13. Summary: private enforcement of competition law

This thesis discusses the question to what extent and how European and Dutch competition law can be enforced using private law techniques within the Dutch legai system. A pr-incipal reason for enquiring into this question is the modernisation and decentralisation of European competition law enforcement. In order to answer the question several sub-questions have been explored.

Chapter 2 discusses the objectives and contents of competition law. The competition rules applicable in the Netherlands have been laid down in the EC Treaty (EC) and the Dutch Competition Act ('Mw').

The prohibition on cartels contained in Article 81 EC provides that all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market are prohibited.

The prohibition on the abuse of a dominant market position contained in Article 82 EC provides that it is incompatible with the common market and prohibited for one or more undertakings to abuse a dominant position on the common market (or in a substantial part of it), insofar as it may affect trade between the Member States.

The contents of Articles 6 and 24 of the Dutch Competition Act are similar, but the requirement of an adverse effect on the trade between the Member States does not play any role in these provisions; Article 24 Mw concerns a dominant position on the Dutch market or a part thereof.

To clarify the (additional) role of private law enforcement of competition law, chapter 3 considers the main points of the question how the public law enforcement of competition law works. The European Commission, the Court of First Instance (al EC) and the Court of Justice (ECJ) on the one hand, and the Dutch Competition Authority (NMa), the Court of Rotterdam and the Trade and Industry Appeals Tribunal (CBB) on the other, are the agencies that play a key part in the administrative law enforcement of competition law: the Commission and the NMa as active investigative authorities which at the same time act as enforcement agencies, the CFI EC, the ECJ, the Court of Rotterdam and the CBB as appeal tribunals for the judicial review of the decisions taken by the Commission and the NMa. This chapter also considers the possible (re)introduction of cr-iminal law enforcement of competition law.

Chapter 4 explores the contours of the different options and developments in the private law enforcement of competition law. This chapter outlines the necessary developments in the area of private law enforcement of competition law, considering successively Regulation 1/2003, the Ashurst report, the Dutch report by Houthoff Buruma and the European Commission's Green Paper and the subsequent White Paper on damages actions for breach of EC competition rules.

Chapter 5 examines the evolution of the role played by the national court in the private law enforcement of competition law. It also focuses on the question of what effect the modernisation and decentralisation of European competition law enforcement has had on the civil law court's role in the enforcement of competition law. It is clear that the national court's responsibility for the decentralised application and enforcement of European competition law is substantial.

The modernisation and decentralisation of European competition law enforcement has led to Regulation 1/2003. This Regulation continues the trend for the national court to be awarded a greater share in the enforcement of competition law. The new system does away with authorization and notification, the application of competition law has been decentralised, and the subsequent inspection system has been reinforced.

The Commission's monopoly to grant individual exemptions under Article 81.3 of the EC Treaty has disappeared in Regulation 1/2003. In addition to the national competition authorities the national courts are also authorised to assess whether an agreement complies with the criteria set by the third paragraph of Article 81 EC.

The national court must apply Articles 81, 82 and 86 EC of its own motion if the party to the proceedings that has an interest in their application has not invoked those Articles, but Community law does not require national courts to raise of their own motion an issue concerning the breach of provisions of Community law where examination of that issue would oblige them to abandon the passive role assigned to them by going beyond the ambit of the dispute defined by the parties themselves and relying on facts and circumstances other than those on which the party with an interest in application of those provisions bases his claim.

Chapter 6 explores the arbitrator's role in the private law enforcement of competition law, drawing attention also to the question of what effect the modernisation and decentralisation of European competition law enforcement has had on the arbitrator's role in the application and enforcement of competition law.

Chapter 6 draws the conclusion that indirectly, arbitrators are under the obligation to apply European competition law of its own motion in the event that it is not invoked in the arbitration proceedings. Arbitrators, after all, may not give a ruling that should be set aside right away because it is contrary to European competition law.

In the application of European law, and European competition law in particular, there appears to be a remarkable difference between the regular court's role and that of the arbitrator. It appears to be a consequence of the Eco Swiss/Benetton ruling that in cases in which certain agreements are contrary to European competition rules, arbitrators should raise of their own motion an issue concerning the breach of provisions of Community law where examination of that issue would oblige them to abandon the passive role assigned to them by going beyond the ambit of the dispute defined by the parties themselves and relying on facts and circumstances other than those on which the party with an interest in application of those provisions bases his claim. However, this duty concerns only facts that have been established in the course of the proceedings and does not require arbitrators to instigate investigations into breaches of competition law.

