Availability of civil claims
Scope for civil claims in Sweden
Civil claims can be brought under Swedish and EU competition rules by individuals or companies against any undertaking for damages resulting from that undertaking intentionally or negligently infringing any of the prohibitions contained in the Competition Act or EU competition rules. No prior finding of an infringement by a competition authority is required in order to bring such an action.
For the purposes of the Swedish Competition Act (Sw: Konkurrenslagen (2008:579)) an undertaking is defined as a natural or legal person who conducts operations of a financial or commercial nature (and excludes businesses carried out in the course of exercise of public authority).
It is not possible to seek damages from individuals who are mere employees of the defendant corporation. However, the Companies Act (Sw. Aktiebolagslagen (2005:551)) provides that a member of a board of directors or a managing director may be liable for damages caused to the company (or a shareholder) intentionally or negligently in the performances of his duties.
Civil claims for infringement of Swedish competition law can be brought provided that the rules of the Swedish Competition Act apply. According to the recitals of the Swedish Competition Act, its application outside of Sweden is based on the effects principle. Thus, where a restriction on competition has effects on trade within Sweden, the Swedish Competition Act is applicable. In accordance with Chapter 3 Section 25 and 26 of the Swedish Competition Act, the District Court of Stockholm shall always be competent to examine cases relating to damages, subject to the provisions of the Brussels Regulation and the Convention.
If the Brussels Regulation or Convention does not apply, the Swedish national rules on jurisdiction provide that the competent Swedish court to examine civil cases is the court of the district where the defendant is domiciled (Chapter 10, Section 1 of the Swedish Code of Judicial Procedure (Sw. Rättegångsbalken (1942:740)). As regards claims for damages, both the court of the district where the infringing act took place and court of the district where the damage was incurred are also competent to hear the case (Chapter 10, Section 8 of the Swedish Code of Judicial Procedure). It is important to note that, if applying Swedish competition law, the courts only have the power to award damages suffered in Sweden. This is the case even in relation to findings of infringement by the European Commission, where harm may have been suffered in jurisdictions other than Sweden – the Swedish courts can only award damages for harm suffered in Sweden.
Applicable limitation periods
The limitation period for bringing a claim for damages based on competition law infringement runs for 10 years from the date when the damage was caused (Chapter 3, Section 25 of the Swedish Competition Act). Note that this limitation period is not dependent upon when the claimant became aware of the infringement or that it had suffered harm and so it is irrelevant for the purposes of limitation if the infringing activity was concealed.
The District Court of Stockholm has sole jurisdiction, upon application of the Swedish Competition Authority, to order an undertaking to pay a special fine where the undertaking or a person acting on the undertaking’s behalf intentionally or negligently violated the prohibition in Chapter 2, Section 1 or 7 or Article 101 or 102 of the Treaty on the Functioning of the European Union. Its judgments may be appealed, with leave, to the Courts of Appeal (Sw. hovrätter) on points of fact and/or law. Judgments from the Court of Appeal may, if leave to appeal is granted, be appealed to the Supreme Court (Sw. Högsta domstolen).
As regards other matters, the district courts are competent to hear an action for damages according to the forum rules in Chapter 10 of the Code of Judicial Procedure and the District Court of Stockholm may also have jurisdiction to hear cases relating to damages pursuant to Chapter 3 Section 25 of the Swedish Competition Act. A claimant or defendant may appeal District Court (Sw. tingsrätter) judgments relating to private competition law matters to the Courts of Appeal (Sw. hovrätter) on points of fact and/or law. Leave to appeal such judgments is required.
Availability of class actions for infringement of competition law and/or damages in Sweden
Under the Swedish Group Proceedings Act, which entered into force on January 1, 2003, class actions may be brought in competition litigation cases. A group action may be instituted by private physical or legal persons (group civil claim), organizations (organization group action) or authorities (public group action).
A group civil claim can be brought by any person who belongs to the group that such person wishes to represent. A public group action can be brought by certain specially designated government authorities. The government has designated two such authorities for this purpose: the Consumer Ombudsman and the Swedish Environmental Protection Agency. The Swedish Competition Authority has no power to bring public group actions.
An organization action can be brought by non-profit organizations devoted to the safeguarding of consumer or employee interests if the action concerns goods or services supplied to consumers (i.e., the purchaser of the end product).
