Cartel Damages Claims: European Commission Guidelines To Estimate The Passing On Of Harm Caused By Cartels

Author:Mr Günter Bauer and Robert Wagner
Profession:Wolf Theiss
 
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The number of cartel damages claims before national civil courts in Europe has dramatically increased over recent years. The Damages Directive (2014/104/EU) and its implementation into national law have removed a number of obstacles faced by the alleged victims claiming cartel damages before national courts.

One of the greatest challenges in cartel damage litigation is the quantification of the harm suffered by the claimant as a result of the cartel. In their defence of the claim, cartelists often argue that the claimant has passed on the overcharge down the supply chain (so-called passing-on defence). The Damages Directive provided that the European Commission ('Commission') shall issue practical guidelines to help estimate the amount of the overcharge which was passed on to indirect purchasers.

On 1 July 2019, the Commission published its "Guidelines for national courts on how to estimate the share of overcharge which was passed on to the indirect purchaser" ('Passing-on Guidelines'). The Passing-on Guidelines are intended to offer practical guidance on how to estimate the passing-on of overcharges and are the result of a long process. In 2016, the Commission published an in-depth economic "Study on the Passing-on of Overcharges". The publication of a draft version of the guidelines in 2018 was followed by a public consultation during which stakeholders could express their views and comment on the draft.

PASSING-ON OF OVERCHARGES

Overcharges caused by a cartel may affect not only customers of cartelists (direct purchasers), but also buyers further down the supply chain (indirect purchasers). If a direct purchaser pays a higher price for a product due to a cartel, it may decide to charge higher prices to its own customers when selling on this product or when selling products for which it used the cartelized product as an input. In other words, the direct purchaser may potentially (at least partially) pass-on the overcharge caused by the cartel to its customers.

Passing-on of overcharges is relevant in two procedural scenarios. On the one hand, passing-on is invoked as a 'shield' against damages claims by cartelists (passing-on defence). If the claimant was able to pass-on the overcharge to its own customers, the harm suffered by the claimant is reduced by the amount passed on. On the other hand, passing-on is also used as a 'sword' by indirect purchasers claiming damages from a cartelist. The Damages Directive explicitly specifies that...

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