The European Commission has opened a public consultation on a draft guidance paper it has prepared on quantifying harm in actions for damages based on breaches of the EU antitrust rules (EU prohibitions on restrictive agreements/cartels and on abuse of dominance). Comments are requested by 30 September 2011.

The guidance paper is the latest public step in the Commission’s work on antitrust damages actions. It follows the Commission’s April 2008 white paper on damages actions for breach of the EU antitrust rules. The guidance paper also draws on a report on quantifying antitrust damages published in December 2010, prepared for the Commission by Oxera, an economics consultancy (see our earlier law-now on the Oxera report).

The aim of the guidance paper is to provide insights into the harm caused by infringements of the EU antitrust rules to different categories of injured parties. It presents the main methods and techniques currently available to quantify such harm.

The paper stresses that the final guidance will be purely informative, does not bind national courts and does not alter legal rules applicable in EU Member States on damages actions. It also stresses that whether any and, if so, which of the methods and techniques set out in the guidance paper are appropriate to use in a particular case will depend on national law. It continues that relevant considerations in this respects are likely to include whether a certain method or technique meets the standard required under national law, whether sufficient data are available to the party charged with the burden of proof to apply the method or technique, and whether the burden and costs involved are proportionate to the value of the damages claim at stake.

The guidance paper focuses on two principal areas of harm and indicates approaches to quantification in each case:

  • increased prices to customers due to the exploitation of market power e.g. through price fixing, market sharing or output limitation cartels; and
  • exclusion of competitors from a market or reduction in their market share e.g. through margin squeeze, predatory pricing or tying or certain exclusivity agreements between suppliers and distributors that infringe competition law.

The European Commission hopes that the guidance paper will help to overcome the “range of obstacles which currently stand in the way of injured parties effectively receiving the compensation to which they are entitled” in EU antitrust damages claims. Whether the final guidance does more than formalise the input of economists to a potential case remains to be seen.