Jean-François Laborde ‘Cartel damages actions in Europe: How courts have assessed cartel overcharges’ (2019) Concurrences

The primary objective of this study, available here, is to analyse how national European courts have assessed cartel overcharges. In addition, it also provides figures on the development of cartel damages actions in Europe (how many cases were decided, in which countries, with which outcomes, etc.). It was completed with the help of lawyers, law professors, economists, national competition authorities and national judges from 30 European countries.   Now in its fourth edition, this study shows that national courts in Europe have handed down judgments in at least 239 cartel damages actions in 13 countries, relating to more than 63 cartels. In these judgments, courts have given many insights into how to assess cartel overcharges. Section I describes the methodology followed. The process employed for this research involved four steps. The cases were identified; copies of judgments were gathered; using a recent automatic translation service, judgments were translated into English; their content was then analysed. To identify cases, contributors were asked whether they…

Magnus Stand and Eric Monsen ‘Passing-on unlawful charges: Still no small matter’ (2019) European Public Law 25(2) 249

‘Passing on’ occurs when the economic burden of a charge levied from a business is passed on that business’s customers, and possibly even further down the supply chain. The main issues at stake as regards passing on are whether it should be relevant to the calculation of payable damages, and whether  downstream claimants should be able to bring an action in respect of an economic burden passed on to them. The Court of Justice has largely left it to the national legal systems of the Member States to find proper solutions to the passing-on problem in the repayment of unlawfully levied charges. It has nevertheless scrutinised national approaches with increasing stringency. In this paper, available here, the authors call for EU harmonisation of the legal issues triggered by passing on. To that end, the authors present two alternative models for harmonisation. Section 2 describes existing EU rules on passing on. Most European case law on passing on is concerned the duty of…

Cento Veljanovski ‘Collective Certification in UK Competition Law: Commonality, Costs and Funding’ (2019) World Competition 42(1) 121

This article, available here, provides critical assessment of the UK’s emerging collective certification process. It argues that the Competition Appeal Tribunal has applied the test for certification too strictly and not in accordance with the case law surrounding the ‘Canadian model’ on which the UK certification procedure is based; and incorrectly treated the award of aggregate damages as the summation of individual damages. It also argues that the way the CAT has handled these two factors threatens to undermine the purpose and effectiveness of the UK’s new collective action regime. The piece is structured as follows: Section 2 provides an overview of the collective certification requirements. Prior to the Consumer Rights Act 2015, which amended the Competition Act, potential litigants had limited opportunities to bring a group action against a common defendant. One might try to rely on group litigation orders – a case management device that allows a court to manage separate claims which share ‘common or related issues of fact…

Makan Delrahim ‘Merricks v MasterCard: ‘Passing On’ the US Experience’ (2020) Competition Policy International, May Column

Over the past few years, in addition to cooperating with international counterparts in many cases, the DoJ has made efforts to further common understandings on a variety of substantive and procedural antitrust issues. Developments in competition law, both substantive and procedural, can be driven by courts, particularly in countries that allow for private antitrust enforcement in the form of class actions. The upcoming decision of the UK Supreme Court in Merricks v. MasterCard is of interest to competition enforcers around the world because it involves novel questions on the proper approach to certification of an opt-out collective action — akin to a class action in the United States — brought by indirect purchasers. This essay, available here, aims to share the United States’ experiences confronting similar questions to those faced by the UK Supreme Court in this case – in particular, how the class representative can show “a realistic prospect of establishing loss on a class-wide basis,” and what should…

Michael D. Hausfeld, Irving Scher and Laurence T. Sorkin ‘In Defense of Class Actions: A Response to Makan Delrahim’s Commentary on the UK MasterCard Case’ (2020) Competition Policy International June

This article, available here, was written by lawyers of a US firm that is, in its own words, a ‘global leader on claimant focused competition damages practice’, enabling victims of anticompetitive conduct to obtain damages for harm suffered. This law firm acts for an intervenor, the Consumers’ Association, in the UK MasterCard proceedings that led to the US DoJ sending a letter to the UK’s Supreme Court. This piece is – as the title indicates – a reaction to that letter. The paper begins by framing the issue. The DoJ AAG’s letter to the UK Supreme Court provides an overview of class actions in the US. The authors agree with the general overview of Rule 23 provided by the Division. For example, few would argue with the proposition that, in the antitrust context, indirect purchaser class actions raise more difficult questions of commonality, impact, and manageability than direct purchaser class actions, even though harm may have been sustained at both…

