Trucks Cartel claims – assessing pass on

In competition cases, pass on arguments arise where the direct purchaser passes on some or all an unlawful overcharge to its own customers, the indirect purchasers. The trucks cartel fraud litigation will be about pass on – i.e. how much of the additional costs (overcharge) to original purchasers is passed on to customers down the vertical market line. Different levels of the market can thus be in conflict.

There is one advantage of events in the law for direct purchasers – the decision of the Competition Appeal Tribunal about pass on in Sainsbury’s v Mastercard. Mastercard argued that Sainsbury’s had passed some or all of the increased fees downstream to its customers, through increased prices of products. The decision suggested however that for the likes of Sainsbury’s, it was too difficult to assess pass on to customers and therefore the Tribunal would undertake a general assessment. In other words, it was nigh on impossible to see how the overcharge was reflected into the cost of, for example, an apple in Sainsbury’s.

The Tribunal rejected the Mastercard passing on defence on the grounds that no identifiable increase in retail price had been established, let alone one that was causally connected to the anti-competitive behaviour in question. It was also impossible for Mastercard to identify any purchaser or class of purchasers of Sainsbury’s to whom the overcharge had been passed who would be in a position to claim damages. We think the defendants in the trucks claims will face a similar hurdle if they try to argue that direct purchasers of trucks using them within consumer facing industries, such as brewers or supermarkets, passed on the cartel overcharge to their customers.

Edwin Coe’s trucks cartel team is able to advise on all aspects of the claim including how pass on may affect you. Please contact Zahira Hussain – Senior Associate for more information.

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