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.

Jens-Uwe Franck and Martin Peitz ‘Toward a coherent policy on cartel damages’ (2018) University of Manheim Discussion Paper No. 007

In short, the argument of this paper – which can be found here – is that there is an undue focus on overcharges when talking about cartel damages. The authors argue that significant losses can be suffered as a result of volume effects as well, i.e. from reduced sales / purchases as a result of the higher price that results from a competition infringement. This has implications in terms of standing, since victims of volume effects may not be allowed to bring claims for damages. This is mistaken, and standing should be granted to victims of volume effects. The argument is developed as follows: Part II outlines the law on antitrust standing in the U.S. and the E.U., as well as the basic economics of cartel damages and optimal deterrence. In the US, only direct purchasers or sellers have standing to claim antitrust damages, alongside some victims of ‘umbrella pricing’ (i.e. when non-cartelists raise their prices as a consequence of a competition infringement)….

Walter Hugh Merricks CBE v Mastercard Incorporated and Others [2017] CAT 16

This judgment – which can be found here – concerns the first ever class certification request in an opt-out collective damages claim in the UK. I think this is a very important decision. Class or collective actions allow the aggregation of a large number of small claims for competition damages, and are likely to prove a crucial mechanism for customers seeking to obtain redress for loss caused by a competition infringement. Europe is not familiar with the type of class actions that are typical in North America, and the English courts – and particularly the CAT – are one of the first European courts (if not the first) to have to grapple with the challenges that such claims pose. One very important challenge is class certification, while another is the certification of the class representative. The first opt-out collective claim ever brought in the UK– i.e. Dorothy Gibson v Pride Mobility Products Limited [2017] CAT 9 – ended with the…

Eckart Bueren and Florian Smuda ‘Suppliers to a sellers’ cartel and the boundaries of the right to damages in U.S. versus EU competition law’ (2018) European Journal of Law and Economics (2018) 45(3) 397

This article – which can be found here – looks at the loss that suppliers to a downstream sellers’ cartel can suffer as a result of that cartel, and asks whether they are / should be entitled to claim damages for this loss. The paper is structured as follows: It first identifies three economic effects that determine whether suppliers will suffer losses due to a cartel in which their customers participated: quantity, price and cost effects. The quantity effect is a consequence of cartelised prices, which reduce sales and, hence, the amount of supplies needed to produce the cartelised good or service. The price effect is equivalent to the lower price of input products that will result from the reduced demand by cartelists caused by the quantity effect, multiplied by the number of input units sold. And the cost effects reflect the difference in costs of producing a lower number of supply units (e.g. as a result of loss of…

Jens-Uwe Franck and Martin Peitz ‘Toward a Coherent Policy on Cartel Damages’ (2017) ZEW Discussion Paper No. 17-009

This paper – which can be found here – looks at who should have standing in private cartel damages claims. It is an economics paper, so it engages in a normative / most-efficient analysis of who should have standing to claim damages for antitrust infringements. It also looks into both the US and EU’s legal system in detail, to see whether / how their proposal could work. Their main argument is that cartelists should also be liable for damages caused to firms that supply the cartel or the cartel’s customers with complementary product components. What connects these classes of firms is that they may suffer a loss due to cartel‐induced underpayment. In response to the cartel’s output reduction, they may find it a profit‐maximizing strategy to lower their prices to mitigate the decline in demand, thereby effectively reducing the damage to the cartel’s purchasers. In particular, the authors develop a model which purports to demonstrate that the allocation and distribution of…