Case review of Apple v. Pepper  Harvard Law Review (2019) 33 382

Since Illinois Brick, standing to sue for violation of US federal antitrust law has been reserved exclusively to those parties who purchased directly from price-setting monopolists or cartelists. Indirect purchasers, who transacted with these direct purchasers rather than with the monopolist itself, had no standing, even if the direct purchaser “passed on” the full cost of the monopolistic overcharge to them in the form of higher prices. The Court prohibited these pass-through arguments because it judged itself ill suited to efficiently determine what parts of an overcharge are passed on at any given stage in the chain of distribution. The Court also worried that allowing pass-through arguments would undermine deterrence, as indirect purchasers, who could not sue as effectively as direct purchasers, would be able to claim a portion of what would previously have gone to direct purchasers in a successful suit. Last year, however, the Supreme Court in Apple v Pepper held that app purchasers could sue Apple for…

Herbert Hovenkamp ‘Apple vs. Pepper: Rationalizing Antitrust’s Indirect Purchaser Rule’ (2020) Columbia Law Review Forum 120(1) 14

The simplest measure of loss caused by an antitrust infringement is the amount of the overcharge caused by a conduct. However, customers of the infringing party may be able to pass on this overcharge to their own customers, which means that indirect purchasers may also suffer loss. The US – unlike other countries – typically limits the ability to claim damages to direct purchasers for the amount of the relevant overcharge (typically trebled). In Apple Inc. v. Pepper, the Supreme Court held that consumers who allegedly paid too much for apps sold on Apple’s App Store because of an antitrust violation could sue Apple for damages because they were “direct purchasers”. The paper, available here, argues that, working within the context of applicable rules, the majority reached the right conclusion. At the same time, and while this judgment eliminates some of the irrationalities of the indirect purchaser rule as it has been applied, it hardly adopts a definite solution to the…

Andrew Gavil ‘Consumer welfare without consumers? Illinois Brick after Apple v Pepper’ (2019) Journal of Antitrust Enforcement 7 447

This essay, available here, examines the recent Apple v Pepper decision with a focus on two issues: its seeming rehabilitation of compensation principles and its approach to evaluating antitrust damages. Together, these two aspects of the Court’s reasoning may undermine the continued vitality of Illinois Brick’s decision not to allow indirect purchasers to claim for damages. The author argues that, although the Supreme Court formally retained Illinois Brick, the Court’s logic in explaining the nature of damages that flow from antitrust violations will prove hard to contain and difficult to reconcile with Illinois Brick’s simplistic conception of ‘pass-on’. That, in turn, will likely alter how parties litigate antitrust damage claims in ways likely to invite future challenges to Illinois Brick. Apple v Pepper also may have reopened long-simmering debates in the USA about how best to balance the twin remedial goals of deterrence and compensation. Given the evolution over four decades of a fairly intricate federal-state, public–private enforcement ecosystem in the USA,…

Lukas Rengier ‘Cartel Damages Actions in German Courts: What the Statistics Tell Us’ (2019) Journal of European Competition Law & Practice 1,

Germany is commonly mentioned as one of the three preferred jurisdictions for cartel damages actions in Europe, next to England and the Netherlands. The level of private enforcement is indeed quite high in Germany, and its growth is accelerating. Up until the end of 2018, there had been 119 judgments by German courts concerning cartel damages actions— 91 by district courts (i.e. first instance courts), 24 by regional courts (i.e. second instance courts), and four by the Federal Court of Justice. Many more lawsuits are currently pending—there is no public record, but the author counts approximately 650 pending cases in district courts alone. This article, available here, takes a closer look at the practical approach adopted by German courts to cartel damages claims by conducting a statistical analysis of these 119 judgments. Section I looks at the history of cartel damages actions in Germany. Cartel damages actions in Germany can be filed before 27 district courts. Seventeen higher regional courts deal with…

The OECD Report on International Private Enforcement

Officially known as ‘Individual and Collective Private Enforcement of Competition Law: Insights for Mexico in 2018’, this Report was prepared with a view to advise Mexico on how to reform its private enforcement regime. The Report can be found here. Advising Mexico in this regard required the pursuit of a comprehensive overview of international experiences with private competition enforcement – with a focus on Europe and North America, but also looking beyond these regions. This project also required the identification of the various elements that comprise private enforcement regimes around the world, the various forms that each of these elements may take, and how these elements relate to one another. I may of course be mistaken, but I think there is no other work like this in the market. As such, I circulate the Report here because I think it can provide a useful reference for anyone working or interested in private enforcement.