CONSUMER INVOLVEMENT IN PRIVATE EU COMPETITION LAW ENFORCEMENT Consumer Involvement in Private EU Competition Law Enforcement MARIA IOANNIDOU 1 1 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Oxford University Press 2015 The moral rights of the author have been asserted First Edition published in 2015 Impression: 1 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization. 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Acknowledgements This book is a revised and updated version of my DPhil thesis defended in May 2012, at the University of Oxford. It is the outcome of a long journey that has been made possible due to the support of many people and different institutions, both on a personal and an academic level, for which I am very grateful. In reality, I am grateful to many more people and far more grateful than I could ever express in this note . . . To my supervisor Ariel Ezrachi I am immensely indebted for his continuous support, guidance, and encouragement throughout the completion of this project and beyond. He has allowed me ample room to develop my ideas while always instilling an optimistic account of every perceived problem. I would also like to express my warmest thanks to my DPhil examiners, Philip Marsden and Aidan Robertson, for their very helpful comments and for making the viva such an enjoyable experience. Invaluable advice and comments have been provided by many people at different stages of the project, especially Stephen Weatherill, Barry Rodger, and Caron-Beaton Wells. This book would not have been made possible without the generous financial support of IKY, the Hellenic State Scholarships Foundation, and the Leventis Foundation. Special thanks are owed to all the staff at the Bodleian Law Library and the Law Faculty, University of Oxford, for their continuous support, espe- cially Geraldine Malloy, for having an answer to every question. Corpus Christi College has provided a particularly stimulating and supportive environment throughout my time in Oxford. Liz Fisher, Lucia Zedner, Sanja Bogojević, and Louis Karaolis have played an important role in this regard. Rethinking of this project took place in Brussels and I would like to thank in particular Julian Ellison for being such a wonderful person to work with, as well as Luiza Wojciszke, Ed McNeill, Tania Patsalia, and Elissavet Karaiskou for being excellent colleagues and friends. Part of the re-writing of this book was done at the University of Surrey and the Queen Mary University of London and it was made much easier and enjoyable by many colleagues, especially Theodore Konstadinides, Kanstantsin Dzehtsiarou, Filippo Fontanelli, Anastasia Karatzia, Ioannis Kokkoris, Eyad Dabbah, Spyros Maniatis, and Valsamis Mitsilegas. The help of the people at OUP in bringing this project into fruition is much appreciated. Many people have contributed in many different and unique ways to this project—from my first MJur/BCL year in Oxford back in 2007. I am really happy that I met such great people. It is the people you meet and the friends you make that define an unforgettable journey. Thank you for all the funny, unique, and memorable times we had. Seb Grifnee you have been a big part of this journey and you will always be remembered. vi Acknowledgements I would also like to thank my closest friends from Oxford, London, Athens, and beyond for making my life so much better and easier; Dimitrios Moraitis, Andriani Fili, Vassia Balafa, Vanessa Tzoannou, Strati Sakellariou, Elmina Chadio, Konstanti Ioannidou, Eugenia Bouvi, Antonios Kouroutakis, Michalis Risvas, Eliza Kazili, Elena Siskou, Pantelis Aivaliotis, Katerina Virvidaki, Lily Kotsana, Deni Mantzari, Christina Moutsiana, and Kalliope Vounisea. My interest in competition law and the long library days would not have been the same had it not been for Vasiliki Brisimi, Julian Nowag, and Pablo Marquez. It has been a real privilege working (and living) with such great people and I still miss it. This book is dedicated to my family: my parents, Anna and Charalambos, and little brother, Diomedes, for always being there for me, especially when I am often not. Contents Table of Cases xi Table of Legislation xxiii List of Abbreviations xxix 1. Introduction 1 1. Background 1 2. Nature of the Subject Matter 2 2.1 EU competition law enforcement: A fused approach 3 2.2 The consumer’s role in EU competition law enforcement 3 2.3 Function of tort law 4 2.4 Harmonization: Unity or diversity? 