On 19 November 2015, the Regional Court of Düsseldorf (the
"Court") rejected a car insurer's claim for damages
resulting from the European Commission's decision in the car
glass cartel case. This judgment indicates that it remains
difficult for indirect purchasers of products that formed the
object of a cartel to prove that the damage resulting from the
cartel has been passed on to their market.
In 2008, the Commission fined four car glass producers for
participating in market-sharing, discussing target prices, and
allocating customers, between 1998 and 2003 (seeVBB on Competition Law, Volume 2008, No. 11,available
www.vbb.com). The total fine imposed on the producers amounted
to over € 1.3 billion. According to both EU law and German
law, such a Commission decision constitutes binding proof in
national courts that the conduct in question has taken place, was
anti-competitive and is therefore illegal.
In 2010, Huk-Coburg, a German insurance company, claimed damages
of at least € 21.56 million (while leaving the exact
determination of the amount to the discretion of the Court and
claiming almost double that amount with interest included) for
having paid excessive prices for the settlement of insurance claims
related to car glass during the period of 1998 to 2006.
The Court accepted that the Commission decision finding a cartel
constitutes prima facie evidence of higher prices in the market for
car glass, and found that the car glass manufacturers had not put
forward sufficient evidence to prove the contrary. Moreover, the
Court noted that it is unlikely that the cartel participants would
have continued their cooperation for such a lengthy duration if the
cartel had not had the effect of lessening competition.
Consequently, the Court acknowledged that damage had occurred with
respect to the car glass manufacturers' direct customers,
namely car manufacturers, who had paid higher prices as a result of
However, the Court found that Huk-Coburg had not advanced
sufficient elements proving that the damage had been passed on to
the downstream market of car insurance (i.e., indirect customers).
In the judgment, reference is made to the so-called ORWI case law
of the German Federal Supreme Court, in which that Court found that
there is no presumption that an increase in price during the cartel
period, on a market level downstream of the cartel's direct
customers, is attributable to that cartel. Rather, such a causal
relationship must be materially established, in a concrete sense,
by the indirect customers, which Huk-Coburg failed to do.
The principle established in the ORWI case is based on the
assumption that the direct customers of the cartel participants
would possibly have charged the same price to their customers, even
in the absence of the cartel. The Court lists a number of relevant
factors to take into account in this regard, including price
elasticity of supply and demand; the duration of the cartel; and
the intensity of competition on that market level. The Court deemed
that the evidence adduced by Huk-Coburg did not show that the
direct customers of the cartel members had determined their price
on the basis of costs, rather than on value, target, or some other
The Court acknowledged the existence of certain market
conditions suggesting that a passing-on of the higher price could
have taken place, namely the inelasticity of demand by end users,
the absence of alternatives, and the fact that all car
manufacturers were equally affected by the cartel. However, the
Court also referred to the particularity of this sector, in which
car manufacturers (i.e., direct customers) have a monopoly with
regard to the original spare parts market. Further, the Court
considered, a monopolist sets its price based on profit
maximisation, rather than on costs. This is illustrated by the fact
that car manufacturers have a significant profit margin and are
able to sell the car glass at 7 to 10 times more than their
purchasing price. As a result, the Court concluded that car
manufacturers were capable of absorbing the cartel surcharge into
their own margins, and that a passing-on of this surcharge had
therefore not necessarily taken place. The Court thus rejected
Huk-Coburg's claim for damages.
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