Group litigation in European competition law : a law and economics perspective / Sonja E. Keske.
2010
KJE6456 .K47 2010 (Map It)
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Details
Title
Group litigation in European competition law : a law and economics perspective / Sonja E. Keske.
Published
Antwerp ; Portland, Or. : Intersentia, [2010]
Copyright
©2010
Call Number
KJE6456 .K47 2010
ISBN
9400000847
9789400000841
9789400000841
Description
xviii, 273 pages ; 24 cm.
System Control No.
(OCoLC)667174094
Note
Originally presented as the author's thesis (Ph.D.)--Erasmus University, Rotterdam, 2009.
Bibliography, etc. Note
Includes bibliographical references (pages 253-273).
Record Appears in
Table of Contents
Acknowledgements
v
Foreword
vii
List of Abbreviations
xvii
Preface
1
ch. 1
Enforcement of European Competition Law
5
A.
The Rationale of European Competition Law
5
1.
Protection of Competition
5
2.
Total versus Consumer Welfare
9
B.
Enforcement of Competition Law in the European Union
13
1.
The Classic Debate: Private versus Public Enforcement
16
1.1.
Advantages of public enforcement
17
1.1.1.
Private incentives to sue are lacking
18
1.1.2.
Lack of information on the victims side
19
1.1.3.
Limited sanctions in private enforcement
20
1.1.4.
Specific public sanctions needed
21
1.2.
Advantages of private enforcement
23
2.
The Right Private Enforcement as Complement to Public Enforcement
25
3.
The Development in the European Union
26
3.1.
One way fee-shifting
28
3.2.
Financing mechanisms
29
3.3.
Types of damages awarded
31
3.4.
Passing-on defence and standing of indirect buyers
33
3.5.
Access to evidence
35
3.6.
Group litigation mechanisms
36
C.
Summary
36
ch. 2
Group Litigation: A General Legal and Economic Framework
39
A.
Definition of General Concepts
39
1.
The Types of Group Litigation
40
1.1.
Joinder procedures
40
1.2.
Representative actions
41
1.3.
Collective actions
43
2.
Establishing Group Membership
43
2.1.
Opt-in systems
44
2.2.
Opt-out systems
44
2.3.
Mandatory systems
45
3.
Remuneration of Lawyers
46
3.1.
Hourly fee arrangements
46
3.2.
Conditional fee arrangements
46
3.3.
Contingency fee arrangements
47
4.
The Types of Victims
47
B.
The Legal Framework
48
1.
The Types of Infringements
48
1.1.
Horizontal agreements
49
1.2.
Vertical agreements
50
1.3.
Abuse of a dominant position
52
2.
Other Relevant Regulations
53
C.
The Economic Framework
56
1.
The Rationality Assumption
56
2.
The Theory of Optimal Deterrence
57
2.1.
Optimal sanction
59
2.2.
Optimal sanction for anticompetitive conduct
64
2.3.
Optimal deterrence
66
2.4.
Optimal enforcement
67
2.5.
Actions for damages as deterrence tool
67
2.6.
Policy implications of the rational choice model
68
3.
Obstacles in Cases of Competition Law Infringements
69
3.1.
Information asymmetry
69
3.2.
Rational apathy
71
3.3.
Free riding behaviour
73
3.4.
Total enforcement costs to society are not minimised
73
D.
Summary
74
ch. 3
Optimal Group Litigation from a Deterrence Perspective
75
A.
Deterrence Effect of Follow-on Suits Versus Stand-alone Suits
75
B.
Deterrence Effects of Stand-alone Suits with Regard to Different Types of Infringements
78
1.
Introduction
78
2.
The Optimal Sanction in Stand-alone Suits
79
2.1.
The optimal sanction and group membership
79
2.2.
Reducing free riding and moral hazard problems
81
2.3.
Procedural efficiency
82
2.4.
The optimal sanction and settlements
82
C.
The Optimal Enforcement Agent
85
1.
Lead Plaintiff/ Attorney (Collective Action)
87
1.1.
Free rider problems
88
1.2.
Overcoming rational apathy
89
1.2.1.
The total costs of litigation
89
1.2.2.
Spreading the costs
90
1.2.3.
Using other ways of financing
90
1.2.4.
The lawyer as agent
92
1.2.5.
Conclusion
92
1.3.
Asymmetric information
93
1.4.
Principal-agent problems
96
1.5.
Nuisance suits
101
1.6.
Minimisation of costs
104
1.7.
Conclusion
105
2.
Representative Organisation
106
2.1.
Free riding
107
2.2.
Rational apathy
107
2.3.
Information asymmetry
109
2.4.
Nuisance suits
111
2.5.
Principal-agent problems
112
2.6.
Minimisation of enforcement costs
114
2.7.
Conclusion
114
3.
The Market Based Solution
116
3.1.
Free riding
123
3.2.
Rational apathy
124
3.3.
Information asymmetry
125
3.4.
