Short Reads

District Court of Gelderland denies passing-on defence in antitrust litigation related to the GIS-cartel

District Court of Gelderland denies passing-on defence in antitrust litigation related to the GIS-cartel

District Court of Gelderland denies passing-on defence in antitrust litigation related to the GIS-cartel

04.04.2017

On 29 March 2017, the District Court of Gelderland rendered a ruling in the "damage assessment procedure" ("schadestaatprocedure") between TenneT and ABB concerning an overcharge TenneT allegedly paid for a gas insulated switchgear installation ("GIS-installation"). The District Court awarded an amount of EUR 23 million plus interest to TenneT and denied ABB’s defence that TenneT did not suffer any loss because it passed on the costs of the GIS-installation to its customers (the "passing-on defence").

In previous decisions by the District Court for the Eastern Netherlands, the Court of Appeal of Arnhem-Leeuwarden and the Dutch Supreme Court, ABB was held liable vis-à-vis TenneT for ABB’s participation in the "Gas Insulated Switchgear cartel" between the years 1998-2004 [see the July 2016 Stibbe Litigation Blog]. Following the judgment of the Supreme Court on 8 July 2016, the case was referred to the District Court of Gelderland to rule on the quantum of damages.

In defence against TenneT's claim, ABB had submitted two economic expert reports arguing - with references to ABB’s profit margins - that TenneT had not paid any overcharge. ABB moreover requested the District Court to rule that these reports would fall under a "confidentiality ring", meaning i.a. that the judgment should not contain any references to ABB's margins. The District Court denied this request on the basis that third parties had a valid interest in obtaining an unredacted judgment, given ABB's reliance on the passing-on defence. As for the substance, the court ruled that the expert reports did not provide sufficient insight into ABB's input and production costs. Instead, the District Court ruled that TenneT had furnished enough evidence to substantiate its claim that it had paid an overcharge.

As for ABB's passing-on defence, the District Court accepted that TenneT, an electricity transmission system operator, was likely to have passed on the overcharge to its direct customers who in turn passed on this overcharge to the general public. According to the Court, however, the general public is unlikely to sue ABB for damages given the costs of legal proceedings. Moreover, any damages awarded to TenneT would – in the Court's view – likely end up benefitting the general public because the Dutch state is a 100% shareholder of TenneT. In a curious consideration obiter, the Court appears to imply that the fact that ABB received immunity from fines in the context of the European Commission's leniency programme, militates in favour of the Court's decision to reject the passing-on defence. In light of these circumstances, the Court ruled that it would not be reasonable to accept ABB's passing-on defence.

The District Court's reasoning is similar to its reasoning in January 2013, when it ruled that it would not be reasonable for ABB to escape liability using the passing-on defence. This ruling was however overturned on appeal because the compensatory nature of Dutch tort law is not concerned with the fact that ABB might escape some or all of its liability. ABB now has three months to decide if it wants to appeal the judgment of 29 March 2017.

This article was published in the Competition Law Newsletter of April 2017. Other articles in this newsletter:

  1. Court of Justice confirms the fine imposed on Samsung in the cathode ray tubes cartel
  2. Court of Justice rules on the Hearing Officer's competence to resolve confidentiality requests
  3. General Court annuls European Commission's merger blocking decision in UPS/TNT for procedural errors 
  4. European Commission proposes a new Directive to empower national competition authorities to be more effective enforcers of EU competition law rules
  5. European Commission launches anonymous whistleblower tool

Team

Related news

26.03.2020 BE law
​I am suffering significant financial losses as a result of the spread of the corona virus. Is there a possibility of State aid?

Short Reads - COVID-19 brings certain questions to centre stage regarding State aid. In this short read, Peter Wytinck, Sophie Van Besien and Michèle de Clerck discuss the possibility of State aid in case of significant financial losses as a result of the spread of the corona virus.

Read more

05.03.2020 NL law
Swifter merger clearance and shorter merger filings in Belgium

Short Reads - Companies can expect swifter merger clearance and simpler filing rules in Belgium. The Belgian Competition Authority has published a communication with additional rules concerning the simplified procedure for certain types of concentrations. As a result, a new category of concentrations will be eligible for a simplified merger filing, leading to swifter approval and lower costs. It will also allow the BCA to focus its resources on more problematic and complex files.

Read more

10.03.2020 NL law
De AVG staat niet in de weg aan de verwerking van persoonsgegevens door een toezichthouder tijdens een bedrijfsbezoek

Short Reads - Bedrijven die met toezicht worden geconfronteerd, zijn gehouden op verzoek van een toezichthouder in beginsel alle informatie te verstrekken. Met de komst van de Algemene verordening gegevensbescherming (AVG) is in de praktijk de vraag opgekomen of een toezichthouder bevoegd is om persoonsgegevens die onderdeel uitmaken van de gevraagde informatie te verwerken.

Read more

05.03.2020 NL law
ECJ confirms: gun jumping is double trouble

Short Reads - Companies beware: the European Court of Justice has confirmed the Commission’s practice of imposing two separate fines for gun jumping; one for failing to notify a concentration prior to its implementation, and another for implementing the concentration before obtaining clearance. The ruling underlines, once again, the increased focus of competition authorities on procedural merger control breaches – good reason for companies to keep a watchful eye on their gun jumping obligations and to take note of the possibility of two separate gun jumping fines. 

Read more

05.03.2020 NL law
CBb confirms: no cartel fine, still interest to appeal cartel decision

Short Reads - Companies can challenge a decision establishing that they committed a competition law violation, even if no fine was imposed on them. The CBb – the highest court for public enforcement of cartel cases – recently confirmed that the absence of a fine does not affect a company’s interest to appeal. Consequently, parent companies held liable for a subsidiary’s cartel infringement can still challenge a cartel decision, irrespective of whether fines were imposed on them separately.

Read more

05.03.2020 NL law
Commission continues cross-border trade crusade

Short Reads - The European Commission is on a roll in its fight against territorial sales restrictions. Just one month after fining broadcast network company NBCUniversal for restricting cross-border sales, it has also imposed a fine on hotel group Meliá for discriminating between customers based on nationality or place of residence. Meanwhile, the Commission is urging national consumer protection authorities to tackle cross-border issues, after an EU-wide screening of nearly 500 e-shops showed that one fifth of the flagged websites did not respect the Geo-blocking Regulation. 

Read more

This website uses cookies. Some of these cookies are essential for the technical functioning of our website and you cannot disable these cookies if you want to read our website. We also use functional cookies to ensure the website functions properly and analytical cookies to personalise content and to analyse our traffic. You can either accept or refuse these functional and analytical cookies.

Privacy – en cookieverklaring