Introduction
Facts
Decision
Comment


Introduction

In the Schlecker case,(1) the Federal Court of Justice (BGH) dealt with claims by a drugstore chain against manufacturers for damages on the grounds of excessive prices. In contrast to many current antitrust proceedings for damages following price agreements, this case involved an unlawful exchange of information. The BGH stated that, in this case, the potentially injured parties benefitted from the "principle of experience" - that is, the fact that the prices achieved after an exchange of information in violation of antitrust law were, on average, higher than those that would have been achieved without the restriction of competition. In the insolvency proceedings of the Schlecker drugstore chain, which have been ongoing since 2012, on 29 November 2022 the antitrust senate of the BGH overturned the judgment of the Frankfurt am Main Regional Court and decided to have the claims of Schlecker's insolvency administrator Arndt Geiwitz re-examined.

The insolvency administrator is demanding at least €212.2 million in damages from the defendants.

Facts

The defendants are manufacturers of drugstore brand articles that supplied Schlecker. The German Federal Cartel Office (BKartA) imposed fines on several well-known drugstore product manufacturers, including the defendants, for a violation of the ban on cartels.

According to the BKartA's findings, the manufacturers were involved in an exchange of information from 2004 to 2006 in violation of antitrust law. According to the BKartA, although no direct coordination of their prices took place within this timeframe, according to the findings, the manufacturers involved did exchange information on intended and implemented gross price increases across customers, as well as on the current status of annual negotiations with selected major retailers (including Schlecker) and the existence and amount of special claims raised against them.

Geiwitz was of the opinion that Schlecker had to pay excessive prices for drugstore brand articles as a result of the drugstore cartel. The insolvency administrator put the amount of the resulting damage at at least €212.2 million.

Decision

The Frankfurt am Main Regional Court dismissed the action for damages in a judgment dated 10 August 2018. The appeal against this before the Frankfurt Higher Regional Court (OLG) was unsuccessful. The OLG based its decision on the fact that a violation of the antitrust ban by the defendant was established according to the binding findings of the BKartA, but it could not be said with the necessary probability whether Schlecker had suffered damage as a result of the conduct in violation of antitrust law.

As the BGH's Cartel Panel stated, the OLG had dismissed the claim prematurely. Its assumption that it could not be convinced that Schlecker had suffered damage was based on an incorrect overall assessment of the relevant circumstances and did not stand up to review by the appellate court.

It must now be re-examined whether and to what extent Schlecker suffered financial damage as a result of the price agreements with suppliers.

According to the decision of the BGH, an exchange of secret information between competitors in violation of antitrust law concerning current or planned price-setting behaviour in relation to a common customer gives rise to the empirical principle in favour of this customer that the prices subsequently achieved are, on average, higher than those that would have been formed without the restriction of competition. There is a high probability that the competitors involved in the exchange of information will jointly achieve a higher price level if secret information relates to current or planned price-setting behaviour.

The assumption of this "principle of experience" is not precluded by the fact that the effects of such an exchange of information depend on the circumstances of the individual case. Rather, within the framework of the overall assessment, these circumstances are to be examined by the judge of the facts to determine whether they give rise to indications which, in the specific case, confirm or invalidate the principle of experience, which regularly has a strong indicative effect. This principle of experience also applies to the drugstore cartel insofar as the exchange of information concerned list price increases and negotiations on discounts and special conditions demanded by Schlecker.

Although the OLG had assumed a corresponding principle of experience, it had erroneously attributed "only little weight" to it. The opposite is true:

Since in the case of the exchange of secret information about the individual intentions of a company with regard to its future price behaviour vis-à-vis the customer, the probability is particularly high that a collusive result will occur to the detriment of this customer and the same applies in the case of information about current price behaviour . . . the principle of experience, viewed in the abstract, regularly has a strong circumstantial effect.

Comment

Some regional courts have so far taken a critical stance on antitrust damages suits following a mere exchange of information without any agreement on prices. According to the guidelines of the BGH outlined above, district courts can, in any case, no longer dismiss lawsuits with brief justification and reference to the lack of agreement.

For further information on this topic please contact Sascha Dethof at Fieldfisher by telephone (+49 211 950 749 0) or email ([email protected]). The Fieldfisher website can be accessed at www.fieldfisher.com.

Endnotes

(1) BGH, decision of 29 November 2022, KZR 42/20, Schlecker. The BGH's press release can be found here.