Victory in landmark antitrust private enforcement damages case in Spain

By Antonio Cueto, Jose Rivas

11-2020

International law firm Bird & Bird recently secured a landmark victory in the Musaat case. 

Damages to Musaat of around four million euros resulting from a boycott and acts of retaliation of three major Spanish insurance companies involved in a price fixing cartel are now confirmed. 

The Musaat case is notable for being one of the first antitrust private enforcement actions in Spain (prior to Spain's implementation of the antitrust damages Directive (Directive 2014/104/EU). The case also represents the largest award of antitrust damages to a victim in Spain.  It stands out for its unusual evolution from a follow-on cartel damages action into a stand-alone damages claim, and for being the first case where the European Commission has intervened as amicus curiae in judicial proceedings in Spain.  

The Musaat case

Background: the antitrust infringement

At the time of the Spanish construction boom, it became compulsory under Spanish law for developers to purchase an insurance policy to guarantee any construction defects for the first 10 years.  Musaat launched an insurance product which was on average 24% cheaper than that of the members of the cartel. The cartel members, Caser, Scor and Asefa, boycotted Musaat and forced its reinsurer to withdraw its reinsurance.  Musaat found an alternative reinsurer which was more expensive and resulted in a considerable loss of turnover and market share for our client.

On 12 November 2009, the Spanish Competition Authority (“CNC”) imposed a total fine of EUR 121 million on Caser, Scor and Asefa for their participation in a price fixing cartel in the Spanish market for building liability insurance from 2002-2007. Caser, Scor and Asefa also established a retaliation mechanism and orchestrated a collective boycott against Musaat who refused to join the cartel which lasted for almost two years (2006-2008).

The process before the Spanish Courts

Antitrust infringement and damages, two distinct but interconnected procedures

Based on the CNC’s decision, Musaat brought a follow-on damages action before the Madrid Commercial Court. 

At a similar time, Caser, Scor and Asefa appealed the CNC’s decision before the Audiencia Nacional.

The Audiencia Nacional overturned the CNC's decision finding an antitrust infringement. As a consequence of the Audiencia Nacional’s judgment, Musaat had to adapt its procedural strategy before the Madrid Commercial Court and convert its follow-on cartel damages action into a stand-alone damages claim. 
On 19 May 2014, the Madrid Commercial Court confirmed that Caser, Scor and Asefa had participated in unlawful acts of pressure and boycott against Musaat and held the companies jointly and severally liable for damages of EUR 3,5 million. The judgment of the Madrid Commercial Court was then appealed before the Provincial Court of Madrid.

The European Commission amicus curiae

The first time the Commission intervenes as amicus curiae in judicial proceedings in Spain

The Audiencia Nacional's judgment overturning the initial CNC’s decision was appealed before the Spanish Supreme Court (“SC”). Following two persuasive requests by our Bird & Bird lawyers, the European Commission submitted, for the first time in Spain, amicus curiae observations before the SC  
On 22 and 26 May 2015 the SC annulled the judgment issued by the Audiencia Nacional and confirmed the CNC’s decision finding an antitrust infringement. The SC confirmed that the boycott suffered by Musaat constitutes a restriction of competition in its own right.

The end of the saga

The SC confirms ruling in favour of Musaat

On 3 July 2017, following the SC judgment, the Provincial Court of Madrid condemned Caser, Scor and Asefa for boycott and acts of retaliation against Musaat. That judgment confirmed that Musaat's damages as a result of the anticompetitive boycott amounted to €3.3 million.

On 23 September 2020, the SC dismissed the appeals lodged by Caser, Scor and Asefa against the judgment of the Madrid Provincial Court, which is now final. As a result, Musaat’s damages for around four million euros are now definitively confirmed.

The cross-border Bird & Bird team representing Musaat was led by partner Antonio Cueto (Madrid) and assisted by partner José Rivas (Brussels).