Judgment — ECLI:EU:C:2018:533
Date: 2018-07-05
Language of the case: Lithuanian
Court formation: Second Chamber
Subject matter: Area of freedom, security and justice;Judicial cooperation in civil matters
Procedure: Reference for a preliminary ruling
Origin: Lithuania

summary accounts that are separate from those of the parent, Air Baltic Corporation A/S. Instead, during the relevant period, the branch’s financial performance data were incorporated into the financial statements of the parent. Also, whilst the referring court confirms that the branch did have the power to set flight prices, there is no indication that it actually did so. 137. In case of tort-based claims, in order for the dispute to arise out of the operations of the branch, the branch must participate in at least some of the actions constituting the tort. 138. In my view, the fact that the branch’s financial performance data were incorporated into the financial statements of the parent is, in principle, neutral as regards the question of whether the dispute arises out of operations of the branch. The establishment of separate summary accounts might constitute one factor among others in the assessment of the existence of a ‘branch’ and might also help identify the activities carried out by the branch. However, at least in this case, I do not see how it could be decisive, in itself, in the assessment of whether the branch has participated in the tort. That said, ultimately, the evidential value of the details of the accounting system used is a question for the national court. 139. The second factor mentioned above — the lack of clarity as to whether prices were actually fixed by the branch — is arguably of more relevance. 140. If it can be established that the branch did in fact fix the prices that are allegedly predatory, then, in my view, the dispute can indeed be considered as having arisen out of the operations of the branch. For the reasons explained above, (67) the fixing of predatory prices, to the extent it remains an activity entirely internal to the dominant undertaking, cannot be considered to constitute the ‘event giving rise to the harm’. However, it does constitute a necessary precondition (68) to the abuse. It amounts to participation and, in a way, complicity in bringing about the anticompetitive behaviour in question. As such, the act of fixing the prices constitutes sufficient participation in the tort to justify the application of Article 5(5) of Regulation No 44/2001. 141. I understand that the issue facing the referring court is that it is not clear whether the branch did in fact set the relevant prices. What then if that fact remains unestablished to the standard of proof required? 142. In my opinion, the branch can still be considered to have participated in the predatory pricing, such that the dispute arises out of the operations of the branch, even if it has not fixed the predatory prices itself, but would have offered those prices on the market or have otherwise been instrumental in concluding contracts for services at those prices. In such cases, the branch has again participated in the commission of an act that constitutes a necessary precondition for the abuse. 143. Whether that is the case is ultimately a question of fact for the referring court to decide. The purpose of such factual assessments is to ascertain whether or not the branch participated in bringing about the anticompetitive behaviour. If that is indeed the case, it must be accepted that the dispute arises out of the operations of the branch. 144. In the light of the foregoing, I propose replying to the referring court’s third question as follows: In cases such as the present one, a dispute relating to alleged predatory pricing must be considered as arising from the operations of a branch for the purposes of Article 5(5) of Regulation No 44/2001 if the branch has participated in the commission of acts constituting a necessary precondition to the abuse, including in particular by fixing predatory prices, by offering those prices on the market or by otherwise being instrumental in the conclusion of contracts for services applying those prices. V. Conclusion 145. I propose that the Court answer the questions referred by the Lietuvos apeliacinis teismas (Court of Appeal, Lithuania) as follows: (1) In circumstances such as those of the present case, the notion ‘place where the event giving rise to the harm occurred’ under Article 5(3) of Regulation (EC) No 44/2001 of 22 December 2001 on jurisdiction and the recognition of judgments in civil