Civil-procedure issues in cross-border breaches of competition law

I. Facts and question

The legal pursuit of anticompetitive statements made by competitors in cross-border situations raises a range of civil-procedure issues. This can be illustrated with the following example:

A German company wishes to bring an action before a German court against an American competitor domiciled in the USA over defamatory comments made on the Internet. The management of the German company is particularly interested in obtaining an affirmative decision before a German court as it wishes to counteract any possible loss of standing among its (potential) customers. If fears that damage to its reputation could result in economic losses in the form of a specific drop in turnover. Both companies are competitors on various markets in the USA and the European Union, but not in Germany.

Can the German company assert its claim against the US competitor through German courts with the prospect of success although the two companies are not competitors in this country?

This question of relevance for legal practice is discussed in the article „Inanspruchnahme deutscher Gerichte bei im Ausland begangenen rufschädigenden Internet-Äußerungen, auch wenn die Unternehmen im Inland nicht im Wettbewerb zueinander stehen?“ (“Can companies have recourse to German courts over defamatory Internet comments made abroad, even if these companies are not competitors in Germany?”) in Betriebsberater 2015, p. 520ff. Overall, the authors arrive at the following conclusions:

II. Overall conclusions

• Defamatory comments made on the Internet abroad about a company domiciled in Germany establish both the international competence of German courts and the applicability of German law, even though neither company is a competitor on the German market.
  
  
  • In accordance with the case law of the German Federal Court of Justice (Bundesgerichtshof), the jurisdiction of the German courts can be established on the basis of the location of the damage, provided that the occurrence of the damaging event forms part of the statutory definition of the offence. In the case in question, the damage could be asserted by the German company as damage arising from market confusion (Marktverwirrungsschaden), which is acknowledged by the case law of the German Federal Court of Justice in connection with competitors’ anticompetitive conduct and understood to be a state of disturbance arising as a result of diffuse disinformation by market participants to the damaged party’s detriment. In this regard, however, the German Federal Court of Justice has yet to decide whether a mere loss of reputation as a result of defamation is sufficient or whether this always has to have resulted in a drop in turnover with a causal connection to the defamatory statement.
  
  
  • An interpretation of the concept of the location of the damage – in this case, in the context of the Rome II Regulation – is also of significance for establishing the applicability of German law. In German legal literature, the prevailing view is that this concept should be interpreted in terms of the German legal understanding, i.e. as the location where the damage occurred, which means the law of the place in which the violation of the legally protected interest occurred. An argument against such an interpretation is the fact that a specifically German legal understanding not only makes a distinction between the concepts of the location of the damage and the location of the occurrence but also classifies the latter as the “location where the damage arose”; the justification of this German legal understanding may at least be questionable in an autonomous Union-law context.

• In any event, the filing of a claim in Germany should be preceded by an analysis of the specific objectives that the German company hopes to achieve in pursuing its claims against the US competitor before a German court. If the German company is primarily concerned with enforcing a particular court order in the USA, then filing a claim in Germany may not necessarily be the means to achieving this end. The assertion of claims before German courts may, however, be of interest to a German company whose primary focus is on restoring its reputation. The possible publication of an affirmative decision may then ultimately be imbued with a significance equivalent to the enforcement of a claim in the USA.