On 20 April 2021, the European Commission (EC) ruled that the Österreichische Bundesbahnen-Holding Aktiengesellschaft (ÖBB), Deutsche Bahn AG (DB) and the Société Nationale des Chemins de fer belges (SNCB) had unlawfully formed a cartel. In doing so, they coordinated which party would submit an offer to a potential customer and agreed that the other parties would artificially increase their offer, as a result of which the best deal would always come from the lead carrier.[1]
As DB had previously committed a similar violation, its fine was increased by 50%. ÖBB cooperated fully with the investigation and reported itself to the Commission on own initiative. Consequently, it was not required to pay a fine. DB and SNCB also had their fines reduced by virtue of their cooperation in the investigation. The resulting fines totalled €48,324
[1] European Commission decision AT.40330 (Rail Cargo), paras. 30, 34 and 40.
On 11 March 2021, the CJEU was asked by a Spanish court to render a preliminary ruling on Article 5(1) of the Damages Directive (Directive 2014/104/EU)[1] in the context of an action for damages instituted in response to the trucks cartel.[2] We covered this earlier in Q (2021-1). The CJEU published the questions in Q2. The question put forward is as follows:
“Must Article 5(1) of Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union be interpreted as meaning that the disclosure of relevant evidence refers exclusively to existing documents in the control of the defendant or a third party or, in contrast, can Article 5(1) also include the disclosure of documents that must be created ex novo by the party to whom the request for information is made by compiling or classifying information, knowledge or data held by it?”
[1] Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union.
[2] AD and Others v. PACCAR Inc, DAF Trucks N.V. and DAF Trucks Deutschland GmbH, Case C-163/21.
Renault Trucks, Daimler AG and other truck manufacturers confronted with extensive antitrust damages claims in Europe have become aware that, in April 2021, a Spanish court asked the CJEU to clarify whether customers who had purchased dump trucks could also claim compensation.[1] The question from the Provincial Court (audiencia provincial) of Pontevedra dates from April last year, but was only recently disclosed.
Renault Trucks is being sued by Dalarjo et al. in connection with the sale of various trucks and participation in the truck cartel.
Renault Trucks argues that dump trucks are not covered by this decision, because they are not used on the road and have no registration number. Dalarjo et al. dispute this argument. The Provincial Court of Pontevedra has now asked the CJEU for the meaning of ‘medium heavy’ and ‘heavy’ trucks to be further clarified.
On 4 June 2021, the British antitrust watchdog announced that it had started an investigation into whether Facebook had gained an unfair advantage over competitors in providing services for online classified ads and online dating, through how it gathers and uses certain data.[1] The European Commission (EC) has also started its own investigation into Facebook’s use of data.
[1] CMA press release, ‘CMA investigates Facebook’s use of ad data’, 4 June 2021.
On 10 May 2021, the CAT upheld the CMA decision issued in 2016 to the effect that GlaxoSmithKline plc (GSK) made payments aimed at delaying the potential entry of Paroxetine, which is relied on by patients to relieve symptoms of depression, in settlement of patent litigation.[1] The CMA found these payments to be in breach of competition law and imposed fines totalling £44.99 million on the companies involved. The companies appealed the decision. The CAT dismissed a number of grounds back in March 2018 and referred the remaining grounds to the CJEU for a preliminary ruling on various questions of EU law. In January 2020, the CJEU confirmed that these ‘pay for delay’ agreements are in breach of competition law and may constitute an abuse of a dominant position. In the decision of 10 May 2021, the CAT dismissed all remaining grounds of appeal of the companies’ against the CMA decision, opening the door for parties seeking follow-on damages.
[1] CMA Press release, ‘CAT upholds infringement decision for pay for delay pharma deals’, 10 May 2021.
On 18 May 2021, the German Federal Court of Justice (Bundesgerichtshof) ruled on the ‘best price clause’ that Booking.com uses in agreements with hotels.[1] This clause requires hotels not to rent hotel rooms via other channels for a lower price than indicated on Booking.com’s website. In a 2015 decision, the German competition authority announced that this provision was contrary to Article 101(1) TFEU. However, on appeal by Booking.com, the Higher Regional Court (Oberlandesgericht) in Düsseldorf ruled that the provision in question was permissible because it was a necessary ancillary agreement to the agency agreements with hotel companies, and therefore did not fall under the prohibition on cartels. In that respect, particular attention was given to the ‘free rider’ problem that had been raised by Booking.com. The problem is that consumers use Booking.com to obtain information, but then reserve directly at the hotel, meaning that although Booking.com bears the marketing costs it does not generate any sales. The Bundesgerichtshof held otherwise. It did not consider the best price clause to be objectively necessary for the agreement between Booking.com and its hotels, as Booking.com can also sell the rooms without this provision. It was also clear that Booking.com had been able to strengthen its market position in Germany after it stopped using the best price clause. There was no other exemption that Booking.com could invoke.