and commercial matters is to be understood as meaning, as regards the alleged anticompetitive agreement, the place of the conclusion of the agreement, and as regards the alleged abuse of dominance consisting in predatory pricing, the place where the predatory prices were offered and applied. (2) In a case such as the present one, the ‘harm’ suffered by the applicant for the purposes of establishing jurisdiction under Article 5(3) of Regulation No 44/2001 is the applicant’s loss of sales caused by the impugned distortion of competition. The ‘place where the damage occurred’ for the purposes of establishing jurisdiction under that provision is the place within the market affected by the infringement where the victim alleges loss of sales. (3) In cases such as the present one, a dispute relating to alleged predatory pricing must be considered as arising from the operations of a branch for the purposes of Article 5(5) of Regulation No 44/2001 if the branch has participated in the commission of acts constituting a necessary precondition to the abuse, including in particular by fixing predatory prices, by offering those prices on the market or by otherwise being instrumental in the conclusion of contracts for services applying those prices. 1 Original language: English. 2 Council Regulation of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1). 3 For simplicity, in the rest of this Opinion, I will use the post-Lisbon numbering of the Treaty Articles. 4 Judgment of 23 October 2014, flyLAL-Lithuanian AirlinesflyLAL-Lithuanian Airlines (C‑302/13, EU:C:2014:2319). 5 Already in judgment of 30 November 1976, Bier (21/76, EU:C:1976:166, paragraph 19); recently confirmed in judgment of 17 October 2017, Bolagsupplysningen and IlsjanBolagsupplysningen and IlsjanBolagsupplysningen and Ilsjan (C‑194/16, EU:C:2017:766, paragraph 29). 6 Judgment of 30 November 1976 (21/76, EU:C:1976:166, paragraph 19). 7 In English, the Court mostly uses the term ‘damage’ in this context, although ‘harm’ is also used occasionally. Therefore, although in my view it can be the source of some confusion, I will generally use ‘damage’. Some of the ambiguity in terminology that has arisen in this area is I think attributable to linguistic variability. Thus, two different ‘root words’ exist in certain languages and are used when talking about these concepts (for example in English: ‘harmful event’/‘harm’, on the one hand, and ‘damage’, on the other) but do not exist or are not always used in other language versions. That can be seen by comparing Article 5(3) of Regulation No 44/2001 and the various language versions of the judgment of 30 November 1976, Bier (21/76, EU:C:1976:166, paragraph 19) — for example French (‘dommage’ and ‘fait dommageable’); Dutch (‘schade’ and ‘schadebrengende feit’); or Italian (‘danno’ and ‘evento dannoso’). The German language version, also uses the same root word, but makes the difference somewhat clearer (‘Schadenserfolg’ and ‘schädigende Ereignis’). 8 ‘Damage’ refers to the adverse effects on the victim. ‘Damages’ is the pecuniary amount paid which includes the monetary expression of the ‘damage’ (compensation) but can also cover punitive damages or symbolic damages. 9 EU law requires national law to provide for the possibility to bring actions for damages for breaches of EU competition law (see judgment of 20 September 2001, Courage and CrehanCourage and Crehan(C‑453/99, EU:C:2001:465, paragraph 26)). Case-law and EU legislation set down basic conditions for establishing liability and require national law to respect the principles of equivalence and effectiveness. See judgment of 13 July 2006, Manfredi and OthersManfredi and Others (C‑295/04 to C‑298/04, EU:C:2006:461, paragraph 92) and 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 (OJ 2014 L 349, p. 1). 10 See, for example, judgment of 22 January 2015, Hejduk(C‑441/13, EU:C:2015:28, paragraph 29 and the case-law cited). 11 Judgment of 30 November 1976(21/76, EU:C:1976:166, paragraphs 15 and 16). Emphasis added. 12 Opinion of Advocate General Capotorti in Bier(21/76, EU:C:1976:147, point 10). 13 Judgments of 30 November 1976 (21/76, EU:C:1976:166, paragraphs 11, 17 and 18). 