Time is ripe for private damage actions

They can complement CCI’s work, both to promote fair markets and to benefit competition and consumers in India’s rapidly developing economy

Written by Guest

July 12, 2025 04:30 IST

Time is ripe for private damage actions. (Image: Freepik)

By Payal Malik, Luke Streatfeild, Demica Kaur Nettleford & Ram Tamarappoo

It’s been more than three decades since India replaced a command-and-control mode of governance relying on state ownership of the means of production with a new mode of governance where private sector participation in economic activity is governed by the rule of law and independent regulation.

While independent regulatory bodies are entrusted with the statutory mandate of sectoral governance in areas perceived to be at greater risk of market failures, such as telecoms, oil and gas, ports, and airports, an economy-wide market regulator, the Competition Commission of India (CCI), has supplemented these regulatory institutions to make markets function better and provide the necessary “entrepreneurial freedom” to fuel economic growth.

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On the back of these economic and institutional reforms, thus far, India is poised to become the third largest economy in the world. With balanced regulatory oversight and stakeholder engagement, a strong regulatory foundation can unleash the potential of industry and preserve the appropriate incentives for investment and innovation.

The enforcement of competition law—to combat anti-competitive agreements, anti-competitive mergers, and abuse of market power—provides the ground rules of a market economy. Anti-competitive conduct affects the process of competition—how competition unfolds in the market—and as a result causes harm to competitors and consumers.

While regulatory action can deter anti-competitive conduct by ordering violators to cease and desist (from such conduct) and/or by imposing financial penalties, is such action alone sufficient to curb anti-competitive behaviour? We argue that the time is now ripe to broaden the instrumentality of competition law beyond just enforcement by the regulator.

Regulatory action, however, does not ensure that those harmed by anti-competitive behaviour are compensated for the losses suffered. Fines imposed by the regulator, which are often formulaic, may have no relation to the actual harm caused and may not be punitive enough to deter anti-competitive conduct. Moreover, it is worth noting that the fines imposed, although substantial, may be relatively small compared to the relevant business profit. Therefore, the deterrence effect may not be as impactful as one would hope.

Realising this, several jurisdictions, including the US, the UK, European Union (EU), and China allow private damage actions where consumers and competitors harmed by anti-competitive conduct litigate for damages in court. In the US, UK, EU, and China, private damage actions can be initiated even if there is no regulatory proceeding. Further, in the US, the law allows for treble damages to be awarded in private damage actions, thus acting as a severe deterrent on firms/corporation/business entities.

Private damage actions have been filed and litigated in relation to cartels, and monopolisation, in virtually all the traditional sectors of the economy—including financial services, energy, technology and transport—across the US, UK, EU, and China. For example, in transport, in 2016 the European Commission fined five truck manufacturers €2.93 billion for cartel activities. This decision led to numerous private damages claims in the UK and EU. In the Netherlands, one of the five major manufacturers involved in the Dutch trucks cartel, DAF, recently settled with 1,000 claimants in the Dutch Trucks litigation. Similarly, the US Air Cargo Shipping Services litigation (a follow-on damages action related to collusion on shipping charges) settled for $1.2 billion and in the healthcare sector the Blue Cross/Blue Shield lawsuit resulted in a settlement exceeding $2.6 billion.

In financial services, the UK Competition Appeal Tribunal recently approved a £200-million settlement in Merricks v Mastercard, a collective action against Mastercard in relation to interchange fees.

In the tech sector the, the UK Competition Appeal Tribunal recently certified a £13.6-billion claim against Google over its alleged anti-competitive behaviour in “ad tech”, which will now proceed to trial, and the court recently heard a £1.5-plus-billion claim against Apple for abuse of its dominant position on behalf of 19 million UK consumers. Both these cases are also the subject of similar EU proceedings in the Netherlands.

In 2023, the Beijing People’s Court in China ordered Alibaba to pay JD.com RMD 1 billion for abuse of dominance in relation to its online marketplace (JD.com v Alibaba Group). This award is the largest damages award in the history of private enforcement litigation in China.

Section 53N of India’s Competition Act provides the legal framework for compensation claims to be brought by market participants who are affected by anti-competitive practices. While a few claims have been filed with the National Company Law Appellate Tribunal (NCLAT), progress has been slow. Well-established regimes in the US, EU, and UK could potentially serve as models for the development of private enforcement of competition law in India in the coming years, to complement the public enforcement initiatives of the CCI.