Late last year, the Dusseldorf Court of Appeal issued a decision (VI-Kart 5/14 (V)) confirming the Federal Cartel Office’s practice of publishing press releases along with its decisions to impose administrative fines on companies for infringements of competition law. The decision is also notable because the court assumed that consumers had suffered damages from the cartel even though the cartel sold to independent retailers, not consumers.

Facts

Two companies mentioned in a Federal Cartel Office press release as receiving fines for competition violations appealed the fines and requested the court to prohibit the Federal Cartel Office from publishing the press release. According to the companies, their involvement was a disputed fact as long as the decision was not final. Although the companies withdrew their motions regarding the press releases, when it ruled on costs the court held that the companies' motions would not have succeeded on the merits, as the Federal Cartel Office had acted within the legal boundaries when it published the press release.

Legal analysis

According to the court, the facts stated in press releases of the Federal Cartel Office must be accurate and true since the general principles of proportionality and the prohibition against arbitrary decisions bind the authority.

The press release in question satisfied these 2 principals, as the Federal Cartel Office had reported only the fact that it had imposed fines on the companies for illegal price fixing. The company’s ability to challenge the fine before a court did not alter the fact that fines had been imposed and the press release explicitly indicated that the decision was appealable.

Further, according to the court, the press release did not violate the principle of proportionality as there is generally considerable public interest in being promptly informed of price-fixing cases. In particular, the court held that end customers were substantially injured by the cartel at issue and would be able to claim damages from cartel members only if they were informed about the identity of the fined companies.

Damages

The decision is also notable because the court assumed, without in-depth analysis, that consumers had suffered substantial injury as a result of the cartel. This is surprising as the cartel occurred at a manufacturing level and products were sold to independent retailers, not end users. Even if the court assumed that the cartel led to price increases for retailers, this would not automatically mean that retailers could pass this price increase on to end consumers. This ruling appears to be a turn from the Supreme Court ruling stating that there is no presumption that cartel-related price increases were passed on to indirect customers and that the burden of proof in this regard rested with the indirect customers.

Interestingly, article 14(2) of the EU Directive on Antitrust Damages Actions (2014/104/EC), which must be implemented by EU member states by December 27 2016, contains a rebuttable presumption with very low conditions that cartel overcharges are passed on. Following the implementation of the directive in Germany, Supreme Court case law will probably no longer be applicable and it may often be up to cartel members to prove that there was no pass on to indirect consumers.