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EU court ruling raises the stakes against cartels

Sep 01, 2014
Companies found guilty of taking part in cartels are likely to face more legal action for damages from victims after Europe's top court said that cartel members could be found liable for price rises initiated by rival businesses outside the cartel.



On 5 June a landmark ruling from the Luxembourg-based Court of Justice of the European Union (ECJ) came in a case involving elevator manufacturers Kone, Otis, Schindler and ThyssenKrupp. The companies were fined €992 million euros by the European Commission in 2007 for fixing prices of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands.

A subsidiary of the Austrian Federal Railways later sued the companies for €1.8 million in an Austrian court, saying its elevator suppliers, which were not members of the cartel, were able to charge an inflated price as a result of the cartel's actions.

The Austrian court subsequently asked the ECJ for guidance because Austrian laws block victims from seeking compensation if their suppliers are not part of a cartel. Judges in Luxembourg backed the plaintiff. "Where a cartel has the effect of leading competitors to raise their prices, the members of the cartel may be held liable for the loss caused as a result," they wrote in the ruling.

This is an important decision, since it increases the exposure and potential damage for cartel defendants.

 

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