When a competition authority sanctions a cartel, public attention tends to focus on the fines imposed on the companies involved. However, businesses that have suffered harm because of the infringement may also be entitled to compensation.
This right, recognised by the Court of Justice of the European Union and strengthened by the EU Damages Directive, allows any person who has suffered harm caused by an infringement of competition law to claim full compensation. The right applies to both direct and indirect purchasers.
To facilitate claims for damages, the Damages Directive establishes a rebuttable presumption that cartels cause harm. In practice, customers affected by a cartel have generally paid higher prices than they would have in a competitive market. Although claimants must still demonstrate the extent of their loss, this presumption significantly eases the burden of proof.
The Belgian Security Services Cartel
A recent case in Belgium illustrates how this right to compensation can be exercised in practice.
On 2 July 2024, the Belgian Competition Authority (BCA) imposed fines totalling almost €47 million on G4S, Securitas and Seris for participating in an illegal cartel that, among other things, involved coordinating prices on the Belgian security services market between 2008 and 2020.
As a result of these anti-competitive practices, affected customers paid more for security services than they would have under normal market conditions. Companies that purchased security services during the relevant period may therefore consider bringing a claim for damages before the competent courts. In practice, claims based on the BCA's decision may be brought until June 2029, five years after the publication of the Authority's decision.
Facilitating Access to Justice
Competition law damages actions often require significant financial resources, including legal expertise, economic analysis and complex litigation.
To help overcome these barriers, third-party litigation funding has become increasingly common in recent years. Specialised litigation funders may cover legal fees, expert costs and court expenses in exchange for a share of any compensation recovered if the claim is successful. If the claim is unsuccessful, claimants generally have no obligation to reimburse these costs. LitFin is one of the companies offering this type of litigation funding.
Conclusion
Competition authority decisions do more than sanction anti-competitive conduct. They can also pave the way for businesses that have suffered harm to obtain compensation.
The Belgian security services cartel is a reminder that, beyond imposing fines on infringing companies, competition law also provides victims with a genuine right to seek compensation.
By Juraj Siska, Director LitFin France & Benelux
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