Private Antitrust Litigation - 2020 Contributing editor Francesca Richmond - Milbank

Private Antitrust
Contributing editor
Francesca Richmond

                      © Law Business Research 2019
Tom Barnes

                                               Private Antitrust

Claire Bagnall


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Adam Sargent

Dan White

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                                               Francesca Richmond
                                               Baker McKenzie LLP
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    Global Overview                                           3     Mexico89
    Francesca Richmond                                               Lucía Ojeda Cárdenas, José Enrique Espinosa Velasco,
    Baker McKenzie LLP                                               Felipe García Cuevas, Mariana Carrión Valencia,
                                                                     Ernesto Álvarez Castillo and Priscila Monge Kincaid
    China5                                                          SAI Law & Economics
    Ding Liang
    DeHeng Law Offices                                               Netherlands95
                                                                     Erik Pijnacker Hordijk, Willem Heemskerk and Susanne Kingma
    England & Wales                                         13      Pels Rijcken & Droogleever Fortuijn
    Elizabeth Morony, Ben Jasper and Oliver Carroll
    Clifford Chance LLP                                              Norway101
                                                                     Siri Teigum, Eivind Vesterkjær, Eivind Sæveraas and Heidi Jorkjend
    France45                                                        Advokatfirmaet Thommessen AS
    Mélanie Thill-Tayara and Marion Provost
    Dechert LLP                                                      Portugal108
                                                                     Mário Marques Mendes and Pedro Vilarinho Pires
    Germany53                                                       Gómez-Acebo & Pombo (GA_P)
    Alexander Rinne
    Milbank LLP                                                      Spain115
                                                                     Pedro Suárez Fernández, Antonio de Mariano Sánchez-Jáuregui
    Greece61                                                        and Javier Pérez Fernández
    Dimitris Loukas and Kostas Manikas                               Ramón y Cajal Abogados
    Potamitis Vekris Law Firm
    Israel68                                                        Stefan Perván Lindeborg, Fredrik Sjövall, Sarah Hoskins
    David E Tadmor and Shai Bakal                                    and Mårten Andersson
    Tadmor Levy & Co                                                 Mannheimer Swartling

    Italy76                                                         Switzerland128
    Eva Cruellas Sada and Salvatore Gaudiello                        Daniel Emch, Anna-Antonina Gottret and Stefanie Schuler
    Gianni, Origoni, Grippo, Cappelli & Partners                     Kellerhals Carrard

    Japan83                                                         Turkey134
    Hideto Ishida and Takeshi Suzuki                                 M Fevzi Toksoy, Bahadır Balkı and Ertuğrul Can Canbolat
    Anderson Mōri & Tomotsune                                        ACTECON

                                                                     United States                                                  141
                                                                     Paul Eckles, Karen Hoffman Lent, Matthew Martino, Tara Reinhart
                                                                     and Jane Klinger
                                                                     Skadden, Arps, Slate, Meagher & Flom LLP

2                                                                                                         Private Antitrust Litigation 2020
                                                      © Law Business Research 2019
Alexander Rinne
Milbank LLP

LEGISLATION AND JURISDICTION                                                      Damages Directive, it can be expected that Germany will continue to
                                                                                  be an important forum for antitrust damages claims in Europe. In fact,
Development of antitrust litigation                                               Brexit implications may further strengthen the importance of Germany
1    How would you summarise the development of private                           as a forum for damages claims resulting from competition law infringe-
     antitrust litigation in your jurisdiction?                                   ments covering more than one EU member state.

