On 7 December 2016, competition law in Luxembourg was considerably strengthened by the entry into force of the law implementing EU Directive 2014/104, which is aimed at assisting victims of anti-competitive practices (cartel or concerted practice, agreement, other anti-competitive arrangement, abuse of a dominant position) in bringing actions for damages before the civil courts. This new law introduces several important provisions which will help victims to more easily establish the fault, i.e. the illegality of the conduct, of an undertaking which has infringed the rules of competition and quantify the harm suffered.
Establishing the fault: value of a decision by the Luxembourg Competition Council
The law first reinforces the probative force of a decision adopted by the Luxembourg Competition Council (Conseil de la concurrence luxembourgeois) which holds that an anticompetitive practice has taken place. Such a decision addressed to an economic operator (undertaking) amounts to irrefutable proof of a fault for the purposes of an action for damages. A decision by a competition authority of another Member State of the European Union also constitutes, according to the law, proof of an infringement of competition law but will have less probative value than a decision of the national authority given that it can be weighed up against other evidence.
Presumption of harm
Furthermore, the law gives rise to the presumption that anticompetitive agreements cause harm. The law does not provide for the presumption as regards abuses of a dominant position, however.
Gathering evidence
To quantify this harm, the law facilitates access to evidence for victims. A judge in civil proceedings is empowered to order undertakings found guilty of infringements to disclose the relevant evidence in their possession and to request the competition authorities to transmit to them the evidence contained in their files.
« Passing-on defence »
The issue of the transfer of the overcharge of anticompetitive harm by the direct clients of undertakings involved in an anticompetitive practice is also broached by the law. A passing-on defence, whereby the defendant, e.g. a supplier, can claim that the claimant, a distributor, has passed on the price increase linked to the anticompetitive practice to its own clients is recognised by the new law. However, the burden of proof still falls upon to the defendant concerning this exception.
Calculating damages suffered and interest owed
It should be pointed out that neither the law of 5 December 2016 nor Directive 2014/104 has provided any definitive solution to one of the major difficulties in respect of actions for damages: the method for calculating the harm resulting from an anticompetitive practice. Nevertheless, victims and judges can rely on a communication of the European Commission of 13 June 2013 which presents economic methodologies which it considers appropriate for quantifying harm and which are selected on the basis of the data available.
Combination of administrative fine and payment of damages and interest
Economic operators in Luxembourg infringing competition law are liable to pay both a fine imposed by the state regulator and pay damages subject to a court order issued by a judge in civil proceedings. In this respect, it is also important to point out that competition law applies to any agreement between two or more undertakings, irrespective of the economic sector concerned and irrespective of whether the undertakings are competitors or occupy different positions within the economic chain, and to any undertaking in a dominant position. As a result, not only cartels between competitors (such as price fixing, market allocation and bid-rigging for procurement contracts) but also contracts or sales practices containing anti-competitive terms (such as the imposition of resale prices and the blocking of sales and supply opportunities) are governed by competition rules. This is also the case for abuses committed by an undertaking in a dominant position (roughly speaking, more than 50% or in certain cases more than 40% of the market share) on one market at least (such as excessively high prices, predatory prices, loyalty discounts, discrimination, tying, refusal to sell or to supply).
It is necessary, therefore, for undertakings to make sure that their operations and sales practices comply with competition law (by competition law audits, training sessions and compliance programmes, for instance).
The law of 5 December 2016 on certain rules governing actions for damages as a result of infringements of competition law and amending the amended law of 23 October 2011 on competition:
http://www.legilux.public.lu/leg/a/archives/2016/0245/a245.pdf
