Suppliers to a Sellers’ Cartel and the Boundaries of the Right to Damages in U.S. Versus EU Competition Law

43 Pages Posted: 8 Dec 2017 Last revised: 14 Dec 2017

See all articles by Eckart Bueren

Eckart Bueren

Max Planck Institute for Comparative and International Private Law

Florian Smuda

Centre for European Economic Research (ZEW)

Abstract

While customer damage claims against price-cartels receive much attention, it is unresolved to what extent other groups that are negatively affected may claim compensation. This paper focuses on probably the most important one, suppliers to a downstream sellers’ cartel. The paper first identifies three economic effects that determine whether suppliers suffer losses due to a cartel by their customers. We then examine whether suppliers are entitled to claim net losses as damages in the U.S. and the EU, with exemplary looks at England and Germany, delineating the boundaries of the right to damages in the two leading competition law jurisdictions. We find that, while the majority view in the U.S. denies standing, the emerging position in the EU approves of cartel supplier damage claims. We show that this is consistent with the ECJ case law and in line with the new EU Damages Directive. From a comparative law and economics perspective, we argue that more generous supplier standing in the EU compared to the U.S. is justified in view of the different institutional context and the goals assigned to the right to damages in the EU. We demonstrate that supplier damage claims are also practically viable by showing how supplier damages can be estimated econometrically.

Note: This article is published in the Max Planck Private Law Research Paper Series through Open Access funding provided by Max Planck Society. It is distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0). No changes were made to the article. As published in: European Journal of Law and Economics (2017), DOI: 10.1007/s10657-017-9571-6.

Keywords: Competition policy, Comparative law, Private enforcement, Cartels, Suppliers, Quantification of damages, Standing

JEL Classification: L41, K21

Suggested Citation

Bueren, Eckart and Smuda, Florian, Suppliers to a Sellers’ Cartel and the Boundaries of the Right to Damages in U.S. Versus EU Competition Law. European Journal of Law and Economics, Online First Article, Forthcoming; DOI: 10.1007/s10657-017-9571-6; Max Planck Private Law Research Paper No. 17/19. Available at SSRN: https://ssrn.com/abstract=3080187

Eckart Bueren (Contact Author)

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, D-20148
Germany

Florian Smuda

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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