14 That also constitutes another factor distinguishing ‘damage’ as an aspect of the ‘harmful event’ from ‘damage’ as part of the substantive assessment. The latter is a broader concept encompassing not only initial harm but also potentially subsequent adverse consequences. See, for example, Article 12(1) of Directive 2014/104. According to that provision it must be possible to obtain compensation for harm caused to indirect consumers as a result of infringements of EU and national competition law. ‘… Member States shall ensure that … compensation of harm can be claimed by anyone who suffered it, irrespective of whether they are direct or indirect purchasers from an infringer …’ 15 Judgment of 19 September 1995(C‑364/93, EU:C:1995:289). 16 Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, OJ (1978) L 304, p.36. 17 Judgment of 19 September 1995, Marinari(C‑364/93, EU:C:1995:289, paragraph 14). 18 Judgment of 19 September 1995, Marinari(C‑364/93, EU:C:1995:289, paragraph 21 and the operative part). 19 Judgment of 11 January 1990, Dumez France and Tracoba (C‑220/88, EU:C:1990:8, paragraph 20). 20 See in that sense, for example, Idot, L., ‘La dimension internationale des actions en réparation. Choisir sa loi et son juge : Quelles possibilités?’, Concurrences No°3-2014, point 30, where the place of specific damage is preferred; Vilá Costa, B., ‘How to apply Articles 5(1) and 5(3) of the Brussels I Regulation to Private Enforcement of Competition Law: a Coherent Approach’, in International Antitrust Litigation : Conflict of Laws and Coordination, Basedow, J., et al., eds., Hart Publishing, Oxford and Portland, Oregon, 2012, which proposes both the place of the general damage (referred to by that author as ‘generic harm’) and the specific damage. 21 To the extent it involves predation and collusion to exclude through the use of predation. 22 It being understood that that market may include multiple Member States. 23 Above, point 33 of this Opinion. 24 Judgment of 21 December 2016 (C‑618/15, EU:C:2016:976, paragraph 30). Emphasis added. 25 The need for consistency between the rules on applicable law under Regulation No 864/2007 and jurisdiction under Regulation No 44/2001 is explicitly referred to in recital 7 of the former regulation (see Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II)) (OJ 2007 L 199, p. 40). 26 The present case concerns exclusively the issue of jurisdiction and the corresponding question of whereactions for damages relating to different alleged infringements of competition rules may be brought. I readily acknowledge that the question that immediately arises after that is what exact damage may be claimed in each of the jurisdictions? That question arises in particular in view of the recently confirmed mosaic approach of the Court in the judgment of 17 October 2017, Bolagsupplysningen and Ilsjan (C‑194/16, EU:C:2017:766, paragraph 47). That issue is, however, beyond the scope of the present case and this Opinion. 27 Judgments of 5 June 2014, Coty Germany(C‑360/12, EU:C:2014:1318, paragraphs 43 to 45), and of 16 June 2016, Universal Music International Holding (C‑12/15, EU:C:2016:449, paragraph 25). 28 Judgment of 21 May 2015, CDC Hydrogen Peroxide (C‑352/13, EU:C:2015:335, paragraph 39). Emphasis added. 29 Points 34 and 35 of this Opinion. 30 Judgment of 21 December 2016 (C‑618/15, EU:C:2016:976). 31 Judgment of 21 December 2016, Concurrence (C‑618/15, EU:C:2016:976, paragraph 35 and the operative part). Emphasis added. 32 Judgment of 21 May 2015, CDC Hydrogen Peroxide (C‑352/13, EU:C:2015:335, paragraph 52). 33 Points 37 to 41 of this Opinion. 34 Judgment of 19 September 1995(C‑364/93, EU:C:1995:289, paragraph 21). 35 Judgment of 21 December 2016 (C‑618/15, EU:C:2016:976, paragraphs 33 and 35 and the operative part). 36 Judgment of 16 June 2016, Universal Music International Holding (C‑12/15, EU:C:2016:449). However, Advocate General Szpunar in that case did not consider that the financial damage was direct (Opinion in Universal Music International Holding (C‑12/15, EU:C:2016:161, points 30 to 33)). 37 Judgment of 16 June 2016, Universal Music International Holding (C‑12/15, EU:C:2016:449, paragraph 40). 38 Judgment of 16 June 2016, Universal Music International Holding (C‑12/15, EU:C:2016:449, paragraph 39). Emphasis added. 39 Judgment of 21 December 2016 (C‑618/15, EU:C:2016:976). 40 Loss of income would, in principle, ensue. Whether that leads to loss of profits will of course depend on costs. 41 Relativisation of that statement is called for. Where a competition law based damages claim is not a ‘follow-on’, that is, where there is no pre-existing decision finding an infringement, the evidentiary hurdles in terms of proving an infringement may be extremely significant in comparison to proving and quantifying damage. 42 Judgment of 21 May 2015, CDC Hydrogen Peroxide (C‑352/13, EU:C:2015:335). 