EU Commission gets green light to claim damages from cartel

Tue Nov 6, 2012 11:07am EST

* EU's highest court backs Commission claim against elevator cartel

* EU regulators seek 7 mln euros from Otis, Kone, Schindler, ThyssenKrupp

* Commission's first cartel compensation claim

By Foo Yun Chee

BRUSSELS, Nov 6 (Reuters) - The European Commission can claim compensation like any other customer from companies which it has found guilty of fixing prices, Europe's highest court said on Tuesday.

The Commission is seeking compensation for having overpaid for escalators and lifts in European Union buildings in Brussels and Luxembourg as a result of a cartel formed by Otis, Kone, Schindler and ThyssenKrupp.

The European Court of Justice said the Commission, the European Union's executive, could seek damages from companies that had collaborated in a cartel because of the harm it had suffered as a consumer.

The Commission launched a damages claim in 2008 on behalf of the EU after its had fined the four companies and Mitsubishi Elevator Europe 992 million euros ($1.3 billion) for the cartel in Belgium, Germany, Luxembourg and the Netherlands.

The Commission asked a Belgian court to award damages of about 7 million euros from U.S. conglomerate United Technologies Corp's Otis, Swiss-based Schindler, Finland's Kone and German firm ThyssenKrupp.

Asked by the Belgian court to clarify several points, European Court judges ruled that the Commission was entitled to seek compensation on behalf of the European Union.

"The Charter of Fundamental Rights does not prevent the Commission from bringing an action, on behalf of the EU, before a national court for compensation for loss caused to the EU by an agreement or practice contrary to EU law," the court said.

But it said that EU rules clearly block the Commission from using information gathered during an antitrust investigation for other purposes. Lawyers said this would determine how the Commission could proceed with such damages claims.

It was possible some defendants would challenge the Commission's adherence to such a legal safeguard, said Tobias Caspary, an antitrust lawyer at London-based firm Fried Frank.

"This is obviously a landmark case and a victory for the Commission. However, the minute the Commission puts itself in the shoes of a private plaintiff, it potentially exposes itself to the same risks any other private plaintiff would face in European damage claims," he said.

He said defendants could argue that the Commission used information obtained in connection with its cartel investigation to support its damage claim.

Judges would review such challenges under the rules and procedures of the relevant member state, which could have differing results, Caspary said.

It was also possible that suits could be filed in a "defendant-friendly" EU country to try to prevent the Commission from launching a damage claim in other EU member states.

The EU competition watchdog has sanctioned 187 cartel participants in the last five years.