The AG’s Opinion for the EUCJ in the Dutch air cargo litigation: the bigger picture
On 6 May 2021, Advocate General Michael Bobek gave an Opinion[1] on a preliminary issue for the EU Court of Justice significantly restricting the temporal scope of the claimants’ claims in air cargo cartel damages actions brought before the District Court of Amsterdam, Netherlands[2]. This Opinion is the latest development in the thorny – and potentially far-reaching – issue of whether claimants are able to rely on the direct effect of Article 101 TFEU and Article 53 EEA Agreement to establish the national court’s competence, irrespective of the administrative enforcement of competition law.
Background
British Airways, KLM and other major airlines are defending damages claims in connection with an air-cargo cartel identified in the European Commission’s Airfreight decision of 2010 (later annulled by the EU General Court in and supplemented with a re-adopted Commission decision in 2019), which is alleged to have caused damages to shippers.
Damages are sought in relation to the period 1999 to 2006, in line with the overall duration of the cartel identified in the Commission’s decision. However, the decision also specifies that, in finding a cartel, the Commission’s competence was limited to conduct occurring after 1 May 2004 in respect of EU-third country routes and after 19 May 2005 in respect of routes within and between the EEA (but not EU Member States) and third countries (for simplicity, we refer to these dates and routes as the Relevant Dates and Relevant Routes). That is because, before the Relevant Dates, the Commission did not have the implementing powers under the relevant regulatory arrangements to apply Article 101 TFEU and Article 53 EEA Agreement in respect of air transport on the Relevant Routes.
The Opinion
The referring District Court of Amsterdam considered that it is competent to apply competition law to the conduct in question on the Relevant Routes and for the periods prior to the Relevant Dates. However, the District Court of Amsterdam notes expressly that that position deviates from the 2017 judgment of the High Court of Justice (England and Wales) in Emerald Supplies Ltd v British Airways Plc[3], and as upheld by the Court of Appeal (England and Wales) in La Gaitana Farms SA & Ors v British Airways Plc[4], in separate air cargo cartel damages actions brought in the UK.
Notably, in his Opinion, Advocate General Bobek sided with the District Court of Amsterdam in disagreeing with the view of the airlines that the relevant regulatory regime denied national courts the authority to apply competition law to cartel conduct before the Relevant Dates in respect of the Relevant Routes. In other words, the entire regulatory arrangement of excluding the Relevant Routes from competition law in respect of the period prior to the Relevant Dates was limited to the administrative enforcement of competition law by the Commission and thus should not restrict private enforcement before the national courts.
The bigger picture
Although the Advocate General's Opinion is non-binding on the EU Court of Justice which will rule on this preliminary issue at a later date, the conclusions reached in this Opinion would, if mirrored in a ruling of the Court in due course, be a significant victory for the claimants and one which would allow them to pursue the full temporal scope of their claims before the District Court of Amsterdam.
However, it should also be noted that, if the EU Court of Justice accepts the Advocate General’s recommendation, the logic guiding this Opinion will have potentially far-reaching implications for cartel damages actions more broadly. Certainly, there are other decisions where the Commission similarly found that its competence to apply competition law to certain cartels was curtailed by overreaching regulatory arrangements. This occurred most recently in the Commission’s Maritime Car Carriers decision of 2018 – in this case the Commission’s competence was limited to conduct occurring after 18 October 2006 even though several other competition authorities (including the US Department of Justice) identified a cartel between maritime car carriers going as far back as 1997. We therefore anticipate that the victims of this cartel will also be paying attention to the EU Court of Justice’s judgment given the potential implications for their damages claims against maritime car carriers.
Footnotes
[1] C-819/19, Opinion of Advocate General Michael Bobek dated 6 May 2021, ECLI:EU:C:2021:373.
[2] Stichting Cartel Compensation, Equilib Netherlands BV v Koninklijke Luchtvaart Maatschappij NV and Others
[3] [2017] EWHC 2420 (Ch).
[4] [2019] EWCA Civ 37.
