Public and Private Enforcement of Competition Law in Europe : Legal and Economic Perspectives

Over the past fifteen years, the optimal enforcement of EU competition law has become a major concern. This book contains a unique collection of articles by lawyers and economists on current issues in the public and private enforcement of competition law. Public enforcement has been strengthened in numerous ways ? for example, through the introduction of a leniency programme and a substantial increase in fines for competition law violations. At the same time the EU Commission has been promoting private enforcement ? for example, by developing a legal framework that grants victims of EU antitrust law infringements access to compensation. The contributions in this book address a range of topics in the area of competition law enforcement, including the role of fines and leniency programmes in public enforcement; access to evidence and the quantification of damages in private enforcement; and the interaction between public and private enforcement of competition law in Europe. > Table of Contents 6 Public and Private Enforcement of Competition Law in Europe – Introduction and Overview 8 1 Introduction 8 2 The Contributions to this Volume 10 3 Outlook 15 Public Enforcement of Anti-Cartel Laws – Theory and Empirical Evidence 16 1 Introduction 16 2 Theoretical Foundations of Anti-Cartel Law Enforcement 17 2.1 Detection 20 2.2 Intervention 22 2.2.1 Derivation of Deterrence-Optimal Corporate Fines 22 2.2.2 The Role of Leniency Programmes 28 3 Empirical Evidence from EC Cartel Enforcement (2000– 2011) 32 3.1 Dataset and Descriptive Statistics 32 3.2 Discussion of Selected Enforcement Characteristics over Time 34 3.2.1 Number of Decided Cases and the Role of Leniency 34 3.2.2 Sum of Fines and Average Fines per Firm 35 3.2.3 Share of Leniency Applicants and Average Fine Reductions 36 3.2.4 Duration of Cartel Investigations 37 3.3 Are Current EU Fine Levels Deterrence-Optimal? 39 4 Conclusion 43 Leniency Programmes and the Structure of Cartels – Remarks from an Economic Perspective 45 1 Introduction 45 2 Leniency Programmes 47 3 Reactions of Cartels to the Competition Authority and its Measures 51 3.1 Adjustments in Cartel Behaviour 51 3.2 Adjustments in the Internal Structure of a Cartel 53 4 Conclusions for Competition Policy 56 The Role of Fines in the Public Enforcement of Competition Law 58 1 Introduction 58 2 The Commission’s Basis for Imposing Fines and the ‘Rule of Law’ Principle 58 3 Proposals for a New Approach to Fines 61 3.1 Turnover-Based Assessment of Fines Must Be Reviewed 61 3.2 Compliance Efforts Must Be Considered 61 3.3 The Concept of Parent Company Liability Needs to Be Reviewed 65 4 Conclusions 66 The Interaction of Public and Private Antitrust Enforcement – The Calculation of Fines and Damages 67 1 Introduction 67 2 Compensatory Damages and Deterrent Fines in a Hypothetical World: The Example of Horizontal Price-Fixing 69 3 Calculating Damages and Fines in the Real World: The German Experience 71 3.1 Calculating Fines on the Basis of Counterfactuals: Lessons from the Application of Former Section 81(2) ARC 72 3.2 Calculating Fines on the Basis of Proxies: The Present EU and German Guidelines 74 3.3 Calculating Damages on the Basis of Counterfactuals: Facilitating Devices in German Law 77 3.4 How to Take Account of Damages in the Calculation of Fines 79 4 Conclusion 80 The Interaction of Public and Private Enforcement – The Calculation and Reconciliation of Fines and Damages in Europe and German 81 1 Introduction 81 2 Interaction Between Fines and Damages – Economic Principles 82 2.1 The Optimal Deterrence Framework 