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Suppliers to a sellers’ cartel and the boundaries of the right to damages in U.S. versus EU competition law

Author

Listed:
  • Eckart Bueren

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

  • Florian Smuda

    (German Federal Cartel Office (Bundeskartellamt))

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.

Suggested Citation

  • Eckart Bueren & Florian Smuda, 2018. "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, Springer, vol. 45(3), pages 397-437, June.
  • Handle: RePEc:kap:ejlwec:v:45:y:2018:i:3:d:10.1007_s10657-017-9571-6
    DOI: 10.1007/s10657-017-9571-6
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    More about this item

    Keywords

    Competition policy; Comparative law; Private enforcement; Cartels; Suppliers; Quantification of damages; Standing;
    All these keywords.

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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