The European Commission and national competition authorities (NCAs) make extensive use of commitment decisions. Since these decisions do not establish the existence of competition infringements, claimants still have to bear the burden of proof in stand-alone damages actions concerning conduct covered by them.
However, some evidential effects should be recognised to commitment decisions, as well as to certain statements made in the context of related public enforcement proceedings. This article, available here, describes such effects as follows.
Section II outlines the relationship between commitment decisions and the private enforcement of competition law.
According to Regulation 1/2003, commitment decisions are adopted without concluding whether competition law has been infringed. Commitment decisions merely state that there are no longer grounds for action by a competition authority, as the behavioural or structural measures taken by the companies involved in an investigation are sufficient to put an end to the potential restriction of competition. In short, the main features of commitment decisions are that: (i) they do not conclude whether an infringement has taken place or not; and (ii) the decision of the competition authority renders the commitments made by the companies involved in the proceedings legally binding.
To understand the effect that commitment decisions may have in private enforcement, one must first understand the value that infringement decisions have in such proceedings. Under Article 9 of the EU Damages Directive, infringement decisions by national competition authorities and national courts will automatically constitute full proof of the infringement before the courts of that same Member State. All other elements required to claim damages – the existence of loss, its quantification, and the causal link between the damages and the infringement – must still be established by the parties. A similar effect extends to infringement decisions adopted by the European Commission under Article 16 of Council Regulation 1/2003, which requires national courts not to take decisions running counter to decisions adopted by the Commission.
The situation is slightly different as regards decisions by a national competition authority or court from a different country to the one in which damages are claimed. In such cases, the Directive dictates, in Article 9(2), that national regulations must recognise these decisions as at least prima facie evidence that an infringement of competition law has occurred, to be assessed along with any other evidence adduced by the parties. While it is open to EU Member States to give a broader binding effect to these foreign infringement decisions, most countries merely make their findings equivalent to rebuttable presumptions.
However, neither the Damages Directive nor the national rules adopted to transpose address the effects of commitment decisions in damages claims for breaches of antitrust law. It is important, therefore, to clarify what the impact of commitment decisions may be. Thus far, the European courts have simply held that the adoption of a commitment decision concerning certain agreements between undertakings by the European Commission does not preclude national courts from examining whether those agreements comply with the competition rules and, if necessary, declaring those agreements void. Additional guidance on the appropriate treatment of commitment decisions in private enforcement proceedings would be welcome.
Sections III and IV considers the ability of private parties to rely on commitment decisions, and the binding effect of commitment decisions in subsequent damage claims.
The commitments incorporated into a decision that brings a competition proceeding to an end has two main consequences. Firstly, the companies are bound to comply with the pledged measures. Secondly, and importantly for our purposes, any concerned person can bring an action before national courts on the basis of such decisions. Further, private parties are also able to go to court and ask it to determine that conduct allowed by a commitment decision breaches competition law.
This reflects the fact that commitment decisions simply aim to overcome the concerns of the authority about a possible restriction of competition, removing their effects for the future and restoring competitive conditions in the market. They do not establish that an infringement occurred; but neither do they absolve infringers of their potential liability for the damages resulting from their actions, nor do these decisions provide their addressees with immunity against private damages claims.
In other words, there are no obstacles to claiming damages for loss suffered as a result of conduct that occurred before the content of a commitment decision was implemented. The claimant will bear the burden of proving the relevant elements to support its claim, like in any tort action. The crucial question is whether the commitment decision adopted by a competition authority produces any legal effect on the subsequent private enforcement proceeding. In other words, can such a decision be used as an evidentiary basis to substantiate the damages claim?
Two positions can be adopted in this regard. The first denies any legal effect of commitment decisions in subsequent private enforcement proceedings. The second recognises certain effects to commitment decisions, which in turn raises the question of what these effects might be.
The position that commitment decisions cannot have effects in damages claims builds on both textual and policy arguments. From a textual perspective, commitment decisions do not conclude whether an infringement has taken place or not. Therefore, commitment decisions do not produce any effect as regards the existence of an infringement, including in subsequent private enforcement proceedings. The policy argument is that companies proposing commitments would be more exposed to damages claims if commitment decisions were recognised in subsequent damages proceedings, which would detract from the effectiveness (and attractiveness )of commitment procedures.
Another possibility is that commitment decisions can have some effect on subsequent damages proceedings, even if the decision will not be binding as to the existence of a competition infringement. In particular, the commitment decision and the objections presented by the competition authority in its preliminary findings or in the statement of objections may contain certain statements that the claimant could use to prove the existence of an infringement in private enforcement proceedings. In the past, the European courts have held that both the principle of sincere cooperation laid down in Article 4(3) TEU and the objective of applying EU competition law effectively and uniformly require national courts to take into account the preliminary assessment carried out by the Commission before issuing a commitment decision. National courts are also require to regard such assessments as providing an indication, if not prima facie evidence, of the anticompetitive nature of the agreement at issue. Some national courts have already taken up this position, and derived support for finding that an infringement occurred from the very wording of commitment decisions. However, in other cases, the courts did not consider that a commitment decision sufficed to establish the elements of an infringement.