Nuisance suits
125
3.5.
Minimisation of enforcement costs
126
3.6.
Principal-agent problems
129
3.7.
Conclusion
130
4.
Determining the Agent: Auction Mechanisms
131
4.1.
Auctions before detection
132
4.1.1.
Free riding
134
4.1.2.
Rational apathy
134
4.1.3.
Asymmetric information
135
4.1.4.
Nuisance suits
136
4.1.5.
Principal-agent problems
136
4.1.6.
Minimisation of costs
137
4.1.7.
Conclusion
138
4.2.
Auctions after detection
138
4.2.1.
Free riding
140
4.2.2.
Rational apathy
140
4.2.3.
Asymmetric information
142
4.2.4.
Nuisance suits
142
4.2.5.
Principal-agent problems
142
4.2.6.
Minimisation of costs
143
4.2.7.
Conclusion
144
D.
Conclusions
144
ch. 4
The European Way Ahead
149
A.
The Way Ahead as painted in the White Paper
149
B.
Evaluation of the Proposed Mechanisms with Regard to Deterrence
151
1.
Overcoming Existing Obstacles to Private Litigation
152
1.1.
Free rider problems
152
1.2.
Overcoming rational apathy
156
1.3.
Asymmetric information
158
1.4.
Principal-agent problems
160
2.
Reaching the Optimal Sanction
162
3.
Minimisation of Costs
165
3.1.
Minimising the risk of nuisance suits
166
3.2.
Reaching procedural efficiency
169
3.3.
Interaction with leniency programs
172
4.
Conclusion
172
C.
Legal Obstacles Created by Tort Law and Other Areas of Law
173
1.
Limitations Concerning the Optimal Sanction
174
2.
Limitations Concerning Mandatory Group Litigation
178
3.
Limitations Concerning the Possibilities to Reward Enforcers
180
3.1.
Transfer of rights
180
3.2.
Contingency fee of 100 percent
182
3.3.
Cy pres distribution
183
D.
Other Specific Aims of the Commission and Their Realisation
183
1.
The Goal of Compensatory Justice
184
1.1.
Full compensation
184
1.2.
All victims
185
1.3.
Conclusions
187
2.
Intermediary Goals
187
2.1.
Reducing the differnece between small damages and large individual costs
187
2.2.
Fostering stand-alone as well as follow-on actions
188
2.3.
Preserving competition in the internal market (deterrence)
189
3.
Conclusion
189
E.
General Assessment
189
ch. 5
Comparison and Analysis of Selected Legal Systems
193
A.
United States of America
194
1.
The US Federal Legal System
194
1.1.
Joinder and consolidation
194
1.2.
The class action
195
1.3.
Other relevant issues
197
1.3.1.
Rules on damages
197
1.3.2.
Costs, fees and cost-shifting rules
199
1.3.3.
Passing-on defence
201
1.3.4.
Disclosure rules
201
1.3.5.
Role of judges
202
1.3.6.
Jury trials
203
1.3.7.
Multiple nationwide class actions
204
2.
Deterrence Effects
205
2.1.
Joinder and consolidation procedure
205
2.2.
Class actions
205
B.
United Kingdom
208
1.
The Legal System
208
1.1.
Forms of group litigation mechanisms in competition law infringements
208
1.1.1.
Litigation before ordinary courts
209
1.1.2.
Group litigation orders
211
1.1.3.
Actions for damages before the Competition Appeal Tribunal
214
1.2.
Other relevant issues
217
1.2.1.
Rules on damages
217
1.2.2.
Costs, fees and cost-shifting rules
218
1.2.3.
Passing-on defence
220
1.2.4.
Disclosure rules
221
1.2.5.
The role of judges
221
2.
Deterrence Effects
222
2.1.
Group litigation order in general
222
2.2.
Actions for damages due to competition law infringements
225
C.
Germany
228
1.
The Legal System
228
1.1.
Test case procedures (Kapitalanleger-Musterverfahrensgesetz)
228
1.2.
Group litigation in competition law
230
1.2.1.
Joinder, consolidation and assignation
231
1.2.2.
Representative injunction actions
231
1.2.3.
Representative actions for (restitutionary) damages: Skimming-off procedures
232
1.2.4.
Assignation as special case: The Cartel Damage Claims company
233
1.3.
Other relevant issues
234
1.3.1.
Rules on damages
234
1.3.2.
Costs, fees and cost-shifting rules
235
1.3.3.
Passing-on defence: an open question in Germany
237
1.3.4.
Disclosure rules
238
1.3.5.
The role of judges
239
2.
Deterrence Effects
239
2.1.
Representative skimming-off procedures
239
2.2.
The Cartel Damage Claim company model
240
2.3.
Test case procedures akin to the KapMuG
241
D.
Conclusion
242
ch. 6
Summary, Policy Implications and Future Research
245
A.
Summary
245
B.
Policy Implications
248
C.
Future Research
251
References List
253