Unlike the regular courts, arbitrators may not submit preliminary questions to the ECJ. Under the regime of Regulation 1 /2003 arbitrators, like the regular courts, will be authorised to apply the third paragraph of Article 81 EC. The arbitrator's role in the private law enforcement of competition law is essentially different from that of the regular court. Still, the arbitrator could and should play a fully-fledged role in the private law enforcement of competition law.

Chapters 7, 8 and 9 discuss three pr-incipal questions. Are undertakings and consumers who have fallen victim to a breach of competition rules entitled to damages? If so, what obstacles face those undertakings and consumers in instituting actions to obtain damages on account of breach of competition law? What are the possibilities of reducing those obstacles and creating a more efficient system of private law enforcement of competition law?

Chapter 7 reviews the award of damages on account of breach of competition law. This chapter considers several sub-questions. The first question is what the objective is of damages in the private law enforcement of competition law. Secondly, what criteria should be fulfilled under Dutch law to establish liability on account of breach of European and Dutch competition law. Thirdly, what criteria are relevant in determining the scope of liability and the nature and extent of the damages. Fourthly, what obstacles face the party injured by the breach of competition law when claiming liability on account of that breach and determining the nature and extent of damages. Fifthly, whether the injured party's position should be reinforced and, if so, how. Amongst other things, the passing-on defence and the possible introduction of punitive damages are discussed.

Chapter 8 examines the role played by collective actions in the private law enforcement of competition law. The key question is what possibilities there are for a group of individuals to enforce competition law by means of private law. In particular the problems encountered by groups of injured parties if they seek compensation for the damage sustained due to a breach of the competition rules is explored. This chapter also examines the changes necessary to improve the possibilities of instituting collective actions. It pays attention to the problems that occur in the event of 'scattered losses' and the financing of collective actions.

Chapter 9 explores evidentiary problems in the private law enforcement of competition law and the possible solutions. Research showed that evidentiary problems have two phases. The first phase is the period in which no action has yet been brought. The second phase is the period that begins with the issue of a writ of summons.

For the injured party in breach of competition law the collecting of evidence in the preliminary phase (the period in which no action has yet been brought) could present a major problem, especially in cases in which no competition authority has yet given a ruling (stand alone actions). It will not always be easy to prove breaches of competition law.

In the private law enforcement of competition law economic expertise may come in useful, especially if no decision has been rendered (yet) by a competition authority establishing breach of competition law.

This chapter furthermore considers the direct effect of a decision of a competition authority in civil law proceedings (follow-on actions) and the direct effect of leniency schemes in civil law proceedings. The conclusion is that using the instruments available, the court can play a significant role in unearthing the facts that are relevant to the private law enforcement of competition law.

In particular in cases in which European competition law applies, it will frequently happen that in the private law enforcement of competition law the injured parties and the injuring parties are residents of different countries and the effects of the breach of competition law spread over different countries. The rules of private international law provide the answer to the questions which court has jurisdiction, which law is applicable and whether a ruling on the private law enforcement of competition law is eligible for recognition and execution. Chapter 10 discusses several aspects of private international law that could play a role in the private law enforcement of competition law. These are issues concerning jurisdiction, applicable law and the recognition and execution of foreign court rulings.

Chapter 11, finally, contains some concluding observations. The conclusion is that although private law enforcement has its drawbacks, it also has advantages compared to public law enforcement. It is not necessary, however, to make a choice between a system of just public law enforcement on the one hand, or just private law enforcement on the other. Private law enforcement and public law enforcement can complement and reisforce each other. The advantages of public law enforcement can thus be combined with the advantages of private law enforcement. The drawbacks of public law enforcement may be compensated in part by private law enforcement, and vice versa. Having regard to the corrective justice effect of private law enforcement, the additional contribution to the deterrent effect and the filling up of the enforcement gap, it can be concluded that private enforcement of competition law is both useful and necessary.