Opinion of Advocate General Kokott in the Heureka/Google case: Possible new guidelines for interpreting the statute of limitations in antitrust damages actions

By Javier Pérez and Diana Radoi

On 21 September 2023, Advocate General Juliane Kokott delivered her Opinion before the Court of Justice of the European Union (CJEU) in Case C-605/21, Heureka Group a.s. v Google LLC (Heureka v Google case). This case arises from a reference for a preliminary ruling made to the CJEU by the Městský soud v Praze (Prague Municipal Court) concerning a claim for damages based on the European Commission's decision on case AT.39740, Google Shopping, adopted on 27 July 2017 and published in the Official Journal (OJEU) on 12 January 2018 (Decision).

The Heureka/Google case focuses on two main topics: (i) the interaction between two different prescription regimes - a general national one and one specific to the Directive 2014/104/EU (Damages Directive)-; and (ii) whether these criteria on interaction are consistent with EU law.

1. Background to the dispute between Heureka and Google presented by the Prague Municipal Court

On 12 January 2018, the summary of the European Commission's decision was published in the OJEU. In it, Google LLC (Google) and its parent company, Alphabet Inc (Alphabet), were sanctioned for abusing their dominant position, in breach of Article 102 TFEU, in the market for online price comparison in several countries of the European Economic Area, including the Czech Republic, from February 2013 until at least July 2017. The decision was partially confirmed in the judgment of the General Court of 10 November 2021, which is currently under appeal before the Court of Justice (CJEU) under case number C-48/22 P.

Following the publication of the Decision, a number of affected companies brought actions to recover damages caused by Google's sanctioned conducts. In this context, Heureka Group a.s. (Heureka) sued Google in the Czech Republic before the Prague Municipal Court on 26 June 2020 for damages suffered during the period specified in the Decision.

For defense, Google argued that part of the claim was time-barred under Czech law prior to the Damages Directive (Article 10 of which introduces a special statute of limitations regime, applicable on the basis of the rules on temporal application set out in Article 22). In this respect, Czech law prior to the Damages Directive provides that the limitation period starts with the knowledge of the identity of the offender and the existence of harm. This means that damages can be segmented for the purposes of the claim and that the limitation period can start even before the end of the infringing conduct.

The Municipal Court of Prague referred the following four questions to the CJEU:

(i) Whether Article 10 of the Damages Directive applies to the entire claim or only to the part after the deadline for transposition of the Directive.

(ii) Whether Article 10 of the Damages Directive is a substantive or procedural provision for the purposes of its temporal application in terms of Article 22.

(iii) Whether Czech national law, which allows the time limit for bringing a claim to commence before the end of the infringing conduct, is compatible with Article 10 of the Damages Directive and Article 102 TFEU.

(iv) Whether Article 10 of the Directive and Article 102 TFEU preclude a law such as Czech law which links the commencement of the limitation period to knowledge of the identity of the infringer and the existence of harm.

2. The Advocate General's reply to the questions referred

At the beginning of her Opinion, Advocate General Kokott addresses a point not directly raised but which she considers essential: the binding nature of a non-final Commission decision and its impact on civil proceedings. Kokott argues that, unlike infringement decisions of national competition authorities, a decision of the European Commission is binding from its adoption, unless it is annulled, because of the primacy of EU law. This implies that the national judge does not automatically have to stay the proceedings pending a final decision, but it can decide on the stay according to the circumstances of the individual case and rely on such decisions to determine the existence and duration of the infringement.

With regard to the first and second questions on the temporal application of Article 10 of the Damages Directive, Kokott refers to the judgment of the CJEU of 22 June 2022 in the Volvo and DAF Trucks case. It is explained there that Article 10 of the Directive is a substantive provision that can be applied, without infringing the prohibition of retroactivity, as soon as it the legal situation has arisen (in this regard, we refer to the memorandum published a year ago in this blog on that judgment). She argues that it is necessary to verify whether the original situation had arisen before the deadline for transposition of the Directive expired or whether it still had effects at that time. This relates to the national prescription regime prior to the Directive. It distinguishes between: (i) the infringement period after the transposition deadline; and (ii) the infringement period before that deadline.

He concludes that the first scenario (post-Directive) must be examined under Article 10 of the Damages Directive, where the action for that period would not be time-barred as the limitation period cannot start before the infringement ends. In contrast, for the second scenario (pre-Directive), recourse must be had to national law, determining whether the pre-Directive limitation regime already complied with the requirements of EU law prior to the Damages Directive.

The third and fourth questions referred for a preliminary ruling are the focus of the third part of Advocate General Kokott's Opinion.

Kokott argues that, even for the period of infringement prior to the expiry of the deadline for transposition of the Directive, it would not be time-barred. Under EU law prior to the Directive, Article 102 TFEU, in relation to the principle of effectiveness, already precluded:

(i) National legislation allowing the limitation period for claiming damages to start before the end of the infringement (in this case, the date of adoption of the Decision).

(ii) National legislation allowing the limitation period for claiming damages to start before the essential elements of the action, including the existence of a competition infringement, became known to the affected party (in this case, the date of publication of the summary of the Decision in the OJEU).

