On December 11, 2018, the German Federal Court of Justice (“FCJ”) held that, at least in relation to quota fixing and customer allocation cartels, plaintiffs could no longer rely on prima facie evidence to establish that a cartel infringement led to causal damage. The FCJ accepted, however, a factual presumption (tatsächliche Vermutung)— softer compared to prima facie evidence—that cartels would lead to an overcharge, and held that such a presumption was of “high indicative significance”. Since then, lower courts have rendered a number of judgments and struggled with applying the new evidentiary standard in practice.
In an administrative proceeding in 2005, the FCJ held that economic theories postulated that cartels are generally “profitable” from the cartelists’ perspective. In the FCJ’s view, there is accordingly a high probability that cartels lead to inflated prices for purchasers of cartelized products. Following this ruling, German civil courts developed extensive case law on prima facie evidence that a plaintiff needs to put forward in cartel damages litigation. This line of case law routinely enabled plaintiffs, for a wide variety of hardcore cartels, to rely solely on prima facie evidence to show that a cartel affected their business transactions and that they suffered loss as a result. For prima facie evidence, it typically sufficed to submit an antitrust authority’s infringement decision. In the case of non-hardcore cartels (e.g., pure information exchange), on the other hand, courts rejected plaintiffs’ reliance on such prima facie evidence.
The FCJ’s Decision
No Prima Facie Evidence In Relation To Occurrence Of Damage And Causality
In its December 2018 decision, the FCJ rejected the assumption that cartels “typically” cause damage, “in view of the diversity and complexity of agreements restricting competition”. The “typicality” required for the principle of prima facie evidence could only be established where the underlying elements occur so frequently that there is a very high probability that they are present in every individual case. In particular, according to the FCJ, it could not be established with the requisite very high probability that cartel agreements are always implemented successfully. This depended on numerous factors that may change over time, such as the number of market participants and the parties to the anti-competitive agreements, their ability to exchange the information necessary to implement these agreements, their “cartel discipline,” and customers’ ability to switch to other suppliers. As anti-competitive agreements were ultimately motivated by the cartelists’ self-interests, which might lead to widespread deviation from the agreements, it could not typically be assumed that prices would be inflated in all cases. The FCJ, nevertheless, left open the possibility of prima facie evidence being appropriate in specific cases where additional “qualified” circumstances typically causing damage are present (e.g., a cartel agreement concerning long-standing and legacy customers and in relation to transactions involving such customers).
The FCJ also reversed the lower courts’ case law that, in order to establish causality, it was sufficient to demonstrate a transaction fell within certain parameters in terms of the cartel’s relevant products, period, and geographical scope—as typically described in infringement decisions of the antitrust authorities. According to the FCJ, it is not sufficiently certain that anti-competitive agreements are actually implemented in respect of each customer.
Factual Presumption Can Be Applicable
In view of the effet utile principle established by the European Court of Justice (“CJEU”), the FCJ nevertheless seems ready to introduce alternative mechanisms to alleviate the evidentiary burden imposed on cartel victims. Even though “typicality” cannot be assumed, the FCJ allows for a softer factual presumption that cartels would lead to higher market prices; it also held that such presumption was of “high indicative significance” when courts come to consider evidence. The main difference between a factual presumption and prima facie evidence—as implied by the FCJ—is that the former requires a greater effort on the part of plaintiffs (in the form of circumstantial evidence) to clarify and present the facts on an individual basis, a more intensive factual analysis, and a specific and comprehensive evaluation of the individual case.
The Düsseldorf Court Of Appeals’ Decision
In its decision of February 23, 2019, the Düsseldorf Court of Appeals’ (“DCA”) deviated from the FCJ’s position and allowed a plaintiff to rely on prima facie evidence to prove that a cartel had caused it to suffer loss and damage, noting, however, that the outcome of the case would not have been different, had it resorted to the FCJ’s evidentiary standard.
