Case:ECJ-Manfredi v Lloyd Adriatico II PART Ioan Iulian Curelaru The Opinon of the Advocate General

(summarised ideeas) The Opinion contains 71 Articles.The competition Authority has established that in the period 1994 to 1999 the rise in RC -civil liability auto insurance premiums in Italy,unlike the rest of Europe was excesive.As such insurance is compulsory the demand for it is inelastic.For consumers confronted with an increase in premiums ,the choice is not to use their vehicle or to pay higher premium.It is also evident that many insurance companies have exchanged informations on all aspects of that activity-prices,deductions,receipts ,the cost . The Italian Competition Autority stated that the insurance companies had adopted an unlawful agreement ,contrary to antitrust rules,for the purpose of exchanging information. The Competition Autority s measure was challenged by insurance companies. The applicants in the main action brought an action before the Giudice di pace di Bitonto against the insurance companies concerned. Both national and European competition law can be applicable simultaneously and national competition law may not be in breach of European competition law. The Principle of Equivalence implies that the rules which apply to a claim based on European law must not be less favourable than those which govern similar claims under national law. The limitation periods for actions for damages based on the infringement of the European competition rules must not be less favourable than those applicable to similar national claims. Most Member States have no specific legislation governing claims for damages resulting from practices prohibited by Competition Law.They are governed by the Normal rules laid down in the domestic legal system.

It is well known that an horizontal agreement directed to raise prices at a level greater than the competitive level normally has the effect of facilitating the entrance of new competitors,because it increases the profits that can be made by entering in the market. Judgement comments

The case highlated the tension between the emphasis on national procedural responsability and autonomy and the requirement that national remedies must secure the effectiveness of the Union rights. There were asked for damages for breach of EU competition law,the Court ruled that injured parties must be able to seek compensation not only for actual loss,but also for loss of profit. The ECJ ruled that a national rule under which the limitation period begins to run from the day on which an anti-competitive agreement or concerted practice was adopted could make it practically imposible to exercise the right to seek compensation for the harm caused,particularly if the limitation period was also a short one and not capable of being suspended. The Court ruled that the requirements of effectiveness and equivalance did not prevent national courts from taking steps to ensure that the protection of EU rights did not entail the unjust enrichment of those claiming them.The Court ruled that if in similar domestic actions it is possible to award specific damages such as exemplary or punitive damages,it must also be possible to award them in action based on EU rules. The judgement contains remarks on compensatory damages that should be awarded in the event of violation of EU competition law.The Court asserts that the principle of effectiveness ,if it does not require punitive damages ,does require compensations for actual loss(damnum emergens) and for loss of profit(lucrum cessans). Compensation for the actual loss alone would not be sufficient ,because it could make in some cases the exercise of the right practically impossible or excessively difficult. It can be observed that a universally criterion to estimate the damage that should be compensated in the event of violation of

antitrust law does not exist.Rather it is necessary to distinguish in function of the type of violation and of the type of victim.For example ,the damage caused by a cartel must be estimated differently from the damage caused by a predatory practice aimed at excluding a competitor from the market.Moreover the damage suffered by a firm must be estimated differently from the damage suffered by a consumer. There are usualy three criteria by which to calculate this damage. The first criterion consists in compensating ,for every good or service purchased,the difference between the price effectively paid(the real price)and the price that would have been paid,if there had not been the violation(hypothetical or competitive price). The second criterion consists in compensating ,together with this difference ,also the profits that the victim of the anticompetitive behaviour would have realised by means of the purchase and the resale of a greater number of goods or services.In this respect it is well known that the existence of a cartel determines,on the one side,that the price paid for every good or service purchased is greater than the competitive price and,on the other side,that the quantity of goods or services effectively purchased is lower than the quantity that would have been purchased with a competitive price(hypothetical quantity).For this reason ,in order to put the victim in a position as close as possible to the position in which she would have found herself if there had not been the violaton,it would be necessary to compensate the greater price paid for every good or service effectively purchased(actual loss) and the profit she would have made from the resale of a grater number of goods or services(loss profit). The third criterion consists in compensating the difference between the total profits that would have been made if there had not been the violation and the total profits that have been effectively made given the restriction if the competition. The Manfredi judgement suggests that the principle of effectiveness requires the adoption of the third criterion or at least of the second criterion of estimation of damages that should be compensated .Only these two criteria allow the victim of the violation to obtain the compensation for the loss of profit. The ECJ held that the full effectiveness of Article 81 would be put at risk if it were not open to any individual,even a party to the agreement,to claim damages for loss caused by a contract or by conduct liable to distort competition. There should not therefore be any absolute bar in national law to such

actions,even by parties to the agreement.It was however open to national law to prevent a party From being unjustly enriched or profiting from his unlawful conduct . The national Court shuld take into account,inter alia,the respective bargaining strength of the contracting parties and the extent to which a contracting party had responsability for the breach of Article 81. The italian legislator adopted the day of the fact as the starting day of the prescription period. In any case a prescription period of ten years for a claim of damages for pecuniary losses could not be considered contrary to the principle of effectiveness of the EU law. The Manfredi Judgement is significant in requiring that national law must provide an action for damages against a private party for the breach of the Treaty competition rules,but remains unclear whether its implications extend beyond the sphere of competition law.