On 13 May 2021, the CAT ruled that DAF could not amend its pleas by adding general mitigation defences at the current stage of the proceedings against Royal Mail Group Limited (Royal Mail) and BT Group Limited & Others (BT). The case is expected to come to trial in April 2022.[1] DAF sought to amend its pleas by adding additional general mitigation defences in relation to the passing-on of damage, i.e. that Royal Mail and BT mitigated any loss by negotiating lower input costs and/or otherwise reducing its costs of supply. The test for allowing such an amendment at a rather late stage in the proceedings is whether there is a realistic prospect of the plea succeeding at trial. The CAT ruled that for a defendant to be permitted to raise a plea of mitigation in such general terms as proposed by DAF, “there must be something more than broad economic or business theory to support a reasonable inference that the claimant would in the particular case have sought to mitigate its loss and that the steps taken by it were triggered by, or at least casually connected to, the overcharge (..)”.[2] The CAT further held that where a defendant is in the position to make specific averments as to the alleged overcharge, it will be bound to plead them, rather than plead a wholly general allegation of mitigation of loss. The CAT added that in such circumstances, a general plea is liable to be struck out, or permission to amend refused.[3] DAF had not pleaded such specific averments. Even though DAF could not could not be expected to know the detail of the internal operations of Royal Mail and BT, it could at least be expected to be aware of its own commercial dealings with each of them, according to the CAT.[4] As there was therefore no factual support identified by DAF, the CAT was not persuaded that DAF currently had a sufficiently arguable case. Consequently, the application for permission to plead the general mitigation defence was dismissed.
[1] CAT 13 May 2021, [2021] CAT 10, Case Nos. 1284-1290/5/7/18 (T).
[2] Para. 36.
[3] Para 37.
[4] Para 38.
In a four-day trial starting on 19 April 2021, rival claimants the Road Haulage Association (RHA) and UK Trucks Claim (UKTC) argued before the Competition Appeal Tribunal (the CAT) that their applications should be approved, enabling them to proceed to trial.[1] Both claimants are potential class action representatives intending to sue the truck manufacturers that were involved in the truck cartel on behalf of injured parties that bought or leased trucks from the cartelists. The CAT will have to decide whether or not to award a “collective proceedings order” (CPO) to one, both or neither of the claims. A CPO is required under the UK class action regime for either claim to proceed.
The claims differ in that the RHA is looking to use an “opt-in” scheme, while UKTC is primarily looking to bring an “opt-out” claim, with an opt-in scheme put forward only as an alternative. Another difference is that the UKTC claim does not extend to second-hand trucks, while the RHA claim covers all trucks, both new and second-hand.
The truck manufacturers argued that neither RHA or UKTC should be awarded certification because their claims did not satisfy the criteria for approval. As early as October 2019, the cartelists tried to have the planned class actions struck out by challenging the funding arrangement underlying the lawsuits, but without success at first instance.[2] A hearing took place in January 2021 in appeal proceedings brought by DAF to challenge this ruling. The appeal continues.[3]
[1] The case references are: 1282/7/7/18 UK Trucks Claim Limited v. Stellantis N.V. (formerly Fiat Chrysler Automobiles N.V.) and Others; 1289/7/7/18 Road Haulage Association Limited v. Man SE and Others.
[2] Competition Appeal Tribunal 28 October 2019, [2019] CAT 26, Case No. 1282/7/7/18, 1289/7/7/18.
[3] According to Mlex, ‘DAF tells UK judges truck-cartel mass suits must be struck out over funding arrangements’, 26 January 2021.
On 14 April 2021, the Court of Appeal in London upheld a High Court decision of February 2020 to the effect that computer company OT Computers was not time-barred from suing chip manufacturers Infineon Technologies and Micron Technology for their role in the memory chips cartel for which the European Commission had fined the companies back in 2010.[1] The chip makers attempted to get the ruling overturned on appeal, arguing that the limitation periods for the claims had passed because the impact of the cartel was investigated by the US Department of Justice years prior to the EU probe into the chip makers’ conduct. This argument did not succeed, as the judge said the EU decision involved information that was essential in order to bring a claim, and the claimants therefore had to wait for the decision. As the limitation arguments were a preliminary issue which has now been decided in favour of OT Computers, the parties can now press ahead with full legal proceedings.
[1] Court of Appeal London 14 April 2021, [2021] EWCA Civ 501, Case No. A4/2020/0658, A4/2020/0672, A4/2020/0675 & A4/2020/0674.
On 6 May 2021, Advocate General Michal Bobek issued an Opinion in one of the cases concerning the air cargo cartel.[1] The Dutch litigation vehicles Stichting Cartel Compensation and Equilib Netherlands instituted proceedings against British Airways, KLM and other airlines after the European Commission established in 2010 that the airlines had made prohibited price agreements with regard to cargo shipments prices. The AG’s Opinion pertained in particular to the question of whether damage could also be claimed for the period prior to 2004, when important competition law came into force. According to the airlines, Articles 104 and 105 TFEU would result in the national courts not having jurisdiction to rule on antitrust damages cases from that period. Advocate General Bobek did not concur with this and thus concluded that national courts could also rule on antitrust damages claims dating from before 2004.
[1] Advocate General M. Bobek, 6 May 2021, case C-819/19 (Stichting Cartel Compensation and Equilip Netherlands/KLM et al.)
