EU Top Court Clears Governments to Seek Payment for Antitrust Losses

(CN) – Wading deep into the weeds of antitrust law, the European Court of Justice ruled Thursday that entities indirectly affected by price-fixing or other anticompetitive acts by a cartel – including government agencies – can demand compensation for their losses.

A man walks by the European Court of Justice in Luxembourg on Oct. 5, 2015. (AP Photo/Geert Vanden Wijngaert, File)

The Luxembourg-based high court’s preliminary ruling stems from a case pending in the Supreme Court of Austria in which the Austrian government is seeking compensation from five elevator manufacturers found to be acting as a cartel. According to the government, increased construction costs caused by the cartel led the government to subsidize construction projects in the form of promotional loans to the builders and its indirect losses should be compensated.

However, the Austrian high court questioned whether national law – which allows for repayment of material losses only – means that only entities that deal directly with the cartel, like customers and suppliers, can collect on losses caused by the cartel. The court referred the case to the European Court of Justice for clarification.

In its 7-page preliminary ruling, the EU high court found that effective protection against the negative consequences of an antitrust scheme would be seriously undermined if the right to compensation only applied to those directly affected by the cartel’s actions.

“Any loss which has a causal connection with an infringement of [EU antitrust law] must be capable of giving rise to compensation in order to ensure the effective application of the law and to guarantee the effectiveness of that provision,” the court wrote.

“Consequently, persons not acting as suppliers or customers on the market affected by the cartel must be able to request compensation for loss resulting from the fact that, as a result of that cartel, they were obliged to grant subsidies which were higher than if that cartel had not existed and, consequently, were unable to use that difference more profitably.”

It is up to the Supreme Court of Austria to determine if the Austrian government actually suffered a loss “by verifying, in particular, whether that authority had the possibility of making more profitable investments and, if that is the case, whether that authority adduces the evidence necessary of the existence of a causal connection between that loss and the cartel at issue,” the EU high court wrote.

The preliminary ruling is binding on the Austrian high court.

Elevator manufacturers in the case include Otis, two Schindler subsidiaries, Kone and ThyssenKrupp.

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