Consumers should be able to exercise their legal right to recover billions of euros a year from companies that fix prices and the EU must clear the way, the European Commission said on Thursday.
The Commission, executive arm of the European Union, laid out a plan to sweep aside legal and procedural hurdles discouraging recovery by victims of cartels. Most antitrust actions in Europe originate from the Commission or competition authorities in the EU’s 27 member states. By contrast, more than four out of five antitrust actions in the United States are brought privately. “The right of victims to compensation is guaranteed by community law,” a Commission document said, adding that, the “victims are forgoing ... several billions of euros a year.”
The Commission proposals stop short of the US system, criticized in Europe as creating havoc through broad class actions that can vacuum up evidence and result in treble damages. “We have the luxury of learning from your experiences in this area and it’s no great secret they aren’t all positive,” Competition Commissioner Neelie Kroes told US antitrust lawyers last week.
On Thursday, she added that the goal was to create “an effective system that complements public enforcement, whilst avoiding the potential excesses of the US system”. Once a court or agency gives a final judgment on price fixing, victims should be able to rely on it in court and have two years to bring follow-on actions, the Commission said. When victims initiate cases, courts need more power to compel evidence but without “overly broad and burdensome disclosure”, a clear reference to the United States. Recognized consumer groups could bring joint actions, or consumers could choose to act together. Damages would include full compensation as well as lost profits and interest. Suspected price fixers could defend themselves by arguing, that their victims passed on the inflated prices to others.
Critics say that could create problems. For example, a cement cartel could defend itself by arguing that concrete producers in turn raised prices to their consumers. That would complicate the recovery process because the numerous concrete purchasers would have to get together and sue as a group, each opting in separately. That has proved impractical in the past. The Commission also proposed limiting court costs for the loser, to encourage people to bring suits. (Reuters)