In the DCA’s view, the FCJ had failed to provide persuasive reasons for abandoning prima facie evidence in relation to hardcore cartels, thereby putting itself at odds with its own case law. Notably, in another decision of 2018, the FCJ had concluded that a quota fixing agreement (i.e., a hardcore cartel) “generally” results in increased profits of the cartelists. Moreover, according to the DCA, unless there is specific evidence suggesting, for instance, a lack of “cartel discipline”, such aspects do not need to be assessed specifically, as they only concern exceptions to the general experience and regular course of events. Finally, the DCA also referred to the fact that the latest amendment to the ARC, implementing the EU Damages Directive, introduced a statutory legal presumption of damage (applicable to damage suffered after December 26, 2016). Taking all these factors into account, the DCA saw no reason to require a “very high probability” for prima facie evidence or a factual presumption, as suggested by the FCJ.
The DCA also objected to the FCJ’s position on prima facie evidence in relation to whether business transactions with a cartel participant had specifically been affected by the anti-competitive conduct. Unlike the FCJ, the DCA did not consider the “mere abstract possibility” of “practical difficulties” during the implementation of a cartel infringement sufficient to rebut the presumption that a cartel affected a customer’s specific business transaction with a cartelist.
The Stuttgart Regional Court’s And Stuttgart Court Of Appeals’ Decisions
In a series of decisions concerning the Trucks Cartel, the Stuttgart Regional Court followed an approach similar to the DCA’s. Although the court ultimately left open whether the FCJ’s ruling also applies to price fixing cartels, it concluded that if the FCJ’s stricter requirements for a factual presumption are satisfied, the requirements for prima facie evidence under the previous case law must also be satisfied. Similarly, in its decision of April 4, 2019, the Stuttgart Court of Appeals confirmed that the specific circumstances of
the Trucks Cartel meet both the FCJ’s stricter requirements for a factual presumption and the typicality requirement for the application of prima facie evidence.
The FCJ decision requires plaintiffs to submit to the court detailed accounts of how their business transactions with cartelists were affected by the cartel and that they suffered damage as a result. The latter, however, is only relevant for those cases (albeit still pending for several years) in which damage occurred prior to the end of 2016, as the legislator has since adopted a legal presumption of damage (see above). Despite this decision, plaintiffs will be able to rely on a factual presumption, which continues to ease their burden of proof to a certain degree.
As illustrated by the lower courts’ recent decisions, the long-awaited FCJ decision has still not put an end to the discussions around fundamental evidential issues in follow-on cartel damages actions. It almost seems as if the FCJ’s shift towards a factual presumption has rather led to a mere terminological change—the same factors which defendants used to put forward to rebut prima facie evidence may now need to be assessed in the context of applying the factual presumption. The burden of proof for those factors rebutting a factual presumption still lies with the defendant.
 Schienenkartell (KZR 26/17), FCJ decision of December 11, 2018, only available in German here. See also our Client Alert of February 1, 2019, available in English here.
 Berliner Transportbeton I (KRB 2/05), FCJ decision of June 28, 2005, only available in German here.
 Again, there might well be still cases where cartel victims could successfully invoke the principle of prima facie evidence in proving that their business transactions had been affected by the cartel agreements (see above).
 Schienenkartell (VI-U (Kart) 18/17), DCA decision of January 23, 2019; as of publication of the newsletter, the decision has not yet been published.
 Grauzementkartell II (KZR 56/16), FCJ decision of June 12, 2018, only available in German here.
 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union Text with EEA relevance.
 Section 33a (2) ARC implements Article 17(2) of Directive 104/2014/EU on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union.
 LKW Kartell (45 O 5/17), Stuttgart Regional Court decision of February 11, 2019; (45 O 13/17), Stuttgart Regional Court decision of February 18, 2019; (30 O 47/17) Stuttgart Regional Court decision of February 28, 2019; (30 O 310/17), Stuttgart Regional Court decisions of February 28, 2019; (30 O 311/17), Stuttgart Regional Court decisions of February 28, 2019; (30 O 11/18), Stuttgart Regional Court decision of February 28, 2019; (30 O 7/18), Stuttgart Regional Court decisions of February 28, 2019; and (30 O 39/17), Stuttgart Regional Court decision of February 28, 2019.
 LKW Kartell (2 U 101/18), Stuttgart Court of Appeals decision of April 4, 2019. At time of publication, only the press release was available (in German here).