The Rotterdam District Court recently used the European Commission's cartel decision in the elevators case as a point of reference to determine the scope and effects of the cartel in follow-on damages proceedings brought against several elevator manufacturers.
However, this does not bring the case home yet as the court also pointed out that the claim vehicle DGL will still need to substantiate the potential damage caused by the cartel with sufficiently detailed data.
In 2007, the Commission fined five elevator manufacturers for operating a cartel on the Dutch market between 1998 and 2004. Following this decision, several purchasers of elevators started legal proceedings to recover the damage they allegedly suffered as a result of the anticompetitive agreements. Among them are 41 housing associations, which have transferred their claims to claim vehicle DGL. DGL started legal proceedings against the elevator manufacturers in 2013.
In an interim judgment of 29 May 2019 in the damages proceedings brought by DGL, the Rotterdam District Court ruled on the effect of this Commission decision in follow on-proceedings, in particular when it comes to determining the scope and effect of the cartel. The Court addressed the questions (i) whether the cartel covers the entire Dutch market or only several projects (scope of the cartel) and (ii) whether the cartel led to a price increase (effect of the cartel).
The defendants raised several arguments in support of their claim that the scope of the cartel was limited and that the illicit arrangements did not cover the entire Dutch market. They alleged that only a limited number of projects were allocated and that for some projects not all manufacturers were invited to participate in the tender. The Court ruled that the anticompetitive agreements covered in principle every possible project. While it was not necessary for the manufacturers to divide a particular project (because it was clear from the outset to which party it would be assigned), this does not exclude the possibility for allocation. If not all manufacturers participated in a tender, that simply means that the agreement for that moment only directly covered the tender participants. And if a housing association had only requested an offer from one manufacturer, it is - considering the high common market share of the cartel participants - very plausible that the particular manufacturer took into account the information that was illegally exchanged by the other cartel participants.
In addition, the defendants argued that the infringement had no price-increasing effect. Again the Court referred to the Commission decision, that established that the purpose of the cartel was to increase prices and that the cartel participants succeeded in this. The Court found the fact that the manufacturers sometimes did not comply with their own agreements insufficient to assume that the purported price increase was undone. The infringement was extensive, long-lasting and covered the entire Dutch market. The District Court considered it likely that the cartel had a price-increasing effect and caused damage to the contracting parties of the manufacturers.
Similar to the judgment of the Amsterdam District Court in the trucks case [see our article: "Court applies Dutch law to all air freight cartel damages claims"], the Rotterdam District Court ruled that DGL will still need to argue and substantiate for each of the housing associations that there is a reasonable chance it suffered damage as a result of the cartel. DGL must submit into the proceedings further evidence that each housing association purchased elevators and/or related devices and services from a cartel participant during the time period the cartel was operated.
This article was published in the Competition Law Newsletter of June 2019. Other articles in this newsletter: