On July 1, 2019, following a one-year public consultation with national courts and other stakeholders, the Commission published new guidelines to assist national judges in estimating the “passing-on” of overcharge in cartel damages claims.[1] The guidelines are the latest step in efforts to develop a forum for antitrust damages litigation throughout Europe, given that these actions are, at present, typically confined to a small number of national jurisdictions (the U.K., the Netherlands, and Germany).

Three points are notable. First, particular emphasis is placed on the economic theory underlying the notion of passing-on, and the factors affecting the existence and magnitude of its effects. The guidelines explain that passing-on is more likely when the overcharge impacts the direct purchaser’s variable costs, and, in particular its marginal cost, which typically has a considerable bearing on price-setting decisions. Second, the text provides guidance on the data and information required to quantify passing-on effects, and the use of economic experts in damages actions. Third, different methodologies for the quantification of passing-on effects are explained, such as the comparison with similar markets unaffected by the cartel, the analysis of historical changes in the cost of inputs and their impact on prices, and the development of simulations based on economic models.

In addition, the Commission has initiated a consultation on draft guidelines on the disclosure of confidential information. Under the Damages Directive, national courts have the power to order the disclosure of evidence containing confidential information. The draft communication clarifies that confidentiality of information does not stand in the way of its disclosure, and also sets out the following considerations to govern any disclosure request: (i) national courts must determine if the claim for damages is plausible, if the disclosure request concerns relevant evidence, and if the request is proportionate; (ii) disclosure requests must identify specific evidence “as precisely and as narrowly as possible;”[2] and (iii) when assessing proportionality, a national court must consider whether the request was formulated specifically with regard to the nature, subject matter or contents of documents submitted to a competition authority.[3]

[1]      A communication from the Commission, on guidelines for national courts on how to estimate the share of overcharge passed on to the indirect purchaser.

[2]      Recital 16 and Article 5(2) of the Damages Directive.

[3]      Article 6(4)(a) of the Damages Directive.