The ECJ confirms that a decision of a competition authority is not a prerequisite for private enforcement

Today, 11 November 2021, the European Court of Justice (the ECJ) rendered an important judgment on the relationship between the public and private enforcement of competition law in case C-819/19 (Stichting Cartel Compensation and Others). Following Advocate General Bobek’s opinion, the ECJ confirms that national courts are authorised to apply article 101 TFEU in cartel damages actions, which authority they derive directly from the TFEU, regardless of whether a competition authority has rendered a decision in respect of the relevant infringement (in whole or in part).

The judgment of the ECJ goes back to a judgment of the Amsterdam District Court (the District Court) in the cartel damages action of Stichting Cartel Compensation (SCC) in respect of the Air Cargo cartel. That judgment (ECLI:NL:RBAMS:2019:3394) concerned the question whether the District Court, as national court, was authorised to privately enforce the European prohibition on cartels in respect of flights from before certain dates. This question arose as the European Commission had made carve-outs from its decision in respect of these flights because the Commission believed it did not have the power to apply article 101 TFEU thereto until the entry into force of Regulation 1/2003 on 1 May 2004.

The District Court itself answered the question in the affirmative. Nonetheless, the District Court decided to make a preliminary reference to the ECJ (ECLI:NL:RBAMS:2019:9966). In its judgment, the ECJ concurs with the thorough analysis of the District Court in that:

  • article 101 TFEU has always been applicable and has always had direct effect, also in respect of the air transport sector – the entry into force of Regulation 1/2003 did not entail the application of a new substantive standard;
  • the reason why, according to the case law of the ECJ, national courts had to exercise restraint during the period up until the entry into force of Regulation 1/2003 lay in the possibility of an exemption still being obtained on the basis of article 101, paragraph 3, TFEU, with or without retroactive effect, which could have compromised legal certainty;
  • legal certainty is not compromised in these proceedings because it has been established that the Airlines did not request an exemption from the national authorities (or the Commission) and that such a request is no longer possible; and
  • there is also no risk of irreconcilable decisions because the decision of the Commission does not extend to the relevant flights.

The main take-away from the judgment, which applies much broader than just the Air Cargo case or the air transport sector, is that an infringement of competition law is clearly distinct from a decision of a competition authority. Such a decision is neither a prerequisite nor a limitation of the private enforcement of competition law: there may be an infringement without a decision and one and the same infringement could very well be (much) broader than the temporal or geographical scope of a decision, like in the Air Cargo case. A national court is bound by such a decision, but not confined to its scope. Instead, national courts have a duty to protect individual rights derived from directly effective provisions of EU law in respect of the entire infringement.

The lawyers of Brande & Verheij LLP, who represent the claimants in this case, congratulate SCC with this great victory.

For more information, please contact Theodoor Verheij.