On April 18, 2024, the Court of Justice delivered its judgement on the questions referred to it by the Prague Municipal Court in the Heureka v. Google case.[1] Heureka Group (“Heureka”), a Czech comparison shopping service company (“CSS”) brought an action before the Municipal Court of Prague in the Czech Republic, seeking compensation from Google for the harm it allegedly suffered as a result of Google’s abusive behavior as part of the Google Shopping decision. The referring court sought clarification about whether Article 10 of Directive 2014/104 (the “Damages Directive”) [2] and/or Article 102 TFEU[3] preclude the effects of a national law that requires parties seeking compensation for competition infringements to file suit within three years of the occurrence of the harm. The Court of Justice ruled that Article 102 TFEU and the principle of effectiveness require the suspension of limitation periods during the Commission’s investigation. The limitation period will only start running when the injured party knows the information necessary to bring its claim, which is presumed to be as of the date of the publication of the summary of the Commission’s infringement decision in the Official Journal of the EU. Additionally, the injured party, Heureka in this instance, can then rely on the findings of a Commission decision under appeal, as it is binding in nature, unless and until it has been annulled.
Background
In 2017, the Commission fined Google for favoring its own CSS by showing it in prominent boxes with rich display formats (called Shopping Units), while displaying competing CSSs only as generic results which were not as prominent because they were prone to being demoted.[4] The Commission found the abuse lasted at least from February 2013 to the date of its decision, on June 27, 2017. The General Court upheld the Commission’s decision and Google subsequently appealed that judgment to the Court of Justice on January 20, 2022.
In June 2020, Heureka filed for damages relying on the Commission’s 2017 decision. Google argued the action was at least partially time barred under Czech time limitation rules, which would have required Heureka bring an action seeking damages within three years of each partial occurrence of harm, i.e., each time that Google favored its own CSS and allegedly reduced the number of visits to Heureka’s CSS. In practice, this meant that Heureka’s claims for damages would have needed to be rejected for the period between February 2013 and June 2016.
On September 30, 2021, the Prague Municipal Court asked the CJEU to confirm the compatibility of the Czech time limitation period with EU law.[5]
Enforceability of limitation periods under the Damages Directive for competition infringements
In its judgment, the Court of Justice emphasized the importance of the right of parties that had suffered harm as a result of an abuse of a dominant position under Article 102 TFEU to claim compensation for damages from the infringing parties.[6] The Court of Justice considers that this right contributes to the full effectiveness and deterrence of Article 102 TFEU, and thus constitutes “an integral part of the system for the enforcement of those rules.”[7] In the absence of fully harmonized EU procedures, injured parties must rely on national procedural laws to claim damages, so long as it is not “excessively difficult or practically impossible” to exercise that right. It would otherwise be contrary to the EU law principle of “effectiveness and proportionality.”[8]
The Damages Directive aligned national procedural laws for these damages claims, including with respect to limitation periods. [9] However, the Czech Republic only adopted the Damages Directive on September 1, 2017, both after the transposition deadline of December 27, 2016, and after the end of the infringement period stated in the Commission’s Google Shopping decision.
