{"id":4864,"date":"2024-07-16T12:15:00","date_gmt":"2024-07-16T10:15:00","guid":{"rendered":"https:\/\/djp-a9vm.1wp.site\/?p=4864"},"modified":"2026-10-19T19:08:29","modified_gmt":"2026-10-19T17:08:29","slug":"quantifying-damage-caused-by-infringements-of-competition-law-part-2","status":"publish","type":"post","link":"https:\/\/djp.pl\/en\/quantifying-damage-caused-by-infringements-of-competition-law-part-2\/","title":{"rendered":"Quantifying damage caused by infringements of competition law \u2014 Part 2"},"content":{"rendered":"

In part I<\/a>, Maciej Rzepka discussed legal conditions for competition damages under the Act of 21 April 2017 (the Claims Act<\/strong>) and civil procedure. Here we examine economic and practical quantification.<\/p>\n

Basic challenges<\/h2>\n

Exact calculation is generally impossible. Economic reality is too complex to isolate causation of a precise sum: falling profit may reflect many factors, including infringement, and assessing loss requires a hypothetical world without it.<\/p>\n

Data availability is another challenge. Quantitative evidence includes prices, sales volumes and actual or comparable markets. Experts use it for estimation, but it is usually fragmentary and supplemented with assumptions, including economic theory, potentially weakening reliability. Qualitative evidence includes authority market studies and victims\u2019 internal analyses of infringement effects.<\/p>\n

Data and method also determine cost. Econometric methods requiring extensive data are generally expensive. Proportionality to dispute value may justify Article 322 approximation rather than maximum precision.<\/p>\n

Helpful documents<\/h2>\n

The Commission published two important aids recognising these challenges.<\/p>\n

The Practical Guide on quantifying harm in damages actions based on Articles 101 or 102 TFEU, accompanying Communication 2013\/C 167\/07, and Guidelines for national courts on estimating passing on, Communication 2019\/C 267\/07, are non-binding and do not alter proof or evidence assessment. They nevertheless provide useful methodology and informed method selection, with broadly applicable economic insights. Courts should study both before deciding evidential applications and assessing evidence.<\/p>\n

Forms of harm<\/h2>\n

The typical form is an overcharge, such as furniture makers paying cartel-inflated sawmill prices. It affects direct purchasers and indirect purchasers where costs are passed on.<\/p>\n

A second form is reduced sales or market share. Passing inflated input costs downstream may reduce demand. Furniture makers might raise wholesale prices, prompting wholesalers anticipating weaker demand to order less. Makers then suffer both an absorbed overcharge and lost margin on reduced sales.<\/p>\n

Competitors may also lose sales or market share through exclusionary practices, such as coordinated obstruction of access or elimination from the market.<\/p>\n

The counterfactual: \u201cwhat if?\u201d<\/h2>\n

The first and hardest step is constructing the victim\u2019s hypothetical position without infringement, separating its effect from other influences on prices, costs and results.<\/p>\n

Comparator methods are most common. A time comparison uses the same market before or after infringement. Alternatively, an unaffected geographic or product market supplies a benchmark. Comparability is essential, particularly across products: characteristics, sales methods, market and cost structures and customer buying power must be considered. Combining time and market comparisons helps remove other influences. Econometrics may identify relationships between variables. Real data and generally lower cost make comparators potentially preferable.<\/p>\n

Other, usually more complex and costly methods use market simulation, costs or financial analysis.<\/p>\n

Simulation models apply economic research predicting outcomes for markets with particular features. Actual data feeds them, but assumptions and simulation remain, making courts potentially reluctant to accept results as proof.<\/p>\n

Cost methods establish unit production cost and add a reasonable no-infringement margin, potentially derived from comparators. The hypothetical unit price is compared with the infringer\u2019s actual price to estimate overcharge.<\/p>\n

Financial methods compare actual profit with hypothetical no-infringement profitability, using pre-infringement results or comparable-market returns.<\/p>\n

Passing on<\/h2>\n

Defendants commonly argue that direct purchasers passed all or part of an overcharge to customers, reducing actual loss. Passing on also grounds indirect purchasers\u2019 claims, assisted by the statutory presumption discussed in part I.<\/p>\n

Its extent depends on:<\/p>\n

    \n
  • whether affected costs are fixed, making short-term passing on unlikely, or variable, where it is usual;<\/li>\n
  • demand\u2019s price elasticity;<\/li>\n
  • the nature and intensity of competition in direct and indirect purchasers\u2019 markets;<\/li>\n
  • whether only one purchaser is affected, making passing on practically impossible, or the whole market.<\/li>\n<\/ul>\n

    Two approaches exist: direct comparator methods analogous to overcharge estimation, and indirect methods combining overcharge and sales data with an estimated pass-on rate.<\/p>\n

