European Legislation of Damages: The EU wants to encourage its citizens to get used to claiming damages they suffer (as has been the case for years in Anglo-Saxon countries).

The legislation of the European Union (EU) that addresses the claim for damages in cases of violation of competition rules is primarily found in Directive 2014/104/EU. This Directive focuses on claims for damages under EU competition laws and establishes the principles so that anyone (whether a natural or legal person) can claim compensation from companies for damages suffered due to anti-competitive practices such as cartels or abuse of dominant position.

Directive 2014/104/EU establishes the following:

Right to full compensation:

Victims of anti-competitive practices have the right to be fully compensated for the damage suffered. This includes compensation for both the actual damage suffered as well as for loss of profits plus the payment of interests.

Facilitation of damage claims:

The Directive seeks to facilitate damage claims by victims of anti-competitive practices by improving conditions for access to evidence, setting reasonable limitation periods, and clarifying the effects of national decisions by competition authorities.

Joint and several liabilities:

In cases where there are several offenders, they are generally jointly and severally responsible for the damages caused, meaning that the victim can claim the entirety of the damages from any of them.

Back to top

A business cartel is defined as an agreement between competing companies in the same sector with the goal of carrying out anti-competitive practices such as price-fixing, market-sharing, production control, or limiting innovation to artificially increase their profits. These agreements are usually secret and result in the distortion of free competition in the market, harming both consumers and other companies that are not part of the cartel by facing higher prices and fewer options.

Fighting against business cartels is a duty for several reasons:

Consumer Protection:

Cartels often result in higher prices and lower quality products or services since the incentive to innovate or reduce costs is less. Combatting them ensures that consumers can benefit from fair prices and continuous improvement in quality.

Market Efficiency:

Competition promotes efficiency in the market, forcing companies to be more innovative and to improve their productivity. Cartels diminish this efficiency by eliminating competition.

Equity and Market Access:

Cartels block market access to other companies that could offer better prices or more innovative products, which is detrimental to equity and economic dynamism.

Legality:

The formation of cartels violates competition laws in many jurisdictions, including the European Union. The existence of such laws reflects a consensus in society that fair competition is essential for economic and social well-being.

Overall Economic Health:

Cartels can cause significant harm to the economy by distorting the principles of supply and demand, which can lead to economic crises in specific sectors or even across the entire economy.

For these reasons, Directive 2014/104/EU of the EU and similar legislations around the world seek to provide the means for those affected by anti-competitive practices to claim damages and, at the same time, disincentivize the formation of cartels by increasing the legal and financial risks of participating in such practices.

Back to top

In 2022, the global market for investment in litigation assets reached $12.2 billion. By 2030, it is expected to reach approximately $25.8 billion, which would represent an annual growth rate of about 9%. These are worldwide figures from Custom Market Insights, a portal specialized in market research studies

Collective litigation platforms for businesses offer an effective and strategic solution to defend commercial interests, comply with corporate responsibilities, and improve reputation, perfectly aligning with the current needs and challenges of Boards of Directors.

Protection and Defense of Commercial Interests

Solution: Collective litigation platforms offer a powerful tool for businesses to proactively defend their commercial interests. By joining collective litigation, they can effectively address anti-competitive or monopolistic practices that harm their business. This collective action is not only more cost-efficient but also has a greater impact and visibility, sending a clear message about the company’s commitment to fairness in the market.

Compliance and Corporate Responsibility

Solution: The platforms facilitate compliance with antitrust regulations and strengthen corporate governance. By participating in collective litigation, a company demonstrates a clear commitment to legality and ethical business practices. This enhances the company’s ESG score, especially in aspects of governance and social responsibility, which is increasingly valued by investors and other stakeholders.

Risk Management and Corporate Reputation

Solution: The platforms not only help to mitigate legal and financial risks by collectively facing legal threats but also improve the public perception of your company. By taking a firm and collaborative stance against unfair practices in the market, your company positions itself as an ethical leader in its sector, which can translate into an increase in trust and loyalty from clients and partners.

Back to top