First, in line with its jurisprudence,[10] the Court of Justice held that the competition infringement must come to an end for the limitation period to commence. This is because a limitation period which forces the injured party to constantly re-evaluate the harm it has suffered for every occurrence would be too complicated, given the already complex factual and economic assessments that a victim must conduct to quantify the harm it suffered.[11] The Court of Justice also noted that starting the limitation period when the infringement ends has a deterrent effect, encouraging the offender to bring the violation to an end sooner rather than later to limit potential damages.[12] In the present case, the Court of Justice considered that the limitation period could have only started to run after 2017, when the Commission considered that Google’s alleged abuse of dominance had ended.[13]
Second, the limitation period only starts running after the injured party can reasonably be expected to know all the information necessary for bringing its action. That information includes: (i) the existence of the infringement, (ii) the existence of the harm, (iii) the causal link; and, (iv) the identity of the infringer(s).[14] The injured party is presumed to be aware of all the relevant information on the date of the publication of the summary of the Commission’s infringement decision in the Official Journal of the EU, where there is such an investigation. The alleged infringing company (here, Google) can rebut this presumption by showing that the victim knew all the elements necessary to bring its action before the publication.[15]
Third, the Court of Justice held that the principle of effectiveness requires the suspension of limitation periods during the Commission’s investigation. It argued this was necessary to guarantee the injured party’s rights and to allow it to assess: (i) whether an infringement of competition law has been committed, (ii) the scope of the infringement; and, (iii) its duration; and be able to rely on that finding in a subsequent action for damages.[16] In essence, the Court of Justice found that Article 102 TFEU and the principle of effectiveness require what is provided by Article 10(2) and 10(4) of the Damages Directive.
National Courts must Follow Commission Decisions until they are Annulled, and are Not Required to Suspend Follow-on Damages Proceedings during the Appeal
The Court of Justice also clarified that an injured party can rely on a Commission decision which is subject to appeal to substantiate its claims for damages.[17] Indeed, decisions from the Commission enjoy a presumption of legality and carry an obligation for all persons, including national courts, to respect their enforceability.[18] In turn, this implies that national courts can rely on a non-final Commission decision to establish the existence of an infringement and its duration, and are not required to suspend the proceedings in the action for damages while the Commission decision is being appealed.[19] They may do so if they consider it appropriate and do not depart from said decision.[20] The upshot is that the limitation period for follow-on damages claims will usually start running after the summary of the Commission’s decision has been published in the Official Journal, and will generally not be suspended during an appeal of the decision.
Conclusion
The judgment is the latest installment in a saga addressing whether procedural limitations hinder the ability of injured parties to bring claims for damages resulting from competition law infringements.[21] The judgment of the Court of Justice essentially extends the applicability of Article 10(2) and (4) of the Damages Directive to conduct that occurred prior to the Directive’s adoption—–at least in circumstances where the infringement started prior to the Directive coming into force and ended before the Member State adopted the Directive.
[1] Heureka Group a.s. v. Google LLC (Case C-605/21) EU:C:2024:324, (“Heureka”).
[2] 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 349/1. Article 10 harmonizes rules applicable to limitation periods for bringing actions for damages, such as when limitation periods begin (Article 10(2)) or are suspended (Article 10(4)), and provides for a minimum limitation period of five years (Article 10(3)).
[3] Consolidated Version of the Treaty on the Functioning of the European Union, OJ 2012 C 326/47, (“TFEU”). Article 102 prohibits abusive behavior by companies holding a dominant position in any given market.
[4] Google Shopping (Case AT.39740), Commission decision of June 27, 2017. See our previous newsletter here.
[5] Heureka, para. 30.
[6] Heureka, para. 53.
[7] Heureka,paras. 54, 61.
[8] Heureka, para. 51.
[9] Directive 2014/104/EU, supra fn 2.
[10] Volvo and DAF Trucks (Case C‑267/20) EU:C:2022:494.
[11] Heureka, paras 57–60.
[12] Heureka, para 63.
[13] Heureka, para 86.
[14] Heureka, para 64.
[15] Heureka, paras. 70–71, and 86.
[16] Heureka, para 79.
[17] Heureka, para 77.
[18] Heureka, para 73–74. This is also provided for by Article 16(1) of Council Regulation (EC) No.1/2003 of 16 December 2002 on the Implementation of the Rules on Competition Laid Down in Articles 81 and 82 of the Treaty, OJ 2003 L 1/1.
[19] Heureka, paras. 62, 79 and 80.
[20] Heureka, paras. 80, and Article 16(1) of Regulation 1/2003.
[21] Volvo and DAF Trucks, supra fn 10, and Cogeco Communications (Case C‑637/17) EU:C:2019:263.