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Achievement of compensation objectives in EU competition law demands US measures

Victims who claim damages from large corporations for the harm caused by an infringement of competition law are often powerless in the European Union. How could collective actions enhance their position? Zygimantas Juska will defend his doctoral thesis on 23 April.

'Back in 2013, I felt frustration that a large majority of victims were powerless in claiming damages from large corporations for the harm caused by an infringement of competition law', Juska explains. 'This led me to ask questions: Why is there no effective system of private enforcement of infringements of competition law in the European Union? What measures could enhance the development of an appropriate approach of antitrust collective redress to better achieve compensation?' Coincidence or not; the European Commission adopted the private antitrust reform in June 2013, comprising of the Directive on damages actions and the Recommendation on collective redress. 'I simply could not miss the opportunity of starting the thesis together with this long-awaited reform and developing the research together with the implementation aspects of this reform.'

Zygimantas Juska

Although the future of antitrust collective litigation is brighter nowadays than it was in 2013, there is still much room for improvement according to the researcher. 'The most disappointing attribute of the reform is that the Directive includes no provisions on collective litigation. The results have shown that the non-binding Recommendation has led to hardly any development in antitrust collective litigation in the EU Member States.'

The aim of this dissertation has been to assist in the development of an appropriate approach of antitrust collective redress in the EU to better achieve full compensation, which is the main goal of the private antitrust reform. 'For this purpose, three studies were performed. The first examined the effectiveness of available EU-style collective action mechanisms to contribute to achieving full compensation. Because of their failure to achieve this objective, the second study designed more forceful antitrust collective redress mechanisms and assessed their impact on full compensation. The third study scrutinised the potential of collective redress actions to contribute to deterrence through an increased effect of detection and liability. The common ground for all three studies was a comparison between two private antitrust enforcement models: the deterrence-based one in the United States and the compensation-oriented one in the European Union.' The research idea has provided important added value for legal scholarship in the EU. 'The European Commission granted me the Fulbright Schuman scholarship for conducting research at Stanford University as well as the University of Michigan for one academic year.'

Limited impact

Antitrust collective actions have the ability to contribute to achieving full compensation, but only if US style deterrence-based measures were allowed in the EU context, Juska concludes. 'However, even if the best possible collective redress mechanism was introduced, the impact on full compensation would be limited, as the achievement of this objective requires fulfilling very high standards. Nevertheless, collective actions should not be denied, because they allow vulnerable victims to defend their rights in courts.'

As regards the conclusions and recommendations of the research, it is unlikely that the European Commission will follow the proposed forceful approach, Juska thinks. 'This approach would demand strong political will, which is unlikely to be achieved in the nearest future. Hopefully, the EU will find inspiration in the pro-active EU Member States where antitrust collective actions have been brought before courts. Despite the EU and US having inherently different legal systems, it is important to study the comparative aspect further, not only in class actions, as both systems can offer valuable lessons for each other.'

Supervisor Professor T.R. Ottervanger on Zygimantas Juska's research:

In Europe we are rather reticent when it comes to 'class actions'. We are aware of this phenomenon in the United States where at the drop of a hat lawyers fighting injustices are ready to hold ‘perpetrators’ liable, and when successful to pocket a high percentage of the damages. Of course situations do exist where collective redress fills a gap. Bundling claims can be an effective and efficient way to achieve remedy. In the Netherlands, but also elsewhere in Europe, steady progress is being made in the area of collective claims for compensation.

Enforcement of competition law can be achieved via both the public law and private law route. The EU wants to stimulate the latter, primarily in relation to compensation, and to that end it introduced a harmonisation Directive in 2014. However, full compensation of minor damages in particular is difficult since this Directive does not cover collective litigation. Juska’s research is primarily aimed at the question of whether collective litigation in competition law can contribute to the full remedy of damages and how such claims can best be defined in legislation. 

The outcome of the research - a proposal for a collective redress mechanism which corresponds to the European legal system, and not the American - is highly topical. In view of the current heightened interest concerning claims for compensation in competition law, this dissertation could serve as inspiration for the EU to come up with proposals in this area as well.

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