The EU Commission Issues Passing-on Guidelines

July 2019

CPI EU News Column edited by Thibault Schrepel, Sam Sadden & Jan Roth (CPI) presents:

The EU Commission Issues Passing-on Guidelines By Prof. Dr. Peter Georg Picht, LL.M. (Yale)1

Background

Cartel damages litigation is of increasing importance in the EU, evolving into a second main pillar of competition law enforcement besides the agencies’ activities. While at least in follow-on litigation, the violation of competition law as such is oftentimes relatively easy to establish, the showing and quantifying of economic harm can be very challenging. One of the typical hurdles consists in the so-called “passing-on defence,” i.e. the defendant’s argument that the claimant did not suffer lasting harm because it could shift a cartel-caused overcharge down the supply chain by raising its own prices. Passing-on can, however, also be invoked as a “sword” by an indirect purchaser who claims damages due to the passed-on overcharge.

Article 12 of the Directive 2014/104/EU (Cartel Damages Directive/CDD) stipulates that the passing-on defence is admissible, that the claimant shall nonetheless have the right to “claim and obtain compensation for loss of profits [also called “volume effect”] due to a full or partial passing-on of the overcharge,” and that “Member States shall ensure that the national courts have the power to estimate, in accordance with national procedures, the share of any overcharge that was passed on.” Article 16 of the Cartel Damages Directive takes up …

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