A new directive approved by the Council of the European Union this week will make it easier for companies or other victims of antitrust violations to seek damages anywhere in the 28-member bloc.

The directive, already approved by European Parliament in April, harmonizes antitrust damages laws throughout the 28 Member States and will enable victims of cartel activity to receive compensation for both actual loss and lost profits. Lawmakers said under the previous rules, the right to compensation was guaranteed, but in practical terms very difficult to obtain due to differences among the Member States and national court systems.

Margrethe Vestager, the new EU Commissioner tasked with competition policy, praised the Council’s action.

“We need a more robust competition culture in Europe. So I am very glad that the Council has now also formally approved the directive on antitrust damages actions,” Vestager said in a statement. “I am very pleased that it will be easier for European citizens and companies to receive effective compensation for harm caused by antitrust violations.”

The new regulation requires Member States to ensure their national court system can order the disclosure of relevant evidence to parties in an antitrust case while also protecting confidential business information during court proceedings. Direct or indirect purchasers can seek full compensation of harm under the new rules, but the claimant has the burden of proof for passing on overcharges, the council said.

Cartel victims can use final national decisions on competition law infringements as evidence in other Member States, which the council said should bolster the victim’s position in court. Cartel victims have a minimum of five years to file claims for damages; the clock stops during any consensual settlement process. National courts also will be empowered to estimate the harm suffered by cartel victims so the claim doesn’t become bogged down by trying to quantify the harm involved.

The directive also seeks to boost leniency programs for companies admitting their role in a cartel in exchange for immunity or a lesser fine. To encourage companies to enter into a leniency programs or settlement agreements, voluntary self-incriminating statements will be exempt from disclosure requirements. However, any documents accompanying those statements will be subject to disclosure. Other documents will be subject to full or partial disclosure, depending on their relevance, proportionality, and the company’s legitimate interest to protect confidential information, the council said, and the parties faced with a disclosure order have the right to a hearing on the matter. The Council said the new rules were needed because companies could be deterred from cooperating if they faced greater disclosure requirements – and greater civil liability – than companies that were not cooperating with authorities.

Leniency recipients also would face a reduced burden for a period of time since companies admitting wrongdoing would become the primary target for claims, the council said.

In cartel-like cases involving more than one company infringing competition rules jointly, those companies will be liable jointly and severally, the council said. National courts will determine an individual company’s share based on factors like turnover, market share, and its role in the cartel. Co-infringers can seek a contribution from the other parties if the court determines they paid more than their fair share. Small and midsize enterprises will be liable only to their own purchasers if their market share is under a certain size and their role in the cartel was not a major one, under the new rules.

The language regarding small and medium-sized enterprises led to Germany, Poland, and Slovenia abstaining from the vote. Representatives from the three countries argued that the compromise text regarding joint and several liability will make it tougher for SMEs to seek full compensation, noting that SMEs are often the victims in antitrust cases.

“It will also lead to legal uncertainty and unequal treatment due to differences in the definition of small and medium enterprises among the Member States,” the representatives maintained.

Having won approval from the European Parliament and the council, the damages directive will be published in the EU’s Official Journal in the next few weeks. Member States will have two years to implement the directive.

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