Collective Redress and EU Competition Law

Dr. Eda Şahin is a lecturer at EU School of Law. She was awarded a Doctorate in Law at Queen Mary, University of London. She holds an LLM in Competition Law and Policy from the University of East Anglia. Her LLM thesis examined the passing-on defence in competition law in the EU, US and Turkey. She holds business administration and law degrees from the University of Istanbul, Turkey. Eda was admitted to Istanbul Bar in 2007. She is also the editor of the Global Antitrust Review which is published annually by the Interdisciplinary Centre for Competition Law and Policy, Queen Mary, University of London. After graduation, she returned to Turkey, and started working as a lecturer in law at a public university in Turkey in order to serve her compulsory work in return for the Ministry of National Education’s scholarship she received to pursue her doctorate in the UK. In her current position as a lecturer, she is responsible for teaching Law of Obligations and Property Law at the undergraduate level and UK Contract Law and Family Law at the postgraduate level.

Table of Contents

Preface

Acknowledgements

List of Abbreviations

Table of Cases

Table of Legislation

CHAPTER 1

INTRODUCTION

I. Background *

1. Paucity of Actions for Damages for Competition Infringements

2. The Need for Collective Redress in Competition Law Enforcement

3. Reflection on the Term ‘Collective Redress’

II. Issues relating to the Design of a Collective Redress Action

1. Judicial v Non-Judicial Means of Collective Redress

2. Elements of Collective Redress Actions

III. Methodology

IV. Structure

CHAPTER 2

THE NOTION OF AND NEED FOR COLLECTIVE REDRESS ACTIONS

I. Introduction

II. The Concept and Function of Collective Redress Procedures

1. A Short Summary of Evolution and Policy Rationale

2. The Purpose of the Procedure

III. Setting the Scene for EU Collective Redress Actions

1. The Recognition and Exercise of the Right to Damages

2. The Need for Collective Redress Actions for Consumers

2.1. Barriers to the Effective Compensation of Consumers

2.2. Inadequacy of Existing Aggregation Mechanisms

3. The Role of Collective Redress Actions

IV. Concluding Remarks

CHAPTER 3

COMMISSION INITIATIVES ON COLLECTIVE REDRESS ACTIONS

I. Introduction

II. Two Distinct Initiatives in Competition and Consumer Law

1. Commission Efforts in Competition Law

1.1. The Green Paper

1.2. The White Paper

1.3. Withdrawn Directive in 2009 *

2. Commission Efforts in Consumer Law

III. Combining the Two: A Horizontal Approach toward Collective Redress Actions

1. Overview of the Reasons leading to Horizontal Approach

2. The Proposals Under the Horizontal Approach

2.1. Public Consultation

2.2. Recommendation and Communication

3. Impact of the Horizontal Approach on Collective Redress

IV. Distinctive Approach toward Collective Redress Actions

1. Potential Shortcomings of the Horizontal Approach

2. The Case for a Distinctive Competition Law Approach

V. Concluding Remarks

CHAPTER 4

OBJECTIVES OF COLLECTIVE REDRESS ACTIONS IN EU COMPETITION ENFORCEMENT

I. Introduction

II. Determining the Objectives and Their Significance

III. Objectives of Actions for Damages

1. The Approach of the EU Courts

2. The Approach of the Commission

IV. Compensation and Deterrence Objectives for Collective Redress Actions

1. The Unique Competition Law Enforcement Goal and its Implications for Collective Redress Actions

2. Objectives of Collective Redress Actions

2.1. The Compensatory Objective

2.2. The Deterrence Objective

3. Collective Redress Actions for Consumers: Do the Objectives Pursued Differ?

V. Concluding Remarks

CHAPTER 5

CONSUMER DAMAGES CLAIMS IN EU COMPETITION CASES

I. Introduction

II. Damages Caused by Competition Infringements

1. The Types of Competition Infringements

2. The Types of Harm Resulting from Competition Infringements

3. Potential Damages of Competition Infringements

III. The Overcharge as a Measure of Damages in Consumer Cases *

1. Overcharge in Collusion Cases

1.1. Practices Giving Rise to Overcharge

1.2. Case Studies

1.2.1. Case Study 1

1.2.2. Case Study 2

2. Overcharge in Abuse of Dominance Cases

2.1. Practices Giving Rise to Overcharge

2.2. Case Studies

2.2.1. Case Study 1

2.2.2. Case Study 2

IV. The Ways in Which Consumers are Harmed

1. Direct Consumers

2. Indirect Consumers

3. Deadweight Loss Consumers

4. Umbrella Consumers

V. Concluding Remarks

CHAPTER 6

GROUPING COLLECTIVE CLAIMS: OPT-IN v OPT-OUT

I. Introduction

II. Establishing the Group Membership

1. Opt-In Actions

2. Mandatory Actions

3. Opt-Out Actions

3.1. The Functioning of Opt-Out Actions

3.2. The Role of Notice

3.3. The Compensation Objective and Opt-Out Actions

3.3.1. Participation Rates

3.3.2. Take-Up Rates

4. The Proposed Approach

4.1. Reflections

4.2. Assessing the Criticisms

4.2.1. Overview of the Criticisms

4.2.2. The Merits of the Criticisms

III. Grouping the Claims

1. The Ways in Which the Group is Defined

2. Two Necessary Elements of Group Definition

3. Towards an Adequate Group Definition: What Matters?

3.1. The Type of Loss

3.2. The Type of Plaintiff

4. The Proposed Approach: Grouping Consumer Claims

IV. Concluding Remarks

CHAPTER 7

DESIGNING COLLECTIVE REDRESS ACTIONS: REPRESENTATIVE PARTY AND FUNDING RULES

I. Introduction

II. Determining the Representative Party

1. Lead Plaintiff

2. Ideological Claimant

III. Funding

1. Liability for Costs

2. Possible Options for Funding

3. Contingency Fees as One of the Options

4. The Proposed Approach

IV. Concluding Remarks

CHAPTER 8

CALCULATION AND DISTRIBUTION OF DAMAGES IN COLLECTIVE ACTIONS FOR CONSUMERS

I. Introduction

II. Possible Ways of Awarding Damages to a Group

1. Aggregate versus Individual Damages Assessment

2. Aggregate Damages Assessment and the Compensation Objective

III. Calculation of Damages to Consumers

IV. Allocation of Damages

1. Distribution of Damages to Group Members

2. Possible Alternatives for Undistributed Damages and the Proposed Approach

V. Concluding Remarks

CHAPTER 9

CONCLUSIONS

Bibliography

index