Umbrella Pricing and Cartel Damages under EU Competition Law
EUI Department of Law Research Paper No. 2015/18, final version European Competition Journal 11 (2015) 135-167
33 Pages Posted: 26 May 2015 Last revised: 3 Nov 2021
Date Written: 2015
This article explores whether cartelists should be liable for losses resulting from umbrella pricing, thereby critically evaluating the ECJ’s judgment in “Kone”. Since the EU legislature did not resolve the question of liability for umbrella pricing, it has to be evaluated in accordance with national law, which must however comply with the principles of equivalence and effectiveness pursuant to Article 4(3) TEU. Therefore and in accordance with the Court’s judgment in “Courage”, the decisive criterion should be the effect a cartelist’s liability for umbrella pricing would have on effective and efficient enforcement of competition law. An analysis based on the standard model of optimal sanctioning reveals the ambivalent effect of such a liability. Thus, in view of opposing risks of systematic over- and under-deterrence and in accordance with the principle of institutional balance, the Court has to leave the EU legislature and the national legislatures, respectively, with the discretion not to provide for compensation in the case of umbrella effects.
Keywords: Umbrella pricing; Competition law damages; Principle of effectiveness; Institutional balance; Reasonable foreseeability
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