Author:
dr Christian Andrelang, LL.M.
Lawyer
Specialist lawyer for international business law
Specialist lawyer for commercial and corporate law
Compensation under antitrust law - The Federal Court of Justice has already dealt with questions of compensation for damages under antitrust law several times, in particular in the decisions ORWI (BGH, judgment of June 28, 2011 - Az: KZR 75/10), Lottoblock II (BGH, judgment of July 12, 2016, Ref.: KZR 25/14), gray cement cartel II (Federal Court of Justice, judgment of June 12th, 2018, Ref.: KZR 56/16) and rail cartel I (Federal Court of Justice, judgment of December 11th, 2018, Ref.: KZR 26/17). The most recent decision of the Rail Cartel II (Federal Court of Justice, judgment of January 28, 2020, Az: KZR 24/17) also ties in with the rail cartel, a quota and customer protection cartel, and clarifies important questions about causality and proof of damage.
Antitrust damages - cartel impact vs cartel bias
The Cartel Senate made a clarification that is important for practice in its judgment in the rail cartel II on the distinction between being affected by a cartel and being biased by the cartel. Antitrust damages require a precise distinction between the two requirements.
Cartel impact addresses the question of whether the respective plaintiff can at all be entitled to invoke the violation of an antitrust norm and to assert a claim for damages under antitrust law. Or in the wording of the Federal Court of Justice, whether the opposing party is to be blamed for anti-competitive behavior which - mediated by the conclusion of sales transactions or in another way - is suitable for directly or indirectly causing damage to the claimant.
According to the case law of the European Court of Justice, anyone can demand compensation for the damage if there is a causal connection between the damage and the behavior prohibited under Article 101 TFEU (ECJ, judgment of July 13, 2006 – C-295/04, – Manfredi; ECJ, judgment of March 14, 2019 – C-724/17, – Skanska; ECJ, judgment of December 12, 2019 – C-435/18, – Otis et al./Land Oberösterreich). Ultimately, popular lawsuits should be ruled out by the characteristic of – personal – cartel concern.
According to the clarification of the BGH in the rail cartel II, cartel bias is a question of causality and thus a question of damage. There was a lot of confusion here after the judgment in the rail cartel I. In the Rail Cartel II judgment, the Federal Court of Justice has now made it clear that it is not a question of establishing liability as to whether the cartel agreement actually had an effect on the procurement process in question, on which the claimant bases his request for cartel damages, and the business with it in this sense was "participated in a cartel". If it turns out that the claimant suffered damage attributable to the cartel agreement, it is also clear that the prohibited agreement had a negative impact on the transaction, in particular on the price paid. This is particularly the case if the judge comes to the conclusion that the antitrust agreement results in an excessive price level that affects the entire market. If the judge of fact cannot determine a market-related price increase, he must assess the indications that justify an excessive price in the specific case, i.e. for all affected and presented procurement processes. These aspects are the subject of the liability-filling causality within the framework of the damage assessment. The BGH also makes it expressly clear: If the Senate's judgment on the rail cartel I of December 11, 2018 () suggests something different, it is not adhered to. This has the advantage for the plaintiff that the first judge can be satisfied with the overwhelming probability when taking evidence and does not have to be fully convinced.
The plaintiff's problem of proof and prima facie evidence
burden of proof on the plaintiff
In practice, antitrust damages require the claimant to prove all the facts necessary for his claim, viz
- Affected by the cartel – this is about the plaintiff’s entitlement to claim
- antitrust bias – this is about the question of whether a specific transaction by the plaintiff concerned a product that was affected by the antitrust behavior
- Anti-trust behavior - here the plaintiff can usually refer to the investigation and the decision of the anti-trust authorities
- The causally caused damage and the causal connection between the antitrust violation and the damage.
The plaintiff must therefore prove that he has suffered damage of a certain amount which can be traced back to this violation of antitrust law, the so-called "fulfillment of liability".
principles of proof
The law regulates when a fact is actually proven. Compensation under antitrust law requires compliance with these legal principles in exactly the same way. A fact is proved when the judge is satisfied that a fact is correct as alleged. However, there are different degrees of this judicial conviction: While the judge must be completely convinced when establishing liability that the necessary claim requirements such as violation of antitrust law and cartel impact have been met, it is sufficient for the fulfillment of liability, i.e. the occurrence of damage, of the asserted Amount of damage and the causality that the judge considers these to be predominantly probable. The so-called prima facie evidence helps here. The prima facie evidence is a facilitation of proof: If the person with the burden of proof succeeds in proving a certain course of events that is typical, i.e. often occurs in general, and this course of events typically causes a certain success, the occurrence of this success is also assumed for the person with the burden of proof, without the person with the burden of proof being able to prove the success must be specifically proven. For a cartel, this would mean: If the anti-trust agreements generally have a price-increasing effect, there would be an empirical finding that the specifically disputed procurements made on the market affected by the cartel were also affected by this effect. The plaintiff would therefore have to prove a general price-increasing effect and at the same time would have provided evidence for the products he purchased.
Antitrust damages: The end of prima facie evidence
The jurisprudence also allowed the prima facie evidence for two questions: On the one hand, there should be an appearance and thus the proof should be provided that a certain procurement process, i.e. the purchase of products from one of the cartelists, which was in the " Sphere of action" of a cartel took place, was also biased by this cartel agreement. On the other hand, there should be an indication that a cartel is increasing prices, i.e. that the plaintiff bought at inflated prices and suffered damage as a result.
However, the BGH did not agree with this assumption of prima facie evidence as far as quota and customer protection cartels were concerned. The Federal Court of Justice ruled in its judgment of 11.12.2018 Rail Cartel I, Az.: KZR 26/17 - "Rail Cartel" that in the case of a quota and customer protection cartel, the requirements for prima facie evidence are not met either with regard to the occurrence of damage or with regard to the cartel bias of individual orders are. Whether the BGH still wanted to allow and use the prima facie evidence for price cartels, however, cannot be inferred from the judgment in the First Rail Cartel.
