National Rapporteur

SWEDEN

SWEDEN

LIDC

National Rapporteur

Advokat Per Karlsson[1]

Advokatfirman Vinge KB

Box 1703

SE-111 87 STOCKHOLM

Email:

T: +46 8614 31 29

F: +46 8614 31 90

M: +46 70714 31 29

Private enforcement

∙ Should private enforcement of anti-trust law be encouraged?

∙ By what measures?

1I.General context

(i) Description of applicable legal provisions

(ii) Recent or foreseen changes in these provisions

(iii) Description of competent courts

(iv) Current debate and issues

2II.Legal system

2.1A. Access to courts

(i) What are the legal requirements for bringing an action for damages

(ii) Are collective actions available in your jurisdiction? Is the current system satisfactory? Should the possibility to bring class actions be introduced/developed? What about other types of collective actions? Are you in favour of an “opt-in” or an “opt-out” system?

2.2B. Difficulties encountered when establishing the legal conditions for the award of damages

With regard to the proof of the fault / of the violation of competition law

(i) What are the powers of the judges in the research of evidence? Should judges be able to request the production by the parties of “all documents relating to the cases”, or only of documents that were previously identified?

(ii) What is the role played by competition authorities in actions for damages? Is cooperation between competition authorities is favorable? What kind of cooperation? Should courts have access to the competition authorities’ files?

(iii) How do leniency procedures and actions for damages coexist in a given case? Possible (partial or total) immunity as regard damages for leniency applicants? Suggestions?

(iv) What is the legal value of decisions rendered by (national or foreign) competition authorities in the jurisdiction? Should they bind the court before which an action for damages is brought?

(v) What are the difficulties encountered by the victims when they have to prove the fault of the defendant or the reality of the anticompetitive practices? What concrete measures would remedy these difficulties?

With regard to casual link and injury

(i) Can indirect victims bring an action? Should such actions by indirect victims be available?

(ii) Is the ”passing on defence” available to the defendant? Should the availability of this defence be limited?

(iii) Is the evaluation by the courts if the injury suffered satisfactory? How can this evaluation be improved? Should econometric or financial analysis be used in order to facilitate the calculation? Should experts be granted imperative powers enabling them to have access to all necessary documents? Use of punitive and multiple damages? Should interest be granted? What other measures are recommendable?

3III.Practical issues

(i) Are the courts which actions for damages are brought able to appropriately deal with this kind of cases? Are these courts specialised? Should the judges be specialised?

(ii) Do the costs of actions for damages deter the victims from bringing such actions? How can these costs be reduced?

(iii) What other concrete measures could encourage this kind of actions?

4IV.Specific issues

Invalidity of clauses or agreements which restrict competition

(i) Can the judge pronounce the invalidity of clauses or agreements that restrict competition?

(ii) What are the consequences of such decision? Can the injured party claim for damages? Does the “nemo auditur” saying prevent the party which signed the agreement to invoke invalidity or to claim damages?

International dimension: competent court and applicable law

(i) Can actions for damages be brought by foreign victims? Under which conditions? How can forum shopping be prevented?

(ii) Is arbitration an alternative means of resolution of actions for damages?

5V.Conclusion

(i) Is the applicable regime satisfactory? Should it be profoundly or slightly modified?

(ii) What are the three major difficulties or legal obstacles for development of actions for damages? What are the most appropriate measures to remedy this difficulties?

Private enforcement

∙ Should private enforcement (actions for damages) of competition anti-trust law be encouraged, and if so, through ?

∙ By what concrete measures?

1I.General context

(i) Description of applicable legal provisions

The Swedish Competition Act (Sw: Konkurrenslagen (1993:20)) 1993:20) (the Competition Act) introduces a competition law regime similar to the EC competition rules. Section 6 and Ssection 19, which mirror Aarticle 81 and Aarticle 82 of the EC Treaty, prohibits anti-competitive agreements and abuse of a dominant position.

The Swedish competition legislation provides both public and civil law sanctions for breaches of Swedish and EC competition law rules. Public remedies include injunctions requiring the infringing party to put an end to the infringement as well as the imposition of administrative fines (Ssection 23 and Section 26). Civil remedies include the sanction nullity and damages for parties undertakings affected by anti-competitive infringements (Ssection 7 and Ssection 33).

After the Amendment on 1 August 2005 the provision on damages in Section 33 of the Competition Act reads:

Damages

Section 33

(1) Any undertaking which, intentionally or negligently, infringes any of the prohibitions contained in Article 6 or 19, or in Article 81 or 82 in the EC Treaty, shall compensate the damage that is caused thereby.

(2) The right to such damages shall lapse if no action is brought within ten years from the date when the damage was caused.

(3) The Stockholm City Court shall always be competent to examine cases relating to damages pursuant to this Article.

Liability for damages arises only when an undertaking infringes the prohibitions in the Competition Act and/or the competition rules in the EC Treaty. Further, in order to obtain compensation for damages, the An injured undertaking party [???] may, according to section 33, bring a claim before the Swedish courts for damages incurred as a result of anti-competitive infringements of section 6 and 19 of the Competition Act. Section 33 also explicitly envisages actions based on infringements of EC competition rules.[2]

. claimant must prove the existence of (i) an intentional or negligent infringement of the competition rules, (ii) loss, and (iii) a casual relationship between the infringing conduct and the loss incurred. The claimant must also provide a calculation of the amount of loss it is claiming.

