Antitrust damages claimants, both in Germany and the rest of the European Union (“EU”), have reasons to rejoice.
In its ASG 2 ruling delivered on 28 January 2025 (hereafter the “Ruling” )1, the Grand Chamber of the Court of Justice of the European Union (“ECJ”) ruled, in essence, that in the absence of an effective collective action mechanism in a Member State, its consumers and undertakings who could not seek redress otherwise have a conditional right pursuant to EU law to assign their claims to a third party who will seek compensation for the antitrust damages they suffered. In so doing, the ECJ agreed with the Opinion issued by its Advocate General Szpunar.2
Responding to a preliminary question raised by the Dortmund Regional Court3, the ECJ finally settled in its Ruling a long-standing legal battle over claim assignments, which had divided German courts for decades4. (I)
However, the real impact of the Ruling goes well beyond Germany as the ECJ guarantees for the first time to both consumers and undertakings in the EU a right to act collectively by bundling their antitrust damages claims under specific conditions. (II)
In France in particular, the Ruling must be interpreted as confirming the validity of the various mechanisms provided for by French law which allow undertakings to transfer their damages claims to a third party in the absence of a specific collective action regime available to them. (III)
- The end of a long-lasting legal battle in Germany
At the heart of the questions referred to the ECJ by the German Court lies the compatibility with EU law of the German Legal Services Act (“Rechtsdienstleistungsgesetz”, RDG)5 which regulates the assignment of damages claims to a licensed provider of legal services.
Under German law, the assignment of cartel damages claim is governed by the RDG. In essence, this statute provides that a licensed provider of legal services (the “assignee”) can collect debts from multiple claimants and litigate them in return for a fee in case it obtained damages.6
The case referred to the ECJ involved an action for damages following a price-fixing cartel among woodland owners in North Rhine-Westphalia. In that case, the legal service provider, ASG 2, was transferred claims of 32 sawmill companies from Germany, Belgium and Luxembourg. The claims were transferred pursuant to the RDG, allowing ASG 2 to seek compensation in its own name and at its own expense, in return for a fee in case of success.7 The German Competition Authority had adopted a commitment decision in 2009, prompting ASG 2 to bring the damages claims on a stand-alone basis (rather than on a follow-on basis).
In Germany, claim assignments remained controversial due to the historical reluctance of the legislator and local courts to integrate collective redress into the legal framework.8 Some lower courts found that the assignment model was incompatible with bringing antitrust damages claims because it required a complex damages quantification exercise which, in their opinion, an assignee could not handle.9 Moreover, the fee paid to the assignee in case of success was also thought to lead to conflicts of interest.10
The German Supreme Court (“Bundesgerichtshof”, “BGH”) tried to settle the debate on multiple occasions. In its landmark Lexfox– and FinancialRight rulings11, the BGH called for a “liberal understanding of the notion of debt collection service”. Although these rulings did not concern the antitrust field, the BGH’s position implied that the assignment model was valid across all areas of German law, including antitrust.12
However, the BGH’s efforts to settle the debate seemed unsuccessful, as some lower courts continued to consider that competition damages claims could not be assigned under the RDG.13
It is against this backdrop that the Dortmund Regional Court sought clarification from the ECJ on whether the interpretation by those lower courts of the RDG were compatible with Article 101 TFEU, read in conjunction with Articles 2(4), 3(1), and 4 of Directive 2014/104/EU (the “Damages Directive”)14 and Article 47 of the Charter of Fundamental Rights of the European Union (the “EU Charter”) guaranteeing the right to an effective remedy.15 Even if some recent higher court rulings following the Dortmund Regional Court’s order for reference upheld the assignment model as set out in the RDG16, the Ruling provides further legal clarity and predictability to German claimants, improving their chances of securing compensation for their antitrust injuries in Germany.17
- The legal basis and extent of the ruling in Germany and beyond
In Germany and beyond, the Ruling establishes a broad principle: consumers and undertakings have an EU right, under certain conditions, to bundle claims to obtain compensation in all the Member States where there is no collective action mechanism available18. Three main observations are worth making in this regard.
Firstly, the ECJ grounds the right to transfer claims to a third party in (a) Article 2(4) of the Damages Directive19, and (b) the effectiveness principle and the right to effective judicial protection provided by Article 47(1) of the EU Charter, as applied to Article 101 TFEU.20 As emphasised by the ECJ21, EU competition rules rely on both public enforcement and private enforcement to achieve two distinct but complementary goals: deterrence and compensation. Consequently, the effectiveness of Article 101 TFEU commands that unlawful gains can be fully recovered by any victim, whether they are a consumer or an undertaking.22
In the absence of EU procedural rules providing for the recovery of antitrust damages, it is for the Member States to set out these rules.23 The principle of effectiveness nonetheless requires that national laws do not make the exercise of the right to compensation excessively difficult or impossible24, while the fundamental right to effective judicial protection, enshrined in Article 47 of the Charter of Fundamental Rights guarantees that victims receive full compensation for the harm caused by antitrust violations.25
Secondly, the ECJ laid out two conditions for claimants to assert their right under EU law to bundle damages claims.