In its judgment on the rail cartel II, the Federal Court of Justice confirmed its task of prima facie evidence from the judgment on the rail cartel I and justified it more clearly. According to the BGH, prima facie evidence does not work in the case of quota or customer protection cartels because there is no typical and uniform course of events in quota or customer protection cartels that always leads to the same result. There are too many different forms of and behavior within quota and customer protection cartels to be able to speak of a typical, i.e. always the same, course of events. Cartels differ in particular in the number of participants, the duration and stability of the cartel, the cartel discipline of the participants, the structure of the affected market, the degree of market coverage by the cartel or alternative market options. The longer a cartel has existed, the more these factors can change, so that there is no typicality.
For quota and customer protection cartels, it has now been decided that prima facie evidence is of no help. However, for other forms of cartels, such as price cartels, prima facie evidence is not expressly excluded. Plaintiffs can therefore continue to work and argue with prima facie evidence; however, they will probably no longer be successful with quota or customer protection cartels.
The new role of circumstantial evidence
However, the Federal Court of Justice explains in its judgment on the rail cartel II how the proof of the occurrence or causality of the damage and the amount of the damage is to be provided without recourse to prima facie evidence. The plaintiff has to work with circumstantial evidence.
The finding that the price that a company involved in a cartel agreement agrees with a customer is higher than it would be without the cartel agreement, or in general the price level that occurs on a market affected by a cartel agreement is higher than that price level lies, which would have arisen without the agreement, can regularly only be made on the basis of circumstantial evidence. Because only the actually agreed prices and the actual price level on the affected market can be observed and thus directly ascertained. By contrast, prices and price levels under unmanipulated market conditions are necessarily hypothetical. The judge of fact must therefore come to conclusions about the hypothetical market price, using those circumstances that indicate how market events would probably have developed without the cartel agreement.
For the conviction of the judge of fact as to whether the prices or the price level are higher than the hypothetical one, an overwhelming probability based on a secure basis is sufficient that damage has occurred. The judge must take into account all the evidence presented by the plaintiff. The plaintiff, in turn, must ensure that he cites enough evidence in his lawsuit that justifies the overriding probability.
In the overall assessment of the indications and the assessment of such an overriding probability based on the indications presented, the judge must also include statements of experience. The Federal Court of Justice expressly emphasizes in its judgment of the "Schienenkartell II" that the judge of fact has to consider in particular that in favor of the buyer of a company involved in a cartel agreement, an actual presumption based on the high probability of such an event - in the sense of an empirical sentence, not as a prima facie evidence - argues that the prices achieved as part of the cartel are on average higher than those that would have formed without the anti-competitive agreement and thus make the assumption that the prices achieved as part of the cartel are on average higher than those that would have been without would have formed an anti-competitive agreement. The BGH set out these empirical principles in particular in its judgment "Gray cement II" of 12.06.2018, Az.: KZR 56/16, dated . This presumption gains weight the longer and more sustainably a cartel has been practiced and the higher the probability that it has had an impact on the price level that has arisen as a result of the elimination or at least severe dampening of competition (BGH, WuW/E DE-R 1567, 1569 - Berlin ready-mixed concrete I, BGH, NZKart 2019, 101 para. 55 - rail cartel). The Federal Court of Justice confirmed this recognized empirical statement in its judgment of 11 December 2018.
The difference to prima facie evidence lies in the following:
- The plaintiff must present indications of increased prices or an increased price level. It is not enough to simply present a quota or customer protection cartel. Although this is additionally necessary, it is not sufficient according to the judgment of the Rail Cartel II. The defendant will also present evidence that the prices were not increased. In particular, the plaintiff must provide evidence of the hypothetical cartel-free price and price effects.
- For the judge, based on an overall assessment of all indications that speak for and against an increased price level, there must be an overwhelming probability that damage has occurred.
- In addition, the judge of fact has to deduce for each individual case and take into account in this overall assessment whether there is experience that the prices are excessive. These empirical statements must be taken into account in addition to the indications in the overall assessment. In this respect, the BGH repeats the following two statements of experience: 1. This presumption becomes all the clearer the longer and more sustainably a cartel has been practiced and 2. the higher the probability that it has had an impact on the price level that has changed as a result of the elimination or at least severe dampening of competition.
However, these empirical statements do not apply in the abstract, but antitrust damages require their relevance in the specific damages process and the facts presented in its context. The weight of the empirical sentence thus depends decisively on the specific structure of the cartel and its practice, as well as on which other circumstances can be identified that speak for or against a price effect of the cartel agreement.
Antitrust damages – This is important now
Since the Rail Cartel II judgment, three things have to be observed:
1. The decision model basic judgment and double prima facie evidence is no longer open to the courts. Fundamental judgments are likely to be issued much less frequently in the future, if they are still permissible at all.
2. If a party wishes to claim damages under antitrust law because of a quota or customer protection cartel, it is absolutely required to present all of its so-called procurement transactions, i.e. contracts with which it believes it has purchased products at prices that are inflated by the cartel, individually. In addition, it must present all the indications that speak for an overriding probability of damage caused by the cartel. The plaintiff cannot therefore withdraw from quoting from the fine notice and then claim damage without a detailed explanation of the individual events.
3. These principles are relevant for all cases that took place before the introduction of Section 33a GWB. Section 33a GWB now contains an actual presumption of damage and the cartel-related price increase. The cartel bias, on the other hand, still has to be demonstrated by means of circumstantial evidence in accordance with the requirements of the Rail Cartel II judgment.
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