“Friends forever? Joint and several liability for cartel damages”
“Good friends can never be separated; good friends are never alone; for there’s one thing in life they know how to do, be there for one another…” This timeless classic was sung by Franz Beckenbauer on the occasion of the 1966 FIFA World Cup in England. And he is right: friends show consideration for each other and they are sincere to one another. As delightful as these virtues are for interpersonal relationships; as troublesome they are for intercorporate ones. If companies are too friendly with one another, they may breach antitrust law. Yet, what about friendship, when the cartel is over and third parties are eager to claim their cartel damages?
Provisions on consumer protection account for only a small part of the 9th amendment of the German Act Against Restraints of Competition (ARC), which recently came into force. However, the introduction of the reform has led to a highly controversial debate in the press and literature.
Consumer protection in Germany
Traditionally, private enforcement is the main means of protecting consumer rights in Germany. This involves consumers or, more probably, recognised consumer protection associations bringing private law actions to ensure that consumer protection provisions are applied. Unfair competition law plays a central role here. For example, consumer organisations issue cease and desist letters in response to breaches of general terms and conditions of business. If unsuccessful, they then take legal action.
Unlike previously, the debate about the 9th amendment of the ARC focused on strengthening public enforcement. Not that public enforcement of consumer protection law is completely unknown in Germany: the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) and the German Federal Network Agency (Bundesnetzagentur – BNetzA) already have powers to enforce consumer rights. BaFin is responsible for the protection of all consumers in the area of financial services, while the BNetzA monitors the misuse of phone numbers. As a result of the 9th amendment of the ARC, the German Federal Cartel Office (FCO) now also has powers to protect consumers.
At first glance, not a stone seems to be left standing. The new sec. 33h ARC hardly bears any resemblance with the old sec. 33 para. 5 ARC, the to date only special limitation rule applicable to cartel damages claims in the ARC. What appears tremendous – the new sec. 33h ARC comprises eight paragraphs in total – proves also on closer consideration quite far-reaching – even though perhaps not quite as far-reaching as the multiplication of the number of paragraphs by eight may suggest. The extension of the provision text is to a large extent due to the fact that a comprehensive special limitation regime for cartel (damages) claims has been introduced into the ARC which, while primarily meant to transpose the special requirements stemming from the cartel damages directive 2014/104/EU into national law, largely reconstructs the general limitation rules as contained in the German Civil Code previously applicable to cartel (damages) claims. In that regard, the German legislator aimed at attaining consistency with the general limitation rules, and quite successfully at that. As a result, the differences are in many ways hidden in the details – which by no means is to say that they weren’t fundamental. Apart from that, the newly introduced sec. 33h ARC brings some real novelties. One thing, however, is common to (almost) all changes: they strengthen private enforcement by cartel victims.