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Toward a Coherent Policy on Cartel Damages

51 Pages Posted: 8 Feb 2017 Last revised: 14 Nov 2017

Jens-Uwe Franck

University of Mannheim - Department of Law

Martin Peitz

University of Mannheim - Department of Economics

Date Written: November 12, 2017

Abstract

The focus of cartel damages law is on the recovery of the cartel overcharge. Parties other than purchasers are often neglected, not only as a matter of judicial practice, but also due to legal restrictions. We argue that a narrow concept of standing—which excludes parties that supply either the cartel or the firms that purchase from the cartel with complementary product components—falls short of achieving effective antitrust enforcement and corrective justice in the best possible way. We provide a framework with two complementary products and show that under neither competition nor cartelization do the allocation and the distribution of surpluses depend on whether producers of complements purchase from the cartel or supply the cartel or the cartel’s customers. Thus, we argue that prima facie producers of complements should be treated alike, regardless of their position in the supply chain. Moreover, based on various factors that determine the enforcement effect of antitrust damages claims and their role as an instrument to achieve corrective justice, we show that a broad concept of standing is, indeed, the preferable legal solution. While its implementation would require a change in position by the U.S. federal courts, we submit that it would amount to a consistent completion of the legal framework within the E.U.

Keywords: cartel damages, antitrust standing, pass‐on, suppliers, complementary goods

JEL Classification: K21

Suggested Citation

Franck, Jens-Uwe and Peitz, Martin, Toward a Coherent Policy on Cartel Damages (November 12, 2017). Available at SSRN: https://ssrn.com/abstract=2913572

Jens-Uwe Franck

University of Mannheim - Department of Law ( email )

Schloss Westflügel
Mannheim, 68131
Germany

Martin Peitz (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany
+49 621 181-1835 (Phone)

HOME PAGE: http://peitz.vwl.uni-mannheim.de/

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