vitamin cartel fined to pay damages

20 January 2005

Georg Terhorst

In contrast to previous judgments by German courts against members of the vitamin cartel (see our previous article on this topic), the District Court of Dortmund required Hoffmann-La Roche to pay damages to one of its customers, despite arguments that any financial loss would have been “passed on”, through higher prices, to end customers. The result makes Hoffmann-La Roche the first member of the vitamin cartel to lose a damages claim in Europe. If the decision is confirmed by the Appellate Court of Düsseldorf, it could allow other customers to sue successfully.

The vitamin cartel was the subject of Commission decision COMP/E-1/37.512 of 21 November 2001. In this decision the members of this price cartel were fined the then record fine of €855.22 million. Subsequently a number of customers claimed damages for the difference between the inflated price and the price the vitamins should have cost without the influence of the cartel. Until the Dortmund judgment, German courts had dismissed such cases, reasoning that the damages were not suffered by the customer of a cartel member but by the final consumer to whom the customer passed on the inflated cartel prices.

The Dortmund court ruled that inflated prices initially result in damages for the customers of cartel members. Whether these damages were passed on to the final consumer has to be proved by the injuring party, i.e. the cartel member, but here Hoffmann-La Roche did not present sufficient evidence. In addition, the court argued that the rejection of such a compensation claim would undermine the objective of antitrust laws.

This decision is particularly noteworthy with respect to the amendment of the German Act against Restraints of Competition (ARC). Even though the government draft of 26 May 2004 does not include a clarification that the “passing-on-defence” is inapplicable in German law, potential future cartel members should be aware of possible changes. The German federal government relied, in its draft, on jurisprudence to find a satisfactory answer. Rumours already indicate that the respective provision in the draft ARC may be subject to change in the further course of the legislative process.

Source: Judgment by the District Court of Dortmund (13 O 55/02) published in Europäisches Wirtschafts- und Steuerrecht, (Vol. 15, No. 9, September 2004), p. 434 – 436.