Cartel damages also available to State lenders
This article is part of the November/December 2019 edition of our competition law newsletter, focusing on some recent key developments.
On 12 December 2019, the European Court of Justice ("ECJ") provided important clarification, holding that Article 101 TFEU must be interpreted as meaning that a public body which granted promotional loans to purchasers of products covered by a cartel are entitled to claim damages for loss caused by the cartel.
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The ECJ judgment was on a reference for a preliminary ruling from the Austrian Supreme Court. The case before the Austrian Supreme Court concerned a damage claim brought inter alia by the Land of Upper Austria against five lift and escalator manufacturers which the Austrian competition authorities had already established had engaged in a long running cartel (from the 1980s to 2004).
The Land of Upper Austria had not suffered loss as a purchaser of the cartelised products. However, the Land of Upper Austria has claimed that the cartel caused construction costs to which led it to grant larger subsidies, in the form of promotional loans for the purpose of financing construction projects affected by the cartel, than would have been the case absent the cartel. In turn, this deprived the Land of Upper Austria from using those additional funds more profitably. The Supreme Court of Austria asked the ECJ to rule on whether a state lender, such as the Land, was able to make a claim for damages in these circumstances.
The ECJ confirmed that:
- the direct effect of Article 101 TFEU means that any person who has suffered loss caused by a breach of competition law can claim for damages where a causal connection between the loss and the infringement of the competition rules exists;
- the national rules relating to procedures for exercising that right to compensation must not undermine the effective application of Article 101TFEU (i.e. national rules cannot exclude compensation for losses suffered by persons who do not operate as suppliers or as customers on the market affected by the cartel);
- Article 101 TFEU therefore allows any person who does not operate as a supplier or as a customer on the market affected by a cartel, but who granted subsidies in the form of promotional loans, to request compensation for loss it suffered as a result of the fact that it was unable to use increased levels of subsidies caused by the cartel more profitably; and
- that it is for the national court to determine whether the applicant had the possibility to make more profitable investments and whether the applicant had established the existence of a causal connection between that loss and the cartel at issue.
Contents
- No crossed wires - first ECJ judgment in power cables saga upholds General Court
- ECJ rules on three power cables cartel appeals
- Campine's car battery recycling cartel fine halved
- Cartel damages also available to State lenders
- Benelux competition authorities joint paper on challenges of digitisation
- Astre transport group fined for anticompetitive practices
- French court upholds €20 million fine for breach of merger commitments
- BMW, Daimler and Volkswagen fined for anti-competitive purchasing practices
- Algorithms and competition law: Franco-German joint study published
- CNMC fines two major Spanish audiovisual communication groups for antitrust practices
- CAT upholds Ofcom's Royal Mail fine
- Ofcom focuses on parcels
- BritNed's damages reduced by Court of Appeal
- ACCC customer loyalty schemes report: data practices, disclosures and emerging trends
- A floor on roof prices? ACCC achieves first public enforcement outcome for alleged concerted practices
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