Abstract
The areas of competition law and unfair competition both struggle with the problem of consumer-mass-harm situations where consumers with very small amounts of damages lack the legal options and economic incentives to claim the damages suffered. This article analyses the approach under EU law and the legal practice in the Member States of Germany and the United Kingdom in both competition and unfair competition law, taking the example of misleading advertising, and determines their structural weaknesses. In a second step, a generic approach de lege ferenda for competition and unfair competition law is developed by addressing the prior-identified obstacles. An opt-out system on a three-stage basis is suggested, granting authorities, altruistic bodies and private claimants ranked standing. Further incentives are created by allocating unclaimed funds to the claimants under certain circumstances. At the same time, strong safeguards are necessary in order to avoid unmeritorious litigation, ruling out the application of exemplary damages and favouring a judicial certification process.
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Notes
55 % of the financial damage was below £5 according to a study by the Office of Fair Trading (OFT), OFT992 (April 2008).
Tzakas (2011), p. 1125.
Le Sueur (2000), p. 457.
Hodges (2010), p. 370.
European Commission, COM (2013) 3539/3, p. 5.
Case C-453/99, Courage Ltd v. Bernard Crehan, [2001] ECR I-6297, para. 26.
Joined Cases C-295/04 to C-298/04, Manfredi v. Lloyd Adriatico Assicurazioni SpA, [2006] ECR I-6619, paras. 60, 61, 63.
Case C-195/98, Österreichischer Gewerkschaftsbund, Gewerkschaft öffentlicher Dienst v. Republik Österreich, [2000] ECR I-10497, Advocate General’s Opinion, para. 47.
Commission Green Paper, COM (2005) 672.
Commission White Paper, COM (2008) 165.
Commission Recommendation, COM (2013) 3539/3.
Commission, supra note 5, p. 3, at [7].
Ibid., p. 7, at [21].
2011 Consultation document, paras. 7–9, 20–22.
See e.g. 2008 Impact Assessment Document, para. 119.
Commission, supra note 5, p. 3, at [18].
Ibid., p. 6.
Ibid., p. 3, at [20], [21].
Ibid., p. 9, at [35].
Ibid., p. 7.
Ibid.
Ibid., p. 9, at [29], [30].
Ibid., p. 7.
Ibid., p. 3, at [15], and p. 8, at [31].
Act Against Restrainst of Competition.
Rehbinder and Loewenheim (2009), Sec. 34, para. 3; German Federal Supreme Court, WuW/E BGH 2718, 2720; Federal Supreme Court, 1975 NJW 269, 270; Karlsruhe Court of Appeals, 1975 NJW 793.
BT-Drs. 15/3640, p. 67; Lutz (2005), p. 729.
BT-Drs. 15/3640, p. 56; Emmerich and Immenga (2014), Sec. 34a, para. 15.
Emmerich and Immenga (2014), Sec. 34a, para. 13.
Differently, ibid., Sec. 34a, para. 23.
Ibid., Sec. 34a, para. 3.
BT-Drs. 15/3640, p. 36.
Emmerich and Immenga (2014), Sec. 34, para. 8.
Ibid., paras. 9, 40, 41. The German Federal Cartel Office (BKartA) has determined the calculation of overcharges to be impossible, 17 December 2003, WuW/E DEV 911, 916 et seq. – Fotoarbeitstasche. Likewise, trade and consumer associations do not have the investigative powers of a competition authority and, hence, are unable to bring appropriate evidence, see Goldmann (2013), Sec. 10, para. 113.
Rehbinder and Loewenheim (2009), Sec. 35a, para. 1.
BR-Drs. 641/12 (B), p. 3 et seq.
Committee Report (2005), BT-Drs. 15/5049, p. 50.
See Whish and Bailey (2012), p. 318.
Consumers Association v. JJB Sports (Re: Football Replica Kit), [2009] CAT 2.
Cf. Wisking et al. (2013), p. 72.
Cf. Leskinen (2011a), p. 80.
A “lost opportunity”: Mulheron (2011), p. 293.
LJ Mummery, [2010] EWCA Civ 1284, at 61–63.
See e.g. the proceedings before the High Court with 1,441 claimants in Deutsche Bahn AG and Others v. MasterCard Inc (Case No. HC12E04911).
OFT916resp, 26 November 2007.
Civil Justice Council’s Recommendation, November 2008.
Government’s response to the Civil Justice Council Report, published by the Ministry of Justice on 22 July 2009.
BIS/12/742.
Following Mulheron (2008), p. 157.
“Collective Proceedings and Collective Settlements in the Competition Appeal Tribunal”, 10 March 2014, paras. 7(1), (2).
Ibid., para. 7(3).
Ibid., para. 21(4).
Incorporated in the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
COM (2008) 794 final, 27 November 2008.
Cf. Commission, supra note 5.
Art. 5(2) Directive 2006/112/EC; Art. 11(1) UCPD.
Art. 5(1)(2) and (3) Directive 2006/112/EC; Art. 11(2) UCPD.
Art. 6 Directive 2006/112/EC; Art. 11(1) UCPD.
Misleading advertising is prohibited under Secs. 3 I, 5 UWG.
See e.g. German Federal Supreme Court, 2008 GRUR 818, para. 135 – Strafbare Werbung im Versandhandel.
Köhler and Bornkamm (2015), Sec. 10 UWG, para. 8.
