Damage control: putting a price on economic harm

What the paper says

Damages claims are an important and growing component of competition law enforcement. This article focuses specifically on the techniques and key issues that arise when quantifying harm that arises from different types of anti-competitive conduct, including (i) cartels, (ii) exploitative abuses of a dominant position and (iii) exclusionary abuses. The article draws insights from a number of recent damages cases in the UK. In all instances, the key principle underlying the assessment of damages requires calculations to reconstruct the ‘state of the world’ without the alleged harm (i.e. the counterfactual). However, the conduct that infringes competition law can have a range of anti-competitive effects, and therefore, the models and economic techniques used for quantifying harm can also vary. Even where experts are aligned in relation to the broad technique to quantify damages in a particular case, the large number of choices that need to be made in modelling the counterfactual often results in significant differences in terms of the end harm quantified by the claimants and defendants. Ultimately, the courts have addressed this challenge by applying the ‘broad axe’ principle, where necessary.