Private antitrust litigation has a long tradition in Germany and the              Applicable legislation
enforcement of competition law through litigation continues to increase.          2    Are private antitrust actions mandated by statute? If not, on
There are broadly three different kinds of private antitrust litigation:               what basis are they possible? Is standing to bring a claim
•    damages claims based on infringements of antitrust law;                           limited to those directly affected or may indirect purchasers
•    claims based on abusive behaviour of dominant companies; and                      bring claims?
•    contractual claims being defended on competition law grounds.
                                                                                  Private antitrust actions are mandated by statute in Germany. Claims
Regarding claims challenging abusive behaviour by dominant compa-                 for injunctive relief are primarily based on section 33 of the ARC and
nies, there is a large and established body of case law spanning more             damages claims are based on sections 33a to 33h of the ARC.
than 40 years including, for example, refusal to supply and access to                    In addition, claims for injunctive relief and for damages may under
essential facilities claims.                                                      certain circumstances be based on section 8 and section 9 respectively
      Private antitrust litigation also has a long tradition in Germany in        of the German Act against Unfair Competition. A further legal basis can
relation to competition law grounds being used to challenge or defend             be found in general tort law, in other words, in section 823 et seq of the
the validity of contracts in civil law cases.                                     German Civil Code (CC).
      Damages actions by victims of anticompetitive agreements against                   The invalidity of agreements for competition law reasons is based
participants in the infringement were strengthened significantly as of            on section 134 of the of the CC in connection with section 1 of the ARC.
1 July 2005 (broadening of the circle of potential claimants, alleviation                In a judgment of 28 June 2011 (KZR 75/10), the German Federal
of the standards of proof, restriction of the passing-on defence, etc)            Supreme Court held that also indirect purchasers can bring damage
and again as of 9 June 2017 when Directive 104/2014/EU (Damages                   claims against the members of a cartel (see question 15). Therefore, if
Directive) was implemented into German law (codification of prima facie           manufacturers engage in a price-fixing cartel and charge excessive prices,
evidence and (rebuttable) presumptions that cartels lead to damages,              it is not only their contractual partners (eg, wholesalers or retailers) who
extension of limitation periods, introduction of disclosure procedure, etc).      might be able to claim for damages. Rather, anyone downstream to whom
Even before the Damages Directive had been implemented, Germany                   the whole or a part of the overcharge has been passed on, has standing
was a favourable forum for antitrust damages claims in Europe. Most of            to bring a claim. If certain conditions are met, it is actually presumed that
the principles set out in the Damages Directive applied in Germany for            (a part of) the damage was passed on to indirect purchasers (section 33c
many years, either as part of written laws (such as standing of indirect          of the ARC). However, indirect purchasers bear the burden of proof as
purchasers, binding effect of decisions by competition authorities, joint         to the amount of the damage suffered and as to the causal link between
and several liability, etc) or of the case law (such as availability of certain   this damage and the infringement of antitrust law.
types of joint (de facto collective) actions, prima facie evidence that
cartels lead to damages, availability of the passing-on defence under             3    If based on statute, what is the relevant legislation and which
certain circumstances, etc). By implementing the Damages Directive,                    are the relevant courts and tribunals?
the German legislator has further strengthened private damages
actions. Inter alia, prima facie evidence that competition law infringe-          For the relevant legislation, see question 2. In terms of jurisdiction,
ments lead to damages has been explicitly implemented in the German               there are specific courts with specialised chambers dealing with anti-
Act against Restraints of Competition (ARC) (see question 15). Further, it        trust cases.
is confirmed that limitation periods do not start before a competition law              According to section 87(1) of the ARC, regional courts have exclu-
infringement is terminated and both, limitation periods and suspension            sive jurisdiction over civil actions based on national competition law or
periods, have been extended significantly (see question 17). In addition,         articles 101 and 102 of the Treaty on the Functioning of the European
a disclosure procedure has been established. However, whether this                Union, regardless of the amount in dispute. The federal states in
will actually facilitate or rather delay damages claims remains to be             Germany have been granted the authority to designate one or more
seen (see question 9).                                                            specific regional courts that decide exclusively on antitrust matters
      Taking into account the longstanding experience of the courts with          within the relevant federal state (section 89 of the ARC). Almost all of
antitrust damages claims and the recent changes as a result of the                the federal states have exercised this authority. Within these specific                                                                                                                                             53
                                                              © Law Business Research 2019
Germany                                                                                                                                     Milbank LLP

     regional courts, specialised chambers have been established to deal           the competition law infringement (scene of the behaviour), as well as the
     exclusively with antitrust matters. However, as an exception to the           place at which interference with the object of legal protection occurred
     general rule, according to section 95(2) number 1 of the German Code          (place of interference). In the event of an alleged cartel activity, the
     on Court Constitution, cartel damages actions are no longer heard by          scene of the behaviour and the place of interference are often different.
     these specialised chambers but by the common civil chambers.                  The scene of the behaviour is the place where the cartel activities
           The parties can appeal to the higher regional courts. Again, the        were initiated and, or practised. The place of interference would be the
     majority of the federal states in Germany have determined a single            place where competition was restricted; in particular, where a potential
     court of appeal that has exclusive jurisdiction over antitrust matters. In    claimant suffered loss as a consequence of the cartel activity (regularly
