Abstract
Abstract Cartel damage occurs in many different shapes. Actors that are beyond doubt heavily affected by a cartel agreement are the purchasers of the cartel—the direct same as the indirect ones. Economic insights teach us that they do not only suffer damage in the form of the overcharge they paid or of shares of this overcharge that are passed-on to lower levels in the supply chain, but also in the form of the volume effect: a price increase as induced by a cartel agreement leads to a reduction in quantities sold, the consequence of which is typically lost profit—ie the volume effect. Whereas this effect is firmly established in economics, on the legal side it is so far discussed only on a superficial level with legal practice lacking behind in its recognition altogether. This is particularly surprising in the German and Spanish legal order where the highest courts many years ago did recognize the relevance of this damage component in pass-on situations. This article thoroughly analyses the economic and legal perspectives in respect of volume effects.
Highlights
Cartel damage occurs in quite a variety of shapes
Economic insights teach us that they do suffer damage in the form of the overcharge they paid or of shares of this overcharge that are passed-on to lower levels in the supply chain, and in the form of the volume effect: a price increase as induced by a cartel agreement leads to a reduction in quantities sold, the consequence of which is typically lost profit—ie the volume effect
In contrast with economics and not in line with the Directive’s goal of full compensation, the volume effect has not so far received any major attention in cartel cases. This omission cannot be entirely placed on the shoulders of the judges, because the litigating parties do not seem to refer to it
Summary
Cartel damage occurs in quite a variety of shapes. Economic insights teach us that they do suffer damage in the form of the overcharge they paid or in the form of. The volume effect in cartel cases 3 underestimating the damage that purchasers suffer. This article seeks to determine whether there is anything peculiar about loss of profit caused by the volume effect compared to other situations which generate a loss of profit that can explain the major judicial scepticism.[6] To do so it looks at the volume effect in detail from an economic point of view and from the legal perspective of the two chosen jurisdictions
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