Compensation and the Damages Directive

The EU Damages Directive came into force in December 2014. One of its objectives is to ensure that anyone who has suffered harm caused by infringements of competition law can effectively exercise the right to claim full compensation in the courts of the EU Member States. This paper looks closely at the Directive’s compensation goal and the key arrangements that are to encourage victims to seek redress in the national courts. The paper uses a simple framework to demonstrate that the legal measures in the Damages Directive are unlikely to foster compensation because they fail to create incentives for harmed individuals to seek redress. If Member States seek to encourage full compensation, they should devise a framework for private antitrust actions that goes beyond the Directive’s remit by, for example, allowing class actions.