Access to Evidence

Antitrust damage cases are highly fact-intensive. Relevant facts include information about the existence of the cartel in question, its duration, and its actual effects on the market concerned. However, claimants typically neither know nor possess the evidence to prove these facts. Due to the secret nature of hardcore cartels, the members of the cartel and/or the competition authority are often the only ones in possession of these facts. Because of this inequality, it is widely acknowledged that it is indispensable to provide cartel victims with adequate possibilities for accessing the relevant evidence.

-    Access to files of the competition authorities
-    Disclosure inter partes
-    Protection of information submitted under leniency programmes?

Access to files of the competition authorities

For ‘follow-on’ actions (that is, civil actions brought after a competition authority has found an infringement) in particular, cartel victims usually need access to the file of the competition authority that investigated the operation of the cartel. The European Commission and the national competition authorities have a broad set of investigative tools at their disposal. For example, their officers have the authority to enter any premises, land, or means of transport of suspicious companies; they can examine the books and other records related to the business; and can ask any representative or member of staff of the company concerned for explanations on facts or documents relating to the subject matter and purpose of the inspection. As private parties, cartel victims do not have comparable powers.

For this reason, some national laws in Europe already provide victims of illegal cartel behaviour with the right to access administrative files. The Dutch competition authority, for example, has granted a potential plaintiff access to the ‘onderzoeksrapport’, an equivalent to a Statement of Objections issued by the Commission, addressed to members of a chemicals cartel, in 2009. Prior to this, the competition authority fined the cartel members a total of EUR 3.1 million for their illegal conduct. In Italy, following a request from the Rome Court of Appeals in the context of the International Broker litigation, the Italian Competition Authority disclosed to the court the minutes of a hearing of the defendants’ representatives as well as the documents seized in a dawn raid at the defendants’ premises. In Germany, in 2008, the Local Court of Bonn confirmed that a company, in order to prepare private antitrust litigation, may claim access to the file of the Federal Cartel Office (FCO) on the pending proceedings for the imposition of administrative fines, provided that the company has a legitimate interest and there are no opposing interests warranting protection [Case No. 51 Gs 1456/08]. In 2010, the Higher Regional Court of Düsseldorf granted a victim of the German Cement Cartel access to the full text of the reasons for the judgment which the Court had handed down in the prior proceedings for the imposition of administrative fines on the cartel members. The Court particularly affirmed the ‘legitimate interest’ of the party applying for access to the reasons for the judgment in full [Case VI-2a Kart 2/08 OWi].

Where the European Commission has competence over a case, it may be possible to approach the Commission to grant access to documents contained it its case file. According to Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (‘Transparency Regulation’) [OJ L 145/43, 31/05/2001], any third party may claim access to Commission’s files. In its judgment of 13/04/2005, the General Court strengthened the individual right of access to files of the Commission and annulled the decision of the Commission to refuse the Verein für Konsumenteninformation (VKI) access to its administrative files in a cartel case [Case T-2/03]. The VKI, an Austrian organisation safeguarding the interests of consumers, had applied under the Transparency Regulation for access to documents concerning the investigations against a cartel of Austrian banks (‘Lombard Club’) without being a direct party to the cartel investigation.

In proceedings for the application of Article 101 TFEU, courts of the Member States may also ask the Commission to transmit to them information in its possession or its opinion on questions concerning the application of the EU competition rules [Article 15(1) of the Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1/1, 04/01/2003]. In addition, the Court of Justice of the European Union has held that under the Treaties of the European Union there is a duty of sincere cooperation imposed on EU institutions, which is of particular importance vis-à-vis the judicial authorities of the Member States, who are responsible for ensuring that EU law is applied and respected in the national legal system. Therefore, on request made by a national court hearing proceedings on the infringement of EU rules, the Commission must give its ‘active assistance’ to such national legal proceedings, by producing documents to the national court and authorising its officials to give evidence in the national proceedings [Case 2/88-IMM, order of 13/07/1990, Zwartveld].

Disclosure inter partes

The White Paper of the Commission points out that it is essential to overcome the structural information asymmetry between cartel members and victims by improving the victims’ access to relevant evidence. The Commission further confirms that as a ‘minimum standard’ of disclosure in actions for antitrust damages, national courts should under specific conditions have the power to order disclosure inter partes of precise categories of information or evidence relevant to the case.

Indeed, many national legal systems in Europe enable courts to order defendants or third parties to hand over evidence in their possession, if the claimant specifies this evidence sufficiently and if it is relevant to the case. Some national laws even limit, under certain conditions, the requirement of specification and allow the taking of evidence which is in the sphere of the defendant (or third parties) on the basis of more general factual contentions. In England, in particular, a party who is ‘likely’ to be a party in an antitrust action may also apply for pre-action disclosure against a party who is ‘likely’ to be a party to that same action before the claim is issued.

It is an integral part of the acquis communautaire (that is, the total body of EU law which has evolved over time and binds all the Member States together) that in view of damage actions for breach of EU antitrust law the Member States shall apply all domestic rules and principles that facilitate access to evidence in order to ensure that cartel victims can exercise their right to compensation effectively, while such domestic rules and principles which make the exercise of the right to compensation excessively difficult shall not be applied. The Member States shall do so without differentiating between cases concerning the infringement of national or European competition law.

Protection of information submitted under leniency programmes?

Need for special protection?

The Commission states in its White Paper that adequate protection against disclosure in private damage actions shall be ensured for corporate statements submitted under its leniency programe to avoid placing the leniency applicant in a less favourable situation than the co-infringers. Otherwise, the threat of disclosure of such corporate statements might have a negative impact on the scope of the statements, or even deter an infringer from applying for leniency. Some national competition authorities share this view.

