In a judgment of 5 June 2014 (C-557/12) , the Court of Justice ruled that cartel participants can be liable for increased prices charged by competitors which did not participate in the cartel. This may be the case where the cartel has enabled other market operators to charge higher prices than would have been achievable under normal competitive conditions and where this possibility was foreseeable. Customers who have to accept these higher prices as a result of "umbrella pricing" can claim damages from the cartel participants.
The Court, for the first time, had to rule on the question whether it should be possible to obtain compensation for damages resulting from umbrella pricing. "Umbrella pricing" means that a company that does not participate in the cartel can charge a higher price than would have been achievable under normal competitive conditions. Can customers of that undertaking claim compensation for the damage they incur as a result of the increased price? In some Member States (including Austria), such claims were not accepted for lack of an "adequate causal link".
The Court acknowledges that, in the absence of EU rules governing the matter, it is for each Member State to lay down the rules governing the exercise of the right to claim compensation, including those governing the required "causal link". These rules, however, must not undermine the full effectiveness of competition law, which requires that any individual has the right to claim damages for loss caused by a contract liable to restrict or distort competition.
According to the Court, umbrella pricing is one of the possible and foreseeable consequences of a cartel. Where certain conditions are met, it cannot be ruled out that a competing undertaking outside the cartel in question might choose to set its price at a higher level than it would have chosen in the absence of the cartel. Such a decision, despite being a purely autonomous decision, has been taken by reference to a market price distorted by the cartel, and thus contrary to the competition rules.
As a consequence, the victim of umbrella pricing may obtain compensation for the loss caused by the members of a cartel where it is established that (1) the cartel, given the circumstances of the case and, in particular, the specific characteristics of the relevant market, was liable to lead to umbrella pricing by third parties acting independently, and (2) the participants in the cartel could not have been unaware of those circumstances and specific characteristics. The Court concludes that the full effectiveness of Article 101 TFEU is put at risk by national rules which, in these circumstances, categorically exclude a right to compensation.
The judgment may result in further strengthening of the private enforcement of competition law.
Although it is clear for now that it must be possible to obtain compensation for damages resulting from umbrella pricing, this does not mean that cartel participants are automatically liable for all price increases in the cartelised market. In particular, it will have to be established that the increased price applied by the non-participant was caused by the cartel and that this was foreseeable.