4 3. Methodology and Terminological Clarifications 5 4. Structure 7 PART A: NORMATIVE APPROACH TO CONSUMER PARTICIPATION 2. ‘Consumer Interest’ and the Aims of EU Competition Law 11 1. Introduction 11 2. The Interplay between Competition Law and Consumer Law 12 3. Multiple Aims and the ‘Consumer Interest’ 15 3.1 Multiplicity of aims 15 3.2 ‘Consumer welfare’ in EU competition law 22 3.3 ‘Consumer interest’ in EU competition law 24 4. The Role of the ‘Consumer Interest’ 25 4.1 ‘Consumer welfare’: Commission ‘rhetoric’ 26 4.2 ‘Consumer interest’: Insights from EU jurisprudence 28 5. Embracing ‘Consumer Interest’ in EU Competition Law 42 6. Conclusion 44 3. Normative Justifications for Increased Consumer Involvement 47 1. Introduction 47 2. Endemic/Functional Aims of Private Competition Law Enforcement 48 2.1 Private enforcement of EU law 48 2.2 Private enforcement of EU competition law: EU institutions’ approach 52 2.3 Scepticism as to the deterrent function of (follow-on) damages actions 62 2.4 Ranking the endemic aims 66 viii Contents 3. Ancillary Institutional Benefits 67 3.1 Proliferation of information—contributing to consumer education and empowerment 67 3.2 Legitimization of EU policies 68 4. Conclusion 72 PART B: PRACTICAL APPROACH TO CONSUMER PARTICIPATION 4. Improving Consumers’ Role: ‘Standing’ and ‘Access to Evidence’ 75 1. Introduction 75 2. Characteristics of Consumer Claims: Justifying a More ‘Enabling’ Approach 75 3. Consumer Standing and Passing-on 79 3.1 A theoretical account: SCOTUS approach 80 3.2 The European Court’s approach 83 3.3 Legislative solution 86 4. Access to Evidence 90 4.1 Disclosure of evidence: Promoting stand-alone consumer claims 90 4.2 Promoting follow-on consumer claims—preserving the effectiveness of public enforcement 94 5. Conclusion 104 5. Improving Consumers’ Role: Collective Actions 107 1. Introduction 107 2. EU Developments on Collective Redress: A Historical Account 108 3. Demarcating Collective Action Mechanisms in the Field of Competition Law 111 3.1 Individual v collective consumer interest 111 3.2 ‘Access to justice’ for consumer claims in competition law 115 4. Structural Characteristics of a Model Collective Action 117 4.1 Structuring the group: Opt in v opt-out 118 4.2 Standing to bring claims: Consumer representatives 120 4.3 Funding of actions 124 4.4 Distribution of the damages award 125 4.5 Synopsis 126 5. Structural Characteristics of Member States’ Collective Action Mechanisms 126 5.1 Furthering individual consumers’ interests 127 5.2 Furthering the collective consumer interest 132 5.3 Synopsis 136 6. Structuring the Appropriate EU Collective Action Mechanism 137 6.1 Standing: Lead plaintiff, public body, or consumer organization 138 6.2 Forming the group: Opt-in v opt-out 141 6.3 Distribution of the damages award 142 6.4 Costs and funding of collective actions 144 7. Conclusion 147 Contents ix 6. Consumer Involvement in Public Competition Law Enforcement: Towards Acceptable Alternatives 151 1. Introduction 151 2. Fused Approach to Enforcement: The Benefits 152 2.1 Rethinking the deterrence—Compensation dichotomy 152 2.2 Ancillary institutional benefits 155 3. Current Avenues for Consumer Participation: Public Enforcement Stricto Sensu 156 3.1 Complaints to the Commission 156 3.2 Making complaints to the Commission more effective 162 3.3 Sector inquiries 163 3.4 Improvements to sector inquiries: Priorities, structure, and outcome 165 3.5 ‘Super-complaints’: The European way 166 3.6 Other participation avenues: Intervention 170 4. Public Enforcement Lato Sensu: Towards a Mixed Approach to Competition Law Enforcement 171 4.1 Instances of ‘public compensation’ 172 4.2 Categorization of cases 175 4.3 Institutionalizing a public compensation approach 176 4.4 Serving the collective consumer interest 179 5. Conclusion 180 7. Overcoming Institutional and Political Limitations: Appropriate Instruments for the Introduction of European-Wide Measures 181 1. Introduction 181 2. Enhancing Consumer Participation: Political Obstacles and the Proposed Measures 182 2.1 Political obstacles and the Directive on Damages Actions 182 2.2 Content of the proposals 184 3. Implementing the Proposals 186 3.1 Justifying a competition-specific harmonization of procedural rules for consumer claims 186 3.2 In search of an adequate legal base 189 3.3 In search of the most appropriate legislative instrument 199 4. Implementing Remaining Public Enforcement Proposals 200 5. Conclusion 202 8. Concluding Remarks 205 Selected Bibliography 209 Index 245