At times this has not seemed to be an issue, because enforcement has traditionally focused on clear-cut cases, and because in those cases we resort to presumptions that alleviate the burden e. But the greater the complexity and the competitive ambiguity of the practice, the greater the importance of the burden of proof.
The competitive effects of parity clauses on online commerce
Indeed, a number of decisions have been annulled with regard to more ambiguous practices e. And it is by no means an accident that the current proposals relate to practices that have ambivalent effects my take on that is available here. This would not be necessary in situations e. This is not about presuming harm in the light of clear lessons from economics and experience. It is about presuming harm absent those lessons, or against those lessons. It is about a dogma, believing in what we cannot see or prove.
It may be somehow contradictory to argue that there is an abundance of obvious anticompetitive practices in the digital sector, but then recommend that their existence and anticompetitive potential be presumed, not shown on the basis of evidence.
If a practice is truly anticompetitive, the evidence will be there. But, of course, in the era of digitization we cannot bother with complexity, we have grown accustomed to immediate solutions and easy fixes that address our impulses. Uncertainty must then be balanced against the requirements of the presumption of innocence […]. Shifting the burden of proof in a quasi-criminal context is unheard of in jurisdictions subject to the rule of law and would set a first and dangerous precedent.
And, in the most unlikely scenario that they did, how could one confine ripple effects beyond digital platforms, and indeed beyond competition law? Implementing these changes would certainly make enforcement much easier. No need to bother with foreclosure, effects, indispensability or causality. We could do away with those and, in passing, with lawyers and judges too, as they also are annoying. Implementing these proposals would radically transform competition, but at a cost to basic legal principles that is just too high.
Registrations will open up next Tuesday 5 November at We are thrilled that the conference will feature keynote interventions by Commissioner Vestager and General Court President Marc van der Woude. That was really the blog at its best. I am really grateful. I felt I would not do full justice to the involvement of these readers if I just added a comment of mine to the pile. The insights are so powerful that it makes sense to give them more exposure and hopefully lead to yet more comments.
Chris was the commentator to break the ice. This is a counterintuitive outcome. The fact that it is counterintuitive, however, does not mean anything. Rigorous economic analysis often surprises us with outcomes that contradict our instincts. However, this conclusion could also mean that there is something funny going on.
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More from Jacques Bourgeois Denis Waelbroeck. Faculty library of law and criminology Open print view. Mon 11 Nov closed Tue 12 Nov Ingang koepelzaal gesloten Global competition law centre Publisher: Bruxelles : Bruylant, Section 79B reflects legislative recognition of the importance of safeguarding these rights. It instructs the court that, in the event of a defendant not having sufficient resources to pay both a pecuniary penalty and compensation, preference has to be given to the payment of compensation.
It appears that s 79B has application only where penalties and compensation are sought in the same proceeding. However, the general underlying principle, namely that a penalty should not be set at a level that undermines the capacity for a contravenor to pay compensation, remains sound. For this reason, any amendment to grant immunity would need to be confined to the immunity applicant and not extended, for example, to other parties that seek to cooperate lest entire cartels be granted immunity from paying damages.
Further, the portion of damages for which the immunity applicant would otherwise have been liable would need to be shifted to the remaining participants, rather than excised. Granting successful applicants immunity from damages may well increase the extent to which those harmed by cartels are able to be compensated. This is so for two reasons. The first is that, by increasing the incentive for members of a cartel to apply for immunity, the percentage of cartels that are prosecuted and victims compensated may increase. Secondly, the change may remove a significant disincentive to the cartel participants providing information to the ACCC.
This would be further enhanced by making the civil damages immunity contingent on the cartel participants providing all contemporaneous documents given to the ACCC to a representative party or other plaintiff. The private right of action to recover damages and to seek other remedial orders, including for compensation, is clearly set out in ss 82 and 87 of the CCA.
The Future of the Court of Justice in EU Competition Law - New Role and Responsibilities
While it is clear that there is a right of action, plaintiffs seeking damages for contraventions of the cartel provisions of the CCA nevertheless face considerable uncertainty as to how to exercise that right. Damages claims in competition law cases are well-recognised as inherently complex, and for plaintiffs in Australia, that complexity is compounded by a lack of case law applying s 82 to cartel conduct.
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The key areas of doctrinal uncertainty are familiar concepts with which other jurisdictions have grappled and, at least to some extent, crafted either judicial as, for example, in the United States or legislative and policy responses as reflected in the European Directive.