Criticism by Gärtner (2008), p. 820.
BT-Drs. 15/1487, pp. 23, 24.
Rehbinder and Loewenheim (2009), Sec. 35a, para. 1.
Van Raay (2012), p. 181.
Stuttgart Court of Appeals, 2007 GRUR 435.
Köhler and Bornkamm (2015), Sec. 10 UWG, para. 2.
Möllers and Heinemann (2011), p. 278.
Cf. Davis (2013), Sec. 25, para. 27.
Except contravention of the general prohibition under the CPUT, where proof of mens rea is necessary.
Reg. 13 CPUT.
Reg. 17 CPUT and 11 BPMM. The defendant has to prove that he took all reasonable steps to avoid committing the offence.
Reg. 18 CPUT and 12 BPMM. The defendant has published another’s advertisement without reason to suspect that this would amount to an offence.
The UCPD was incorporated by Schedule 13, Part 1, Paragraph C of the Enterprise Act.
See OFT Guidance on Part 8 of the Enterprise Act 2002, para. 3.8. However, the collective-harm requirement is problematic since it is not provided in the UCPD. This seems to exclude isolated breaches that do not harm the collective interest from the civil enforcement. Hence, technically, the UCPD, which lacks this limitation, might not be properly implemented, see Howells (2009) Journal of Business Law (JBL), pp. 183–194, at p. 192.
Wadlow (2011), p. 102.
Ibid., p. 184.
Peysner and Nurse (2008).
Consumer White Paper, Cm. 2669. See further Consultation: BIS, December 2009.
Howells (2009), p. 183.
Statutory Instrument, 2014, No. 870.
Private litigation as “private attorney general”, see Cargill v. Monfort of Colorado, 479 U.P. 104, 129 (1986).
Antitrust cases filed in US District Courts 1975–2007, Table 5.41.2007, Sourcebook of Criminal Justice Statistics Online, at: http://www.albany.edu/sourcebook/pdf/t5412007.pdf.
Civic Consulting and Oxford Economics (2008), Study regarding the problems faced by consumers in obtaining redress for infringements of consumer protection legislation, and the economic consequences of such problems, p. 42.
By different means: Alexander (2012), p. 1197.
See regarding advantages in general: Nazzini and Nikpay (2008), p. 109.
Buccirossi and Carpagnano (2013), p. 10.
Rodger (2009), p. 55.
Strong (2013), p. 519, in particular about cross-border collective redress.
Case C-199/08, Erhard Eschig v. UNIQA Sachversicherung AG, [2009] ECR I-8295, para. 64.
Tzakas (2011), p. 1138.
Nazzini and Nikpay (2008), p. 109.
A list of possible counter-arguments during certification is provided by Jones (2013), p. 3.
Andreangeli (2012), p. 537, makes a comparison to the “careful” US certification process.
Cf. in detail: Antunes (2007), p. 6.
Jones and Sufrin (2014), p. 1086.
OFT, supra note 49, para. 5.10; Koch (2013), p. 1070.
Buccirossi and Carpagnano (2013), p. 6.
Article 4a(1), (3) of the Lawyers’ Remuneration Act.
Cf. about the situation in 2006: Peysner (2006), p. 99.
Cf. Craig et al. (2013), p. 47.
Peysner (2006), pp. 99–100.
Cf. Lawne (2013), p. 176.
Claims Funding International has expressed its intention to fund “complex multi-party antitrust cases in Europe where businesses are seeking damages for losses caused by a cartel that has already had a decision against it from a regulatory body”, cf. Martin (2008), p. 30.
Mulheron and Cashman (2008), p. 317.
Cf. Wisking et al. (2013), p. 72.
BIS, supra note 52; cf. Herron (2013), p. 161.
Fairgrieve and Howells (2009), p. 407.
Van Raay (2012), p. 607.
CAT, supra note 54.
OFT, supra note 49, pp. 33–34.
Fezer (2012), p. 57.
BT-Drs. 15/1487, p. 24.
Gärtner (2008), p. 818.
Andreangeli (2012), p. 546.
Cf. concerning German antitrust law, Eckel (2015).
OFT, supra note 49, p. 23; Leskinen (2011b), p. 90.
CAT, supra note 54.
A comparison to the US certification practice can be found in Jones (2013), p. 1.
Becker (2009), p. 30.
Koch and Zekoll (2010), p. 117.
Critical about judicial settlement certification: Hodges (2009), p. 58.
CAT, supra note 54, pp. 14–20.
Comments of the Max Planck Institute for Intellectual Property, Competition and Tax Law on the White Paper on Damage Actions, p. 10.
Camillieri (2013), p. 534.
Supra note 7, at [97] and [98].
Möllers and Heinemann (2011), p. 637.
Court of Appeal, Devenish Nutrition v. Sanofi-Aventis, [2008] EWCA Civ 1086.
Commission, supra note 5.
Buccirossi and Carpagnano (2013), p. 8.
Mulheron (2011), p. 290.
Buccirossi and Carpagnano (2013), p. 51.
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Eckel, P. A Common Approach to Collective Redress in Antitrust and Unfair Competition – A Comparison of the EU, Germany and the United Kingdom. IIC 46, 920–939 (2015). https://doi.org/10.1007/s40319-015-0408-y
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DOI: https://doi.org/10.1007/s40319-015-0408-y