By a preliminary ruling of 5 June 2014 (Judgment), the Court of Justice of the European Union (Court) specified the conditions under which the indirect victims of a cartel, who had incurred a loss resulting from the higher price charged by those suppliers who did not participate in the cartel in order to adjust to the market price (price protection, or umbrella effects), are entitled to claim compensation from the members of the cartel. In doing so, the Court enlarged further the scope of civil liability of cartel members, the frontiers of which are expanding.
Following the condemnation by the European Commission and the Austrian Competition Court of various companies involved in a cartel in the market for elevators and escalators, the OBB-Infrastruktur company (OBB) claimed compensation from the cartelists in Austria, based on the argument that it had suffered a loss resulting from the higher price charged when buying products. This was a rather unusual request to the extent that OBB did not purchase products from the cartelists, or from their direct or indirect customers, but had bought those products from cartelists’ competitors who did not participate in the cartel. According to OBB, those suppliers charged a protection price, set at a higher price than that which would have been applied in the absence of the cartel.
Following a successful appeal by OBB, the cartel members further appealed to the Austrian Supreme Court, claiming that they could not be found liable in the absence of a contractual relationship establishing the adequate causal link between the infringement and the prejudice required by Austrian law. The Supreme Court therefore decided to refer the question to the Court to determine whether the principle of full effectiveness laid down by European Union law requires that any person may claim from the members of a cartel damages for the loss which has been caused by a person who did not participate in the cartel who, benefiting from the increased market prices, raises its own prices more than it would have done in the absence of a cartel.
Answering positively, the Court provides an outline of criteria intended to guide national courts before which actions may be brought requesting for compensation. According to the Court, the victim of a protection price must thus be able to claim compensation from the cartel members, even in the absence of any contractual relationship with such members, provided that:
- on the one hand, “the cartel at issue was, in the circumstances of the case and in particular, the specific aspects of the relevant market, liable to have the effect of umbrella pricing being applied by third parties acting independently”, and
- on the other hand, “those circumstances and specific aspects could not be ignored by the members of that cartel”.
However, an issue arises as to the burden of proof of such criteria since the Court points out that “the market price is one of the main factors taken into consideration by an undertaking when it determines” its own prices, and that “where a cartel manages to maintain artificially high prices for particular goods and certain conditions are met, relating, in particular to the nature of the goods or to the size of the market covered by such cartel, it cannot be ruled out that a competing undertaking, outside the cartel in question, might choose to set the price of its offer at an amount higher than it would have chosen under normal conditions of competition, that is, in the absence of that cartel”.
This new breach increases further the risk of private lawsuits for companies involved in a cartel, after cartelists’ indirect purchasers having recently been entitled to claim compensation from cartelists by the directive on damages for infringements of the competition law provisions.