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

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 2010, the Higher Regional Court of Düsseldorf (Germany) 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 the context of its legal action in the Bleaching Agent Cartel case, CDC HP brought an action before the General Court of the EU 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 claimed that the refusal was necessary in order to preserve the attractiveness of its leniency programme for future cases. By Judgment of 15 December 2011, the General Court has annulled the decision of the Commission not to grant access to the index of the administrative file in the HP cartel case. The court noted that the ‘purpose of Regulation No 1049/2001 is to give the public the fullest possible right of access to documents held by the institutions’, and that ‘since they derogate from the principle of the widest possible public access to documents, the exceptions laid down in Article 4 of Regulation No 1049/2001 must be interpreted and applied strictly.’ The General Court specifically held that ’the interest of a company which took part in a cartel in avoiding damage actions cannot be regarded as a commercial interest’ in particular considering the fact ‘that any individual has the right to claim damages for loss caused to him by conduct which is liable to restrict or distort competition.’ The Court also stipulated the importance of private damage actions for an effective enforcement of EU antitrust rules: ‘It must be recalled that the leniency and co-operation programmes whose effectiveness the Commission is seeking to protect are not the only means of ensuring compliance with EU competition law. Actions for damages before the national courts can make a significant contribution to the maintenance of effective competition in the EU.’ 
A competition authority cannot refuse access to documents in its case file based solely on the general assertion that this would jeopardize the appeal of its leniency programme but has to show that the demanded disclosure is actually likely, to ‘specifically and effectively undermine protection of the purpose of investigations.’ Importantly, the Court also ruled that ‘the investigation in a given case must be regarded as closed once the final decision is adopted, irrespective of whether that decision might subsequently be annulled by the courts, because it is at that moment that the institution in question itself considers that the procedure has been completed.’ As a result of this decision, the Commission will have to provide CDC HP access to the index which lists the documents contained in the HP case file. The judgment is of general importance as it strengthens the right to obtain access to documents contained in the Commission’s file in order to substantiate damage claims resulting from cartel infringements.

Protection of information submitted under leniency programmes?

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.
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.

As access to evidence gathered by competition authorities is often indispensable for private claimants to prove the scope of their claim, it is doubtful whether a too restrictive position of competition authorities in this respect would be in line 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. In its Pfleiderer judgement of 14 June 2011 [case C‑360/09] the Court of Justice of the EU acknowledged the right of the cartel victims to compensation and observed that both leniency programmes and civil actions for damages are tools for the effective enforcement of competition law. Therefore it is necessary to ‘weigh the respective interests in favour of disclosure of the information and in favour of the protection of that information provided voluntarily by the applicant for leniency. That weighing exercise can be conducted by the national courts and tribunals only on a case‑by‑case basis, according to national law, and taking into account all the relevant factors in the case.’

There are further legal actions seeking access to the Commission’s case file, documents contained therein or the confidential version of the decision. These actions were filed by potential plaintiffs in other cartel cases and are still 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 potential claims on significant losses caused by a cartel that has been uncovered by the Commission, and point out that knowledge of the content of administrative files is necessary in order to effectively recover their damages.

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.

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.