Territorial limits of EU competition damages claims in England
In the battle to become the EU cartel damages venue of choice, claimants have been increasingly creative, using a variety of strategies to try to expand the scope of the claims they bring in England. Last autumn, the Court of Appeal delivered a significant blow to this campaign, holding in its Emerald Supplies judgment, that the common law tort of conspiracy to use unlawful means could not be used in connection with cartel damage claims. Had the claimants prevailed, this would have allowed them to recover worldwide losses resulting from cartels (conspiracies) before the English courts. On 26 May, the UK Supreme Court denied the claimants permission to appeal against that judgment.
A further blow was dealt to claimant ambition by the 23 May iiyama judgment which struck out a €1 billion damages claim brought by claimants belonging to a group that sold and distributed computer monitors. Those computer monitors contained Cathode Ray Tubes (“CRT”) and CRT Glass, both of which had been found by the European Commission to have been the subject of two separate cartels.
The sales of the CRT and CRT Glass that ended up in the iiyama products sold in the EEA were, however, all made in Asia. No glass which ended up in iiyama monitors in the EU was made in the EU or was sold by the cartelists in or into the EU; no CRTs which ended up in iiyama monitors in the EU were made or sold by the cartelists in or into the EU. The question for the court was whether a claimant whose purchase of products incorporating cartelised components took place outside the EU could claim damages for breach of competition law in England.
The defendants asked the court to strike out these claims on the basis that the pleaded claim disclosed no cause of action. According to the defendants, if the purchases of the cartelised products had been made outside the EU, they fell beyond the scope of EU competition law because EU competition law is concerned with effects on competition within the EU. The claimants, on the other hand, argued that the fact that the monitors containing the cartelised CRT and CRT Glass had been sold in the EU provided a sufficient connection with the EU for EU competition law to apply.
The court held that sales of cartelised products made outside the EU could not be said to constitute implementation of anticompetitive behaviour in the EU. Nor, the court held, could such sales bring about a foreseeable, immediate and substantial effect within the EU. Any such effect in the EU would have been “knock-on”. Accordingly, the judge concluded that the conduct complained about lacked a sufficient territorial connection with the EU.
In part, the claimants failed because of the way in which their case was put. The judgment, consequently, provides a valuable lesson to those preparing competition law damage claims. Whether or not it is successfully appealed, and irrespective of the fate of the similar dispute also concerning iiyama but focused on the LCD cartel, this iiyama judgment provides further evidence that the English courts will scrutinise carefully attempts by claimants to persuade the English courts to take an expansive view of jurisdiction