EU Court of Justice confirms right to claim damages in relation to after cartel effects

By judgment of 14 January 2021 in Case C-450/19, Kilpailu- ja kuluttajavirasto (‘Judgment’), the Court of Justice of the European Union (‘CJEU’) stated that an infringement of Art. 101 TFEU in bid-rigging cases ends with the conclusion of the works, goods or services contract, even if the damage occurs at a later stage. To reach this conclusion, the CJEU made a distinction between the practices distorting competition and their damaging effects.

Although related to public enforcement, the judgment provides interesting guidelines regarding damage claims. In particular, the judgment confirms that the EU right to full compensation also encompasses harm which materialises after the infringement of Art. 101 TFEU has ended, i.e. lingering or after-effects.

Background

The referral for a preliminary ruling originates from the Finnish Administrative Supreme Court (Korkein hallinto-oikeus) and contains a single question asking when exactly the infringement of Art. 101 TFEU in a bid-rigged tender procedure ceases.

According to the referring court, four moments could eventually be considered as the end of the infringement: (1) the submission of the tender, (2) the conclusion of the procurement contract (3) the payment of the last instalment of the agreed price or (4) the completion of the works (para. 19).

Given the novelty of the legal issue, the judgment was preceded by an opinion of Advocate General (‘AG’) Pitruzzella delivered on 10th of September 2020. In paragraph 32 of his opinion, the AG explains that the determination of the end of an Art. 101 TFEU infringement must be contextualized and might differ from one case to another. The opinion hints towards a more structural difference in relation to the end of the market distortion between bid-rigging cases and other types of infringements of Art. 101 TFEU.

A brief discussion

After recalling that agreements to share customers and on fixing prices fall into the category of the most serious restrictions of competition, and that Art. 101 TFEU forbids bid-rigging practices, the CJEU addresses the end of infringement concerning a manipulated tender procedure.

The CJEU gives paramount importance to the moment of the conclusion of the contract between the undertaking and the contracting authority, provided that the essential characteristics, in particular the overall price to be paid, have been definitively determined (para. 41). According to the CJEU, this is the ultimate moment until which the effects on the restriction of competition resulting from the prohibited conduct continue to persist (para. 34).

To reach this conclusion, the CJEU draws up a key distinction between on one hand the cartel’s restrictive effects on competition, which in bid-rigging cases deprive the contracting authority of the opportunity to obtain the agreed goods, works or services under competitive conditions, and, on the other hand, the resulting wider damaging effects, on the basis of which harmed persons may seek compensation before national courts (para. 37).

Comments

With its judgment, the CJEU correctly confirms that the right to full compensation encompasses harm resulting from lingering or after-effects. Such damage positions are also caused by the infringement, but only occur after the end of the infringement. This is in line with the established CJEU’s case law (e.g. Case C‑435/18Otis et Case C-557/12Kone) according to which any person has the right to ask full compensation for any harm that s/he has suffered as a result of an infringement of Art. 101 TFEU, provided that a causal link between the infringement and the harm is established.

By Juraj SISKA & Vasil SAVOV

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