{"id":2044,"date":"2019-03-19T16:00:57","date_gmt":"2019-03-19T15:00:57","guid":{"rendered":"https:\/\/www.d-kart.de\/?p=2044"},"modified":"2019-03-20T19:21:47","modified_gmt":"2019-03-20T18:21:47","slug":"eugh-in-skanska-das-unternehmen-ist-passivlegitimiert-im-kartellschadensersatzrecht","status":"publish","type":"post","link":"https:\/\/www.d-kart.de\/en\/blog\/2019\/03\/19\/eugh-in-skanska-das-unternehmen-ist-passivlegitimiert-im-kartellschadensersatzrecht\/","title":{"rendered":"The \u201cundertaking\u201d is liable in antitrust tort law! \u2013 ECJ in Skanska"},"content":{"rendered":"\n

The European Court of\nJustice\u2019s judgment in Skansa was anticipated with excitement. This damage claim\ncase has the potential to change European competition law \u2013 since it deals with\nthe question whether the definition of undertaking is the same for damage\nclaims as for fining. Patrick Hauser and J\u00f6rn Kramer report on one of the top\ncases in 2019.<\/em><\/p>\n\n\n\n

Introduction<\/h2>\n\n\n\n

The Skanska\ndecision<\/a> has been highly anticipated, as it has\/had the potential to\nshape antitrust tort law to a considerable degree. We have already taken discussed\nthe request<\/a> for a preliminary ruling and the Opinion of Advocate\nGeneral Wahl on D\u2019Kart<\/a>\n(see also Hauser, WuW 2019, 123 or WUW1288470<\/a>).<\/p>\n\n\n\n

At first glance, the request for a preliminary\nruling revolved around the question whether the principle of economic continuity\nthat the ECJ applies in cases concerning fines applies also in antitrust tort\nlaw (more detailed information on the facts of the case here<\/a>.\nThe applicable Finnish law does not lay down rules that provide for an\nequivalent liability of the legal or economic successor. The referring court,\ntherefore, asked (i) whether such a liability in antitrust tort law results\nfrom a direct application of Art. 101 TFEU or (ii) whether the EU law\nrequirement of effectiveness demands such a liability in national law. However,\nthe implications of the decision exceed the cases of (economic) succession: Essentially\nthe question was, to what extent the notion of undertaking also claims validity\nin antitrust tort law.<\/p>\n\n\n\n

Surprisingly quick (possibly in order to\nrelease Advocate General Wahl from his office) the ECJ has now decided. And a\nlandmark decision it is:<\/p>\n\n\n\n

Liable\npersons are determined directly by EU law <\/h2>\n\n\n\n

The ECJ follows the Opinion\nof Advocate General Wahl<\/a>. The persons liable to provide compensation\nfor damages are to be determined by direct application of Art. 101 TFEU.<\/p>\n\n\n\n

It has been recognised since the Courage<\/em> decision that Art. 101 TFEU\nprovides for the right of any individual to claim compensation for damages\narising from a cartel. However, in the absence of relevant Community rules, it\nis for the domestic system of each Member State to lay down the detailed\nprocedural rules governing the exercise of the right to claim compensation\n(paras. 24 et seq.). The ECJ (apparently) does not count the determination of\nthe liable entity among these detailed rules:<\/p>\n\n\n\n

\u2018However, as the Advocate General has pointed out in points 60 to\n62 of his Opinion, the determination of the entity which is required to provide\ncompensation for damage caused by an infringement of Article 101 TFEU is\ndirectly governed by EU law.\u2018<\/em> (para. 28)<\/p>\n\n\n\n

The ECJ emphasises that the prohibition under\nArt. 101 TFEU addresses \u2018undertakings\u2019 (in the sense of the economic unit).\nAccording to settled case law, EU competition law also refers to the activities\nof undertakings. The perpetrator of the infringement is therefore any entity\nengaged in an economic activity, irrespective of its legal status and the way\nin which it is financed. In the opinion of the ECJ, the undertaking (in the sense\nof the economic unit) that infringes competition law must also be liable under\ncivil law for the damage caused by the infringement. <\/p>\n\n\n\n

The concept of undertaking constitutes an \u2018autonomous concept of EU law<\/em>\u2019 which\ncannot \u2018have a different scope with regard\nto the imposition of fines as compared with action for damages<\/em>\u2019 (para. 47).\nAccording to the ECJ, this follows from the fact that the deterrent effect of\ndamages contributes to the maintenance of effective competition. Actions for\ndamages, therefore, constitute an \u2018integral\npart of the system for enforcement<\/em>\u2019 of the competition law rules (para. 45).<\/p>\n\n\n\n

It has been established in the case-law on\nfines that in cases of \u2018restructuring of\nan undertaking in which the entity which committed the infringement has ceased\nto exist \u2026 this change does not necessarily create a new undertaking free of\nliability \u2026 when, from an economic point of view, the two are identical<\/em>\u2019\n(para. 38). Such (successor) liability is not contrary to the principle of\npersonal responsibility (para. 39). Rather, liability of the purchaser may even\nbe necessary to ensure effective implementation of the EU competition rules\nwhere the undertaking responsible no longer exists \u2018by reason\nof the fact that it has been taken over by the purchaser, which as the\nacquiring company, takes over its assets and liabilities, including its\nliability for breaches of EU law<\/em>\u2019 (para. 40).<\/p>\n\n\n\n

