The English High Court (“High Court”) has issued an important judgment in the claim that Gemalto group companies (“Gemalto”) brought against Infineon (“Infineon”) and Renesas Electronics (“Renesas”) companies, for damages arising from the smart card chips cartel (Gemalto NV and others v Infineon Technologies AG  EWHC 156 (Ch), the “Judgment”). The claim arises from a European Commission decision in 2014. The High Court has found that Gemalto brought its claim out of time because the limitation period started to run not when the Commission adopted that decision, but about one and a half years before that, when the Commission adopted preliminary charges in the form of a Statement of Objections. The Judgment gives a clear signal that prospective claimants can no longer assume that the limitation period starts running from the date of a regulatory decision and gives some reassurance that potential defendants should not be on the receiving end of claims that could have been brought earlier.
Starting the clock – Statement of Objection vs Regulatory Decision
Relevant to the matters before the High Court, the smart card chips cartel took place between September 2003 and September 2005. The Commission conducted dawn raids at a number of suspected participants in January 2009. Also relevantly, it sent two requests for information (“RFIs”) to Gemalto in the course of 2012, as a “customer on the relevant market, which may have knowledge of facts thought to be useful for the investigation”. The second RFI specifically mentioned the period of the conduct under investigation and the companies potentially involved. Subsequently, on 22 April 2013, the Commission announced that it had issued a Statement of Objections in connection with the investigation. The international press reported on that, including that Infineon, Renesas and others had received the Statement of Objections. Some one and a half years later, on 3 September 2014, the Commission announced that it had adopted a decision in which it found that Infineon, Renesas and others had taken part in a cartel, issuing a press release alongside a summary of its decision. The Commission published a non-confidential version of its decision on 16 December 2016. Gemalto issued its follow-on damage claim at the High Court on 19 July 2019.
The High Court had to determine at what point the six-year limitation period started to run, which turned on determining at what point Gemalto had, or could have had, sufficient information to form a reasonable belief as to the essential facts of its cause of action. Mrs Justice Bacon had to decide whether this was (i) by the time the Commission announced it had issued its Statement of Objections (in April 2013), or (ii) when the Commission adopted its Decision (in September 2014).
Verdict – The clock can start ticking before the Regulatory Decision
In finding that Gemalto had acquired sufficient information to bring a claim by the time of the former — the Statement of Objections — Mrs Justice Bacon considered that the Statement of Objections sets out the Commission’s preliminary position that there was a cartel infringement, and thus could be relied on as a basis for a claim. Mrs Justice Bacon seemingly attached importance to the consideration that a Statement of Objection is not a preparatory step. Rather, in her view, it reflects the Commission’s belief that it has evidence that the addressees engaged in anti-competitive conduct following a full investigation (including dawn raids, information from the parties, and, potentially responses from third parties).
In addition, Mrs Justice Bacon considered that Gemalto had acquired relevant knowledge of the anti-competitive conduct even prior to the Statement of Objections being announced since it had received two RFIs in 2012 identifying the potential cartel period and suspected participants.
Rejecting one of Gemalto’s arguments, Mrs Justice Bacon also made it clear that having sufficient knowledge to bring a claim does not equate being able to plead all minute details of such claim, which aligns with existing precedents about the applicable pleading standards.
As a result, Gemalto was found to have brought its claim out of time.
Whilst an appeal seems highly likely, the Judgment is significant, as it conveys a strong position from the bench that prospective claimants can no longer assume that the limitation period starts running from the date of a regulatory decision, especially if they have received RFIs in the course of the regulatory investigation, or there has been a fair amount of information about it in the public domain prior to the Statement of Objections. Accordingly, the Judgment provides some reassurance that potential defendants should not be on the receiving end of claims that could have been brought earlier. It remains to be seen whether this decision will act as an incentive for would-be claimants to consider bringing claims generally at the Statement of Objections stage, even though that would mean bringing their claim as a standalone claim initially. In any event, beyond the confines of the particular facts of this case, the Judgment will act as a cogent reminder to would-be claimants that pushing deadlines carries an inherent risk.