12th December 2012 Natalie Harsdorf Cartels & International

1. BUNDESWETTBEWERBSBEHÖRDE 12th December 2012 Natalie Harsdorf Cartels & International

2. CONTENT OF THE SPEECH BUNDESWETTBEWERBSBEHÖRDE CONTENT: I. Collective Actions in Austria II. Amendement of the Austrian Cartel Act III. Print-chemicals Cartel in Austria: Access to file

3. I. Collective Actions in Austria BUNDESWETTBEWERBSBEHÖRDE • No class actions in Austria • But: “Zivilverfahrens-Novelle 2007“ intended to introduce master lawsuit (Musterklage) and collective actions (Gruppenklagen); from 50 claims on • This amendment was stopped in 2008

4. I. Collective Actions in Austria BUNDESWETTBEWERBSBEHÖRDE AUSTRIAN SOLUTION: • = collective actions sui generis: • Developed inter alia by a consumer organisation • Main instrument: Cession

5. I. Collective Actions in Austria BUNDESWETTBEWERBSBEHÖRDE • How it works: • Victims cede their charges to a consumer organisation to claim for them; § 502 Abs 5 Z 3 ZPO • The consumer organisation files a suit in form of a Joinder of causes of actions (objektive Klagshäufung); § 227 ZPO • Litigation funding by private third parties (e.g. companies specialising in financing litigation) • No contingency fee (Erfolgshonorar) for the lawyer

6. I. Collective Actions in Austria BUNDESWETTBEWERBSBEHÖRDE • Thus: No class action • One claimant • But different separate claims • Individual decision for each claim • Names of victims are well known in advance (no unknown group) • Austrian Supreme Court accepts this form of claim sui generis; • Requirements: same issue of fact and same issue of law

7. II. Amendement of the Austrian Cartel Act BUNDESWETTBEWERBSBEHÖRDE • An Amendement of the Austrian Cartel Act is under review of the Austrian Parliament at the moment • It foresees inter alia: • an separate clause for damages and • a clarification regarding a motion for a declaratory judgement (Feststellungsantrag) in case of actions for damages • New § 37 Cartel Act: Decisions of the Cartel Court first instance will be published

8. II. Amendement of the Austrian Cartel Act BUNDESWETTBEWERBSBEHÖRDE A) Motion for a declaratory judgement: (Feststellungsantrag) • The Austrian Cartel Act requires inter alia an entitled interest (not a legitimate interest) of the movant; otherwise no declaratory judgement will be made; § 28 KartG • To the present day the Jurisdiction of the Austrian Supreme Cartel Court says an action for damages in case of the breach of antitrust law is NO entiteld interest within the meaning of § 28 KartG. • Thus, such motions are not allowed and therefore stand alone actions are rather difficulty to bring.

9. II. Amendement of the Austrian Cartel Act BUNDESWETTBEWERBSBEHÖRDE The Amendment foresees : • Such cases fulfill the requirements of an entitled interest, • except the Court has already made a decision in this case or this case is actually pending.

10. II. Amendement of the Austrian Cartel Act BUNDESWETTBEWERBSBEHÖRDE B) Separate clause for damages containing inter alia (§ 37 a Cartel Act new): • A Cause of Action (Anspruchsgrundlage) • Interest (Zinsen) starting with the occurence of damage • No passing on defense (Kein Einwand der Schadensabwälzung) • Binding effect of a valid decision (restricted to the infringement and the fault) made by Cartel Court, European Commission or NCA for the Civil Courts

11. II. Amendement of the Austrian Cartel Act BUNDESWETTBEWERBSBEHÖRDE B) Separate clause for damages containing inter alia: • Abate the tort litigation (Unterbrechung SchaE-Verf) until the decision of the Austrian Cartel Court, European Commission or NCA about the infringement • Limitation period (Verjährung) is supended until 6 month after a valid cartel decision

12. BUNDESWETTBEWERBSBEHÖRDE III. Print-chemicals Cartel in Austria • BWB investigated cartel concerning printing chemicals and brought to the Cartel Court • Fine of 1,5 Mio € was confirmed by the High Cartel Court in October 2010 • Private association representing several companies allegedly harmed by the cartel asked to get access to the entire case file of the cartel Court • At issue is the national legislation whereby, in Court proceedings relating to competition, access to the file by third parties is subject to the consent of all parties to the proceedings. • Austrian Cartel Court made a preliminary reference to the ECJ – C-536/11 Donau Chemie ea – asking in essence whether the Austrian legislation conflicts with principles of effectiveness and equivalence • Oral hearing in front of the ECJ took place on the 4th October 2012

