ECJ Holds That Companies Involved In Price-Fixing Can Be Held Liable For Damage Incurred Outside A Cartel

On 5 June 2014, the Court of Justice of the European Union ("ECJ") handed down its judgment in Case C-557/12 Kone AG and Others V ÖBB-Infrastruktur AG, finding that participants in a cartel may be held liable for damage caused outside the cartel.

In 2007, the European Commission imposed fines totaling € 992 million on Kone, Otis, Schindler and ThyssenKrupp for their participation in price-fixing on the market for the installation and maintenance of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands.

In 2008, the Austrian authorities also imposed fines on several undertakings (including Kone, Otis and Schindler) for their participation in a similar cartel in Austria.

ÖBB-Infrastruktur AG ("ÖBB"), a subsidiary of Austrian Federal Railways, had purchased elevators and escalators from suppliers that were not involved in the cartel. It brought proceedings before the Austrian courts, seeking € 1,839,239.74 in compensation from the Austrian undertakings which had participated in the cartel for losses sustained as a result of its suppliers having raised their prices as a result of the cartel (umbrella pricing).

The Austrian Supreme Court referred a preliminary question to the ECJ, asking whether the Austrian cartel members could be found liable for the losses allegedly sustained by ÖBB. Under Austrian law, such compensation was not possible due to the absence of a contractual relationship between ÖBB and the members of the cartel.

According to the ECJ, the effectiveness of the prohibition on cartel activity would be jeopardised if applicants were unable to seek compensation for loss caused by an infringement of competition law. The Court went...