High Court judgment in colour picture tubes cartel damages case

13/05/19

Barling J has handed down judgment in Media-Saturn Holding GmbH and others v Toshiba Information Systems (UK) Limited and others [2019] EWHC 1095 (Ch). The case raises a number of important issues that will be of interest to competition litigators.

There were two claims and various applications before Barling J.  The Claimants are the same in both claims.  They are 360+ companies in the Mediamarkt consumer electronics retail group.  In both claims the Claimants are claiming damages for losses said to have been incurred as a result of alleged anti-competitive conduct of the Defendants in relation to sales of colour TVs between 1999 and 2006.

The first claim was brought by the Claimants against three entities within the Toshiba Group – a UK entity called Toshiba Information Systems (UK) Ltd (“TIS”) and two German entities – and one entity within the Panasonic Group, a UK entity called Panasonic Europe Ltd (“PE”).  TIS and PE brought strike out and/or summary judgment applications on the merits and the other Toshiba entities brought an associated jurisdiction challenge.  In response to PE’s strike out/summary judgment application, the Claimants issued a second claim against two additional German entities in the Panasonic Group.  Those entities also brought a jurisdiction challenge.

The claims arise out of the Commission’s Decision dated 5 December 2012 in Case COMP/39437 – TV and Monitor Tubes. The Commission found that from at least 3 December 1997 until 15 November 2006 a cartel in respect of colour picture tubes (“CPTs”), had been operated by a number of CPT manufacturers in breach of Article 101(1) TFEU and Article 53 EEA.  A CPT is a type of cathode-ray tube used in televisions for many years prior to the development of flat-screen TVs.

None of the Defendants was an addressee of the Decision. The claims were, therefore, “standalone” rather than “follow-on” actions.  However, Toshiba Corporation and Panasonic Corporation – the parent entities of the Toshiba Defendants and the Panasonic Defendants – were addressees of the Decision. 

Against this background, the Claimants brought a “factual claim” against the Defendants alleging that on the facts they participated and/or knowingly implemented the infringement found by the Commission.  Further or alternatively, the Claimants brought a “legal claim” in which they alleged that, pursuant to the judgment of Aikens J in Provimi Limited v Aventis Animal Nutrition SA and others [2003] ECC 29, the Defendants should be treated as having participated and/or knowingly implemented the infringement by virtue of being part of the same undertaking with one or more addressees of the Decision.

In support of their strike out/summary judgment applications, TIS and PE contended that:

• There was no arguable case on the facts that TIS and PE participated in the infringement in the sense of having had any anti-competitive contacts with competitors.
• The Claimants did not have an arguable case that TIS and PE had knowledge of the infringement or that their activities constituted implementation.
• In light of the legal principles as expounded by the CAT in Sainsbury’s v Mastercard [2016] CAT 11, TIS and PE could not be held liable on an attribution/imputation basis under Provimi.  In particular, on the basis of the principles set out in Sainsbury’s, the liability/knowledge of Toshiba Corporation and Panasonic Corporation could not be validly attributed or imputed down the corporate chain to TIS and PE.

Barling J dismissed TIS’s and PE’s applications and held that there was an arguable case against TIS and PE. He also dismissed the various jurisdiction challenges. 

In his judgment Barling J considers a number of important legal issues, which will be highly relevant to future cartel damages cases including (1) what sort of conduct constitutes “participation” in an infringement of Article 101 TFEU, (2) what level of knowledge is required to incur liability for knowing implementation, and (3) what activities can amount to implementation.  There are two particular aspects of the judgment that are novel:

• In relation to knowledge, the Claimants ran an argument that TIS and PE were fixed with knowledge of the infringement because their respective parents (Toshiba Corporation and Panasonic Corporation) were addressees of the Decision and the parent companies were shadow and/or de facto directors of TIS and PE.  Barling J accepted that this was arguable.
• Barling J held that the CAT’s judgment in Sainsbury’s has not laid to rest the controversy about the Provimi issue.  He held that where a subsidiary is alleged to have implemented an infringement, then it is at least arguable as a matter of law that the subsidiary may be held liable by virtue of being part of the same undertaking as another entity which directly committed the infringement.

Finally, Barling J did accede to TIS’s and PE’s applications to strike out the Claimants’ English law economic tort claims.  He held that the Claimants did not have an arguable case that the Defendants had the requisite intention to injure for the purposes of the torts of unlawful means conspiracy and unlawful interference, applying the reasoning of the Court of Appeal in WH Newson Holdings Ltd v IMI Plc and others [2013] EWCA Civ 1377 and Emerald Supplies v British Airways [2015] EWCA Civ 1024.

The judgment is here.