Document Type

Article

Disciplines

International Law

Abstract

In recent years, much attention has been given to the role of government antitrust authorities in regulating the activities of businesses and markets. The increasing scale and frequency of international mergers and acquisitions have required governments to adapt and enforce their competition laws in new ways. Similarly, the growth of high technology industries challenged government authorities to apply competition laws originally developed with traditional industries in mind. Their struggle to cope with these changes has led to high profile investigations into corporations such as Microsoft and the contentious international merger reviews of the proposed General Electric and Honeywell merger.

Public enforcement by government authorities, however, is not the only means of achieving compliance with competition laws. Businesses and consumers, to the extent they are allowed by law, can file injunctions or lawsuits for damages against other businesses that they believe have been violating competition laws. Such private enforcement, then, can complement public enforcement as part of an overall strategy to deter businesses from engaging in anticompetitive practices. In the European Union, private litigation for damages has not been a distinguishing feature of its competition regime. European Union competition law has allowed for private parties to recover damages for competition violations in national courts since 1973.' Nevertheless, there have been only a handful of largely unreported cases where courts have actually awarded damages.

On December 13, 2002, the Council of the European Union enacted Regulation 1/2003, which will dramatically reform the enforcement of competition law when it becomes effective in May 2004.1 One of the aims of this regulation is to increase the number of private damage actions in the national courts.4 Under the current system, national courts share the competence to apply article 81 of the EEC Treaty with the European Commission. When the new regulation takes effect, national courts will be able to fully and independently apply article 81.

The current system of shared enforcement between the national courts and the Commission is an arrangement unique to the European Union [hereinafter EU] to the extent that it affects private trials. Once the new regulation removes the Commission's substantive role in the process, proceedings in national courts will be more comparable to those in countries such as Australia and Canada. The first objective of this paper is to compare the incentives to litigate private competition actions in Australia, Canada and the European Union as way of assessing the likelihood that the new regulations will actually increase litigation in the EU. The focus will be on price-fixing violations, since these are among the more lucrative damage actions. The second objective is to focus on one incentive in particular, the availability of "follow-on" actions in all three jurisdictions.

Part I describes how the current EU competition structure affects private litigation and Part II describes the major changes of the new regulations. Parts III and IV assess the disincentives to competition litigation in the European Union and compare them to the experience of Canada and Australia. Part V discusses "follow-on" actions and compares their availability in Canada, Australia and the EU. Parts VI and VII address the impact of the new regulation on private damage suits and "follow-on" actions in the EU, and Part VIII concludes.

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