Neelie Kroes, Europese Commissaris voor Mededingingsbeleid, toespraak bij paneldiscussie in Brussel: Collectief herstel (en)

Neelie Kroes

European Commissioner for Competition Policy

Collective redress in Europe

Address at panel discussion organised by DHIK at the Representation of the Free State of Bavaria to the EU

Brussels, 10th December 2008

Dear Minister, honourable members of the Parliament, ladies and gentlemen,

I am happy to be with you tonight and to have the opportunity to say a few words on the subject of collective redress in Europe.

As you know, the availability of an effective collective redress mechanism, both for consumers and businesses, is one of the key suggestions made in the Commission's White Paper on Damages Actions for Breach of the EC Antitrust Rules. In this regard, I am pleased that during the Parliament committee meetings held so far on the White Paper it was widely recognised that we have now moved past the question of "should we do something" to improve access to justice for victims of antitrust infringements and that the debate now focuses on concrete measures presented in the White Paper.

I note with particular satisfaction that the Parliament's Committee on the Internal Market and Consumer Protection has already – on 2 December – adopted a positive opinion on the White Paper and encouraged the Commission to consider proposing appropriate legislative and non-legislative measures that will enable access to full compensation for any victims of antitrust infringements.

Now, in parallel to our advanced efforts in the area of Community competition law, the Commission has adopted – on 27 November – the Green Paper on Consumer Collective Redress. This Green Paper, proposed by my colleague Commissioner Kuneva, launches a public consultation on various options of collective redress which could provide consumers with improved access to compensation for harm caused by breaches of consumer protection laws.

In this context, I am often asked to clarify the relationship between these two Commission initiatives. So let me explain my view on this.

First of all, it goes without saying that consistency must be ensured between various Commission initiatives. I would like to reassure you that I have worked closely and am in regular contact with Commissioner Kuneva, to ensure a coherent and consistent approach to the issue of collective redress.

That being said, it is clear that each of the two initiatives has its own focus. The White Paper presents a package of measures, including collective redress instruments, which address the specific problems experienced in the area of competition law. The Green Paper, on the other hand, is more general in suggesting diverging collective redress options which may be appropriate to address harm caused by breaches of a wide range of consumer protection laws. Further, while the Green Paper only concerns harm suffered by consumers, the White Paper concerns both consumers and businesses, in particular SMEs.

Each of the papers must be read in the appropriate context. What I mean by this is that concrete suggestions on collective redress can, and may have to, be different, depending on the context for which they are formulated. Consistency in the Commission's approach towards collective redress requires that any proposed models of collective redress should be compatible, unless there are good reasons justifying certain diverging elements.

In any event, it would be wrong to construe one initiative as jeopardising the other: the implementation of both policy projects can follow a different speed and a different focus. The Commission does not consider it necessary, nor appropriate, to deal with collective redress in all areas at the same time in a single horizontal Community law instrument. One should not forget in this context that precisely in the field of collective redress many Member States, including Germany, do have specific procedural rules, such as for competition law or capital markets law.

Whereas I agree that we should strive for horizontal measures where it is adequate, technically possible and politically feasible, this cannot be an alibi for not doing anything at all, or for having unreasonable delays.

This is all the more true with regard to antitrust infringements which regularly produce damages that are scattered across the whole economy and, thus, result into a welfare loss for the society at large. At the same time, individual injured parties face particular difficulties when trying to get compensated, given the complexity of antitrust cases, the issue of passing-on of overcharges, etc.

And let me remind you that each and everyone of us are negatively affected by anticompetitive practices – after all, we are all consumers. Moreover, businesses and in particular SMEs, the backbone of our economy and job market, often suffer significant harm as a result of anticompetitive practices. And as they often operate in highly competitive or difficult markets, any extra cost or charge resulting from cartel infringements upstream may have to be absorbed by them. This is why the measures proposed in the White Paper, including the collective redress mechanisms, are designed to benefit both consumers and businesses.

According to the impact assessment study accompanying the White Paper, the lack of effective instruments for obtaining compensation may well cost European consumers and businesses more than 20 billion Euros per year.

Further, let us not forget that the European Court of Justice has been very clear when it pronounced that the right for damages is a necessary element to guarantee the full effectiveness of the Community competition rules. The Commission, as the guardian of the Treaty, is therefore required to take any action that is necessary to make that right a reality.

This brings me to another point that is sometimes raised in reaction to our collective redress proposals. Namely, it is argued that because some Member States are already in line with most of the proposals of the White Paper, no initiative at Community level is necessary.

Let me be clear: we of course welcome all developments in Member States, and the measures we propose in the White Paper are inspired by their experience. But is it acceptable that the right to compensation, guaranteed by the Treaty, is effectively available to only some citizens and business in the European Union, given that many Member States still do not have any effective instruments of collective redress? I believe that compensation should be an effective right for all victims across Europe.

At the same time, I acknowledge that the prospect of introducing any new instruments in this area does raise certain concerns at least in parts of the European business community. These concerns are mainly linked to the perceived risk of increased litigation, enforcement of unmeritorious claims and potential abuse of the collective redress mechanisms.

I have noted a certain degree of uneasiness also in the title that was chosen by the organizers for tonight's event, namely "Experiment Collective Redress".

I would like to assure you that since the publication of the Green paper on Damages Actions for Breach of the EC Antitrust Rules in December 2005 the Commission has made great efforts to strike the right balance. By this, I mean the balance between improving compensation for victims, and avoiding unmeritorious litigation.

You have certainly noticed that we were very careful in the White Paper not to import any potentially dangerous elements of the US class action system. Instead, we have suggested a truly European model that reflects the legal traditions of the Member States of the European Union and will not lead to any excessive litigation culture. As you are aware, the White Paper is based on the compensatory principle, which means that no punitive damages are introduced, and contains a number of safeguards, including the fact that collective actions are based on the opt-in model and that representative actions can only be brought by qualified entities, such as consumer organisations or trade associations, which must fulfil eligibility conditions prescribed by the Member States.

Ladies and gentlemen, I would like to thank you again for inviting me here tonight and for giving me the opportunity to speak about this highly interesting and important topic.

I hope that the forthcoming panel discussion will be lively and constructive and that it will help to clarify any issues that I may not have covered in my speech.

Thank you