"'Competition Authorities’ Growing Support of Damages Actions: A Delicate Balance"

by Skadden, Arps, Slate, Meagher & Flom LLP


[authors: Patrick Heneghan, David Kavanagh, Gary A. MacDonald, Ingrid Vandenborre, Tiffany Rider]

Competition authorities around the globe are taking an increasingly active part in the pursuit of civil claims for damages for antitrust infringements. The decision by the Korean Fair Trade Commission (“KFTC”), announced on 24 January, to finance a damages action brought by the Green Consumer Network against Samsung and LG on the basis of its infringement decision in this respect marks a new and interesting development. The increasingly proactive assistance and support provided by competition authorities to follow-on claims for damages is a matter that undertakings will need to consider when deciding whether to inform competition authorities of their own anti-competitive conduct in the context of an application for leniency or immunity from fines.

There are a number of different ways in which competition authorities can support follow-on civil claims based on findings of competition law infringements. First, recent legislative developments in certain jurisdictions permit competition authorities to file actions for damages on their own initiative. The decision of the KFTC to fund a private plaintiff is another example of competition authority support for civil follow-on actions. Finally, competition authorities can invite input from those arguably harmed by alleged anti-competitive conduct during infringement investigations and proceedings and, if an infringement is found, make express reference to the scope of the harm resulting from such conduct, and the damage caused, in their final decision.

Hungary is a good illustration of the first example. Since 2011, the Hungarian Competition Act allows the Hungarian competition authority to pursue civil law claims based on competition law infringements on behalf of consumers if a number of conditions are met. The competition authority must have either initiated proceedings or closed a case with a finding of an infringement, and the legal basis and the causal link between the infringement and the damages must be clearly identifiable. In addition, the amount of damages must be determinable, and the infringement must affect a large number of consumers who are identifiable, at least as a group. Affected consumers continue to retain the right to initiate their own civil law actions against the infringers.

In Australia, similarly, Section 87 of the new Competition and Consumer Act 2010 allows the Australian Competition and Consumer Commission (“ACCC”) to act on behalf of one or more persons who have suffered (or are likely to suffer) loss or damages from competition infringements. With the consent of the affected persons, the ACCC can seek a wide range of compensation orders, including disgorgement of the benefit obtained as a result of the anti-competitive behaviour or the payment of compensation to those affected.

As mentioned above, on 24 January the KFTC announced that it would financially support the Green Consumer Network’s class action lawsuit against Samsung and LG. The KFTC reportedly based its decision on the consideration that the fines which it imposed 11 days earlier for a price fixing infringement in relation to household electronics were not a sufficient deterrent.

But even less direct active intervention by competition authorities can have a significant impact on the success of follow-on damages actions. For example, in the investigations of cartel practices in the automotive parts sector, the U.S. Department of Justice and the Canadian Competition Bureau have reportedly sought and obtained input from car manufacturers who arguably would have been harmed by the alleged cartel and who would therefore potentially be significant plaintiffs in any private follow-on actions. Similarly, the EU Commission has a practice of requesting information from third parties in the course of infringement investigations and proceedings, and thus has the opportunity to obtain input from potential private plaintiffs, if deemed useful. This could put potential plaintiffs in a position to influence the scope and the direction of the authorities’ investigation and, ultimately, the content of the final decision.

Finally, a recent decision of the Italian competition authority illustrates the potential impact of a more “damages conscious” approach by competition authorities in their decision making. In its 11 January 2012 decision fining Pfizer €10.6 million for the abuse of its dominant position in the market of ocular glaucoma drugs, the Italian authority determined that Pfizer’s infringement, which it found consisted of delaying the entry of competing generic pharmaceutical products, had resulted in €14 million in lost savings to the Italian national healthcare system.

Competition authorities’ increasing support for follow-on actions for damages raises complex questions in relation to the optimal combination of private enforcement on the one hand, and effective public enforcement which is heavily dependent on leniency applications, on the other hand. It may increasingly cause undertakings to reconsider the merits of a leniency application in light of the detailed information requirements involved and the impact disclosures may have on the scope of follow-on civil actions. If competition authorities become increasingly proactive in pursuing and assisting private follow-on claims, undertakings may well question whether the opportunity for avoiding some or all of a fine by making a leniency application is off-set by an increased risk of successful private follow-on claims.

Download PDF Version


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Skadden, Arps, Slate, Meagher & Flom LLP | Attorney Advertising

Written by:

Skadden, Arps, Slate, Meagher & Flom LLP

Skadden, Arps, Slate, Meagher & Flom LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.