Damages\nDirective does not contradict these conclusions<\/h2>\n\n\n\n

This conclusion is not in conflict with the Damages Directive<\/a> which is not applicable in the present case anyway. In particular, Art.\u00a011 (1) does not confer on the Member States the power to determine the party liable to pay damages, but merely demands that Member States ensure joint and several liability between the \u2018undertakings\u2019 liable to pay damages. On the contrary, the provision confirms, as does Art.\u00a01 (1), \u2018that those responsible for damage caused by an infringement of EU competition law are specifically the \u201cundertakings\u201d which committed that infringement<\/em>\u2019 (see already Kersting<\/em>, WuW 2014, 564, 565 or WUW0661876<\/a>).<\/p>\n\n\n\n

Effects\nof the judgment not limited in time<\/h2>\n\n\n\n

The judgment also affects legal relationships\nthat have already been entered into before the ruling. After all, the ECJ \u2018clarifies and defines the meaning and scope\nof [the rule in question] as it must be or ought to have been understood and\napplied from the time and its entry into force<\/em>\u2019 (para. 55). Such a\nlimitation (to future cases) is therefore only possible in exceptional circumstances.\nThe relevant request had already not been sufficiently substantiated (paras. 56\net seq.).<\/p>\n\n\n\n

First\nassessment<\/h2>\n\n\n\n

It does not come as a surprise that the ECJ applies\nthe EU-notion of undertaking to antitrust damages as well (see already here<\/a> and\nHauser<\/em>, WuW 2019, 123 or WUW1288470<\/a>). However, it might have been\nadvisable to transfer the notion of undertaking into national law via the\nprinciple of effectiveness, as put forward in the third and consequently unanswered\npreliminary question. The Commission possibly suggested the same during the\noral hearing (see para. 33). <\/p>\n\n\n\n

Art. 101 TFEU does not explicitly determine\nthe persons\u2019 liable for compensation of cartel damages. At the same time it\nappears persuasive that the infringer of the prohibition and the liable entity\nare to be the same. However, there are no provisions in EU law that provide for\nrules regarding civil liability. The situation, therefore, differs from the law\non fines (cf. Art.\n23 Regulation 1\/2003<\/a>). <\/p>\n\n\n\n

It is clear now, that according to primary law\nthe \u2018undertaking\u2019 is liable for cartel damages. As European Law takes\nprecedence, any opposing Member State regulations are irrelevant. How this liability\n(dogmatically) fits into the national antitrust regulations remains open, however.\n<\/p>\n\n\n\n

Implications<\/h2>\n\n\n\n

The questions referred focused on the principle\nof economic continuity. But the implications of the ruling extend beyond that.\nDue to the direct application of Art. 101 TFEU, the law on fines and cartel\ndamages are now in sync, as the direct application of Art. 101 TFEU leads\nto a comprehensive transfer of the principles regarding the liable person established\nin fine law to damages law. Thus, in any case the parent company is also liable\nfor damages caused by the subsidiary\u2019s infringement in the economic unit.<\/p>\n\n\n\n

The decisions\u2019 implications are, however, not\nlimited to cartel damages, but also effect the law on fines. Ultimately, it should\nfollow from the equal treatment of fines and damages regarding the notion of\nundertaking that the addressee of a fine is equally derived directly from Art.\n101 TFEU. Thus, this would also be the case if the national cartel authorities\nimpose fines for an infringement of Art. 101 TFEU. <\/p>\n\n\n\n

Therefore, Directive (EU) 2019\/1 (ECN\nPlus Directive<\/a>) only has clarifying effect insofar as it requires\nMember States to ensure that fines can also be imposed on \u2018undertakings\u2019 and that\nthe notion of undertaking applies for the purpose of parent and successor\nliability (cf. Art. 13 (1), (5) and recital 46). Likewise, there is (probably)\nno longer need for Section 81 (3a-3e) of the German Act against Restraints of\nCompetition (GWB) and the related transitional provisions, as far as infringements\nof EU antitrust law are concerned.<\/p>\n\n\n\n

In addition, as the effects of the decision are\nnot limited in time, it may be possible that fine proceedings that were\ndiscontinued due to the lack of (solvent) addressees of the fine could be\nreopened and continued against the parent company or the economic successor.<\/p>\n\n\n\n

Particularly in the course of mergers and\nacquisitions, it is now advisable to be (even more) thorough during due\ndiligence. Due to the civil liability of the (economic) successor, even asset\ndeals may result in further antitrust liability risks if the original company\n(economically) ceased to exist.<\/p>\n\n\n\n

Follow-up\nquestions<\/h2>\n\n\n\n

The decision raises a variety of further questions\nwhich will probably concern legal practitioners in the Member States for some\ntime to come:<\/p>\n\n\n\n