Saturday

21st Apr 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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

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.

Agenda

Whistleblowers, Syria and digital revolution This WEEK

The European Commission will present proposals to protect whistleblowers, combat fake news and organise the digital single market. The international community will gather in Brussels to discuss how to help Syrians in the current war and after.

Investigation

MEP friendship groups offer 'backdoor' for pariah regimes

MEPs are using so-called 'friendship groups' to cater to foreign governments without oversight and little public scrutiny. Initially set up to promote cultural exchanges, some have become lobbying platforms to push state views from governments with poor human rights records.

Macron and Merkel pledge euro reform

France and Germany have pledged to forge a joint position on euro reform by June, despite German reluctance on deeper monetary union.

Agenda

Whistleblowers, Syria and digital revolution This WEEK

The European Commission will present proposals to protect whistleblowers, combat fake news and organise the digital single market. The international community will gather in Brussels to discuss how to help Syrians in the current war and after.

Macron and Merkel pledge euro reform

France and Germany have pledged to forge a joint position on euro reform by June, despite German reluctance on deeper monetary union.

News in Brief

  1. Audit office: Brexit 'divorce' bill could be billions higher
  2. MEPs urge better protection for journalists
  3. Dieselgate: MEPs back greater role for EU in car approvals
  4. European parliament adopts new organic farming rules
  5. EU granted protection to half million people in 2017
  6. Report: Facebook to carve 1.5bn users out of EU privacy law
  7. Greek court ruling permits migrants to travel to mainland
  8. Commonwealth summit hopes for trade boost after Brexit

Stakeholders' Highlights

  1. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  2. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  3. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  4. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  5. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  6. UNICEFCalls for the Protection of Children in the Gaza Strip
  7. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  8. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  9. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  10. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  11. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  12. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia

Latest News

  1. ECJ ruling set to end 10-year 'mouth tobacco' lobbying saga
  2. Whistleblowers, Syria and digital revolution This WEEK
  3. MEP friendship groups offer 'backdoor' for pariah regimes
  4. Macron and Merkel pledge euro reform
  5. Obscurity surrounds EU military fund's expert groups
  6. New EU party finance rules short circuit accountability
  7. Draghi to stay in secretive 'lobby' group
  8. Bulgaria offers lesson in tackling radical-right populists