Tuesday

19th Jun 2018

EU ruling could open floodgates on cartel lawsuits

  • The ECJ's ruling could lead to a slew of private damages claims against firms involved in cartels (Photo: avail)

Individuals can claim compensation from cartels even if they did not buy products from one of the companies involved, the EU's top court has ruled.

In a verdict on Thursday (5 June), the European Court of Justice stated that companies that participate in cartels are responsible for the losses caused by competitors being forced to raise their prices.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

Thursday's judgement could open the floodgates for a slew of private damages claims, but has particular implications for the commission's ongoing cartel investigation into the Libor rate-fixing scandal.

The judgement relates to a case brought by Austrian firm OBB-Infrastruktur, after the commission imposed fines totalling €992 million on Otis, Kone, Schindler and Thyssenkrupp for a cartel on lifts and escalators sold in Belgium, Germany, Luxembourg and the Netherlands.

OBB, which forms part of Austrian Federal Railways, had bought elevators and escalators from firms outside the cartel but sued Kone, Otis and Schindler for €1.84 million on the grounds that they had paid a higher price because of the cartel's existence.

The EU court ruled in their favour, arguing that "any person is entitled to claim compensation for loss suffered where there is a causal relationship between the loss claimed and the cartel at issue".

The EU executive had itself also brought a parallel case before the Brussels Commercial Court in June 2008, seeking damages of over €7 million against the four firms on the grounds that the EU had also been short-changed by the cartel's price-fixing.

But the ruling by the Luxembourg-based court could set an explosive precedent.

For one, it could leave many of Europe's largest banks open to legal action from customers who have been mis-sold or over-charged for financial products affected by the London inter-bank lending rates, Libor, and its European equivalent Euribor.

In 2013, a handful of banks were fined for manipulating Libor and Euribor, which determine interest rates on a raft of different financial products.

Meanwhile, last December, a further eight European banks were fined a total of €1.7 billion after the commission found that they had fixed the multi-trillion euro market of financial derivatives, with other banks still facing similar charges.

"A cartel can have the effect of leading companies that are not a party to it to raise their prices in order to adapt them to the market place resulting from the cartel," the court stated.

"Victims of this price increase must be able to claim compensation for loss sustained from the members of the cartel," it added.

"It is a significant judgement, one in a series of cases that make the whole system across the EU more harmonised and claimant-friendly," said Bernd Meyring, an antitrust lawyer with Linklaters in Brussels.

Opinion

Is EU retail sector equipped for 21st century?

After a thorough analysis in cooperation with EU countries we have identified many regulatory restrictions that hamper innovation and investment in the retail sector.

EU asylum claims drop, Germany registers most

EU states, plus Norway, Switzerland, Iceland and Liechtenstein, registered 728,470 asylum applications last year, a 44 percent drop compared to 2016. Germany had the highest registrations at 222,560, followed by Italy and France.

Opinion

EU summit: migrants get a 'vote' too

Non-citizens from Nigeria to Afghanistan get a binding 'vote' on whatever the EU's internal debates submit to them. They will vote with their feet on whether to keep trying their luck when faced with a new system.

Basque threat of 'second front' for independence

Last weekend some 175,000 people in the Basque country demanded a 'right to decide'. For some, it means more autonomy from Spain, others independence. "We want to open a second front within the Spanish state," says one Basque politician.

News in Brief

  1. Report: Audi CEO arrested over Dieselgate
  2. EU-Australia trade talks kick off in Brussels next month
  3. France and Germany moving closer to eurozone reform
  4. Merkel to meet Conte to find migration compromise
  5. Seehofer gives Merkel time to strike EU migration deal
  6. Schroeder and Sarkozy appear with Putin at World Cup
  7. Tennis champ and 'EU diplomat' claims immunity
  8. Italy threatens to ditch EU-Canada free trade deal

Stakeholders' Highlights

  1. Macedonian Human Rights MovementMHRMI Launches Lawsuits Against Individuals and Countries Involved in Changing Macedonia's Name
  2. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  3. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  4. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  5. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  6. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  7. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  8. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  9. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  10. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  11. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  12. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs

Latest News

  1. Orban to EPP: turn 'Christian democratic' or face challenge
  2. Is EU retail sector equipped for 21st century?
  3. Tear gas bodes ill for Macedonia name deal
  4. EU asylum claims drop, Germany registers most
  5. EU summit: migrants get a 'vote' too
  6. Basque threat of 'second front' for independence
  7. Progressive regulation needed now for 21st century finance
  8. Greece and Merkel's fate top This WEEK

Join EUobserver

Support quality EU news

Join us