In a landmark ruling, the EU’s top court, the European Court of Justice (ECJ) in Kone and Others C-557/12 of 5 June 2014, has held that, where a cartel causes competing companies to increase their prices, the members of the cartel may be held liable for losses incurred by victims of those price increases.

Significantly, the ruling comes in the wake of the recently agreed, though not yet formally adopted, Damages Directive of 17 April 2014, which seeks to facilitate damages actions by introducing pan-European procedural rules applicable to antitrust damages actions. The ECJ’s ruling in Kone and Others is therefore another important step towards the shifting of the balance of power towards damages claimants. It will also likely spur an increase in antitrust damages actions being brought in the European Union.

The upshot of the ruling for cartel conspirators is that the stakes have been raised massively. Cartelists now face the potential prospect of having to pay not only huge fines, but also having to satisfy numerous damages claims, including those made by parties with whom the cartel members had no contractual relationship.


In 2007, the European Commission (Commission) imposed on the Kone, Otis, Schindler and ThyssenKrupp groups fines of more than €992 million for their involvement in cartel activity pertaining to the installation, maintenance and modernisation of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands between at least 1995 and 2004. Specifically, the infringements found by the Commission related to market sharing by agreeing or collaborating to allocate tenders and sales contracts via the sharing of commercially sensitive information.

The ThyssenKrupp group saw its fines reduced significantly by the General Court, while the fines imposed on the Otis, Kone and Schindler groups were upheld. In 2008, the Austrian antitrust authorities also imposed fines on a number of companies (including, again, Kone, Otis and Schindler) for implementing a similar cartel within the territory of Austria.

ÖBB-Infrastruktur AG (ÖBB), a subsidiary of Austrian Federal Railways, had bought elevators and escalators from companies that were outside the cartel circle i.e., companies that had sold these products on an autonomous basis. ÖBB claimed compensation exceeding €1.8 million from the members of the Austrian cartel for losses incurred as a result of ÖBB’s suppliers setting a price higher than that which could have been obtained had there not been a cartel.

During proceedings, the Supreme Court of Austria made a preliminary reference to the ECJ, asking whether or not the cartel members could be found liable for the losses ÖBB claimed it had incurred. Under the relevant Austrian law, compensation was not possible, as the loss was caused by the decision of a supplier that had no direct involvement in the cartel and therefore acted in accordance with the law. Austrian law could only see the possibility of a damages award being made in circumstances where there is a contractual relationship between the parties.

ECJ Judgment on “Umbrella Pricing”

“Umbrella pricing” occurs when companies that are not themselves party to a cartel, but benefit from the protection of the cartel’s practices (operating under the cartel’s “umbrella”, so to speak), knowingly, or even unknowingly, set their own prices higher than they would otherwise have been able to under competitive conditions.

In Kone and Others, the ECJ ruled that, even in those situations where goods or services are offered as part of an autonomous decision taken by a party not involved in a cartel, that decision may have been strongly influenced by the “skewed” and artificially inflated market price (market prices being a factor taken into account by companies when autonomously setting prices) brought about by the members of a cartel. It was therefore held that, where it has been established that the cartel is liable to result in prices being increased by competitors not party to the cartel, the victims of those price increases must be permitted to claim compensation for losses incurred from the members of the cartel. As such, EU law precludes national legislation to the extent that national law requires, as a general rule, that there be a contractual relationship between the victim and the members of the cartel for the purposes of bringing a damages action.


Damages actions in the European Union are on the rise, with a likely future exponential increase in their number as a result of the recently agreed upon Damages Directive. The recent judgment in Kone and Others serves to reinforce this likely trend. Because of the now established possibility of bringing umbrella pricing actions, we are also more likely to see an increase in third-party document disclosure proceedings, as third party information is pulled into the frame for the purposes of substantiating an umbrella pricing action against the cartel members.

With that said, the judgment in Kone and Others raises some fundamental questions. For example, under the Damages Directive, immunity applicants can only be held liable for losses relating to their own sales under the joint and several liability rules. The Kone ruling is difficult to reconcile with this rule.

The judgment is, however, still to be welcomed, to the extent that it brings EU law in line with mainstream economic thinking in the field of antitrust damages actions. In terms of practical impact, the bottom line is that Kone and Others has significantly upped the ante for cartelists.