Introduction
The Competition Ordinance Aruba (COA) was introduced on January 1st, 2024, to prohibit, avoid and supervise cartel agreements, abuse of power by companies and concentration of companies, respectively. More on COA in my previous article.
EU (European Union) antitrust legislation is not applicable to Aruba. However, with the introduction of COA the Aruba legislator intended to incorporate EU antitrust legislation into the Aruba legal system. It is therefore argued that EU antitrust legislation, including the EU Directive on Private Damages 2014/104, could be evoked under COA.
Public and private enforcement of antitrust laws
The public enforcement of antitrust laws is entrusted to the antitrust authority of a certain jurisdiction. The antitrust authority in Aruba is the Aruba Fair Trade Authority (AFTA).
AFTA carries out the supervision on compliance with COA. AFTA may request information, perform book inspections, enter localities and perform searches, impose administrative penalties, orders or binding instructions on companies for COA infringement.
The private enforcement of antitrust laws entails so-called “follow on” lawsuits filed in civil court against a company for compensation of monetary damages sustained by third parties due to antitrust laws infringement by the company.
The lawsuit may be filed, for instance, by customers or consumers who paid an excessive price for a certain product due to an illegal “hardcore” cartel agreement on price fixing between two or more companies.
The EU Directive on Private Damages
The EU Directive on Private Damages 2014/104 (the Directive) helps the party, that sustained damages due to antitrust laws infringement by a company, to effectively seek monetary compensation in civil court from the company as follows:
- The irrevocable administrative ruling of the antitrust authority against the company is irrefutable evidence of infringement of antitrust laws by the company.
- Cartel infringements are presumed (vermoeden) to cause damage. The company is burdened with the task of refuting this presumption.
The AFTA ruling
An AFTA ruling against a company for COA infringement is subject to objection and appeal in an administrative proceeding according to the ordinance on administrative proceedings (LAR). The AFTA ruling becomes irrevocable after the exhaustion of appeals in the administrative proceeding.
A party seeking monetary compensation from the company may take advantage of the irrevocable AFTA-ruling made against the company and start a civil lawsuit against the company at the Aruba court.
The wrongful conduct by the company is already established whilst the company must refute the causality between the cartel infringement and the damages.
A party can opt to start civil proceedings without an AFTA-ruling having been made against the company. Under this scenario, the party must evidence wrongful conduct and may for that purpose request disclosure of information by the company on the basis of 843a Aruba procedural law.
“Passing on” defense and limitation of liability for SME’s
The company may evoke the following defenses in civil court:
- The company may argue that the customer passed on (a part of) the excessive price to its customers and therefore did not incur financial damages (“passing on” defense).
- Small and medium sized companies may evoke article 11 of the Directive and argue that they are only liable for the damages to their direct and indirect customers. The definition of SME’s is found in Recommendation 2003/361/EC.
Leniency
The Directive instructs the implementation of a leniency program that enables the participant in a cartel to submit a request for leniency with the antitrust authority and cooperate with an investigation by providing information on and its role in the cartel, in return for immunity from or reduction of the penalty for its involvement in the cartel. According to received information, AFTA would have (some version of) a leniency program in place.
Director’s liability for penalty
On a final note, it should be mentioned that a director of a company who engages in antitrust practices may commit mismanagement and, as a result, be held personally liable for the administrative penalty imposed on the company for antitrust laws infringement (ECLI:NL:GHARL:2022:10497). The penalty can be in excess of 1 million AWG under COA.