The problem is threefold. First, the cartel conduct must have caused some harm, typically in the form of prices for goods or services that were higher than the prices that would have obtained in the absence of the cartel conduct.
Secondly, the lead applicants may need to demonstrate that they suffered such harm. Thirdly, although no court has so held, respondents in class actions are likely to argue that it is necessary to show that all members of the class suffered the same kind of anti-competitive harm. The case law addressing causation in relation to a contravention of the competition provisions is extremely limited.
The issue has been canvassed only in the context of interlocutory proceedings that offer little insight as to how causation might be litigated to judgment. This case law provides some general principles that might provide some guidance in future competition law cases.
It is difficult to predict how these principles might be applied to causation analysis in cases involving cartel conduct, but the potential does exist. Proven conduct involving, for example, price-fixing of certain products at certain times, coupled with showing that the conduct had a market-wide impact on prices, might support a rebuttable presumption of the necessary causal connection for plaintiffs and group members purchasing those products during the relevant period — leaving it to respondents to come forward with evidence as to why that presumption should not apply specifically to the applicant or certain group members.
Australian Competition Law | Reading Room
At this stage, however, that argument awaits the intrepid plaintiff prepared to take his or her case to judgment. The situation could not be more different in the European Union. Related in many ways to causation, the status of the pass-on or pass-through defence in Australia is equally uncertain. The first is where purchases of the affected product or service are multi-tiered: the direct purchaser purchases the product or service from the contravening party and then resells it to indirect purchasers, either in a substantially similar or identical form such as telecommunications or transportation services, or in a wholesale—retail context or with substantial transformation, that is, where the product in question is one of a number of components of a new product or service.
The second is where the affected product or service is not resold to indirect purchasers but rather forms part of an overall cost structure that direct purchasers must seek to recover through sales of their own products or services. Analysing pass-on in any given context is an intensely factual inquiry, and the range of potential considerations is almost limitless.
Not unexpectedly, therefore, it is difficult to articulate a stable analytical framework that might have general application across a range of factual scenarios.
Ten years of effects-based approach in EU competition law : state of play and perspectives
But the Hanover Shoe and Illinois Brick doctrine rests on an openly acknowledged policy decision to sacrifice precision in determining exactly who has been harmed in the interests of ensuring that violations of antitrust laws do not go unpunished, and it is not without its critics. While the position in federal courts in the United States has the appeal of being a bright line rule that is easily followed, ensures redress for at least some victims of cartel conduct and eliminates some of the issues that make antitrust litigation so lengthy, complex and costly, it is unlikely to be adopted in Australia, at least not without significant qualification.
In Australia, few cases have confronted pass-on, and those that have confronted it albeit cursorily , only confirm that the position in this country is indeterminate. But Tracey J ultimately expressed no conclusion as to whether pass-on would be available as a defence:. Given the interlocutory nature of the Auskay decision, the Court was not required to consider any of the issues that might arise if the defence were available, most particularly which party would have the burden of showing that the applicant or group members did in fact pass on overcharges. As in Auskay , however, the full implications of pass-on were not explored in any detail as the issue only arose at an interlocutory stage and ultimately the proceeding was discontinued.
Drummond J concluded only that the failure to differentiate between the two kinds of purchase was problematic as a matter of pleading, and he directed the applicant to address the issue in an amended statement of claim. The approaches taken at interlocutory stages in Auskay and Pioneer Concrete , while reaching no conclusions as to either the pass-on defence or indirect purchaser standing, do evince some receptiveness to requiring that plaintiffs address pass-on, at least as between direct and indirect purchasers of the product or service that is the subject of an anti-competitive agreement, which would only be necessary if the defence were available in some fashion.
But neither case provides any guidance as to how applicants might address the issue at the pleading stage; which party bears the burden of proof of showing that overcharges were or were not passed on, and to what extent; or whether the application of the defence might differ between situations involving direct and indirect purchasers, as opposed to purchasers and their downstream customers, where the overcharged product or service is part of an overall cost structure. Indirect purchasers have standing, the defence is available, and the burden of proof lies with the contravening party to establish and quantify pass-on.
As with causation, the quantification of damages arising from cartel conduct is fraught with complexity. Essentially, a plaintiff seeking damages must prove what did happen in relation to conduct but what did not happen in relation to damages.