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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- A 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.
- This right is not limited to just suppliers or customers on the market affected by a cartel, but can include others such as, in this case, a state lender which incurred losses resulting from the impact of increased prices of products on the amount of loans granted.
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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.
