Cartel Damages
German Court considers parental liability and overcharge issues.

Jul 16, 2020

In a recent judgment, a German court for the first time considered there to be a general liability of group companies for the conduct of economic units they belong to. Whilst the question who is liable to compensate for damages is of wider legal interest, the case also highlights the evidentiary burden necessary to establish damages. The court clarifies that – in line with previous case law – even for claims with modest monetary claim value, succinct reference to historic cartel effects (such as the (in)famous 18%) is not sufficient. Instead, either an economic expert report deriving the damages or a detailed (economically and legally backed-up) discussion and interpretation of the facts of the case, which allow the Judge to estimate the damage “free-handedly”, is required.

Whilst the burden for small claimants ought to be set in a way that it does not strip them of their access to justice, it is clear that the courts are not willing to give free passes to small claims.

Market definition
Market definition under product migration.

Jul 15, 2020

In markets with substantial technological progress, there appears to be some confusion about the proper definition of the market when consumers migrate from older to newer products. Key questions are whether migration is a sign of substitution and whether substitution in these cases is asymmetric, and what this means for the market definition. Given the important role of market definition in competition cases and regulation, this may lead to suboptimal regulatory decisions. We discuss in this note how market definition should be approached under product migration.

State Aid
State aid in times of COVID-19. Competition, moral hazard and public policy

Jul 14, 2020

The outbreak of COVID-19 is having a significant impact on the world’s economy. There is a disruption of supply chains, lower consumer demand, increased uncertainty on investment plans, and liquidity constraints for firms. As a result, EU governments are ramping up State aid measures to weather the immediate blows. Granting State aid will have an impact on competition in the internal market. While the European Commission has set out some ground rules for granting State aid during this crisis, differences between aid levels and eligibility criteria remain. Additionally, Member States are also granting State aid that falls outside the Commission’s mandate, namely in the shape of wage subsidies and tax reliefs. In designing the State aid measures, Member States will have to ensure moral hazard is limited. Some Member States are considering to achieve additional public policy objectives through the eligibility criteria such as reduced tax evasion and increased sustainability.