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On December 19, 2005 Commissioner Kroes published a Green Paper summarizing possible ways of facilitating damage actions in national courts for breach of the EU competition rules ("the Damages Green Paper").[1]  Contrary to the expressed desire of the European Commission ("the Commission") to encourage private enforcement of the competition rules by implementing the modernization package,[2]  relative little private antitrust litigation has developed in Europe in the last 18 months. 

The stated aim of the Damages Green Paper is to identify the main obstacles to a more efficient system of damages claims and to set out different options for possible action to improve damage actions both for follow-on actions (e.g. cases in which the civil action if brought after an antitrust agency has found an infringement) and stand-alone actions. 

According to the Commission, the key advantages of private enforcement by way of damage actions are:

• Compensation of victims of anti-competitive behavior, in order to improve the protection of consumers and companies.
• Deterrence – the risk of damage claims increases the incentive to comply with competition law.
• Bringing competition law closer to the EU citizen – improve opportunities to directly enforce competition rights will make companies and consumes more actively involved in their enforcement.

In order to achieve these advantages, the Commission’s green paper analyzes the main problems impeding private litigation in Europe and sets out a range of options for consultation.  The most important are:

         Access to evidence:  the difficulties facing a claimant in obtaining evidence of an alleged antitrust infringement, in particular in stand-alone cases, is one of the main obstacles to damage actions in Europe.  In order to solve this problem, the Damages Green Paper discusses a number of options:

o       sanctions for not disclosing evidence;

o       preventing destruction of evidence;

o       summoning and cross-examination of witnesses; and

o       access by the courts to documents held by the Commission or national antitrust agencies.

         Damages:  the Commission considers that pure compensation of the loss cause by an antitrust infringement appears not to provide a sufficient incentive for claimants to bring a damages action.  In order to remedy this deficiency, the Commission proposes inter alia imposing double damages for horizontal cartels.

If the options described in the Damages Green Paper are eventually incorporated into legislation, the EC competition framework will be yet another step closer to the US antitrust enforcement system.  However, Commissioner Kroes says she wants to avoid the excesses of the US framework.  In a recent speech at the Harvard club in New York, Commissioner Kroes stated that "[the Commission] want[s] to use the debate to identify the appropriate incentives for private damage claims, while avoiding unmeritorious and even vexatious claims. We want to use the debate to find ways to increase deterrence, while avoiding the situation where defendants settle simply because litigation costs are too high. In short, if we want to use the debate to see how we can do the European economy a favour. How we can foster a competition culture, not a litigation culture."[3]