The new act follows the scope of the Damages Directive and applies to infringements of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and their corresponding provisions in the Competition Protection Act (Article 15 regarding prohibited agreements and Article 21 regarding abuse of dominance). It will apply to all proceedings initiated after December 26 2014. Proceedings initiated before 26 December 2014 will be completed under the former act.
For damages which occur under the new act, the guilty party is obliged to provide compensation. The detailed provisions regarding liability, which correspond to the Damages Directive, refer only to Articles 101 and 102 of the TFEU. Thus, it is unclear whether the new provisions would apply to breaches relating to unfair competition and abuse of stronger bargaining power.
Under the new act, the civil and commercial courts of the defendant's place of incorporation or residence are competent to hear damages claims.
The new act introduces rebuttable presumption that a decision of a competition body of another member state, which establishes breach of competition, may serve as proof in damages claim. Until otherwise proven, the court must accept as established the fact of the breach. The new act also introduces joint liability when more than one company breaches competition law. It provides for an exception in favour of small and medium-sized enterprises (SMEs) (based on market share). However, the exception does not apply to SMEs which:
- took a leading role in the competition breach;
- forced the other undertakings to participate in it; or
- had already committed a competition breach.
The prescription term is fixed at five years as of the date on which the breach was suspended. However, it starts running only once the damaged person has acquired knowledge or it can be inferred that it had knowledge of the breach, damage and identity of the respective infringers. In addition, the new act provides that the prescription term is interrupted when proceedings are initiated before a competition authority and the new term begins on termination of the proceedings.
Until the adoption of the new act, a very broad provision existed whereby damaged persons under the act could claim damages. To date, no proceedings have been initiated. It is expected that the new act, which provides for much more detailed regulation of private damages, will increase the number of private damages proceedings to be initiated.
This article was first published on www.internationallawoffice.com
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