    Direct methods are generally preferred. Indirect methods help where no suitable comparator exists. Estimating the rate is hardest: historical input-price changes and resulting output prices may provide it. The rate is then applied to overcharge and volume data. But the assumed relationship may not hold. If an input is a tiny share of total costs, the cost of changing prices may justify absorbing it.<\/p>\n

    Reduced sales<\/h2>\n

    Passing on usually reduces volume. The typical sequence is: establish overcharge \u2192 establish passing on \u2192 establish associated sales reduction.<\/p>\n

    Lost profit equals lost volume multiplied by the counterfactual unit margin. Actual margin may itself be depressed by the overcharge, especially if only partly passed on. Comparator methods can establish hypothetical volume and margin, controlling for other factors.<\/p>\n

    Alternatively, price sensitivity of demand can estimate the volume response, then multiplied by counterfactual margin. Sufficient data to establish elasticity may be unavailable.<\/p>\n

    Conclusion<\/h2>\n

    Quantification is complex and generally requires an expert, but court, parties and counsel must prepare. Courts should at least study Commission documents and basic economics, interact with experts, decide scope and methods with attention to cost, and hear parties. Mechanical acceptance is insufficient: judges need enough knowledge to check conclusions and objections. UOKiK may be asked for views on methods and estimation guidance.<\/p>\n

    Parties should choose suitable counsel, potentially teams with economists, obtain private opinions supporting justified favourable calculations, and participate actively in defining expert scope and methods.<\/p>\n","protected":false},"excerpt":{"rendered":"

    In part I , Maciej Rzepka discussed legal conditions for competition damages under the Act of 21 April 2017 (the Claims Act ) and civil procedure. Here we examine economic and practical quantification.<\/p>\n","protected":false},"author":5,"featured_media":1718,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"294","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"","_seopress_redirections_param":"","_seopress_redirections_type":0,"_seopress_analysis_target_kw":"","_seopress_news_disabled":"","_seopress_video_disabled":"","_seopress_video":[],"_seopress_pro_schemas_manual":[],"_seopress_pro_rich_snippets_disable_all":"","_seopress_pro_rich_snippets_disable":[],"_seopress_pro_schemas":[],"iawp_total_views":0,"_djp_featured_image_mode":"full","footnotes":""},"categories":[{"term_id":294,"name":"Articles","slug":"articles-en","term_group":0,"term_taxonomy_id":294,"taxonomy":"category","description":"","parent":0,"count":100,"filter":"raw","cat_ID":294,"category_count":100,"category_description":"","cat_name":"Articles","category_nicename":"articles-en","category_parent":0},{"term_id":293,"name":"Corporate, M&A","slug":"corporate-ma-en","term_group":0,"term_taxonomy_id":293,"taxonomy":"category","description":"","parent":0,"count":49,"filter":"raw","cat_ID":293,"category_count":49,"category_description":"","cat_name":"Corporate, M&A","category_nicename":"corporate-ma-en","category_parent":0},{"term_id":291,"name":"General","slug":"general-en","term_group":0,"term_taxonomy_id":291,"taxonomy":"category","description":"","parent":0,"count":153,"filter":"raw","cat_ID":291,"category_count":153,"category_description":"","cat_name":"General","category_nicename":"general-en","category_parent":0}],"tags":[],"djp_center":[],"coauthors":[235],"class_list":["post-4864","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles-en","category-corporate-ma-en","category-general-en"],"acf":{"djp_promote_now":false,"djp_promotion_days":7},"images":{"thumbnail":"https:\/\/djp.pl\/wp-content\/uploads\/2024\/07\/cz2B-scaled-1-150x150.jpg","medium":"https:\/\/djp.pl\/wp-content\/uploads\/2024\/07\/cz2B-scaled-1-300x200.jpg","medium_large":"https:\/\/djp.pl\/wp-content\/uploads\/2024\/07\/cz2B-scaled-1-768x512.jpg","large":"https:\/\/djp.pl\/wp-content\/uploads\/2024\/07\/cz2B-scaled-1-1024x683.jpg","full":"https:\/\/djp.pl\/wp-content\/uploads\/2024\/07\/cz2B-scaled-1-djp-web.webp"},"_links":{"self":[{"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/posts\/4864","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/comments?post=4864"}],"version-history":[{"count":4,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/posts\/4864\/revisions"}],"predecessor-version":[{"id":5586,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/posts\/4864\/revisions\/5586"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/media\/1718"}],"wp:attachment":[{"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/media?parent=4864"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/categories?post=4864"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/tags?post=4864"},{"taxonomy":"djp_center","embeddable":true,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/djp_center?post=4864"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/djp.pl\/en\/wp-json\/wp\/v2\/coauthors?post=4864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}