On 9 October 2018, the German Federal Court of Justice annulled four judgments of the Higher Regional Court of Düsseldorf with regard to the amount of fines imposed in the liquefied gas cartel case. The Federal Court of Justice remitted the case to the lower court as regards the calculation of the fine, but confirmed the substance of the decision.
In 2007 and 2009, the Federal Cartel Office (the "FCO") fined nine individuals and eleven undertakings a total of approximately € 250 million for their involvement in a customer allocation cartel in the liquefied gas sector. The companies had agreed not to poach each other's customers; they had informed each other about customer price requests and had paid compensation in case a customer switched to another supplier.
On appeal, the Higher Regional Court of Düsseldorf increased the fines imposed on the companies involved in the infringement. The Higher Regional Court did so to take account of the additional profits generated by the anticompetitive conduct, i.e., the difference between the actual revenue generated by the cartel and the revenue that the cartelists would have generated absent the cartel. According to the Higher Regional Court, the additional profit could only be estimated since the hypothetical competitive price was unknown. The cartel profit was estimated by comparing the prices charged by the companies involved in the collusion (the "cartelised prices") and those charged by their competitors active on the same market during the same period which were not involved in the cartel (the "competitive prices")
In its recent judgment on appeal, the Federal Court of Justice considered that the comparative analysis conducted by the Higher Regional Court was flawed in a number of respects. In particular, it noted that the methodology applied by the Higher Regional Court was not included within the catalogue of economically recognised methods (see, e.g., the European Commission Staff Working Document on quantifying harm in actions for damages based on breaches of Articles 101 or 102 of the Treaty on the Functioning of the European Union, para. 26). Recognized methods would include a comparison with the price development on cartel-free markets or a comparison based on price-determining elements.
The Federal Court of Justice stated that the approach adopted by the Higher Regional Court was not per se wrong and might be appropriate in cases where there was no comparable market with effective competition. However, it found that the Higher Regional Court had failed to explain why it preferred this specific method over other, more established, ones. According to the Federal Court of Justice, the trial court must clearly state why it chose one specific method and why that method was appropriate. In particular, the judgment must indicate that the court was aware of the main advantages or disadvantages of the alternatives in question.
The Federal Court of Justice confirmed that, in the case of a customer-allocation cartel, it was generally probable that, without the infringement, the prices of the cartel members would have been similar to the lower prices of the companies not involved in the infringement. However, the Federal Court of Justice found that, in making its analysis, the Higher Regional Court had disregarded the "umbrella effect", i.e., the fact that non-cartel members may increase their prices in view of the higher prices of the cartel. According to the Federal Court of Justice, the Higher Regional Court had failed to provide verifiable evidence to support the key assumptions on which its estimates were based, namely that absent the cartel, the average prices of the cartelists would have been comparable to those of the companies not involved in the infringement.
Remitting the cases, the Federal Court of Justice indicated that, in view of the time elapsed since the 2013 judgment of the Higher Regional Court of Düsseldorf, it might be preferable to apply a temporal comparative analysis, comparing the cartel period with a period of time when the market was not subject to the cartel. Furthermore, the Federal Court of Justice recommended engaging an expert to determine the amount of the additional profits generated by the cartel.
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