82 2.2 Leniency Cases 87 3 Interaction of Fines and Damages – The Legal Perspective 89 3.1 Leniency Cases 90 3.2 Reconciling the Level of Fines and Damages 94 3.2.1 Recognition of Previous Compensation Payments as Attenuating Circumstances 94 3.2.2 Claims for Reimbursement Under Sec. 34(2) GWB and Sec. 99(2) OWiG 95 3.2.3 Application of the non bis in idem Principle 97 3.2.4 The Principle of Proportionality 102 3.2.5 Reduction of the Amount of Damages 104 3.2.6 Evaluation 105 4 Conclusion 107 Disgorgement and Private Enforcement as Mitigating Circumstances for the Determination of Fines in Antitrust Law 109 1 Recent Developments 109 2 Profit and Sanctioning 111 2.1 Gross Principle 111 2.2 Net Principle 111 2.2.1 In General 111 2.2.2 Compensation and Profit 111 2.2.3 Estimation 112 2.2.4 Problem Relating to the Succession of Private and Public Proceedings 112 2.2.5 Tax and Profit 113 3 Elements of Fine, Disgorgement and Compensation 113 4 The Legal Situation 114 4.1 In the European Union 114 4.2 In Germany 116 5 The Relationship between Public and Private Enforcement 118 5.1 Advantages and Disadvantages 118 5.2 Theoretical Models 120 5.2.1 The Relationship Between Private and Public Enforcement 120 5.2.2 Exemplary Damages 120 5.2.3 Restriction to Pure Restitution 121 5.2.4 Advantage of a Flexible System 121 5.2.5 Relation between Confiscation and Fine 122 6 Conclusion 123 Quantifying Antitrust Damages – Economics and the Law 124 1 Introduction 124 2 Policy Principles Behind Damages Claims 125 3 Searching for the Right Answer Within Practical and Legal Limits 127 4 Main Stages in the Damages Estimation 128 5 Harm from Hard-Core Cartel Agreements 129 6 A Classification of Methods and Models for the Quantification of Damages 131 7 Selecting which Methods or Models to Use 133 8 Comparator-Based Approaches 134 9 Interest and Discounting: Why Things Are not Always Simple 139 Best Practices for Expert Economic Opinions – Key Element of Forensic Economics in Competition Law 144 1 Introduction 144 2 Forensic Economics in Competition Law 145 3 Minimum Quality Standards for Expert Opinions 151 3.1 Purpose and Rationale 151 3.2 The Bundeskartellamt’s ‘Best Practices for Expert Economic Opinions’ 152 3.3 The International Perspective 156 3.3.1 A Comparison with Guidance Documents from Six Other Jurisdictions 156 3.3.2 A Quick Glance at Jurisdictions Without Guidance Documents 160 4 A Special Look at the US: The Daubert Trilogy and Beyond 163 5 Conclusion 168 Access to Evidence and Presumptions – Communicating Vessels in Procedural Law 170 1 General Context 170 2 Burden of Proof 170 2.1 Burden of Production, Burden of Persuasion, Burden of Proof 170 2.2 An Example: The Cartel Interdiction 171 2.3 Specific Lack of Evidence in Private Competition Law? 173 3 Coping with Problems of Proof 174 3.1 Options 174 3.2 Discussion 175 3.2.1 Inquisitorial System 176 3.2.2 Amicus curiae Function of Competition Authorities 176 3.2.3 Binding Effect of Administrative Decisions 176 3.2.4 Right to Information 177 3.2.5 Easing of the Standard of Proof 177 3.2.6 Access to Evidence and Presumptions 177 4 Access to Evidence 178 4.1 The Proposal of the European Commission 178 4.2 Discussion 179 5 Presumptions and Other Rules on the Burden of Proof 180 5.1 Concept 180 5.2 Different Effects of Presumptions in Private, Administrative and Criminal Law 181 5.3 The Efficiency Defence 182 5.4 Per se Prohibition and Rule of Reason 184 6 An Economic Analysis of Disclosure Obligations and Presumptions 186 6.1 Justification of Presumptions 186 6.2 Economics of Disclosure Obligations 187 6.3 Economics of Presumptions 187 7 Examples 188 7.1 Dominant Position 188 7.1.1 Market Shares 188 7.1.2 Assessment 189 7.2 Predatory Pricing 190 7.2.1 Sales Below Cost 190 7.2.2 Assessment 190 7.3 Passing on 191 7.3.1 Passive and Active Use 191 7.3.2 Assessment 191 8 Conclusions 192 8.1 Insights 192 8.2 The Link Between Presumptions and Disclosure Rules 192 8.3 Preference for Improved Disclosure or for Presumptions? 