Group action suits are intended to complement conventional legal proceedings. A group action may therefore only be heard by the court if certain special pre-conditions for proceedings are satisfied:
i) The issues addressed in the case must be the same or similar as regards the claims of all of the members of the group;
ii) The case must not be evidently unmanageable on account of substantial differences in the legal basis of the claims of different members of the group;
iii) A group action must be more appropriate than other legal proceedings;
iv) The group must be appropriately defined, for example, in terms of its size and delimitation; and
v) The person bringing the action on behalf of the group must be an appropriate representative, which includes having the financial resources to bring an action. Moreover, the representative must not have interests of his own in the case that clash with the interests of other members of the group.
Unless all these special preconditions are satisfied, the court will dismiss the group action.
Conduct of proceedings and costs
Burden of proof
Private competition litigation damages claims are governed by general principles of Swedish tort law, under which the party claiming damages bears the burden of proof. Damages may only be claimed under Chapter 3, Section 25 of the Swedish Competition Act if the infringement was committed intentionally or negligently. Thus, the claimant must prove the existence of: (i) an intentional or negligent infringement of the competition rules; (ii) loss; and (iii) a causal relationship between the infringing conduct and the loss incurred. The claimant must also provide a calculation of the amount of loss it is claiming.
Relevant facts must be “proven” or “shown” (Sw: “visat” or “styrkt”). The standard of proof is less than the requirement that facts be proved “beyond a reasonable doubt” as applied in criminal cases, but requires more than merely showing that the damage is more likely than not the result of infringement (i.e., it does not involve a simple “balance of probabilities”).
According to Swedish law, the claimant must prove (Sw. styrka) the facts in order to satisfy the standard of proof in civil proceedings, including competition litigation cases. The claimant must prove: (i) the infringement or the act that caused the damage; and (ii) the size of the damage, including that it is the direct effect of the act of the defendant. The claimant may rely on a regulatory decision (of either the European Commission or the Swedish Competition Authority to support a claim, but it is only likely to be considered relevant where the decision concerns the Swedish market) as proof of an infringement but must show that the infringement caused the claimant to suffer damage. The basic principle is that the extent of injury must be proven (as is the case for the infringement and the causal link). However, if proof regarding the extent of injury cannot be adduced (or can only be adduced with difficulty), the court may estimate the injury at a reasonable amount. This may also be done where the production of the relevant evidence can be expected to entail costs or inconveniences out of reasonable proportion to the extent of the injury and the amount of the claimed damages is minor. As far as we are aware, this approach has not yet been applied in a competition damages case.
If a claimant brings a civil claim against a defendant claiming that an agreement is unenforceable due to certain provisions which are in breach of the competition rules, the burden of proof is upon the claimant, which may be discharged by proving the facts as above. In principle, a defendant might also argue that any damage which the claimant might have suffered (e.g., in the form of higher prices) has been passed on by the claimant and, therefore, that it has not suffered any loss as a result of the infringement. Should the claimant establish in principle that it has suffered loss, the burden of proving passing-on might switch to the defendant.
Joint and several liability of cartel participants
When two or more undertakings are liable for the same injury caused by an infringement of competition law, they are, according to general principles of Swedish tort law, jointly and severally liable for any damage resulting from that infringement.
A party who has paid compensation to an injured party has a right of recourse against other liable parties by way of separate contribution claim.
Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege
Any person (including the parties to the claim) who holds a document which can be assumed to be of importance as evidence in proceedings (criminal or civil) may be ordered to disclose it by the court on the application of the other party. There are certain exemptions to this general rule; in particular, it is not necessary to disclose legally privileged documents, which includes correspondence between a client and its lawyer. It should be noted that advice provided by in-house lawyers is not deemed privileged in Sweden.
A court may grant an order for the disclosure of a document which is relevant to the proceedings as evidence (Sw. editionsföreläggande) on the application of a party to the proceedings or on its own initiative. A party who seeks an order for the disclosure of a document must identify the document and the relevant contents that would justify its disclosure. The court can then order the party to disclose the document. However, the possibility of obtaining evidence from an infringing undertaking is often limited, as the courts tend to find that there are insufficient grounds to issue such an order.
