INspiRE Jean-Monnet-Centre of Excellence - Rechtsprechungskomplexe: Cargest-Rechtsprechung
On 4 June 2015, the Supreme Court of Cassation overruled a judgment of the Court of Appeal of Rome concerning a claim brought by 52 wholesale fruit and vegetable suppliers against CARGEST S.r.l., which was held liable of an abuse of dominant position.
CARGEST is the company in charge of managing the Rome-Guidonia Agri-food Center. It was the only entity allowed to lease the commercial spaces of the Center to suppliers. Being also the only party to arrange the contents of the lease contracts, CARGEST imposed unfair terms and conditions, discriminatory and contrary to the principles of competition, thus infringing Article 3 of law no. 287 of 10 October 1990. For that reason, the suppliers brought an action to obtain a declaration of invalidity of those unfair contractual terms.
On 8 March 2010, the Court of Appeal of Rome rejected the claim, establishing that the Claimants failed to determine the “relevant market” and, as a consequence, it was impossible to ascertain the abuse of dominant position. The Claimants appealed the decision to the Supreme Court of Cassation.
The line of reasoning followed by the Court stems from two premises: 1) the Appeal Court was right in establishing that the definition of “relevant market”, in both its product and its geographic dimension, is a prerequisite to verify the market shares of the firms and therefore, to establish the alleged abuse of dominant position. It is also essential in order to identify the parameters of supply-side and demand-side substitutability; 2) the “relevant market” definition results from a factual assessment, followed by the application of the provisions on “relevant market”, as interpreted by the Court of Justice and the national court, to the facts analysed in the assessment.
Following these premises, the Supreme Court overturned the decision taken by the Court of Appeal, because its argument was incomplete and contradictory.
First of all, the Court of Appeal stated incorrectly that the Claimants did not compare the Center of Guidonia with other centers, such as the Fondi market. In doing so, the Court did not fulfil the factual analysis, failing to assess, for instance, that the Guidonia Center also includes a fish market, while the Fondi market does not. Furthermore, the Court of Appeal did not consider that for the suppliers, the market of Fondi did not satisfy the requirement of substitutability, due to transport costs and entry barriers.
In addition, according to the Court of Appeal, the evidence of the lease contracts and annexed guidelines, which regulated access and use of the Guidonia Center, was insufficient because it merely referred to the agreements between the CARGEST and each of the 52 wholesale fruit and vegetable suppliers, “beyond comparisons and/or connections that would have let to evaluate the supply-side substitutability”.
The decision of the Appeal Court also held that the existence of a “relevant market” was proven only by a few general references; thus, the Claimants failed to satisfy the burden of proof. By making this statement, the Court of Appeal just followed the general procedural rule, without paying attention to the particular features of private enforcement litigation.
On the contrary, the Supreme Court proceeded from the difference between follow-on actions and stand-alone actions. The first ones follow from a decision of a Competition Authority or the European Commission. In follow-on actions, the decision of the Competition Authority functions as “privileged evidence” (Court of Cassation, Judgment no. 5327 of 4 March 2013). On the other hand, stand-alone actions are commenced without a prior decision of the aforementioned authority. Given the absence of privileged evidence, the Claimants are subject to prove the infringement of Competition Law by the Defendant. However, the Supreme Court recognised the difficulty for the Claimants to prove anti-competitive conduct, due to the high costs of technical-economic investigations involved. Such difficulty to provide evidence can impede the effective exercise of the right to compensation guaranteed by the TFEU as well as by the Directive 2014/104/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union. This directive establishes that “in accordance with the principle of effectiveness, Member States shall ensure that all national rules and procedures relating to the exercise of claims for damages are designed and applied in such a way that they do not render practically impossible or excessively difficult the exercise of the Union right to full compensation for harm caused by an infringement of competition law” (Article 4).
The need for effective procedural remedies also follows from the right to effective judicial protection as laid down in the second subparagraph of Article 19 (1) of the TEU and in the first paragraph of Article 47 of the CFR.
In this scenario, the judge should make effective the protection of private individuals that claim compensation for damages resulting from infringements of national competition law (alleged violations of Articles 2 et seq. of the law no. 287/1990), taking into account the information asymmetry between parties in access to relevant evidence as well as interpreting procedure provisions in a way that they become most appropriate to the effective application of competition law. This aim can be reached enhancing the instruments of investigation and learning that procedural rules already provide, along with extensive interpretation of conditions, upon which disclosure of evidence can be ordered and request for information can apply (See Article 15 of Reg. (EC) no. 1/2003) but, above all, with recourse to official technical consultancy, for the purpose of investigation, even ex officio, in order to gather useful information on the alleged infringement of competition law.
According to the Supreme Court, these instruments correspond to those spelt out in the Directive 2014/104 EU, which seeks to guarantee the principle of effective judicial protection by introducing a number of procedural provisions that allow for the proper functioning of private damages action.
In particular, the Supreme Court refers to exhibition orders (Article 210 of the Italian Civil Procedure Code), access to relevant information and, above all, technical consultancy. These tools would lead the judge to an effective exercise of the inquiry powers by taking into due account the principle of adversarial respect and, at the same time, without prejudice to the Claimants’ burden to bring strong indirect evidence, even if not detailed, but sufficient to indicate a “plausible” antitrust violation.
The Court of Appeal of Rome neither conducted such kind of investigations nor used those tools. Such approach did not take into consideration the specific circumstances of the case and did not lead to an effective application of EU Competition Law. The Supreme Court thus decided to overrule the judgment of the Appeal Court for having failed to comply with the scope of European and national Competition Law.
This judgment refers to the following European legislative acts:
Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union.
Council Regulation (EC) no. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.