In addition, Kokott addresses, in a subsidiary manner, points iii and iv of the fourth question referred for a preliminary ruling. She concludes that Article 102 TFEU, in relation to the principle of effectiveness, does not require a limitation period that automatically suspends or interrupts the limitation period until the adoption of a decision or during its judicial review. However, it does require for the national limitation period regime to allow the affected party to base its action on the decision of a competition authority.

3. Potential implications of the Advocate General's Opinion for antitrust damages actions in Spain

Over the last 20 years, the CJEU has developed a significant body of case law on actions for damages for infringements of competition law and, in particular, on the interpretation of limitation rules, either generally and in the light of the principles of effectiveness and equivalence (Manfredi and Cogeco judgments), or, recently, on the interpretation of Article 10 of the Damages Directive (Volvo and DAF Trucks judgment and Deutsche Bank order). However, the question raised by the Czech court in the Heureka/Google case shows that there are still aspects to be determined, both before and after the Directive.

The ruling of the CJEU in this case, whether it follows or departs from Advocate General Kokott's proposal, will shed light on a growing discipline throughout the European Union.

In Spain, where antitrust damages litigation has grown considerably in recent years (among others, the Paper Envelopes, Trucks, Milk Purchasers and Automobile Manufacturers cases), the adoption by the CJEU of the reasoning proposed by Kokott would has a limited impact.

Kokott's first answer, concerning the temporal application of the Directive, is confined to a very particular case where the infringement on which the action is based covers the pre- and post-Directive periods. If this solution were adopted, the judgment in Volvo and DAF Trucks would be qualified for this case, although, in view of the criteria which the Advocate General then proposes for the pre-Directive period (on the elements necessary to bring proceedings in follow-on cases and on the cessation of the infringement), an interpretation analogous to that provided for in Article 10 of the Directive is reached.

The second answer clarifies that national law prior to the Directive must be interpreted according to the principle of effectiveness, preventing the limitation period from starting before the cessation of the infringement. This is the rule laid down in the first indent of Article 10(2) of the Damages Directive. The repercussions of this proposal could be more significant in legal systems other than the Spanish one, which already has a clear jurisprudence on the interpretation of the calculation of the limitation period in cases of continuous damage. The extent of this will depend on the particularities of the specific case and the possibility of identifying different infringements (instead of a single and continuous infringement within the meaning of Articles 101 and 102 TFEU).

The third answer provides clear criteria for determining, under national law prior to the Directive informed by the principle of effectiveness, how to compute the limitation period in follow-on and stand-alone cases.

With regard to follow-on actions, we arrive (as anticipated obiter dicta in the judgment of the CJEU in Volvo and DAF Trucks) at a solution equivalent to that of Article 10 (second indent of paragraph 2) of the Damages Directive, but already provided for by the Civil Chamber of the Spanish Supreme Court in its judgment of 4 September 2013 in the Céntrica/Iberdrola case; in other words, the limitation period cannot start to run before the indispensable elements for bringing the action are reasonably known, such as the existence and classification of the infringing conduct, the damage caused and the identity of the infringer.

With regard to stand-alone actions independent of a decision of the competition authority, the Advocate General proposes, for the purposes of reasonable knowledge of the victim, to require "a body of precise and consistent evidence on the basis of which it can be assumed that a diligent party could not reasonably have been unaware that the facts known to it, or which could have be known to it, equated to an infringement of competition law". This contribution might be particularly innovative, since it is not contemplated in Article 10 of the Directive, and neither the CJEU nor, in the Spanish case, the Civil Chamber of the Supreme Court has had the opportunity to qualify this aspect of stand-alone actions, which will foreseeably attract more attention in the future.

Finally, the fourth response, which refers to the non-need to suspend a national procedure parallel to a sanctioning process or judicial review, while indicating that the defendant should be allowed to await the outcome of the public action, may seem contradictory. However, this two-pronged approach seeks to remove obstacles for claimants. Indeed, prohibiting a victim of anti-competitive conduct from bringing an action for damages early is potentially as harmful as penalizing a victim who waits for the final decision of the competition authority, considering his action time-barred. It is essential to recall that Advocate General Kokott recognizes the variety of remedies in the legal frameworks of the Member States. Nevertheless, at the same time, attention must be paid to the proper procedural construction of the action (anticipatory or follow-on) for it to succeed.

In the Spanish case, the courts have shown flexibility in interpreting the statute of limitations, based on the doctrine of full capacity to litigate. But judicial practice in relation to the suspension for stay of proceedings is not uniform, given the restrictions of Articles 42 and 434.3 of the Ley de Enjuiciamiento Civil (Civil Procedure Act). Moreover, a national decision (in this case, by the Spanish competition authority -CNMC- or the regional authorities) does not benefit from the effects of the principle of primacy (as well as the principles set out in the CJEU ruling in Masterfoods and Article 16.3 of Regulation (EC) 1/2003), which would cover a stay in cases arising from decisions of the European Commission.

We agree with the Advocate General that antitrust damages actions have distinctive characteristics from civil tort actions. Private enforcement of competition law, in its broadest sense and not only in follow-on damages litigation, complements and strengthens competition policy, rather than weakening it, as some suggest with concerns about the leniency program. Private enforcement of competition law (both stand-alone and follow-on) is likely to gain prominence over public enforcement in the coming years.

Finally, as is always the case with an Advocate General's opinion, it is the CJEU that has the last word.