43 Judgment of 21 May 2015, CDC Hydrogen Peroxide (C‑352/13, EU:C:2015:335, paragraphs 52 and 56). 44 As far as that has not already happened. CDC also appears difficult to reconcile with the (later) judgment in Universal Music. It seems that in CDC the damage probably did ‘consist exclusively of financial damage which materialises directly in the bank account of the applicant and is the direct result of an unlawful act committed in another Member State’. The Court did not, however, identify a particular additional connecting factor as referred to and required by its subsequent ruling in Universal Music — see judgment of 16 June 2016, Universal Music International Holding (C‑12/15, EU:C:2016:449, paragraph 40). In my opinion, the connecting factor in such cases could be the place of purchase of the cartelised goods (or services). 45 The referring court does not refer to other possible acts of implementation, such as the granting of discounts to Air Baltic. 46 Again, as stated above in points 19 to 21 I take that conclusion as a given, since the present opinion discusses only jurisdiction and not substance. 47 See above footnote 9. That was the case at the relevant time and has since been confirmed in Directive 2014/104. That directive indeed explicitly states that ‘all national rules governing the exercise of the right to compensation for harm resulting from an infringement of Article 101 or Article 102 TFEU, including those concerning aspects not dealt with in this Directive such as the notion of causal relationship between the infringement and the harm, must observe the principles of effectiveness and equivalence’ (recital 11, emphasis added, see also Article 4). 48 Judgment of 16 May 2013 (C‑228/11, EU:C:2013:305, paragraph 35). 49 See my Opinion in Bolagsupplysningen and Ilsjan (C‑194/16, EU:C:2017:554, point 68). 50 Judgment of 16 June 2016, Universal Music International Holding (C‑12/15, EU:C:2016:449, paragraph 44). 51 Opinion of Advocate General Jacobs in DFDS Torline (C‑18/02, EU:C:2003:482, point 52). 52 See examples given in European Commentaries on Private International Law: Brussels Ibis Regulation, 2nd ed., Vol.1, Mankowski, P., and Magnus, U., Sellier European Law Publishers, Cologne, 2016, p. 293 et seq. 53 Judgment of 7 March 1995, Shevill and OthersShevill and Others (C‑68/93, EU:C:1995:61, paragraph 24). 54 Judgment of 30 November 1976 (21/76, EU:C:1976:166, paragraph 20). 55 See, for example, Danov, M., Jurisdiction and Judgments in Relation to EU Competition Law Claims, Hart Publishing, Oxford, 2011, p. 92. 56 Judgment of 21 May 2015, CDC Hydrogen Peroxide (C‑352/13, EU:C:2015:335, paragraph 50). 57 Judgment of 7 March 1995, Shevill and OthersShevill and Others (C‑68/93, EU:C:1995:61, paragraph 24). 58 Judgment of 19 April 2012, Wintersteiger (C‑523/10, EU:C:2012:220, paragraph 34). 59 Judgment of 5 February 2004, DFDS Torline(C‑18/02, EU:C:2004:74, paragraph 41). 60 Above, points 98 and 99. 61 I cite the main reasons here. Others might also be invoked, for example, the fact that in principle ‘restrictions by object’ constitute violations of Article 101(1) TFEU even without proof of implementation or effects (although a claimant would obviously not get very far with a damages claim if it could not show effects). 62 Judgment of 13 February 1979, Hoffmann-La Roche v CommissionHoffmann-La Roche v CommissionHoffmann-La Roche v Commission (85/76, EU:C:1979:36, paragraph 91). 63 Points 19 to 21 of this Opinion. 64 As far as terminology is concerned, it might recalled that there is no reason to distinguish between the terms ‘branch, agency or establishment’ for these purposes — see in that regard, judgment of 6 October 1976, De BloosDe Bloos (14/76, EU:C:1976:134, paragraph 21). 65 Jurisdiction under Article 5(5) might in that sense be referred to as a ‘quasi defendant’s domicile for the purposes of jurisdiction’. See European Commentaries on Private International Law: Brussels Ibis Regulation, 2nd ed., Vol.1, Mankowski, P., and Magnus, U., Sellier European Law Publishers, Cologne, 2016, p. 350. 66 Judgments of 22 November 1978, Somafer (33/78, EU:C:1978:205, paragraph 12); of 18 March 1981, Blanckaert & WillemsBlanckaert & Willems (139/80, EU:C:1981:70, paragraphs 9 to 13); and of 6 April 1995, Lloyd’s Register of Shipping(C‑439/93, EU:C:1995:104, paragraph 19). 67 Above, points 110 and 111. 68 See by analogy, judgment of 5 February 2004, DFDS Torline(C-18/02, EU:C:2004:74, paragraph 34). The notion of ‘necessary precondition’ in this sense is clearly broader than the notion of ‘event giving rise to the harm’.