On 13 November 2013, the Düsseldorf Higher Regional Court ("OLG Düsseldorf") issued a judgment on an action for damages following restrictions  of online sales.1 The judgment is noteworthy for several reasons: It concerns a stand-alone damage  claim for a vertical infringement, which was terminated in a settlement between Dornbracht and the  German Federal Cartel Office (Bundeskartellamt, "FCO"). The judgment provides also guidance on the  standards of proof for plaintiffs claiming lost profit following a competition law infringement.  And, lastly and most remarkably, the OLG Düsseldorf clears the way for holding managers personally  liable for compensating losses caused by competition law infringements of a company. The complaint  by the defendant was recently rejected by the German Federal Court of Justice ("BGH").2

Facts of the case

Plaintiff is Reuter, a German retailer of bathroom fittings with two physical as well as several  online stores. Reuter claims damages from a manufacturer of bathroom fittings ("Dornbracht"), and  one of its managing directors ("Managing Director") for restrictions of online sales. Reuter sells  Dornbracht products which it obtained not directly from the manufacturer but from wholesalers.

In 2008, Dornbracht amended its wholesaler contracts in the course of a so-called "Action against  online marketing" and a so-called "Strengthening of specialist retailing"-campaign, respectively.  Dornbracht introduced new conditions granting its wholesalers additional rebates if they supply  retailers that fulfill certain quality criteria. These criteria could only be met when selling to  specialized trade with a physical  presence (Fachhändler). Namely, retailers were required to offer a quality level of service that comprised the consulting of costumers,  installation, after sales care, etc. Online retailers could    not    meet    these    criteria    with    the consequence that wholesalers would only supply them at higher prices. Dornbracht's campaign was  caused by the Managing Director being responsible for the distribution of the company's products.

Following several complaints of online retailers, the FCO opened a proceeding against Dornbracht in  2010 for restrictions of online sales on the basis of dual pricing. After Dornbracht had agreed to  amend its contracts with its wholesalers, the FCO terminated its proceeding against Dornbracht in  December 2011 and published its reasoning in a case report.3

In the action at hand, Reuter claimed that it had lost more than €2 million following Dornbracht's  rebate system, due to higher purchase prices (losses of margin) as well as the loss of future  businesses that could not have been realized by Reuter. The court of first instance, the Cologne  Regional Court ("LG Cologne"), dismissed the claim holding that the plaintiff failed to  substantiate its alleged damages.4 The OLG Düsseldorf annulled the judgment of the LG Cologne  and   granted  the  plaintiff  the  sum  of € 820,000 for losses of margin but dismissed the remaining part concerning the loss of future  businesses. On 7 October 2014, the BGH rejected Dornbracht's complaint relating to non- admission,  and the judgment of the OLG Düsseldorf became final.

Reasoning of the Court

Due to the lack of a prohibition decision by the FCO, the OLG Düsseldorf had to establish whether  Dornbracht's rebate contracts infringed Art. 101 of the Treaty on the Functioning of the European Union ("TFEU").5 The court followed the  position of the FCO and the European Commission according to which monetary incentives in order to  de facto exclude online distribution is seen as dual-pricing that is prohibited under both European  and German competition law.6 The OLG Düsseldorf held that the practices restricted competition by  object7 and could not be exempted8.

In contrast to the LG Cologne, the OLG Düsseldorf affirmed that Reuter suffered damages due to  reduced rebates granted by Dornbracht to its wholesalers. The court stressed that Reuter, having  the burden of proof insofar, satisfied the requirements for the assumption of lost profit pursuant  to Sec. 252 sentence 2 of the German Civil Code ("BGB").9 According to this provision, the injured  party only has to state the facts based on which the loss of profit "could probably be expected".  Consequently, it was sufficient for Reuter to show that it purchased the products at higher prices  than in the preceding period and did not pass on the higher prices to its costumers.10

The OLG Düsseldorf established the personal liability of Dornbracht's Managing Director for the  damages suffered by Reuter. As the person responsible for the distribution of the company's  products, he not only initiated the introduction of the conditions in question but also endorsed  them in several press releases.11 Since the Managing Director is not an undertaking, he is not an  addressee of Sec. 33 (3) of the German Act against Restraints of Competition in conjunction with  Art. 101 (1) TFEU. Thus, the OLG Düsseldorf derived the liability of the Managing Director from  general tort law and held that he is to be seen as a contributor to the company's infringement.12  As such, Dornbracht and its Managing Director were jointly and severally liable to Reuter. severally liable to Reuter. 

Comment

As to the substantiation of the damages, the court's ruling seems convincing. The standards of  proof required by the LG Cologne were too high and could hardly be met by Reuter. In contrast, the  reasoning of the OLG Düsseldorf is in line with the lower standards of proof foreseen by Sec. 252  sentence 2 BGB.

With regard to the personal liability of the Managing Director, the judgment raises dogmatic  concerns. Since, according to German civil law, the legal person as such is not able to act, the  actions of a natural person have to be attributed to the company. Therefore, it is inconsistent if  the very same natural person on the one hand has conducted the infringement that is attributed to  the company and on the other hand is seen as a contributor to this infringement. It seems that the  OLG Düsseldorf circumvented this issue in order to be able to hold the Managing Director liable for  the infringement in any case, i.e. if not as the actual infringer then – a maiore ad minus – as a  contributor.

Despite these dogmatic concerns, the courts seem to be willing to accept damage claims against  individuals so they should be aware of their  potential  personal  liability  for  damages following participation in an infringement.