The State Of Umbrella Damages In Canadian Antitrust Litigation

Judges in Ontario and B.C. have reached different decisions on whether cartel members may be liable for umbrella pricing. These two cases of first impression may be headed for the Supreme Court of Canada.

Umbrella claims are not unusual in U.S. antitrust litigation, though not all U.S. courts have permitted such claims to proceed. Last year, the European Union Court of Justice held that umbrella pricing claims are allowed in European cartel cases.

What is Umbrella Pricing?

Umbrella pricing is where cartel outsiders increase their prices for substitute products because of reduced quantities and increased prices by cartel members. The higher prices charged by the cartel members create an umbrella effect and enable non-cartel members to raise their prices to at or just below the cartel price without losing sales. For example, in the EU case, the plaintiff bought elevators and escalators from both members of the cartel and non-cartel members. It alleged that its