Important Guidance from UK Competition Appeal Tribunal on role of econometrics in cartel cases

RBB advised defendant, Autoliv, in a recent litigation claim for breach of Article 101 and damages made by claimant, the Stellantis Group (Stellantis), before the Competition Appeal Tribunal (the Tribunal). 

This was a novel case.  While the European Commission had found Autoliv to have infringed Article 101 in respect of the supply of occupational safety systems (airbags, seatbelts, and steering wheels) to certain buyers, Stellantis was not found to have been one of the buyers affected.  Stellantis claimed it had, in any event, been harmed by cartel activity (either directly or indirectly) and drew on econometric analysis to substantiate both the existence of a cartel and harm from it. 

The judgment concludes that Stellantis failed to establish that there was a cartel operating over the entire alleged cartel period against any of the Stellantis groups.  Further insofar as there was cartel activity within this period Stellantis failed to show that this had resulted in an overcharge.

The Tribunal set out important messages on the use of econometrics.  For an econometric test of the type used by the claimants to provide reliable results, it is essential that the test be formulated in advance in the light of a particular hypothesis (theory of harm) and be used to test that hypothesis.  The Tribunal warned that it is not appropriate to reformulate the hypothesis to fit the data.  Importantly, the Tribunal highlighted that identifying higher prices during an alleged infringement period is not sufficient to prove the existence of a cartel or harm caused by that cartel, unless other factors explaining those higher prices can reliably be ruled out by the modelling itself and/or supporting factual evidence.  This is all the more important when the regression results are not robust to reasonable sensitivity tests. 

RBB expert, Adrian MajumdarAdrian MajumdarManaging Partner, gave evidence in the hot-tub and was cross-examined, inter alia, in relation to econometric estimates of alleged overcharge and pass-on.  Adrian worked alongside an RBB team comprising Katie CurryKatie CurryPartner, Joost VandenbosscheJoost VandenbosschePrincipal, Tim ReuterTim ReuterPrincipal, Hendrik MederHendrik MederAssociate Principal and Aidan HeijmansAidan HeijmansSenior Associate.

RBB was instructed by White & Case on behalf of Autoliv.