Thursday

22nd Jun 2017

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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.

Lack of eligible candidates dogs EU relocation scheme

Member states could fail to meet their refugee quotas even if they wanted to, as strict eligibility rules mean there are few candidates left in Greece and Italy. Sweden is already wondering if it will meet its pledge.

Border management going virtual

EU leaders at a summit in Brussels are set to endorse new border control measures, while the head of a Tallinn-based EU agency predicts a future where border management goes virtual.

Border management going virtual

EU leaders at a summit in Brussels are set to endorse new border control measures, while the head of a Tallinn-based EU agency predicts a future where border management goes virtual.

News in Brief

  1. EU leaders renew vows to uphold Paris climate deal
  2. US issues warrant for VW managers, German media say
  3. EU extends sanctions against Russia
  4. Merkel denies Franco-German deal on EU agencies
  5. Dutch PM: Turkey is upholding migration deal
  6. Britain to outline rights of UK-based EU citizens
  7. Tusk can 'imagine' the UK still remaining in EU
  8. Norway offers more blocks for Arctic oil exploration

Stakeholders' Highlights

  1. EGBAOnline Gambling: The EU Court Rejects Closed Licensing Regimes In Member States
  2. World VisionFaces of Today, Leaders of Tomorrow: Join the Debate on Violence Against Girls - 29 June
  3. ECR GroupThe EU Must Better Protect Industry from Unfair Competition
  4. Malta EU 2017Better Protection for Workers From Cancer-Causing Substances
  5. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  6. Dialogue PlatformGlobalised Religions and the Dialogue Imperative. Join the Debate!
  7. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million
  8. EUSEW17Bringing Buildings Into the Circular Economy. Discuss at EU Sustainable Energy Week
  9. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  10. Malta EU 2017End of Roaming Charges: What Does It Entail?
  11. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move
  12. European Social Services ConferenceDriving innovation in the social sector – 26-28 June

Latest News

  1. EU pressures firms to tackle online terrorism
  2. Lack of eligible candidates dogs EU relocation scheme
  3. Border management going virtual
  4. Tusk hints UK could stay in EU, if it wanted
  5. Merkel, Orban and the not quite closed Balkan route
  6. EU set to roll over Russia sanctions amid defence talks
  7. May to soothe EU leaders' post-election Brexit worries
  8. Leaders at EU summit to reinforce Libyan coast guard