When seeking to recover damages arising from a cartel, litigants will often seek “umbrella” damages – that is, damages in relation to sales by suppliers other than the cartelists – on the basis that the price-fixing agreement will cause all prices for the same product throughout the entire market to be raised. On 5 June 2014, the EU Court of Justice ruled that companies involved in price fixing may be liable for damage caused outside of their cartel (umbrella damages), even where national legislation did not allow for such recovery.
In 2007, the European Commission imposed fines on the Kone, Otis, Schindler and ThyssenKrupp groups totalling €992 million for their participation in cartels involving the installation and maintenance of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands. In 2008, the Austrian authorities also imposed fines on a number of companies (including Kone, Otis and Schindler) for implementing a cartel on the Austrian market in relation to the goods mentioned above.
OBB-Infrastruktur AG (OBB), a subsidiary of Austrian Federal Railways, bought elevators and escalators from businesses that were not party to the cartel but which had raised their prices in order to adapt them to the market price resulting from the cartel. OBB sought compensation of more than €1.8 million from the members of the Austrian cartel in relation both to their purchases from the cartelists and from other suppliers. The Supreme Court of Austria asked the Court of Justice whether the cartel members could be found liable for the loss that OBB claimed to have sustained in relation to its purchases from non-cartelists, even though, under Austrian rules, such loss would not be recoverable.
The Court of Justice in its ruling noted that the effectiveness of the prohibition on anti-competitive cartels would be endangered if applicants could not seek compensation for all loss caused by an infringement of the competition rules. Market price is one of the main factors taken into consideration by an undertaking when determining the price at which it will offer goods and services. Non-cartelist businesses will have therefore raised their prices to reflect the market rate, and the cartel members cannot have been unaware of this.
This decision means that umbrella damages are now in principal available anywhere in the EU irrespective of national rules seeking to prevent them.