A business that infringes competition law must compensate anyone harmed by that infringement. What governs its liability? The Act of 21 April 2017 on claims for damages caused by competition law infringements (the Claims Act), implementing Directive 2014/104/EU of 26 November 2014 (the Directive). Regulation in a separate statute itself indicates distinctive features. Yet this is not an entirely separate form of liability: it remains tort liability. The Civil Code applies to matters not regulated by the Claims Act. In other words, ordinary tort liability with statutory modifications, examined here.
Presumed fault
As usually in tort, liability is fault-based, but fault is presumed. The infringer is liable only for intentional infringement or failure to exercise due care. The victim need not prove fault, only the competition breach. To escape liability, the infringer must show absence of fault: infringement despite due care. This will generally be difficult because businesses are professionals subject to heightened diligence. Ignorance of competition rules, for example, is no defence.
Presumed harm
Damage is essential to compensation. Normally, a claimant must show that unlawful, culpable conduct reduced its assets. The Claims Act assists by requiring courts to presume that competition infringements cause harm. Once infringement is established, harm is presumed and the defendant must disprove it.
The help is limited, however: the presumption does not cover the amount, which the victim must still prove. Information asymmetry can make this difficult. A direct or indirect cartel purchaser must show how much was lost through market price increases compared with prices absent the cartel. The assistance may therefore seem illusory: proving existence without amount still produces no compensation.
Full compensation
Once the amount is proved, full compensation restores the position that would have existed without harm, covering actual loss and lost profit without enrichment. This is also the general civil-law principle.
Compensation generally includes late-payment interest from the demand for payment. Under the Civil Code, however, damages are valued at prices on the assessment date, offsetting adverse passage-of-time effects. Adding interest in that situation would overcompensate, so courts do not award it. Exceptionally, other-date prices may be used. The Claims Act expressly provides that then statutory interest is due from the date whose prices were used until the damages claim becomes due.
Joint and several liability
Multiple tortfeasors generally answer jointly and severally: the victim may seek all or part from all, several or any individually. Competition damages follow this, with limitations for small and medium-sized undertakings (SMEs) and immunity recipients. Immunity means a cartel participant wholly exempted from fines in return for voluntarily supplying evidence and information about the cartel and its role. A mere reduction does not qualify.
An SME is jointly liable only towards direct or indirect purchasers or suppliers in its own supply chain. A victim outside that chain could sue cartel members and find some exempt as SMEs, potentially losing full recovery if others are insolvent. The privilege requires a market share below 5% throughout the infringement and unrestricted liability irretrievably jeopardising economic viability and causing total loss of business value. Proving the latter will be difficult, practically requiring likely bankruptcy. Even that is insufficient if the SME led the infringement, coerced others or previously infringed competition law as found by an authority or court. Given these conditions, limited SME liability appears the exception rather than the rule.
Immunity recipients likewise answer to their supply chain, but not others unless full recovery from other infringers is impossible. The Act thus makes them subsidiarily liable. It also limits contribution recoverable from them by co-infringers that compensated victims.
Settlement with one infringer
If jointly liable infringers exist and the victim settles with one, damages recoverable from the others are reduced. By how much? The statute describes the amount that the settling infringer could have sought from others had it not settled and instead paid the damage itself: the value of its contribution claim. If recovery from the others proves impossible, for example through insolvency, the victim may seek the balance from the settling infringer. The settlement may exclude that right, leaving only the agreed obligations.
Limitation
Like other pecuniary claims, damages claims become time-barred. The ordinary tort period is three years from when the victim knew, or with due care could have known, of damage and the liable person. The due-care alternative was introduced into the Civil Code by the Claims Act. Ordinarily, the ultimate limit is ten years from the harmful event. The Claims Act modifies this:
- Competition damages claims have five years, not three.
- The period does not begin while infringement continues, even if the victim knows the harm and infringer.
- The ultimate ten-year period likewise starts only on cessation, not during infringement.
- All limitation periods are suspended during UOKiK, Commission or another Member State authority’s proceedings concerning the infringement underlying the claim.
The Act, including its five-year period, applies to infringements after entry into force on 27 June 2017. Earlier infringements remain subject to the Civil Code’s three-year period as amended, including constructive knowledge through due care. But if that addition would make the period start before entry into force, it starts on entry instead. This does not affect victims who actually knew both damage and liable person beforehand: their period simply continues. It applies where they did not know but could have discovered through due care. Their three-year period starts afresh when the Act takes effect.
