The Broad Axe Falls ' Granville v. LG

Published date26 March 2024
Subject MatterAntitrust/Competition Law, Litigation, Mediation & Arbitration, Antitrust, EU Competition , Cartels, Monopolies, Trials & Appeals & Compensation
Law FirmArnold & Porter
AuthorAlastair Brown

One of the very few UK cartel damages judgments was recently handed down in Granville Technology Group Limited and Others v. LG Display Co. Ltd. and Others [2024] EWHC 13 (Comm) (Granville v. LG). The judgment demonstrates the UK courts' evolving approach to deciding follow-on damages claims, particularly with regard to the consideration of overcharge and downstream pass-on:

1. Overcharge: The English courts continue to use the "broad axe" principle when assessing overcharge. This approach allows the court to adopt an element of estimation and assumption in calculating damages in order to avoid an unreasonable insistence on precision to defeat a justified claim for compensation. This is a pragmatic approach to damages given the inherent evidential limitations often seen in follow-on damages claims.

A similar approach by the Competition Appeal Tribunal (the CAT) was recently upheld by the Court of Appeal in Royal Mail/BT.1 In its February 27, 2024 judgment, the Court of Appeal dismissed all of the unsuccessful defendant's grounds of appeal, noting that "criticism of this approach [namely wielding the broad axe on issues of overcharge] was unjustified" as the "CAT did not simply split the difference" but "made positive and reasoned findings as to the appropriate quantification of the overcharge" by applying the broad-axe principle in "precisely the sort of situation where wielding the broad axe is appropriate."2

2. Demonstrating Pass-on: A lack of documentary evidence is not fatal to demonstrating that there has been pass-on of the price increases. Rather, the broad-axe principle enables parties to rely on a mixture of economic theory and factual evidence.

3. Broad Axe: In the calculation of pass-on, an estimation of the rate of pass-on will be made where necessary, taking into account all the available evidence.

4. Applicable Law: The court will look to substance and not to form when considering which country's law should apply to a particular claim. It will assess the significance of factors connecting the case to England and Wales at a practical level.

Background

Granville v. LG is a follow-on damages claim arising from a cartel in the worldwide market for thin film transistor-liquid crystal display (LCD) panels. LCD panels are used across a range of electronic devices including computer monitors, laptop screens, and LCD televisions. On December 8, 2010, the European Commission issued a decision finding that a cartel had existed in the LCD market from...

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