- The first condition is that the national law must not provide for any other collective redress mechanism allowing the claimant to obtain compensation.26 This means that, unless a collective action mechanism is in place (for both consumers and undertakings), Member States which would not authorize the bundling of claims would be in breach of EU law. In our opinion, it also implicitly results from the principle of effectiveness that, should a collective action mechanism in a Member State make it excessively difficult or impossible to bring such an action, the claimants should then be entitled pursuant to EU law as interpreted in the Ruling to bundle their claims.
- The second condition is that the national law must make it practically impossible or excessively difficult to bring successfully an individual action.27 This means that there must not be a financially viable alternative to bundling claims to achieve compensation. This typically occurs in cases where the damages are too low and scattered for victims, whether they are consumers or undertakings, to take on the costs of litigation on their own28, but not only. There must therefore be an analysis of the legal and factual circumstances of each case to determine whether victims could bring an individual action. In this regard, assessing whether to bring an individual action is excessively difficult or impossible goes beyond merely taking into consideration the litigation costs.29 As noted elsewhere, all relevant circumstances, such as a new theory of harm30 or the probability of commercial retaliation by the cartel members against the individual claimant31, should also be taken into account when making such an assessment.
Finally, while the Ruling specifically addresses the right to bundle claims in a stand-alone case32, there is no reason to consider that it should not also apply to follow-on cases.33 This is because the principle of effectiveness commands that victims of both cartel and abuse of dominance infringements be compensated, whether a prior decision of a competition authority has been adopted or not.
- The consequences of the Ruling in France
In France in particular, since consumers may act through authorized associations to bring group actions (“actions de groupe”)34, the Ruling has an impact primarily on the right of undertakings to collectively bring a damages action.
Firstly, the ECJ confirms with its Ruling the right of undertakings to transfer their claims, such transfers being already authorized by the Civil Code as no rule under French law prohibits the transfer of claims to one entity bringing an action. The Ruling therefore confirms that the claim assignment (also called the “bundling”) model is open to undertakings in France, at the very least under the conditions it sets out.
Secondly, the Ruling does not indicate what specific transfers of claim mechanisms provided by French law would be valid and, therefore, does not exclude any of them. Under French law, claims may be transferred to a third party in two ways, which are both currently used before the French courts in various collective actions.
Under Article 1321 of the Civil Code, a transfer of claims (“cession de créances”) is a contract pursuant to which the assignor creditor transfers, for consideration or gratuitously, all or part of his claims against the assigned debtor to a third party, referred to as the assignee. The assignee becomes the new (full) owner of the claim. In practice, the assignee is an entity which is set up to buy the claims (SPV) and to seek compensation for these claims in its own name.
A lesser-known way to assign claims – also used by the author of this blog – is the transfer of the claim to a “fiducie” entity under Articles 2011 to 2030 of the Civil Code. In this scenario, the claimants transfer their claims to the “fiducie” entity, entrusting the “fiduciaire” to recover the compensation and return it to them once obtained. In practice, the “fiduciaire” managing the “fiducie”brings the action for damages in the name of the “fiducie”.
One cannot help but note the many similarities there are between the French “fiducie” model and the German RDG model that the ECJ declared compatible with EU law in the Ruling. For instance, both mechanisms require that the third party to whom the claim is transferred holds a specific authorisation and acts in its own name. In France, the “fiduciaire” must either be an “avocat fiduciaire” or an authorized entity35, while in Germany legal service providers must hold a license36.
- Conclusion
The Ruling has far-reaching implications for competition victims in both Germany and the rest of the European Union, as it rules once and for all that the assignment model is, under certain conditions, a valid and effective collective action mechanism for both undertakings and consumers in all the Member States in which no alternative mechanism exists to obtain redress in the context of a competition infringement.
The Ruling will be mostly welcomed by undertakings in Member States where no specific collective redress mechanism exists for them, such as France, as it reinforces their rights to seek justice and compensation.
Finally, in all the Member States in which the Directive on Representative Actions37 has not yet been transposed, such as France, national legislators need to take stock of the lessons of the Ruling. Notably, they need to ensure that the collective redress mechanisms they adopt make it truly possible for consumers to seek compensation collectively in all the cases where an individual action would not be practically or financially viable.