Damages Actions: The Interplay Between The Passing-On Defence And Indirect Purchaser Compensation

Originally published in Competition Law Insight, July 2008

This is the second of a two-part article on the European Commission's recent white paper. This instalment deals with the following train of thought: if the passing-on defence is allowed, the principle of effective compensation requires that indirect purchasers are:

• entitled to claim damages for loss suffered due to a cartelist's prohibited behaviour; and
  
  
• financially capable of initiating a damages action, which in turn requires that there is a large enough loss to justify bringing a claim.
  
  

If this is not the case, the cartelist will get away with not compensating the loss caused by its anticompetitive behaviour at all, which is clearly an undesirable outcome from a public policy perspective. This is particularly the case because such a situation would lead to a decrease in