Thus, liability for damages arises only when an undertaking intentionally or negligently infringes the prohibitions in the Competition Act and/or the competition rules in the EC Treaty.

As regards the first requirement tThe preparatory works to the Competition Act state that it should be this requirement is to be assessed in relation to the anti-competitive effects of the infringement. It is not sufficient that the infringing undertaking took the actions that constitutes an infringement, it must be shown that the undertaking (i.e. a person in a leading management position) has acted with intent or negligence.

Further, Section article 33 states that compensation shall cover damages caused by the infringement. The preparatory works state that such compensation shall cover pure financial loss. According to Chapter 1, Section 2 of the Tort Liability Act (Sw: Sskadeståndslagen (1972:207)) pure financial loss means economic injury arising without any person having concurrently sustained loss of life, personal injury, or loss of or damage to property in particular loss of income and loss of or damage to property.

The plaintiff’s financial situation shall be restored as if the infringement had never occurred. The courts will use a “differential method” by comparing the plaintiff’.s actual financial situation with the hypothetical financial situation in the absence of the infringement. Compensation shall in particular cover loss of income and loss of damage. Loss of income equals the difference between the income which the plaintiff would have earned in the absence of the infringement, and the income actually earned (Chapter 5, Section 1, paragraph 2 of the Tort Liability Act). Loss of or damage to property shall cover compensation for the value of the property or for any repair expenses incurred as a consequence of the loss or damage (Chapter 5, Section 7 of the Tort Liability Act).

Lastly, it should be noted that aAn injured party may bring a claim before the Swedish courts for damages incurred as a result of anti-competitive infringements of Section 6 and 19 of the Competition Act, as well as Aarticle 81 and 82 EC in the EC Treaty. There is a limitation period of ten years for bringing an action.[3]

[Se MSA D (i)]

(ii) Recent or foreseen changes

The current applicable rules governing the right to damages are partially a result of recent changes of the Competition Act.. In 2003 [STRUKTURERAS OM] tThe Swedish government decided inappointed 2003 to appoint a Government Committee that had to overlook then existing rules on damages and to propose amendments to the current existing rules governing the right to damage in antitrust cases. The Committee submitted its report in 2004. [It was proposed that the new rules would come into force on 1 April 2005. ÖVERSPELAT] The most important amendments proposed included , which were integrated with the current rules, were the followingwere the reference to the competition rules of the EC Treaty, the extension of the circle of parties entitled to damage and the prolongation of the limitation period.. These proposals were subsequently integrated with the current rules.

[∙ When tThe government had in previous legislation contexts (in year 2000) refrained from expressly regulating the right to damages for infringements of Articles 81 and 82. At the time, the important case for setting a precedent on preliminary rulings, Courage v. Crehan, was pending before the European Court of Justice. SinceAsWhen the Government Committee looked over the existing rules in 2004, the judgment case was later clarified onhad been decided and certain matters of Community law on damages in competitive situations had been made clear through the judgment, . FLYTTAS]

Tthe Committee proposed that the Competition Act’s rules on damages should also be made excplicitly applicable to infringements of Articles 81 and 82 of the EC Treaty.

∙ Before the Amendments,Prior to the amendments of the Competition Act The previous text on damages read that the an infringing undertaking were could only be liable for losses arising for another undertaking or a contracting party. The Government Committee found that the limitation of the circle of parties entitled to damages following from the terms ”undertaking” or “contracting party” had questionable consequences for public tenders and therefore should be withdrawn. Consumers who are contracting parties with the company liable to pay damages are entitled to damages under the wording of the legal provision. Differences in consumers’ rights to receive compensation for loss depending on whether or not a contractual obligation exists between them and the company in question appeared unwarranted. Hence it was proposed that the restriction to contracting parties shwould be removed as regards consumers. Under the The current provision not only concerning damages therefore makes it clear that people other than companies or contracting parties but also other injured parties are entitled to compensation.

∙ Under the previous law system the right to damages under the Competition Act lapsed unless action was brought within five years of the date when the damage arose. However, since the The Government Committee found called attention to that e fact that the previous period of limitation was rather short in such cases where the action for damages followed in the wake of the Competition Authority’s investigations and procedures and since . In addition, doubts had been expressed concerning the compatibility of the rule with Community law had been questioned, . iIt was therefore proposed that the five-year period shwould be extended to a ten-year period. It could be noted that ten years is The Committee called attention to the fact that the previous period of limitation was rather short in such cases where the action for damages followed in the wake of the Competition Authority’s investigations and procedures. In addition, doubts had been expressed concerning the compatibility of the rule with Community law. The Committee proposeds that the period of limitation be changed to ten years, which is the general period of limitation under the Act on Limitation (Sw: preskriptionslagen (1981:130)).