This attitude towards the question of interaction between leniency programmes and actions for damages is anything but compelling. In 2005, Commissioner Kroes stated herself that she ‘do[es] not see how the obligation to compensate the victims of an antitrust infringement could have a chilling effect on the leniency programmes of the European competition authorities’ [SPEECH/05/533]. The Association of European Competition Law Judges also notes, in its comments on the White Paper, that the supposed negative effects of private enforcement on leniency applications have not been demonstrated and may have been overestimated. This finding is supported by the experience of US antitrust experts, who point to the fact that the incentives to seek for leniency are powerful and working. Concerns that potential damages may discourage participation may well be ‘overblown’ [see Cavanagh, Or. L.Rev. 84 (2005) 147, 168]. Besides, the Commission’s proposal that protection should apply to all corporate statements submitted by any applicant for leniency in relation to a breach of Article 101 TFEU ‘regardless of whether the application for leniency is accepted, is rejected or leads to no decision by the competition authority’, is an open invitation for abusive utilisation of the leniency programme by cartel members who have no chance of receiving leniency (because they cannot offer additional evidence to the competition authorities), but who are intent on avoiding disclosure to injured parties in civil proceedings.

Pending cases before the Court of Justice of the European Union

Access to the submissions of leniency applicants is often indispensable for private claimants to prove a claim.  For this reason, the position of the competition authorities is unlikely to be compatible with the victims’ right to effective enforcement of its claims [see ECJ, Manfredi (2006)]. The right to effective enforcement of antitrust damage claims forms part of the fundamental right to property of cartel victims as granted in the EU Charta of Fundamental Rights, the European Convention of Human Rights and the constitutions of most Member States. At a conference in Paris in February 2010, Nicholas Forwood, a UK judge at the General Court, said that private claims brought in the EU against antitrust infringers will not ‘become a reality’ until pending issues on disclosure of information held by competition authorities are resolved.

In the context of its antitrust action in the Bleaching Agent Cartel case, CDC HP brought an action before the General Court on 6 October 2008 [Case T-437/08], challenging the Commission’s refusal to grant CDC HP access under the Transparency Regulation to the case file index of Case COMP/F/38.620 – Hydrogen peroxide and perborate. In its decision, the Commission essentially claims that the refusal was necessary in order to preserve the attractiveness of its leniency programme for future cases. However, under the Transparency Regulation refusal of access to files is the exception of the rule, justified only under narrow conditions. It is not sufficient to rely on the merely hypothetical risk of detriment to any interests protected such as the general protection of a leniency programme. In addition, as indicated above, the alleged threat by private actions to the attractiveness of public leniency programmes is neither proven nor convincing, given the remarkable reduction of fines granted to leniency applicants. The interest of the injured parties in the details of the infringement should also be valued higher than the interest of the cartel members to not disclose to these details along with the scope of its cooperation with the Commission under the leniency notice. Finally, given the nature and the scope of the information demanded, the contested decision is justified neither by the exemption clause in the Transparency Regulation regarding the protection of commercial interests, nor by the protection of the purpose of inspections and investigations. In support of CDC HP, the Kingdom of Sweden has intervened in the action pending before the General Court.

For similar reasons, there are also several further legal actions filed by potential private plaintiffs in other cartel cases pending before the General Court [see, for example, Case T-380/08, The Netherlands v Commission; Case T-344/08, EnBW Energie Baden-Württemberg v Commission]. In these cases, the plaintiffs also base their respective claim on significant losses caused by a cartel that has been uncovered by the Commission, and point out that knowledge of the contents of the administrative files is necessary in order to recover these losses.

The Local Court of Bonn [Case No. 51 Gs 53/09], which basically shares this view, lodged a reference for a preliminary ruling with the ECJ on 9 September 2009. It concerns the question of whether or not the provisions of EU competition law are to be interpreted as meaning that parties adversely affected by a cartel may, for the purpose of bringing civil-law claims, be given access to leniency applications or to information and documents voluntarily provided in that connection by applicants for leniency which the national competition authority of a Member State has received, pursuant to a national leniency programme, within the framework of proceedings for the imposition of fines which are (also) intended to enforce Article 101 TFEU. The Local Court of Bonn has yet to adopt a final decision in a case where a customer applied for access to the file under the German Criminal Procedural Code in order to prepare a claim for antitrust damages. In particular, that customer requested access to the leniency applications and all documents which the leniency applicants had handed over to the FCO. The FCO denied access to these leniency documents. The Local Court is of the preliminary opinion that under national law the victim of an illicit cartel should be granted access to the leniency documents in the FCO’s file. The proceedings before the ECJ are also still pending [Case C-360/09, Pfleiderer AG v Bundeskartellamt].

Draft directive on damage actions

According to the Commission's unpublished draft directive on damage actions for infringement of the EU competition rules, Member States would have to ensure that their courts do not order cartel members to disclose corporate statements (that is, admissions of the company submitted under a leniency programme) to private claimants. The same would apply with regard to the contents of settlement submissions which reflect the results of the settlement discussions between companies supposed to be members of a cartel and the Commission, and acknowledge the participation of the companies concerned in an infringement of Article 101 TFEU as well as their liability. This provision is at odds with the Commission's public agenda of facilitating private enforcement for cartel victims as it would be a significant obstacle for claimants to the benefit of cartel members.

Private leniency models

It is obvious that a more reasonable balance must be struck between the objectives of public and private enforcement. CDC’s Leniency PLUS⁺ concept applies the idea of public leniency programmes to private damage actions. It is based on existing law and puts CDC in the position to offer significant advantages to cartel members willing to cooperate with private plaintiffs.

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