Documents and information obtained by the Swedish Competition Authority in the course of an investigation or otherwise may be considered by the courts to be “public documents” to which all Swedish citizens have a right of access, according to the Swedish Constitution as set forth in the Freedom of Press Act (Sw. Tryckfrihetsförordningen (1949:105)). However, there are a number of exemptions to this general rule, which are set out in the Swedish Public Access to Information and Secrecy Act (Sw. Offentlighets- och sekretesslagen (2009:400)). For instance, information concerning business activities, business secrets, innovations and research and development of an undertaking shall be secret if the interests of the undertaking or its business parties may be harmed by disclosure. Information held on the Competition Authority’s case files regarding an undertaking’s business, inventions and research, etc. must be treated as confidential by the Competition Authority if the undertaking might be expected to suffer injury if that information were disclosed. Further, during an investigation, documents and information in the Swedish Competition Authority’s file are confidential if it is of significant importance for the investigation that the information is not disclosed but may be obtained on completion of the investigation subject to the rules on confidentiality. A statement from an individual is confidential and covered by secrecy if it can be assumed that the individual will be harmed if the statement is disclosed. In practice, this means that a claimant would find it difficult to secure access to certain documents and information obtained by the Swedish Competition Authority, particularly any information which may support an alleged infringement of the competition rules.
Pre-action disclosure is not available in Sweden.
Average length of time from issue of claim to judgment in Sweden
It is difficult to give an accurate estimate of the average duration of this type of case as there have been few private damages actions for competition law infringements in Sweden to date. As an approximate estimate, a private competition litigation action might take up to six years from first instance to the Supreme Court; complex cases could take three to four years in the lower courts alone and one to two years if appealed further to the Supreme Court.
Average cost from issue of claim to judgment in Sweden
Again, the limited number of relevant cases in Sweden to date makes it very difficult to give an accurate estimate of the average cost of this type of case. For a comparative indication, see the Quick Reference Guide.
In addition to its own legal fees, the losing party will be ordered by the court to pay the successful party’s legal costs. If a party is successful in part, the legal costs for the proceedings may be apportioned between the parties. If the parties are both equally successful/unsuccessful, the court may order each party to bear its own costs. The successful party may also be liable for the legal costs incurred as a result of any unnecessary action, negligently caused delays, or any other procedural negligence. The cost for a court case concerning damages for breach of competition law can be expected to vary widely, depending on the complexity of the case and the number of instances.
Third party/alternative funding
In principle, a claim can be transferred to a third party rather than being pursued by the party that suffered the loss. To date, this has not happened in Sweden. In part, this may be because only the parties in the court proceeding in question may be ordered by the court to reimburse the other party for its legal costs (meaning that, even if transferred to a third party, the original claimant might still be held liable for costs).
Alternative methods of dispute resolution
In general, arbitrators may rule on the civil law effects of competition law as between the parties, but a prerequisite is a binding arbitration agreement between the parties. A court will not consider dismissing a case on this basis unless a party formally objects to the jurisdiction of the court due to the existence of a binding arbitration agreement between the parties.
The district court may, if the parties consent, order a mediation session with a mediator appointed by the court so as to encourage the parties to reach a settlement. Mediation is not a prerequisite to the issue of a claim.
Availability of damages and quantification
Damages are calculated to reflect the actual damage sustained, so damages awarded normally are limited to the amount needed to restore the claimant to the position the claimant would have been in had the defendant not committed the breach (i.e., compensation for costs, the loss of income, reduced turnover, etc.).
For example, in the case of price-fixing, a customer may be awarded the difference between the price it paid for the goods and the price it would have paid in a competitive market. In the case of resale price maintenance, where a reseller is prevented from selling at a lower price, the reseller may be compensated for the loss of profits caused by a reduced turnover. In addition, in the case of market- sharing, resellers may have been prevented from choosing between competing suppliers to obtain the best price. Damages may be awarded to compensate the reseller for the price difference. If the exact amount of loss to the claimant is difficult to prove, the court may use an estimated reasonable amount instead.
Under Swedish procedural law, parties may rely on virtually all kinds of documents, statements by witnesses and experts and occurrences in attempting to prove their case. The courts may in their discretion freely evaluate the evidence presented by the parties. Consequently, all kinds of evidence (including expert evidence) are in principle admissible. However, the court will dismiss evidence which is considered to be obviously irrelevant. An expert may be appointed to assess any type of issue, including of course the amount of damages. As explained above, the passing-on defense is in principle available.
