How to estimate cartel damages

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Despite the best efforts of the European legislator, in some European Member States private enforcement of competition law, that is, private litigation for compensation of cartel overcharges is meagre at best. One of the numerous reasons why private enforcement of competition law mostly fails is the lack of meaningful provisions for determining the damage suffered, that is, the cartel overcharge. Only some EU Member States have solved the problem by implementing a presumption of cartel damage. For the remainder, the burden of proof and, thus, of determining the cartel overcharge lies with the claimant.

As the essential feature of anti-competitive conduct is secrecy on the part of the cartelists and, thus, a striking asymmetry of information between the defendant cartelist and the claimants, the latter rarely have any relevant information on the anti-competitive conduct let alone of the cartel overcharge. Even when competition authorities fine cartelists (‘follow on-cases’) this asymmetry persists. Although claimants thereby learn for which goods or services a cartel existed, the competition authorities do not provide any meaningful information on the cartel overcharge.

To be sure, claimants could present commission expert opinions as evidence in court. These expert opinions are, however, very time-consuming and expensive as the experts also suffer from asymmetry of information on the cartelists’ anti-competitive conduct. Hence, experts perform data forensics and apply difficult economic methodologies with often weak results. Numerous econometric expert opinions in identical cases provide for drastically different outcomes.