The existence of equilibrium trends has important implications for how a jurisdiction might shape a competitive system and how a chosen competitive system will evolve over time. The experience of the United States highlights some of these implications. Among global competition regimes, the U.S. system offers particularly strong private rights of action. (11) The private right to prosecute antitrust claims in the United States is completely independent of prosecutorial oversight. Private parties do not have to ask government authorities for permission to file complaints, nor do government agencies have the right of first refusal to take responsibility for pursuing a potential case identified by a private litigant. Taken together, these developments have narrowed the scope of the U.S. antitrust system. Most of the crucial judicial decisions in this development of doctrine concerned private plaintiffs seeking triple damages. Perhaps the most interesting area to consider between private litigation and the development of doctrine concerns the areas of monopolization and attempted monopolization.
IBM`s exclusive litigation is a useful example. (15) At the end of the 1960s, the Ministry of Justice initiated abuse of a dominant position proceeding aimed, inter alia, at splitting IBM into several new companies. By 1975, approximately 45 private lawsuits had been filed against IBM, alleging an unlawful exclusion and seeking triple damages against IBM. The sum of all claims for damages in private cases exceeded $4 billion – a considerable sum for the time. Competition policy systems could eventually – and should, as I have argued elsewhere (18) – create variants of the qui-tam mechanism. As applied in competition law, such a mechanism would offer a significant financial reward to persons providing information leading to the successful pursuit of a cartel. Acceptance of such an approach in any jurisdiction is highly dependent on its compatibility with existing social and political norms. (19) For various reasons, some jurisdictions may refuse to pay a bonus to whistleblowers for reporting cartel misconduct. This has important implications for the analysis of nominal legal imperatives – whether in the form of laws or precedents – whose wisdom is widely questioned but whose formal authority remains in force. Strong private rights of action mitigate or eliminate the use of prosecutorial discretion to mitigate the implementation of a law or rule developed by a court whose experience or commentary has proven to be reckless in some respects. A prosecutor may limit enforcement to a narrower subset of all possible cases, but the prosecutor`s decision not to enforce enforcement may not bind private actors exercising private rights of action.
If the competition authority rejects the nominal legal requirement, it must ask the legislator to adopt the policy it prefers. The public competition authority may regard certain rules as anachronisms, but private parties are free to apply them, even enthusiastically. My hunch is that the courts reacted to private cases with concern and were uncomfortable with the possibility that the discovery of an illegal monopoly would trigger the imposition of massive claims for damages against IBM. The courts in those cases could not refuse to triple damages if they found liability, but they could interpret the law in such a way that no liability was established. IBM paid severance pay to a small number of private plaintiffs, but obtained justification in most private cases. The findings of private claims against IBM and several other major U.S. industrial companies during this period imbued the U.S. monopolization doctrine with analytical approaches and conceptual perspectives that were skeptical of interventions. We examine the relationship between public and private law enforcement authorities and introduce a more nuanced approach. Unlike the existing literature, we consider that the costs and benefits of detection and prosecution, and thus the benefits of each mode of enforcement, may change with the nature of the anti-competitive behaviour. 19. The importance of national culture, political traditions and legal structures in determining the appropriate institutional framework for a competition policy system is emphasized in William E.
Kovacic, Institutional Foundations for Economic Law Reform in Transition Economies: The Case of Competition Policy and Antitrust Enforcement, 77 Chicago-Kent Law Review 265 (2001). 7. In presenting this framework of compliance variables, I have not overlooked the importance of social and ethical standards in motivating individuals and businesses to comply with the law. In this discussion, I start from the simplistic assumption that existing formal legal imperatives reflect, at least in general, these norms. I also recognize that over time, law enforcement decisions influence social understanding of the norms of behavior that should govern corporate behavior. See William E. Kovacic, The Modern Evolution of U.S. Competition Policy Enforcement Norms, 71 Antitrust Law Journal 377 (2003). 6. In October 2021, the Court of Justice of the European Union („CJEU”) clarified the term „company” under EU competition law in a long-awaited judgment (Case C-882/19, Sumal).
The judgment establishes the possibility for the victim of an infringement of competition law (…) We define a set of parameters that determine the costs and benefits of both types of antitrust law and discuss the implications for European competition law and policy. Jury trials are allowed for antitrust personal injury claims in the US, but not in the EU or UK. In the US, a four-year limitation period applies, in the EU (depending on the Member State) between one and five years and in the UK six years for actions in the English High Court. The deadline will be subject to a fee in the US and some EU Member States during the ongoing government procedure and for a short period thereafter. On 6 October 2021, the Grand Chamber of the Court of Justice of the European Union (the „CJEU” or the „Court of Justice”) issued a long-awaited decision in Case C-882/19, Sumal SL („Sumal”) v. Mercedes Benz Trucks España SL („MBTE”). The verdict highlights the question of whether the victim of a (…) Determining how a legal system might involve private parties in all law enforcement functions does not explain why a jurisdiction might choose to do so. In the context of competition law, we can consider why the participation of private parties might be desirable. The monitoring function provides a starting point.
The involvement of the private sector in monitoring the behaviour of actors subject to the law can lead to more effective detection of offences if the private monitor is closer to the relevant information than a public inspector. (3) For example, a commercial user of an industrial input priced by a disguised agreement may be the first to establish that suppliers of inputs appear to refuse to make sales in certain geographical areas, which is a feature of illegal territorial allocation. Public enforcement can be defined as the enforcement of antitrust laws by a government, such as the competition authority or a public prosecutor`s office, to detect and sanction violations of competition rules. On the other hand, private enforcement can generally be defined as litigation brought by an individual, legal entity, organization or public body (e.g. a local government and a procurement authority in the case of bidding) to bring a court to find an antitrust infringement and order recovery of the harm suffered or to seek an injunction. Private enforcement may be triggered by an autonomous measure or by a measure following a public enforcement decision. In most jurisdictions, private enforcement is usually represented by private follow-up actions. © OECD The state monopoly model is not the only way to implement a legal imperative.
A jurisdiction could use a combination of public and private participation to perform law enforcement tasks. In general, most legal systems do not give the State a monopoly on all law enforcement activities. To varying degrees, legal systems generally permit or encourage private parties to perform certain law enforcement functions. 2) As the following examples show, the idea that private parties would be involved in the implementation of the law is not remarkable in most jurisdictions: My hypothesis about the experience of U.S. competition policy is that U.S. antitrust doctrine would have taken a slightly different path if there had been no private rights of action or if the remedy for damages in private lawsuits had been less effective – For example: limit reimbursement to actual damage or allow tripling only in the case of infringements of horizontal price agreements. In particular, the United States Antitrust doctrine would have become more intrusive if the power to enforce U.S. competition laws had been delegated exclusively to public law enforcement authorities or if the private right of action had been limited to one or more of the above ways. In June 2015, the OECD held a discussion on the current state of private enforcement in OECD members and other selected countries, reviewed initiatives to promote stronger private enforcement and the tools available to promote it, and discussed the practical relationship between public and private antitrust enforcement. An information note by the Secretariat and contributions from participants supported the discussion. Whatever the actual path of innovation in terms of public and private rights, modern experience of competition policy teaches an important lesson on law enforcement reform.
Adjustments to a single aspect of the enforcement mechanism are making waves throughout the enforcement system.