Litigation before national courts to appeal the decision of a
national competition authority (NCA) or a private lawsuit is an
important right for companies conducting business or making sales
in the European Union. However, some Member States have not allowed
their NCAs themselves to participate in such an appeal. A
recent ruling by the EU Court of Justice (Court)
reverses that, with important implications for business and the
NCAs themselves.
In the absence of any EU legislation harmonising national
procedural rules, the conduct of litigation across the 27 EU Member
States varies. Indeed, it is an established principle under EU law
that each national jurisdiction is procedurally autonomous.
Nevertheless, the 7 December 2010 judgment of the Court, in a case
involving the Belgian competition authority, has established the
right of NCAs to intervene in national court proceedings, whatever
national procedural law might provide. This judgment could have a
significant impact on a number of national legal systems and may
also affect defendants in national competition proceedings.
Specifically, defendants in a private enforcement action may find
that they are confronted not only by the claimants but also the
NCA.
Right of authorities to appear in national court proceedings
In various Member States, companies that are the subject of
adverse decisions by national competition authorities have the
right to appeal to a court or tribunal. For example, in the UK, the
Competition Appeal Tribunal has jurisdiction to hear appeals of
decisions of the OFT, Competition Commission, and the various
sectoral regulators, with the relevant authorities also having
standing to defend their decisions. Similarly, in Germany, the
Federal Cartel Office may appear before the German courts in case
of appeal of its decisions. A key feature in these jurisdictions is
that the national competition authorities are part of the appeal
proceedings – and may thus "defend" the general
interest while allowing the national court to hear more than the
parties' views on their particular case.
However, a recent Court judgment has highlighted that today some
Member States' laws do not give their NCAs standing before
their national courts. The case in question reviewed the
implications of the fact that Belgian competition law currently
does not allow the national competition authority to intervene in
national appeal proceedings. According to Belgian law, the
authority may neither defend its decisions nor act as amicus curiae
in other competition law cases. In the course of appeal proceedings
launched by the Flemish Bakers Federation against a cartel fine
decision by the Belgian Competition Council, the Brussels Appeal
Court referred questions relating to the investigatory
authority's inability to intervene to the EU Court of Justice.
The Court ruled that this shortcoming in Belgian law had the
potential to hamper the effectiveness of EU competition law
enforcement.
The Court's ruling puts EU Member States on notice that they
must ensure that their competition authorities do have the right to
appear before national courts. According to the Court, if national
authorities may not appear before national courts, the ongoing
enforcement of Articles 101 and 102 TFEU is jeopardised. Similarly,
the Court found that the effective enforcement of EU law is at risk
even if the power to intervene exists but in practice is exercised
infrequently.
Consistent with the principle that the Member States have
procedural autonomy, the Court made clear that each NCA must
"gauge the extent to which their intervention is necessary and
useful having regard to the effective application of EU competition
law." However, as a result of this Court decision, clearly all
EU Member State NCAs now do have the right to intervene in
competition actions and may begin to appear even in private
enforcement actions (which are encouraged by the EU) where
previously they had no standing.
Consequences of the recent ruling
It remains to be seen whether the Court's judgment will spur
NCAs to act on their newly-declared right to appear in court and
actively intervene in future cases. Such interventions will become
particularly important as follow-on damage actions begin to gain
pace in Europe. Furthermore, some Member States such as Belgium
will now have to revise their national legislation to be consistent
with the Court's judgment.
Our prior Alert on the European Commission's approach to
private enforcement may be found
here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.