EU Court of Justice ruled on the statute of limitation and scope of applicability of the Damages Directive in Heureka vs. Google

The case concerns antitrust follow on damages litigation based on the European Commission decision of 27 June 2017 (Case AT.39740 - Google Search (Shopping)) in which the Commission fined Google over EUR 2.4 billion for an abuse of a dominant position in the market for general search services in the EEA. The Commission established that Google has violated Article 102 TFEU by positioning and displaying more favourably, in its general search results pages, its own comparison-shopping service compared to services of competitors.

On 26 June 2020, comparison shopping service provider Heureka initiated civil proceedings against Google before the City Court of Prague. Google, however, argued that its claim was already time bared according to Czech national law rules. Under Czech national law (that applied before the implementation of the Damages Directive in 2017), a limitation period of three years starts running at the moment the claimant becomes aware, or is expected to be aware, of the harm and of the identity of the liable party. This applies, according to the City Court of Prague, irrespective of whether the infringement is ongoing. In case the infringement is continuing, every new occurrence of harm would set a new limitation period running. Therefore, every general search by potential customers on Google’s web page that leads to a positioning and display of results more favourable for Google’s price comparison service, sets a new and separate limitation period running.

The Prague City Court wondered whether this outcome would be in line with the principle of effectiveness. Secondly, it wondered whether the limitation rules of the Damages Directive would apply, given the fact that part of the infringement took place after the deadline for the implementation of the Directive in 2016.

The CJEU firstly reviewed the national limitation rules in light of the EU principle of effectiveness. In that regard, the CJEU reiterated, in line with the opinion of Advocate General Kokott, that the principle of effectiveness demands that national rules on limitation must be adapted to the specificities of competition law and its objectives. The CJEU had already ruled in the earlier judgment Volvo/DAF that the infringement must have been terminated before the limitation period can commence, as it would otherwise render the exercise of the right to claim compensation practically impossible or excessively difficult. By way of further explanation, the CJEU set out in the Heureka judgment that the complex factual and economic assessment that is required, the information asymmetry and the difficulties of establishing the existence and quantum of damage before an infringement is terminated, require that the limitation period does not start before the infringement is terminated. In particular, a requirement for a claimant to progressively amend its claim in case of a continuing infringement, is not in line with the principle of effectiveness, according the CJEU.

The CJEU further reiterated, referring to its judgment Sumal, that private enforcement and public enforcement form an integral part of the enforcement of competition law rules, the objective of which is to punish infringements and to deter undertakings from committing such infringements. In that regard, the CJEU reasoned that requiring that the limitation period cannot commence before the infringement is terminated, has a deterrent effect.

Furthermore, as to the other criteria for starting the limitation period (knowledge of the infringement and the damage that is caused by it, as well as the responsible party), the CJEU reiterates that such knowledge, in principle, is obtained once the summary of the Commission decision is published in the Official Journal. The CJEU indicated that using an objective factor, such as the publication in the Official Journal, is in the interest of legal certainty. Nevertheless, it remains possible for the defendant to submit evidence that knowledge was obtained by the claimant prior to the publication of the summary decision in the Official Journal.

In the Heureka case, the Commission had established that Google’s infringement was ongoing, even after the date of the decision (i.e. 27 June 2017). As the infringement was a single and continuous infringement that was ongoing after 27 December 2016 (the deadline for implementation of the Damages Directive), the CJEU established that not only had the limitation period not lapsed, but it had not even commenced on the date on which the time limit for transposing the Damages Directive expired (i.e. 27 December 2016).

Interestingly, the CJEU ruled that although Article 10 of the Damages Directive (on limitation) has no retroactive effect, the “situation” at issue (i.e. the start and/or lapse of the limitation period) had not arisen (as a result of the application of the principle of effectiveness) before the expiry of the period for transposition of the Damages Directive. Therefore, according to the CJEU, Article 10 of the Damages Directive is ratione temporis applicable to the case.

Lastly, the CJEU ruled that Article 102 TFEU and the principle of effectiveness do not require the limitation period to be suspended until the moment the Commission’s decision becomes final. It follows that, according to the CJEU, it is possible that the limitation period is running while the Commission decision is under appeal.