     addition, these courts of appeal have established specialised antitrust       the operational location or registered seat of the claimant since that is
     divisions. Both the regional courts and the higher regional courts are        the place where the overcharge was paid).
     trial courts that hear evidence on facts in addition to legal arguments.           If one defendant of a group of joint and severally liable defendants
           The decisions of the higher regional courts can be appealed on          can be sued in Germany, all of the defendants can be sued before the
     points of law before the German Federal Supreme Court, which also has         German courts if there is a sufficiently close relationship between the
     a specialist antitrust division. Such an appeal is possible if the court of   claims against all of the defendants. In cartel cases, a claim against
     appeal grants leave to do so or if, on application by one of the parties,     all participants may, therefore, be brought against all defendants if
     the appeal is admitted by the German Federal Supreme Court.                   one defendant can be sued in Germany (the ‘anchor defendant’). In a
                                                                                   pending damages action regarding the Hydrogen Peroxide cartel, only
     PRIVATE ACTIONS                                                               one of the six defendants was based in Germany and served as the
                                                                                   anchor defendant. Since the anchor defendant reached a settlement
     Availability                                                                  with the claimant (the professional claimant company Cartels Damages
     4    In what types of antitrust matters are private actions                   Claims SA), none of the remaining defendants is based in Germany. The
          available? Is a finding of infringement by a competition                 European Court of Justice (ECJ) found that jurisdiction remains with the
          authority required to initiate a private antitrust action in your        German court unless the claimant and the defendant who reached the
          jurisdiction? What is the effect of a finding of infringement by         settlement colluded to artificially establish jurisdiction (decision dated
          a competition authority on national courts?                              21 May 2015, C-352/13).
                                                                                        In the event that German procedural law applies, German courts
     Private actions (injunctive relief or damages) are available in any type      have, in particular, jurisdiction for cartel damages actions against any
     of antitrust matter. Claims can be made against members of cartels as         cartel member if the cartel activity occurred in Germany. According to
     well as against companies that abuse a dominant position or any party         section 32 of the German Code of Civil Procedure (CCP), jurisdiction in
     to a potentially anticompetitive agreement.                                   matters of tort (here, illegal cartel activity) is connected to the place
           In addition, it is possible to object to a merger if, for example,      where the harmful event occurred. In this regard, the same principles
     competitors or other affected market participants take the position           apply as under Regulation (EU) No. 1215/2012. Other important provi-
     that the respective merger should have been prohibited by the German          sions are sections 13, 17 and 21 of the CCP, which state that the court
     Federal Cartel Office (FCO). Such claims fall within the exclusive juris-     at the place where the defendant is domiciled or where a defendant
     diction of the Higher Regional Court of Düsseldorf.                           has its seat or a branch is the locally competent court. In cases where
           A finding of infringement by a competition authority is not required    a claim against several cartel participants is brought at the court of
     to initiate a private antitrust action. However, without a decision of a      domicile of one participant, this court can be declared to have jurisdic-
     competition authority the full burden of proof that an infringement has       tion by the competent higher regional court according to section 36(1)
     occurred rests on the claimant. If a competition authority investigates       No. 3 of the CCP.
     certain conduct it is, therefore, advisable to await the finding of the
     authority. According to section 33b ARC, national courts are bound by         Restrictions
     a finding that an infringement has occurred, once such a finding forms        6    Can private actions be brought against both corporations and
     part of a final decision by the FCO, the European Commission or any                individuals, including those from other jurisdictions?
     competition authority of another EU member state.
                                                                                   Yes. Provided that German courts have jurisdiction in accordance with
     Required nexus                                                                the conditions as set out in question 5, private actions can be brought
     5    What nexus with the jurisdiction is required to found a private          against both corporations and individuals (including those from other
          action? To what extent can the parties influence in which                jurisdictions).
          jurisdiction a claim will be heard?
                                                                                   PRIVATE ACTION PROCEDURE
     The international competence of German courts in antitrust matters
     is governed either by Council Regulation (EU) No. 1215/2012 on juris-         Third-party funding
     diction and the recognition and enforcement of judgments in civil and         7    May litigation be funded by third parties? Are contingency
     commercial matters or by the Lugano Convention 2007 on jurisdiction                fees available?
     and the enforcement of judgments in civil and commercial matters or by
     German procedural law.                                                        In Germany, litigation may be funded by third parties. Most if not all of
           According to Regulation (EU) No. 1215/2012, German courts have,         the major litigation financing firms are active in Germany. They fund
     for example, jurisdiction in antitrust matters if the defendant is domi-      civil litigation costs and bear the financial risk if the claim has a suffi-
     ciled in Germany (article 2(1)) or in cases of cartel damages actions         cient chance of success. In the event of a successful outcome of the
     where the harmful event occurred or may have occurred in Germany              proceeding, the litigation financing firm will usually receive a certain
     (article 7(2)). A place is considered to be the place where the harmful       percentage of the proceeds recovered by the claimant.
     event occurred if only one of the essential facts constituting the offence          In the event of a cartel damages claim, there are further financing
     occurred there. This is both the place where the defendant committed          possibilities. Several firms and investment funds specialise in acquiring

