Law and Practice
Elgar Competition Law and Practice series
Despite the prima facie simplicity of the principle of the right to damages for breach of EU competition law as laid down in Crehan and Manfredi, more complex are a further two particular yet important matters that have to be addressed when reviewing the operation of damages actions in practice. These are the two linked issues of who is entitled to claim, and, provided the right extends to both direct and indirect purchasers, how damages should be awarded in light of the loss sustained by claimants operating at different levels of a supply chain. These two vexing issues are intrinsically complicated matters which lead to a considerable degree of legal uncertainty. Furthermore, they are two issues where the intersection of antitrust law, policy and economics is particularly acute. To illustrate these two linked concepts, let us assume that a cartel participant or a dominant company abusing its market power (for example, a manufacturer) sells its goods at supra-competitive prices to a direct purchaser (for example, a wholesaler). At this juncture of the supply chain, the wholesaler has two options. It can simply absorb the supra-competitive price and continue its commercial activities, thereby suffering a loss in consequence of paying a price that is in excess of the competitive price (often referred to as an ‘overcharge’). Alternatively, and the more likely course of events, it can pass on this overcharge to an indirect purchaser (for example, the end-consumer), either in whole or in part.
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