At present there are not any new initiatives or proposals with respect to changes or amendments to the current existing rules on damages. However, the suggestion question of introducing investigation of evidence was previously subject for discussion by the Government Committee was previously debated. This matter will be further discussed under section 23 (iii).

(iii) Description of competent courts

The general courts are competent in these matters according to the forum rules in Cchapter 10 of the Code of Judicial Procedure (the "CJP"). The competent court is primarily the district court where the defendant is domiciled, i.e. resides or has its seat. An action for damages can also, alternatively, be brought where the infringement took place or where the injury occurred. Additionally, under Section 33 paragraph 3 of the Competition Act, the Stockholm District Court is always competent to hear cases relating to damages pursuant to the Competition Act.

Appeal against a district court decision is available in these matters and should be made in writing within three weeks from the pronouncement of the judgment. The judgments of the District Courts may be appealed to the Courts of Appeal. A further appeal can must be made to the Supreme Court, provided that the Supreme Court grants leave to appeal.

[General courts etc. se MSA B (i)]

Under Section 33 paragraph 3 of the Competition Act, the Stockholm District Court is always competent to hear cases relating to damages pursuant the Competition Act. The judgments of the District Courts may be appealed to the Courts of Appeal. A further appeal ma be made to the Supreme Court, provided that the Supreme Court grants leave to appeal.

(iv) Current debate and issues currently being considered

See above regarding recent (2005) changes. [FYLL UT, hör m. Per]

To date there is no case law on damages in private antitrust litigation cases. Even though there has yet to be a private antitrust case for actual damages in Sweden, recent and anticipated reforms have provided potential claimants with greater incentives to bring actions for damages; for example the possibility of bringing class actions.

To date there is no case law on damages in private antitrust litigation cases. However, a few parallel follow-on actions have recently been brought in the wake of the Swedish Competition Authority’s action against companies in the asphalt industry and . tThe administrative case is pending before the Stockholm City Court. The Authority has petitioned for approximately SEK 1.6 billion (around 150 million euro) in fines. Several municipalities have sued the largest companies and claimed damages for loss (excessive pricing) caused by the alleged unlawful tendering co-operation between the companies.

Even though there has yet to be a private antitrust case law for actual damages in Sweden, recent reforms have facilitated private competition law enforcement and provided potential claimants with greater incentives to bring actions for damages. The suggestion of introducing investigation of evidence by the Government Committee has previously been debated. This matter will be further discussed under section 2.

A further development towards a more effective private enforcement would probably require more drastic changes. The Government Committee’s proposal to facilitate the collection of evidence was never introduced. Further, punitive damages, limiting the right to passing on defense, and other controversial changes in the national legal order, have not been considered or analysed more in depth. Damages to claimants, other than consumers and competitors, should also be considers in order to give full effect to the competition law policy. A potential risk of stand alone actions against an undertaking would probably have a preventive and deterrent effect. Any measure that would facilitate such actions would contribute to a more effective implementation of competition law policy. The competition authorities can for various reasons (lack of resources etc) not deal with all anticompetitive behaviour. Different means are necessary to achieve a full effect of the competition policy regime. Therefore, the European Commission’s efforts to follow up its shortcomings on the private enforcement and decentralisation idea in the modernisation reform with a thorough analysis on damages in the Green paper are most welcoming.

2II.Legal system

2.1A. Access to courts

(i) What are the legal requirements for bringing an action for damages?

Under Ssection 33 of the Competition Act, both companies and private persons have standing. As described above, following the removal of The text reads: Any undertaking which, intentionally or negligently, infringes any of the prohibitions contained in Article 6 or 19, or in Article 81 or 82 in the EC Treaty, shall compensate the damage that is caused thereby. When the previous limitation to “undertakings” and “parties” in a contractual relationship with the infringing party was deleted, it had the effect that consumer groups and other private individuals affected also would have a right to compensation even in the absence of any contractual relationship with the infringing party.

The standard of proof is that the relevant fact must be “proven” or “shown” (Swe: “visat” or “styrkt” or “visat”). The plaintiff does not need to, in depth, address questions of substance for standing to be granted, as long it can be drawn from the application that the claim is not “obviously unfounded”.

(ii) Are collective actions available in your jurisdiction? Is the current system satisfactory? Should the possibility to bring class actions be introduced/developed? What about other types of collective actions? Are you in favour of an “opt-in” or an “opt-out” system?

On January 2003, the new Class Action Act (Sw: lagen(2002:599) om grupprättegång) entered into force. However, So far, so far courts have not actually certified class proceedings in antitrust matters.

The purpose of the Class Action Act is to compliment the ordinary trial procedure and to improve the effect of existing substantive law. In addition to the general conditions for bringing a civil action, there are special conditions for bringing a class action. The class action should be founded on legal facts that are common or similar to the group members’ claim (the legal foundation). The majority of claims can only be brought on a class and not on an individual basis (the best procedural alternative). The group should be of such size and be clearly defined as to enable the court to determine what procedural steps are necessary to ensure judicial administration of the case (suitable group of claimants) Finally, the claimant bringing the class action on behalf of the group members should be suitable to represent the group (the suitable claimant).