54                                                                                                                           Private Antitrust Litigation 2020
                                                                   © Law Business Research 2019
Milbank LLP                                                                                                                                        Germany

and pursuing cartel damages claims at their own risk and cost. The               possession of leniency applicants other than leniency statements are
injured party will generally receive a certain amount of the proceeds            not exempted.
recovered by these firms; sometimes, litigation funds even pay a certain               Various procedural aspects concerning the application of Section
amount upfront when acquiring the claim. It has to be mentioned that             33g of the ARC are further specified by section 89b to 89e of the ARC.
German courts only accept claims by such firms or investment funds               For example, section 89b(1) of the ARC refers to section 142 of the CCP.
if they are sufficiently funded to bear procedural cost in case of defeat        According to section 142 of the CCP, the judge can order the defendant or
(see question 19).                                                               a third party to produce a certain specified document that it possesses
      In addition, contingency fees are, at least to a certain extent,           that is relevant to substantiate the claim, provided that the document
available in Germany. In 2008, the German legislature lifted the total           can be specified by the claimant and the claimant or the defendant has
ban on contingency fees to implement a prior decision of the German              referred to the document during the proceedings. While section 142 of
Federal Constitutional Court. The German Federal Constitutional Court            the CCP was previously only available once proceedings had been initi-
had held on 12 December 2006 that the prohibition of contingency fees            ated, it is now also available for pretrial disclosure requests in line with
was unconstitutional insofar as it did not contain any exceptions to             section 33g of the ARC.
the general rule. Therefore, contingency fees are now permitted if the                 In addition to requests against third parties, the claimant can
claimant would be prevented from asserting his or her rights without             request access to the records of the FCO or other relevant competi-
contingency fees owing to his or her economic situation. In addition,            tion authorities according to section 89c of the ARC. Section 89c of the
the agreement on contingency fees has to meet certain formal require-            ARC is a newly introduced lex-specialis of the general right to inspec-
ments in accordance with section 4(2) and (3) of the German act on the           tion of files according to section 406(e) of the German Code of Criminal
remuneration of lawyers. The agreement must, for example, state for              Procedure on which such requests were based before section 89b of the
which compensation (estimated statutory fees or if applicable contrac-           ARC entered into force. Leniency statements and acknowledgements in
tual fees that are not contingency fees) the lawyer would have agreed to         connection with settlement discussions with competition authorities are
take the case in the absence of a contingency fee and lay out the condi-         exempted as well. It is important to note that requests for information
tions that entitle the lawyer to claim compensation.                             against competition authorities are secondary to requests against other
                                                                                 parties. Pursuant to section 89c(1), sentence 1, No. 1 of the ARC access
Jury trials                                                                      to the records of competition authorities shall only be granted if the
8    Are jury trials available?                                                  requested information cannot be obtained with reasonable effort from
                                                                                 another party.
No. There are no jury trials available in Germany. In first instance,                  Section 89d(4) of the ARC explicitly stipulates that the rules
damages cases are exclusively heard in one of the respective regional            contained in section 33g of the ARC and sections 89b et seq of the
courts’ civil chambers consisting of (usually) three professional judges.        ARC shall conclusively govern requests for access to information. In
All other cases may either be heard in a civil chamber or a chamber of           this regard, section 89d(4) of the ARC states that general civil proce-
commerce. If the cartel chamber responsible for the case is a chamber            dural rules such as section 421 et seq of the CCP (right to request that
of commerce, two of the judges will be honorary lay judges who are               the defendant should produce individual specified documents in court
businessmen. For more details on courts, see questions 3 and 18.                 proceedings) only apply if and to the extent the claimant has a right to
                                                                                 access to information pursuant to section 33g of the ARC.
Discovery procedures                                                                   Whether the extended rules on access to information will actu-
9    What pretrial discovery procedures are available?                           ally facilitate, or rather hamper damages claims, remains to be seen.
                                                                                 Enforcing (pretrial) disclosure will likely result in significant delays and
Although German law did traditionally not provide for discovery proceed-         may therefore not always be attractive. On the other hand, defendants
ings equivalent to those in common-law jurisdictions, the Damages                trying to delay cases by claiming access to information in connection with
Directive has led to the introduction of a limited disclosure procedure in       an alleged pass-on is may become a regular pattern. This is especially
connection with antitrust damages claims. Section 33g of the ARC intro-          true as section 89b(3) and (4) of the ARC provide for the possibility of a
duces a right to access to information required to seek antitrust damages.       stay of proceedings and an interlocutory judgment regarding access to
To claim access to information from either the potential defendant or            information.
another third party, a claimant has to demonstrate probable cause that
he or she has a right to seek damages and indicate the information as            Admissible evidence
specific as possible. In return, a defendant has the right to access to infor-   10 What evidence is admissible?
mation from either the claimant or a third party, if an action of damages is
already pending (ie, not pretrial) and if the defendant describes the infor-     The claimant may base its claim on any available evidence, including:
mation as specific as possible and explains why they are needed (usually         •    documentary evidence (contracts, website printouts, emails,
to quantify a pass-on by the claimant). In general, the interests of the              letters, attendance notes, telephone notes, etc);
party claiming access to information and the interest of the party that is in    •    evidence by witness;
the (alleged) possession of such information need to be balanced against         •    expert evidence;
each other. In this regard, the following aspects have to be considered:         •    evidence by interrogation of the parties; or
•    relevance and value of information;                                         •    evidence by inspection.
•    the extent to which available information has been exhausted;
•    effort and cost to provide requested information;                           Of the above points, the first three are by far the most relevant in anti-
•    confidential nature of information; and                                     trust proceedings.
•    effectiveness of public competition law enforcement.                             In addition, when a decision of the FCO, the European Commission
                                                                                 or any other European competition authority has become final, the
Access to leniency statements and acknowledgements in connection                 claimant can rely on the findings of the relevant competition authority
with settlement discussions with competition authorities are explicitly          instead of providing evidence for the competition law infringement
exempted from the access to information. However, information in the             (section 33b of the ARC and article 16(1) of Regulation (EC) No. 1/2003).                                                                                                                                           55
                                                              © Law Business Research 2019
Germany                                                                                                                                     Milbank LLP

     Legal privilege protection                                                    to compensate for damages resulting from supplies of other partici-
     11 What evidence is protected by legal privilege?                             pants in the infringement only arises if full compensation cannot not
                                                                                   be obtained from the other participants in the infringement. In addition,
     Generally, the concept of legal privilege does not exist in Germany.          third parties that want to commence an action for damages against the
     In German civil proceedings, the concept of legal privilege is of less        leniency applicant will not be granted access to the leniency application
     relevance than in a number of other jurisdictions, because there are no       (see question 9).
     discovery proceedings equivalent to those in common-law jurisdictions.
     Even the newly introduced limited disclosure procedure pursuant to            Stay of proceedings
     section 33g of the ARC does not contain rules on legal privilege. In          14 In which circumstances can a defendant petition the court for
     general, both (potential) claimants and defendants can request access            a stay of proceedings in a private antitrust action?
     to information in the possession of others. Restrictions only apply to
     leniency statements and acknowledgements in connection with settle-           A civil court can order a stay of proceedings pursuant to section 148 of
     ment discussions with competition authorities (see question 9).               the CCP if its findings are dependent on circumstances that are already
           The same applies with regard to access to the records of a competi-     the subject of either another dispute before a court or an investigation
     tion authority. Communications between the defendant and its in-house         by an authority. As a result, the courts can stay a follow-on damages
     counsel or external lawyers can be found in the FCO’s file because            action if the foregoing infringement decision of the authority is appealed
     the concept of legal privilege does not exist in the event that the FCO       against by the defendants (ie, if the decision is not final). However, in
     conducts cartel investigations and seizes documents. The FCO is enti-         order not to undermine the private enforcement of antitrust cases, there
     tled to seize all documents in the possession of the in-house counsel         is a strong tendency among courts not to stay proceedings despite
     unless they concern ‘defence correspondence’. Defence correspondence          pending appeals against the underlying infringement decision. In addi-
     is correspondence that is prepared in awareness of, and relates directly      tion, a stay of proceedings is possible in connection with proceedings
     to, the actual defence in quasi-criminal cartel investigations or other       regarding access to information (see question 9).
     antitrust proceedings that can lead to the imposition of a fine.
           Documents in the possession of the defendant’s external lawyer are      Standard of proof
     protected by attorney privilege and cannot be seized. This is confirmed       15 What is the applicable standard of proof for claimants? Is
     by section 33g(6) of the ARC.                                                    passing on a matter for the claimant or defendant to prove?
           Trade secrets are generally not privileged under German civil              What is the applicable standard of proof?
     procedural law. However, confidentiality aspects have to be consid-
     ered in relation with a request for disclosure of information pursuant        Standard of proof
     to section 33g of the ARC. If access to the information is granted, the       As a general rule, the court has to be convinced that the facts as
     court has to ensure that trade or business secrets will be protected; for     presented by the claimant are true. No absolute certainty is necessary
     example, through redaction of the relevant documents.                         in this regard. However, it is required that the judge does not have any
                                                                                   reasonable doubts concerning the truth of the facts.
     Criminal conviction                                                                 In relation to the amount of loss incurred by the claimant in a
     12 Are private actions available where there has been a criminal              damages case, the standard of proof is reduced under German law,
        conviction in respect of the same matter?                                  as follows:
                                                                                   •     pursuant to section 33a(2) of the ARC, a (rebuttal) presumption
     Private actions are available regardless of whether there has been a                applies according to which cartels result in damages; and
     prosecution under competition or criminal law. There is no difference         •     the court can estimate the amount of damages suffered by the
     between private actions as to whether there has been a criminal convic-             claimant according to section 33a(3) of the ARC and section 287
     tion or not.                                                                        of the CCP.

