Umbrella Effects and the Ubiquity of Damage Resulting from Competition Law Violations

Abstract

This paper discusses the ubiquity of damage resulting from competition law violations. Umbrella pricing is considered but one instance of quantifiable damage of potentially substantial magnitude occurring outside the vertical chain typically considered the relevant locus of damage resulting from competition law infringements. One of the reasons for this restrictive approach are the general tort principles of causality and foreseeability. This article suggests that, if interpreted too narrowly, the use of these principles as claims regulators is threatening the very policy goal of full compensation for any individual harmed. A wider interpretation of these general tort principles is proposed that would allow claims to be regulated by the merits of the evidence presented. This would render private enforcement in line with the more economic approach followed in the public enforcement of competition law.

Keywords: umbrella effects, umbrella pricing, KONE, AG Kokott, damages claims, economic harm, causality, foreseeability, damage

JEL Classification: K21, K40, L40