According to the author, ‘the offer of commitments to deal with the competition concerns raised by the authority implies a certain kind of unquestionable confirmation that the presented facts are true’. The opening of negotiations with the authority implies a kind of tacit acknowledgement from the involved undertakings as to the truth and conformity of the facts alleged by the authority. Unless the undertakings expressly oppose some of the elements of these assessments in their responses, the offer of commitments amounts to an acknowledgment of those elements and underlying facts. This recognition should later bind the undertakings, including in damages claims. However, the position of the undertakings will be different if they express their complete opposition to certain facts and propositions expressed by the competition authority. Ultimately, the potential evidential effect of commitment decisions in private damages claims will depend on the merits of each case.
Section V deals with the issue of access to evidence in the competition agency’s file.
The author argues that while the relationship between commitment decisions and damage claims is complicated, a certain legal effect (albeit limited) must be granted to commitment decisions in private enforcement. Victims who seek compensation for damages will face a greater or lesser burden to prove the existence of the infringement on the basis of what is contained in the commitment decision. This will depend on the circumstances of each case, the information at their disposal and the availability of other evidence and the scope of the statements made by the competition authority throughout the different phases of the public enforcement proceeding. What cannot be said is that commitment decisions do not produce any effect in private enforcement, nor that the position of the victim in such cases is the same as that held by a claimant bringing a stand-alone action stricto sensu.
Victims may demonstrate the existence of the infringement by relaying on documents made publicly available by the competition agency during the proceedings (e.g. publication of the preliminary assessment, publication of the commitment decision, statements made during the market test, etc.). However, a claimant may need access to additional information and, in particular, may require access to evidence held by the competition authority in its file. The requirements on access to file are listed in the EU Damages Directive and other instruments. According to the author, the mere existence of a commitment decision should suffice to allow the claimant to argue that the damage claim is plausible and disclosure is appropriate when making a request to a civil court to access evidence on the competition agency’s file.
This is an interesting article that deals with an under-theorised matter: the effect of commitment decisions in subsequent private claims. In my opinion, the conclusion that these decisions have some kind of evidential effect in subsequent private proceedings has some force.
I have some qualms with the paper, though. Most importantly, it seems to me that the paper at times confuses the potential binding effect of commitment decisions with the evidential value of documents produced during an investigation or that are available in the competition file – and that, in doing so, the author fails to distinguish between the formal binding effects and the persuasive effects of commitment decisions. This is apparent in the paper’s failure to address what probative value a commitment decision may have in law (e.g. prima facie presumption of infringement, or mere evidence on a par with other pieces of evidence); in how it seems to consider commitment decisions and other material on the competition agency’s file as interchangeable; and in how section V appears to treat commitment decision merely as an additional type of evidence on a par with any other evidence that may be obtained from the competition agency’s file. It is true that, once disclosed, elements in a competition file can have a probative element, like any other piece of evidence; but this is not linked to the probative effect of a commitment decision, as the article seems to imply. Instead, the question of whether national courts are bound by a commitment decision, and if so how, is independent of the question of what is the probative value of the material in the competition agency file. However, this crucial question is not directly addressed, despite it being particularly relevant following judicial guidance issued by the European court that commitment decisions may provide prima facie evidence of an infringement having taken place, which the author uses to good effect for other purposes throughout the article.
A related point concerns a failure to address the effects of commitment decisions in practice. The effects of infringement decisions go beyond what one would expect by merely reading the applicable rules, which would restrict their effect to determining whether there is an infringement. In practice, courts in private proceedings rely on infringement decisions for much more than this. As mentioned in a paper I will discuss in coming weeks, of the 35 damages awards in Europe for cartel infringements up to 2018 at least 15 damages estimates (43%) use publicly available data retrieved from the infringement decision. It is perfectly possible that commitment decisions will have this persuasive effect as well, without having any formal binding effect. The persuasive effect of commitment decisions, and how it compares to other material on the competition file, would have been worth discussing.
An area where I disagree with the author is when he considers that there are ‘the clear and proven facts stated by the competition authority during the public enforcement proceeding’, and that ‘the negotiation of commitments implies some kind of acknowledgement of the facts revealed by the competition authority and accepted at the different stages of the proceeding’. These propositions strike me as not being fully accurate. These ‘facts’ cannot be said to have been proven if the procedure has not concluded; whether the facts are proven is ultimately to be assessed by the court dealing with the case. Furthermore, parties making commitments usually expressly state that they disagree with the assessment of the competition authority, precisely so that it cannot be said to accept the underlying facts or their characterisation – thereby avoiding private enforcement.