     Utilising of criminal evidence                                                Claimants are not required to exactly calculate the damages the suffered
     13 Can the evidence or findings in criminal proceedings be                    as a result of the cartel. It is only necessary that the claimant provides a
        relied on by plaintiffs in parallel private actions? Are                   reliable factual basis for such an estimate. In cartel cases, the court can,
        leniency applicants protected from follow-on litigation? Do                as an additional option, base its estimate of the amount of loss incurred
        the competition authorities routinely disclose documents                   on the profits earned by the defendants through illegal cartel activities
        obtained in their investigations to private claimants?                     (section 33a(3) of the ARC).
                                                                                        Where the claimant asserts lost profits, the burden of proof is
     Pursuant to section 33b of the ARC, the claimant can rely on the findings     further alleviated by section 252 of the CC. According to section 252 of
     of competition authorities.                                                   the CC, lost profits are, for example, those that the claimant would prob-
          In the case of a fining decision of the FCO or the European              ably have earned in the normal course of events.
     Commission, the claimant can introduce the decision as documentary
     evidence in civil proceedings. If the decision is final, the court is bound   Burden of proof
     by the findings of the decision (section 33b of the ARC). In addition, the    In principle, the claimant has to demonstrate and provide evidence for
     claimant has the right to access the respective authority’s records in        the facts forming the basis of the competition law infringement as well
     accordance with section 89c of the ARC (see question 9 in this regard).       as of the loss incurred. However, the claimant may benefit from a shift
          Leniency applicants are only to a limited degree protected from          in the burden of proof or presumptions in certain situations. In cartel
     follow-on litigation. In general, leniency applicants can be sued for         cases, a (rebuttal) presumption applies according to which cartels
     damages. However, there is a modification of the concept of joint and         result in damages (section 33a(2) of the ARC). In discrimination cases
     several liability (for details of the general concept see question 33).       against dominant companies, the claimant only has to prove that there
     According to section 33e of the ARC, leniency applicants only have to         has been a different treatment. It is then on the defendant to demon-
     compensate for damages caused by their own supplies. An obligation            strate and to provide evidence that the discrimination of the claimant

56                                                                                                                           Private Antitrust Litigation 2020
                                                                   © Law Business Research 2019
Milbank LLP                                                                                                                                       Germany

