Legal Alert – New Developments in Liability for Antitrust Damages – Case Skanska Industrial Solutions e.a.
This week brought new developments to our longstanding cartel case as, Advocate General Wahl issued his highly-anticipated opinion in the preliminary ruling case Skanska Industrial Solutions e.a. (C-724/17). According to the AG’s opinion, the EU Court of Justice should rule that the principle of economic succession is to be applied so that, in a private law action for damages before a national court, an individual may seek compensation from a company that has continued the economic activity of a cartel participant.
The case relates to the so-called asphalt cartel that operated in Finland from 1994 to 2002. The three defendants in the case had initially acquired the entire share capital of certain cartelist companies and subsequently dissolved the said companies, while continuing their respective business activities. Relying on the principle of economic succession, the Supreme Administrative Court of Finland ruled in 2009 that the acquiring companies were liable for the cartel fines of the dissolved cartelists. The question currently pending before the Supreme Court of Finland and the EU Court of Justice via a request for preliminary ruling is whether the principle should also apply in the context of follow-on damages claims.
Importance in terms of compensation
In the final Opinion of his mandate as an Advocate General, AG Wahl placed greater emphasis on the deterrent function of private actions for antitrust damages rather than their compensatory function, and opined that if the principle of economic succession were not applied in the context of such actions, this would weaken the deterrent element involved in allowing any individual to claim damages for an infringement of EU competition law. The AG underscored the complementary nature of the public and private enforcement of EU antitrust rules and stated that the arguments put forward in the context of public enforcement in order to justify recourse to the principle of economic succession are, in his view, equally valid in the context of private enforcement. Reiterating the Court’s original rationale underlying the principle of economic succession, the AG considered that if the penalty ensuing from an antitrust infringement were imposed on an undertaking that continues to exist in law, but has ceased its economic activity, such a penalty would have no deterrent effect.
With respect to the attribution of liability, the AG considered, unlike most of the parties in the case, that the determination of persons liable to pay compensation for harm caused by an infringement of EU competition law is a matter of Union law, rather than national law of the Member States. The AG saw the determination of liable persons as ‘the other side of the coin’ of the right to claim compensation for harm caused by a breach of Article 101 TFEU. Moreover, the AG opined that leaving the determination of persons liable for damages solely to the discretion of the Member States might limit the right to claim compensation, since the application of different rules of attribution across the Member States could affect the very existence of such a right and run counter to the objective of creating a level playing field for all undertakings.
Potential future developments
Evidently, the AG placed throughout his opinion considerable emphasis on the efficiency of EU competition law. However, it remains to be seen what importance the Court will ultimately accord to those crucial arguments left unexplored in the AG’s Opinion, in particular how the principle of legal certainty should inform the Court’s judgement. In this regard, the Opinion acknowledged the possibility available to the Court to limit the temporal effects of its judgement.
The Court is expected deliver its judgement later this year.
Borenius’ lawyers are available to assist in addressing any questions you may have regarding this legal alert. Please feel free to contact any of the Borenius’ attorneys listed in this alert or those with whom you usually work.