13. Austrian §39(2) Cartel Act precludes access to file by third parties unless all parties to the main proceeding consent to give access; also only the decisions of the High Cartel Court are open to public. But the BWB informs on decisions of the Cartel Court in the first instance on its website (§10b Competition Act). In the context of competition law proceedings, the Austrian Cartel Court is deprived of any weighing of competing interests, whereas such weighing does take place in respect of access to the file in comparable civil and criminal proceedings. As a result, if only a single party to the cartel proceedings objects, third parties are deprived of access to file not only concerning leniency related information but to the case file at large. BWB –BUNDESWETTBEWERBSBEHÖRDE The issues in the Donau Chemie case

14. The questions referred to the ECJ were whether this national legislation deprives the Cartel Court of an ad hoc balancing of the public interest in an effect application of Art 101 TFEU and the private interest of persons seeking private damages as foreseen in Pfleiderer (Pfleiderer , ¶ 31) and whether the fact that Austrian legislator foresees the weighing of interests in respect of access to the file in comparable civil and criminal proceedings violates the principle of equivalence (Pfleiderer ,¶ 30). BWB –BUNDESWETTBEWERBSBEHÖRDE The issues in the Donau Chemie case (cont‘d)

15. In our view it was not the ECJ’s intention that the weighing exercise can only be conducted by the national courts: The ECJ’s decision is rather premised on the fact that the German legislation foresees a balancing conducted by the courts (§ 406s StPO). “[…] it is, in the absence of binding regulation under European Union law on the subject, for Member States to establish and apply national rules on the right of access, by persons adversely affected by a cartel, to documents relating to leniency procedures.” (Pfleiderer , ¶ 23). Pfleiderer does therefore not necessarily foresee a distribution of competences between the national courts and the national legislator. Thus, it is also the national legislator who can balance the respective interests subject to the principle of effectiveness: According to the explanatory remarks pertaining to the national legislation at issue the legislator conducted that weighing exercise according to which the public interest in prosecuting competition law infringements outweighs the private interest in seeking damages. BWB –BUNDESWETTBEWERBSBEHÖRDE Is it only for the courts to determine the conditions under which access to file is granted or refused by weighing the respective interests protected under EU law?

16. The national legislator’s balancing exercise, though, is subject to the principle of effectiveness: “[…] it is necessary to ensure that the applicable national rules […] do not operate in such a way as to make it practically impossible or excessively difficult to obtain such compensation.” (Pfleiderer, ¶ 30). In our view the relevant benchmark is not whether access to file is practically impossible or excessively difficult but whether obtaining damages and, thus, the effective implementation of the EU competition rules overall is still effectively possible. BWB –BUNDESWETTBEWERBSBEHÖRDE Is it only for the courts to determine the conditions under which access to file is granted or refused by weighing the respective interests protected under EU law? (cont‘d)

17. Notwithstanding the total exclusion from access to the Cartel Court’s file, the right of persons harmed by infringements to seek damages is, in our view, still effectively possible (there has been already one successful case): Decisions taken by the Cartel Court have a binding effect on the civil courts in follow on damage claims. Several provisions in the Code of Civil Procedure facilitate follow on actions: When compensation is claimed in tort actions the burden of proof with regard to fault is reversed. Moreover, the judge may estimate the amount of damages if it is impossible or disproportionate to demonstrate the precise amount of loss If the defendant possesses documents which the plaintiff considers as relevant evidence to support her claim, the judge may order the production of the evidence. As a result, given the overall legal situation of the persons harmed by infringements, the national legislation in respect of access to file goes, in our view, not against the principle of effectiveness. BWB –BUNDESWETTBEWERBSBEHÖRDE Is it only for the courts to determine the conditions under which access to file is granted or refused by weighing the respective interests protected under EU law? (cont‘d)

18. “ […] it is necessary to ensure that the applicable national rules are not less favourable than those governing similar domestic claims.” (Pfleiderer, ¶ 30) The principle of equivalence implies only that the procedural rule applies without distinction to actions alleging infringements of Community law and to those alleging infringements of national law. (Levez v Jennings, ¶ 41) Moreover, the principle is not to be interpreted as requiring MS to extend their most favourable procedural rules to all proceedings in which EU law is applied. (Edis, ¶ 36). BWB –BUNDESWETTBEWERBSBEHÖRDE Does the fact that the Austrian legislator foresees the weighing of interests in respect of access to file in comparable civil and criminal proceedings go against the principle of equivalence?

19. As a result, the fact that there are other more favorable rules governing access to file in comparable civil and criminal proceedings does not necessarily mean that the principle of equivalence is offended. In our view, it was not the ECJ’s intention in Pfleiderer to rule on the relationship between access to file in proceedings related to competition and in comparable civil and criminal proceedings. BWB –BUNDESWETTBEWERBSBEHÖRDE Does the fact that the Austrian legislator foresees the weighing of interests in respect of access to file in comparable civil and criminal proceedings go against the principle of equivalence? (cont’d)

20. BUNDESWETTBEWERBSBEHÖRDE Thank you for your attention! natalie.harsdorf@bwb.gv.at www.bwb.gv.at Twitter: BWB_WETTBEWERB