is justified. A further presumption is provided for in section 20(5) of the     several general provisions that aim to accelerate proceedings (eg, rules
ARC, according to which it is presumed under certain conditions that            on time limits and estoppel).
selling below cost is illegal.                                                        In addition, every party has the possibility to accelerate the
                                                                                proceedings by its own conduct, such as by not requesting an extension
Quantitative rules                                                              of time limits for briefs, etc.
There are no quantitative rules of thumb or rebuttable presumptions of
a quantitative nature in German competition law.                                Limitation periods
                                                                                17 What are the relevant limitation periods?
Passing-on defence
The German Federal Court of Justice, in a landmark ruling handed down           The question of whether a claim is time-barred or not is governed by
on 28 June 2011 (KZR 75/10), has held that members of a cartel are              substantive law. As of 9 June 2017, there have been changes to the
able to defend themselves against a claim for damages by raising the            statute of limitation. The standard limitation period for cartel damages
defence that the relevant applicants have passed on the damage caused           claims has been extended from three years to five years (section 33h(1)
by higher prices to a downstream market (the ‘passing-on’ defence).             of the ARC). The time limit starts running with the end of the year in which
However, the passing-on defence is only available under the principle of        the claim arose and the claimant became aware of the circumstances
‘adjustment of damages by benefits received’. As a result, the burden of        giving rise to the claim and the identity of the (potential) defendant or
proof is on the defendant that the direct purchaser passed the damage           should have become aware without gross negligence. In addition, there
down to the next level of costumers. That means the defendant has to            is an absolute limitation period for antitrust damages claims of 10 years
prove, first, that the overcharge has been passed on and, second, the           from the date on which the claim arose. While it has been disputed in the
extent to which the overcharge has been passed on. As of 9 June 2017,           past whether the limitation periods start to run from the time when the
the German legislature has codified these principles in section 33c of          infringement was committed or only from the time when the infringe-
the ARC. As a result of the introduction of section 33c of the ARC it           ment has come to an end, section 33h(2) and (3) of the ARC now clarify
is open, whether the passing-on defence is not available if it leads to         that the limitation periods do not start to run before the infringement
an unjust benefit for the defendant. This can particularly be the case          has come to an end. However, 30 years after the date on which the act
if the indirect purchasers consist of a large fragmented group, which           causing the injury was committed, all damages claims are time-barred.
makes it unlikely that the indirect purchasers will seek damages. While               The limitation is suspended for the time of investigations of the
the principle of an ‘adjustment of damages by benefits received’ is only        FCO, the European Commission or the competition authority of another
available if the adjustment (ie, the pass-on defence) does not result in        EU member state or for the time of court proceedings in connection
an unjust benefit of the cartelist, the newly introduced section 33c of the     with a request for access to information of the claimant in accordance
ARC does not contain any wording to that effect. As a result, it may well       with section 33g of the ARC (section 33h (6) of the ARC). The suspen-
be that based on section 33c of the ARC, German courts will acknowl-            sion period has been extended as well. The claims will expire no earlier
edge the pass-on defence, even if this leads to a situation under which         than one year after the final decision of the respective authority or
the defendant who, without doubt, caused a damage will not be held              court. Against the background that it is disputed whether the preceding
liable for the overcharge. However, even if a passing-on can be demon-          provision applies to claims that arose prior to the entry into force of
strated by the defendant, the claimant can claim lost profits as a result       that provision, the German legislature decided to include transitional
of volume effects; that is, if the higher resale price (including the over-     provisions specifically on limitation (section 186 (3), sentences 2 and 3
charge) results in reduced sales by the direct purchaser.                       of the ARC).
      In cases where an indirect purchaser wants to benefit from the
passing-on of the overcharge by the direct purchaser and aims to seek           Appeals
damages, the indirect purchaser can benefit from a shift in the burden of       18 What appeals are available? Is appeal available on the facts
proof pursuant to section 33c(2) of the ARC. A pass-on is presumed if the          or on the law?
defendant infringed competition law, the competition law infringement
led to higher prices for the direct purchaser and the indirect purchaser        The parties may appeal a decision of a regional court on the facts and
purchased the cartelised products. It is then for the defendant to prove        on the law to the competent higher regional court. The decisions of
that a passing-on has not occurred.                                             the higher regional courts may be appealed on points of law before
                                                                                the German Federal Supreme Court. Such an appeal is possible if the
Time frame                                                                      court of appeal grants leave to do so or if the appeal is, upon application
16 What is the typical timetable for collective and single party                of either party, admitted by the German Federal Supreme Court (see
   proceedings? Is it possible to accelerate proceedings?                       question 3).

There is no standard timetable for court proceedings. Generally, the            COLLECTIVE ACTIONS
duration of court proceedings is relatively short in comparison with
other European jurisdictions. According to information from the German          Availability
Federal Ministry of Justice and the German Federal Supreme Court, civil         19 Are collective proceedings available in respect of antitrust
court proceedings at first and second instance on average last nine to             claims?
10 months each and, in the event of an appeal on questions of law to
the German Federal Supreme Court, a further 12 to 24 months. This               German civil procedure law does not formally provide for collective
appears, however, a bit too optimistic if compared with the actual dura-        proceedings in competition law matters.
tion of proceedings. It is more realistic to expect 12 to 24 months for              However, despite the lack of collective proceedings, there is a
each of the first and second instance too. This results in an overall dura-     possibility of submitting bundled damages claims through third parties.
tion of usually four to six years if the case is heard through all instances.   This possibility is of particular interest for end users and smaller
     The parties in German civil proceedings have no explicit rights            companies that otherwise do not have the financial resources to assert
to accelerate proceedings. However, German procedural law contains              their legal rights.                                                                                                                                          57
                                                             © Law Business Research 2019
Germany                                                                                                                                    Milbank LLP

