On Tuesday 28 January, the Court of Justice of the European Union ruled that group actions for damages could be brought in competition law cases (Case C-253/23).
In Germany, ASG 2, a company providing legal services, brought a group action for damages against the Land of North Rhine-Westphalia, which, between 2005 and 2019, allegedly applied excessive tariffs to around thirty sawmills that had assigned their rights to compensation to the company.
The Land disputes ASG 2’s legal standing to bring proceedings, arguing that German law does not allow it to bring a group action for collection in the context of an infringement of EU competition law. According to the German Federal Court, a group action for collection is possible in certain areas of law (tenancy law and concerning air passenger rights). However, this court has not taken a position on compensation for harm caused by a cartel.
Referred to the Court of Justice for a preliminary ruling, the Directive (2014/104) confers on any person harmed by an infringement of competition law the right to seek full compensation, either directly or through a third party to whom that right has been assigned. However, as EU law does not regulate the procedures for exercising the right to compensation for harm caused by an infringement of competition law, it is for each Member State to determine these procedures, while respecting, in particular, the principle of effectiveness.
In the present case, the German court is required to ascertain whether the interpretation of national law, which would prohibit the recovery of damages caused by a cartel through a group action, satisfies the requirement of effectiveness.
If it were to conclude (1) that German law does not provide any other collective legal remedy capable of ensuring the effective implementation of this right to compensation and (2) that an individual action makes it impossible or excessively difficult to exercise this right, the German court would be obliged to find a breach of EU law, according to the Court.
In such a situation, it concludes, the German court should disapply the national provisions prohibiting the group action in the competition field.
Read the Court of Justice’s judgment: https://aeur.eu/f/f9n (Original version in French by Mathieu Bion)