193 8.4 Outlook 194 Economic Evidence in Competition Litigation in Germany 195 1 Introduction 195 2 Expert Evidence in German Civil Courts – Basic Features 196 2.1 Court-Appointed Experts (Gerichtssachverständige) 197 2.2 Expert Counsel for the Parties (Privatgutachter) 200 3 Role and Significance of Economic Evidence in Competition Litigation 202 3.1 Scope of the Binding Effect of Decisions by Competition Authorities 203 3.2 Proof of Causation 205 3.2.1 Prima facie Evidence of Causation in Hard-Core Cartel Cases 206 3.2.2 Alleviations of the Standard of Proof in Other Cases 208 3.3 Quantum 209 3.4 Economic Evidence as a Means of Detecting and Proving Collusion? 214 4 Content and Form of Presentation 216 5 Tactical Considerations 217 6 Case Study: The Cement Cartel 218 7 Unresolved Problems 221 7.1 Access to Relevant Data 221 7.2 Confidentiality of Data 225 7.3 Resolution of Conflicting Expert Reports 227 8 Concluding Remarks 228 Private Damage Claims – Recent Developments in the Passing-on Defence 230 1 Introduction: POD and Effective Private Enforcement 230 2 POD and Indirect Purchaser Standing: Definition and Main Issues 231 3 The European Commission’s Proposals 234 4 Italian Case Law on Antitrust Damage Claims: What Can We Draw from National Experience? 236 5 Recent Developments in France, Germany, and the United Kingdom 238 6 Practical Issues in Estimating Passing-on 242 7 Concluding Remarks: Recent Initiatives on Collective Redress and Action for Damages 243 Competition Law Enforcement in England and Wales 248 1 Introduction 248 2 Public Enforcement 250 2.1 The Institutions 250 2.2 Compliance with EU Law 251 2.3 Investigating Anticompetitive Conduct 252 2.4 The Cartel Offence and Company Director’s Disqualification Orders 254 2.5 The OFT’s Fining Practice 256 3 Private Enforcement 259 3.1 Legal Framework for Private Actions 260 3.2 Remedies 264 3.3 Collective Actions 267 3.4 Impact of Private Cases 268 4 Conclusion 269 Editors and Contributors 271 List of Figures 277 List of Tables 278 Front Matter....Pages i-vi Public and Private Enforcement of Competition Law in Europe – Introduction and Overview....Pages 1-8 Public Enforcement of Anti-Cartel Laws – Theory and Empirical Evidence....Pages 9-37 Leniency Programmes and the Structure of Cartels – Remarks from an Economic Perspective....Pages 39-51 The Role of Fines in the Public Enforcement of Competition Law....Pages 53-61 The Interaction of Public and Private Antitrust Enforcement – The Calculation of Fines and Damages....Pages 63-76 The Interaction of Public and Private Enforcement – The Calculation and Reconciliation of Fines and Damages in Europe and Germany....Pages 77-104 Disgorgement and Private Enforcement as Mitigating Circumstances for the Determination of Fines in Antitrust Law....Pages 105-119 Quantifying Antitrust Damages – Economics and the Law....Pages 121-140 Best Practices for Expert Economic Opinions – Key Element of Forensic Economics in Competition Law....Pages 141-166 Access to Evidence and Presumptions – Communicating Vessels in Procedural Law....Pages 167-191 Economic Evidence in Competition Litigation in Germany....Pages 193-227 Private Damage Claims – Recent Developments in the Passing-on Defence....Pages 229-246 Competition Law Enforcement in England and Wales....Pages 247-269 Back Matter....Pages 271-279