          In relation to a cement cartel in which the FCO imposed fines of         National collective proceedings
     approximately €660 million in April 2003, the German Federal Supreme          25 If the country is divided into multiple jurisdictions, is a
     Court confirmed in 2009 (judgment dated 7 April 2009, KZR 42/08) the             national collective proceeding possible? Can private actions
     Regional Court of Düsseldorf’s decision of 21 February 2007 admit-               be brought simultaneously in respect of the same matter in
     ting a damages claim that was submitted by CDC. CDC has bought the               more than one jurisdiction?
     claims of various companies, relying on the argument that the price
     for cement as purchased from the members of the cement cartel was             Germany is not divided into multiple jurisdictions. Once the claimant
     anticompetitive and therefore too high. As there is no legal basis for        has brought a legal action before a German court, it cannot bring a
     class-action lawsuits in relation to private antitrust claims in Germany,     claim in the same matter before another German court (section 261(1)
     the cartel victims assigned their individual claims to CDC for payment of     of the CCP).
     €100 and a certain amount of the proceeds that will be obtained through
     the court proceedings. CDC pursues the respective claims on its own           Collective-proceeding bar
     behalf. However, with first instance judgment of 17 December 2013, the        26 Has a plaintiffs’ collective-proceeding bar developed?
     Regional Court of Düsseldorf has dismissed CDC’s damages claim in
     its entirety for a number of reasons. Most notably, the court decided         See question 19.
     that the cession of the claims was contrary to public policy according
     to section 138(1) CC as CDC would not have been able to cover all the         REMEDIES AND LIABILITY
     expenses of the defendants in case of a complete loss of the case. In
     appellate proceedings, the Higher Regional Court of Düsseldorf on 18          Compensation
     February 2015 upheld this decision and rejected CDC’s appeal in its           27 What forms of compensation are available and on what basis
     entirety. Another attempt by CDC in relation with the cement cartel,             are they allowed?
     after sufficient funding was obtained and cession of the claims was
     re-conducted, again resulted in a rejection of the entire claim. With first   As a starting point, the amount of damages follows a purely compen-
     instance judgment of 24 January 2017, the Regional Court of Mannheim          satory principle. German damages law does not provide for punitive
     found that the claims were by then time-barred. This decision deals           damages such as triple damages (see question 29).
     with the question whether the provision on the suspension of limitation            The calculation of damages suffered by the claimant is primarily
     periods that applied prior to 9 June 2017 also applied to claims that         based on section 249 of the CC (principle of natural restitution).
     arose, prior to the entry into force of that provision (for more details on   According to this provision, damages are calculated on the basis of
     limitation, see question 17). As CDC appealed this judgment it remains        the difference between the financial position of the claimant after
     to be seen whether CDC will in the end be successful in relation to the       the infringement occurred and the hypothetical financial position the
     cement cartel. However, CDC, in tandem, pursues and prepares claims           claimant would have been in if the competition law infringement had not
     in connection with other cartels such as the German sugar cartel and          occurred. The financial status of the affected party has to be considered
     the European truck cartel.                                                    as a whole; therefore, not only its losses in income and wasted invest-
                                                                                   ment have to be taken into account, but also any benefits received as a
     Applicable legislation                                                        consequence of the anticompetitive behaviour. Losses incurred include,
     20 Are collective proceedings mandated by legislation?                        in particular, lost profits (section 252 of the CC).
                                                                                        However, the principle of natural restitution not only leads to pecu-
     No.                                                                           niary compensation but may, particularly in cases of abusive refusals
                                                                                   to supply, lead to the defendant being ordered by the court to contract
     21 If collective proceedings are allowed, is there a certification            with the claimant and supply him or her with the requested goods or
        process? What is the test?                                                 services at non-discriminatory terms.

     Not applicable.                                                               Other remedies
                                                                                   28 What other forms of remedy are available? What must a
     Certification process                                                            claimant prove to obtain an interim remedy?
     22 Have courts certified collective proceedings in antitrust
        matters?                                                                   Claimants can request that the defendant should refrain from an anti-
                                                                                   trust violation according to section 33(1) of the ARC. This means that the
     See question 19.                                                              claimant can either request that the defendant ends a certain behaviour
                                                                                   or that the defendant has to perform a certain activity, such as supply
     Opting in/out                                                                 the claimant in the future. The request is available even for imminent
     23 Can plaintiffs opt out or opt in?                                          antitrust violations (section 33(2) of the ARC). In the event of urgency,
                                                                                   these claims can exceptionally be enforced by way of interim measures.
     Not applicable.                                                                    German procedural law provides for different interim measures
                                                                                   pursuant to sections 935 and 940 of the CCP. In the event of an imme-
     Judicial authorisation                                                        diate risk that the financial situation of the defendant will deteriorate,
     24 Do collective settlements require judicial authorisation?                  the claimant can request a court to seize assets of the defendant.
                                                                                   Furthermore, courts can issue interim measures ordering the defendant
     German procedural law does not provide for class settlements. However,        to perform a certain action, such as supplying the claimant with certain
     if the parties agree on a settlement no further judicial authorisation is     goods, if the claimant would otherwise lose important customers. The
     required. For procedural reasons, however, it can be helpful to have a        standard of proof is lower than for the principal claim on the merits. An
     settlement recorded in court.                                                 applicant for interim relief must provide prima facie evidence that he
                                                                                   or she has a claim and that the realisation of such claim is impossible