Punitive and exemplary damages
Punitive or exemplary damages are not available under Swedish law.
Availability of interim or final injunctions in respect of an alleged competition law infringement
The Swedish Competition Authority may, in certain circumstances, issue an interim injunction pending a final judgment on whether an infringement has occurred. Further, the Swedish Market Court (Sw. Marknadsdomstolen) may also issue an interim injunction following the commencement of legal proceedings in accordance with Chapter 3, Section 3 of the Swedish Competition Act.
According to the recitals of the Swedish Competition Act, an interim injunction should only be issued in exceptional cases, i.e., where the infringement may have serious consequences. Further, the effect of such an injunction on the respondent must also be taken into consideration. As a result, the Swedish Competition Authority/Market Court rarely issues interim injunctions.
As for the standard of proof required for interim measures, the law says that it is sufficient that “probable cause” (Sw. sannolika skäl) has been shown regarding the claim.
Other types of relief
A section of an agreement that is deemed to be anti-competitive can be deemed invalid by the court and thus unenforceable. The invalid section is often replaced by mandatory provisions so that the agreement remains valid but has different legal consequences. However, if the anti-competitive sections form the essential part of the agreement, the entire agreement may be rendered void.
There have been a number of actions for damages based on infringements of competition law in Sweden. Such claims are expected to be more frequent in the future. One example is a case between Scandinavian Airlines Systems and Swedavia (formerly LFV), i.e., the operator of Arlanda Airport in Stockholm. In 2001, the Court of Appeal concluded that Swedavia had abused its dominant position and ordered Swedavia to repay SEK400 million to Scandinavian Airlines Systems, which previously had been paid by Scandinavian Airlines Systems under a contract for construction works relating to a new terminal.
Another example is a judgment rendered by the District Court of Stockholm where Euroclear (formerly VPC), Sweden’s central securities depository, was found to have abused its dominant position on the market for address information by refusal to supply to shareholders in joint-stock companies. The claimants that used the requested information in their business activities were awarded damages. The case was appealed to the Court of Appeal which, in 2011, confirmed the District Court’s findings, although reducing the damages awarded.
Directive 2014/104/EU of the European Parliament and the Council on damages actions under national law for breach of the competition rules (the “Directive”) has led to the proposal for legislation to be drafted implementing the Directive in Sweden. The legislation will take over from the current rules and regulate in more detail the possibilities for damages actions. Such legislation is proposed to take effect on December 27, 2016.
As in the current legislation, it is a requirement that intent or negligence be established. If more than one company has committed the breach and caused damage, the liability will normally be joint and several.
The damage will cover both the actual damage incurred and interest-based compensation. Companies with a turnover of below EUR50 million or total assets of no more than EUR43 million per calendar year and with fewer than 250 employees will benefit from certain limitations in the right of claimants to seek damages, provided that their market share was below 5% at any time during the infringement or that the award of damages would result in their assets losing all value. However, in the event such company caused the infringement by inducing others to participate, the easements may not apply.
The time bar is set to five years from the date that the infringement ceased and the damaged party was made aware or should have been aware of the infringement, the damage and the identity of the infringing party. If the Competition Authority commences an investigation or the matter is brought to a dispute resolution process, the time will be suspended until the end of the dispute resolution or the investigation.
Concerning cartels, the presumption is suggested to be that the infringement is presumed unless otherwise shown. The infringing parties will thereby have the burden of proof.
Damage incurred at previous or later distribution levels will be seen as being over or under the price that is calculated by carrying over the prices. This means that if a company is selling at certain prices to a customer, the customer will have a right to compensation if it could be assumed that the original supplier has over inflated prices to the indirect customer, and such over inflation has then been carried forward to the ultimate customer.
In the case of damage at a previous level, damage may be awarded if the indirect supplier can show that underpricing has occurred and such sales have caused the claimant damage. Services are equal to goods with regard to compensation and sales.
Action shall be taken at the Patent and Market Court, which is to come into effect on September 1, 2016. This court reform will also embrace a new final court, the Patent and Market Supreme Court.
As proof of a claim may be in the possession of the Competition Authority, certain rules have been proposed to apply for the production of such evidence and its use in court.