Noerr Competition Day – Antitrust law goes beyond borders

Antitrust law is becoming increasingly important to internationally operating companies: around the world, experts are noticing stricter regulatory requirements and an increasing tendency by the authorities to enforce antitrust laws strictly. Following the globalisation of the economy, are we now seeing the globalisation of antitrust law? Legal experts in antitrust law discussed this topic at Competition Day 2016, organised by Noerr. Another topic was antitrust damages and the 9^th amendment to the German Act Against Restraints of Competition (GWB) – including the question of when fines for antitrust violations by subsidiaries can be imposed on other group companies and when they are liable for damages.

Antitrust law: A strategic management issue

Whether planning a cross-border merger or dealing with antitrust proceedings, the increasing activity of national and supranational antitrust authorities creates legal uncertainty, delays projects and triggers new risks for companies. “This development requires more efficient coordination on antitrust law matters,” said Dr Alexander Birnstiel, head of the Noerr Antitrust & Competition Practice Group and host of the Challenges in International Cartel Proceedings panel. Birnstiel recommended getting the antitrust law experts from legal departments involved at the stage of corporate strategy planning in order to spot problems early on.

Antitrust damages increasingly important

Antitrust damages were the second main issue of Competition Day. The EU Directive on Antitrust Damages Actions must be implemented in German law by the end of the year. Although in Birnstiel’s view the Directive is not a paradigm shift from a German perspective, the practical impact on companies is extensive, he thinks. From the perspective of cartel participants, the risk of being held liable for damages is increasing. For injured parties, the chances of being able to claim antitrust damages are rising. “Companies involved in cartels therefore have to assess and factor in the risk of claims for damages as well as the risk of fines,” Birnstiel stressed. “Conversely, if a company is the victim of a cartel, its board must carefully review whether claims for damages need to be made and whether there is a duty to take action, otherwise they could soon face accusations of failing to fulfil an obligation.”

Dr Armin Jungbluth, head of Competition and Consumer Policy at the German Federal Ministry of the Economy and Energy, reported on the implementation status of the Directive on Antitrust Damages Actions as part of the 9^th amendment to the GWB. The draft of the GWB amendment drawn up in coordination with the German Federal Ministry of Justice and Consumer Protection has now been published. In addition to an extension of the limitation periods for damages claims under antitrust law, the draft provides for a presumption of damage in favour of parties allegedly injured by the cartel.

The contentious issue of whether parent companies will in future have to pay damages for antitrust violations by their subsidiaries is left deliberately open-ended. This issue is instead intended to be resolved by case law. “The planned implementation of the Directive on Antitrust Damages Actions will clarify some previously unresolved legal issues both for cartel victims and cartel participants,” said partner at Noerr Dr. Kathrin Westermann. “This applies especially to access to evidence for both sides in a trial.” The defence of passing on damages, which is meant to prevent the claimant from being overcompensated, ought to be easier to conduct in future, according to Westermann. Drafting settlements between cartel participants and cartel victims will also be made easier in future.