Umbrella pricing in follow-on actions

Case Summary 6: C-557/12 Kone AG 

I recently stumbled across an interesting judgment by the ECJ on ‘umbrella pricing’.

‘Umbrella pricing’ refers to a situation where an undertaking, who is not a party to a cartel, adjusts its prices higher than what it would otherwise have been able to under normal market conditions, thus benefiting from the cartel’s practices.

The issue before the Court is whether the civil liability of the parties to the cartel extends to ‘umbrella pricing’.


The parties to the cartel in question are in the business of the installation and maintenance of elevators and escalators in various Member States of the EU.

OBBinfrastruktur AG (“OBB”) purchased from a manufacturer who was not a party to the elevator cartel. The former was of the view that the manufacturer, in relying on the protection of the elevator cartel, had set the price higher than would otherwise have been able to under normal market conditions.

As such, OBB brought proceedings against the undertakings involved in the cartel for damages.

It is noted that the claim by OBB would have been dismissed from the outset under the Austrian national civil law where undertakings who are parties to a cartel could not be held liable for umbrella pricing.


The issue before the ECJ is whether the laws of a Member State can categorically exclude the possibility of seeking compensation for damage suffered owing to the higher prices charged, and independently arrived at, by undertakings who are not parties to the cartels.

ECJ Ruling 

In its brief judgment (5 pages), the ECJ held that Member States cannot categorically exclude such possibility.

The Court stated that: “[t]he full effectiveness of Article 101 TFEU [EU equivalent of the First Conduct Rule] would be put at risk if the right of any individual to claim compensation for harm suffered were subjected by national law, categorically and regardless of the particular circumstances of the case, to the existence of a direct causal link while excluding that right because the individual concerned had no contractual links with a member of the cartel, but with an undertaking not party thereto, whose pricing policy, however, is a result of the cartel that contributed to the distortion of price formation mechanisms governing competitive markets.

The reasoning of the Court is as follows:

  1. In recalling the direct effects of the competition rules, the effectiveness of the aforesaid would be undermined if individuals are not able to claim damages for loss caused to him by an anti-competitive conduct [20-22].
  2. The ability for an individual to claim compensation for such a loss has the effect of “[strengthening] the working of the European Union competition rules.” [23]
  3. While, in the absence of EU rules governing the matter, it would be for the domestic legal system of each Member State to legislate on the exercise of such right to claim compensation, “the rules applicable … must not be less favourable than those governing similar domestic actions…and must not make it in practice impossible or excessively difficult to exercise rights conferred by EU law.” [24-25] Also, they must not hinder the effective application of the competition rules.[26]
  4. Notwithstanding that price setting by an undertaking is a “purely autonomous decision”, “umbrella pricing” would have been “one of the possible effects of the cartel” which the members to that cartel cannot disregard. [28-30]
  5. Therefore, the decision to exclude categorically the right to seek compensation in such a situation on the basis that the causal link “have been broken by the autonomous decision of the undertaking not party to the cartel” would undermine the effective implementation of the competition rules. [31-34]


It seems that the usefulness of the above ruling would be limited in the context of a follow-on action in Hong Kong. The reason being that all the Court really says is that Member States cannot categorically exclude the umbrella theory. It would still be a matter for them to lay down the rules.

Having said that, a key take-away from this judgment is that the ECJ appears to accept that there would be a casual link between the cartel and umbrella pricing.

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