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Territorial Scope of EU Competition Law revisited


In iiyama v Schott (or “iiyama 1”) the Claimants brought claims under Article 101 TFEU for losses suffered by reason of cartels affecting the cathode-ray tube (CRT) sector. CRTs are a type of colour picture display. The existence of cartel activity in the CRT sector had been established under certain Decisions of the EU Commission dating from 2011-2012. The Claimants were mainly EU companies, but the CRTs which had found their way into the computer monitors sold by the Claimants had originally been put on the market in Asia. The Defendants applied to strike out the claims on the basis that they fell outside the territorial scope of EU law. In particular, the Defendants said that any ‘implementation’ of the cartel, so far as concerns the sales in question, was in Asia, and any immediate effects were likewise in Asia, so that the tests for the extraterritorial application of EU competition law were not satisfied. By a judgment of 23 May 2016, Mann J acceded to that application and struck out the claims (see .

In iiyama v Samsung (or iiyama 2) the Claimants – who were the same as the Claimants in iiyama 1 – sued for losses suffered by reason of a separate cartel in the liquid crystal displays (LCDs) sector. LCDs are a newer type of colour picture display. The existence of a cartel in the LCD sector had been established under an EU Commission Decision dating from 2010. As in iiyama 1, the Defendants applied to strike out the claims, contending that the LCDs which found their way into the Claimants’ computer monitors had been put on the market in Asia and that the claims were therefore outside the territorial scope of EU competition law.

In response to the strike-out application the Claimants argued (in addition to contending that Mann J had been wrong in iiyama 1) that it was not necessary to satisfy the territoriality requirements of EU law in the first place, contending that in the context of private enforcement those rules were supplanted by the principles of applicable law.

 In the alternative, they argued that the implementation of the cartel in the EU was a but-for cause of the losses they had suffered. The LCD cartel had been implemented in the EU, as otherwise the Commission would not have had jurisdiction to adopt an infringement Decision in respect of it. The Claimants contended that if the Defendants had sold the cartel products in the EU at competitive prices, rather than at the cartel price, the Claimants would have purchased those goods in the EU at that lower price. The Claimants further contended that, if the Defendants had sold the products at a competitive price in the EU, that would have amounted to large-scale ‘cheating’ and would have caused the cartel as a whole to collapse. On either basis, the implementation of the cartel in the EU was a cause of the loss the Claimants had suffered.

By a judgment of 29 July 2016, Morgan J agreed with Mann J that, to the extent that the claim was based on the implementation of the cartels in Asia, it could not be pursued under EU law. In so holding Morgan J rejected the Claimants’ contention that the territoriality requirements did not apply in civil proceedings. However, he held that the Claimants’ causation arguments (advanced in a draft amendment shortly before the hearing) had a reasonable prospect of success and declined to strike out the claim.

The ‘anchor’ Defendants in iiyama 2 also sought to strike out the claims against them on the ground that there was no sufficiently arguable case that they had knowingly implemented the cartel in the UK. They contended in particular that they had had no discretion in setting prices, in that they had to abide by certain pricing guidance set by their parent company. The Claimants contended that, in those circumstances, the guilty knowledge of the parent company – which was an addressee of the Commission Decision - fell to be imputed to the subsidiaries under ordinary English law principles of attribution. Morgan J held that the Claimants’ case on this point was sufficiently arguable and refused to strike out the claims against the UK anchors. Since the claims against the UK anchors would be proceeding in England in any event, Morgan J also rejected an application by the non-EU Defendants to stay the claims against them on forum non conveniens grounds.

The judgment appears here.

Neil Calver QC and Colin West, instructed by Stewarts Law LLP, appeared for the Claimants.

James Flynn QC and Robert O’Donoghue, instructed by Covington & Burling LLP, appeared for the First to Fourth Defendants.

Daniel Piccinin, instructed by Clearly Gottlieb Steen & Hamilton LLP, appeared for the Fifth Defendant.