authority are not taken into account.
Dutch courts have jurisdiction where a defendant is domiciled in The Netherlands. Providing at least one of the members of the cartel is located in The Netherlands (and the claims are closely connected), the Dutch court has jurisdiction over the other defendants.
In April of this year, the EC fined Dutch beer brewers a total of €273,783,000 for operating a cartel in The Netherlands. In addition, a newspaper article on 1 October 2007 reported that the Dutch organisation representing the hotel and catering industry intends to commence legal proceedings for damages against the beer brewers’ cartel.
Commissioner Neelie Kroes has also called on consumers to bring actions before the court.