A Legal Approach to the Kone Decision: Does the Private Enforcement of European Competition Law Need an Umbrella?

With the recent Kone judgment, the European Court of Justice has faced a debate on the admissibility of actions for damages suffered as a consequence of the umbrella effect in the private enforcement of European competition law. In particular, the Court was questioned about whether the right to compensation for damages suffered by the victims of a cartel is also valid for the customers of an undertaking not party to that cartel which decided to raise the prices of its own products above the normal market price under conditions of competition, taking advantage of the price distortion produced by the cartel. Recognizing this right to compensation suggests the likelihood of damage claims, even when those impacted by the anticompetitive practice are not in any way linked to business activities that infringe competition rules. From a legal perspective, serious doubts arise concerning the acceptance of such umbrella damages and the possibility of proof in private enforcement proceedings, especially concerning proof of the link between the anticompetitive conduct and the damages. © 2016, Max Planck Institute for Innovation and Competition, Munich.