58                                                                                                                          Private Antitrust Litigation 2020
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or severely jeopardised without the interim remedy (urgency). As a              this principle in section 33d(2) of the ARC. It is explicitly stated that the
general rule, an interim remedy shall not result in the fulfilment of the       general principles of sections 421 et seq of the CC apply to the adjust-
final remedy.                                                                   ments among the jointly and severally liable cartel members.
                                                                                      Special provisions apply to small and medium-sized enterprises
Punitive damages                                                                with small market shares, limited financial resources and minor partici-
29 Are punitive or exemplary damages available?                                 pation in the cartel (section 33d(3) of the ARC), leniency applicants
                                                                                (section 33e of the ARC; for more details on the protection of leniency
Punitive or exemplary damages are not available.                                applicants see question 13) and cartel members who participated in a
                                                                                settlement (section 33f of the ARC; see also question 34). In general,
Interest                                                                        small and medium-sized enterprises as well as leniency applicants
30 Is there provision for interest on damages awards and from                   only have to compensate damages of their own (direct and indirect)
   when does it accrue?                                                         customers and suppliers. Cartel members who participated in a settle-
                                                                                ment are freed from liability against the party of the settlement. In all
To avoid a situation where compensation of the loss incurred is partially       three cases, further liability is only possible if full compensation could
devalued, the party in breach of competition law is obliged to pay              not be obtained from the other cartel participants. This additional
interest on pecuniary damages (section 33a(4) of the ARC). Interest is          liability can be excluded in settlements. Adjustments among the jointly
calculated from the date the loss accrued.                                      and severally liable cartel members are accordingly limited.
      The obligation to pay interest is particularly important in relation to
follow-on actions when the plaintiff waits until the competition authority      Contribution and indemnity
renders a decision. The general interest rate is 5 per cent above the           34 Is there a possibility for contribution and indemnity among
European Central Bank’s base rate (section 33a(4) of the ARC and                   defendants? How must such claims be asserted?
section 288 (1)of the CC). Owing to changes in law, interest damages
that occurred prior to 1 July 2005 follow different rules, and are gener-       The possibility of a contribution claim exists under German law. If the
ally to be set at 4 per cent or 5 per cent (ie, not base-rate linked).          damage is caused by several defendants, they are jointly and sever-
                                                                                ally liable and each defendant can sue another cartel member for
Consideration of fines                                                          internal recourse. Such claims for internal contribution are subsequent
31 Are the fines imposed by competition authorities taken into                  to the main action. However, in cases where claimants seek damages
   account when setting damages?                                                only from selected participants in an infringement, it is usual practice
                                                                                that the defendants issue third-party notices on the other participants
Fines imposed by the competition authorities are not taken into account         in the infringement since such third-party notices have the effect
when settling damages. Even in the event of a significant fine, the             that the factual findings of the court dealing with the main action
claimant is entitled to seek full compensation. On the other hand, a high       will be binding on the courts dealing with the subsequent actions for
fine does not indicate a liability for higher damages.                          internal contribution.
                                                                                     Settlements are, generally, limited to damages resulting from
Legal costs                                                                     supplies of the parties to the settlement and do not cover damage
32 Who bears the legal costs? Can legal costs be recovered, and                 resulting from supplies of other participants in an infringement.
   if so, on what basis?                                                        According to section 33f(2) of the ARC, claims for internal contribution
                                                                                are not possible in settlement cases as regards the settled portion of
As a general rule, the legal costs are borne by the losing party. If there      the claim.
is no full loss or win, the court allocates the legal costs between the
parties on a pro rata basis according to the outcome of the case. The           Passing on
legal costs include the costs of the court proceedings as well as the           35 Is the ‘passing on’ defence allowed?
attorneys’ fees. However, attorneys’ fees are calculated on the basis of
statutory fees, which are usually well below the fees actually incurred in      See question 15.
complex antitrust damages cases. Put differently, the cost risk for claim-
ants is relatively low and it can be determined upfront with certainty.         Other defences
According to section 89a of the ARC, in antitrust cases, the value of the       36 Do any other defences exist that permit companies or
matter may be adjusted if certain conditions are met.                              individuals to defend themselves against competition law
Joint and several liability
33 Is liability imposed on a joint and several basis?                           There is no special defence that would permit companies or individuals
                                                                                to defend themselves against competition law liability.
Joint and several liability exists if two or more individuals or legal
persons have caused the damage. As a result, participants in a cartel           Alternative dispute resolution
are jointly and severally liable. Each defendant is then liable for the         37 Is alternative dispute resolution available?
totality of the damage incurred by the claimant, but the claimant is only
entitled to claim the totality of the damage once (section 33d(1) of the        In principle, arbitration proceedings are available under German law.
ARC and sections 830, 840(1) and 421 of the CC).                                However, such proceedings are only admissible if an arbitration clause
      With a judgment of 18 November 2014, the German Federal Court             in relation to antitrust damages has been validly agreed between
of Justice held that the necessary adjustments among the jointly and            the parties.
severally liable cartel members themselves will take place according to
section 254(1) of the CC; that is, according to the extent of their respec-
tive participation in the cartel. The German legislature has codified                                                                                                                                           59
                                                             © Law Business Research 2019
Germany                                                                                                                        Milbank LLP


     Hot topics
     38 Are there any emerging trends or hot topics in the law of
        private antitrust litigation in your country?

     Antitrust damages litigation will continue to be on the rise in Germany,
     probably further fuelled by the UK leaving the European Union, which
     will cause claimants to bring certain cases in Germany instead of the            Alexander Rinne
     UK. However, on some topics, courts start to set boundaries on certain
     typical areas of dispute in antitrust damages cases.
           In particular, the Federal Court of Justice held in a decision of 11       Maximilianstraße 15
     December 2018 (KZR 26/17) that in cases of quota and customer alloca-            80539 Munich
     tion cartels a prima facie evidence does not automatically apply to the          Germany
     effect that (i) all customers generally covered by the cartel were actu-         Tel: +49 89 25 559 3686
     ally negatively affected by the cartel and (ii) suffered damage. However,        Fax: +49 89 25 559 3700
     the court conceded that a factual presumption may well be justified
     that quota and customer allocation cartels result in a damage with all
     affected customers, which is also consistent with section 33a(2) of the
     ARC. It remains to be seen whether the decision will have a relevant
     effect in practice. In fact, courts of lower instance seem to decide the
     same way as previously, simply changing the term ‘prima facie evidence’
     against ‘factual presumption’.
           In addition, with regard to indirect purchases courts seem to have
     become stricter in acknowledging that damages of the direct purchaser
     were passed on to indirect purchasers, in particular in complex
     commercial situations (eg, leasing scenarios in connection with the
     Trucks cartel). It will be on the claimants (that are indirect purchasers)
     to develop robust theories and models to demonstrate that damages
     were passed on in full or in part by the direct purchasers.

60                                                                                                              Private Antitrust Litigation 2020
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