Passing judgment on passing-on

The harm suffered by a firm as a result of a competition law infringement that increases its purchase costs may be reduced if it can pass on some or all of this overcharge to its own customers. At the same time, such passing-on will lead to harm, and provide the basis for claims, further down the supply chain. In this Brief we offer an economic perspective on passing-on, highlighting in particular some of the issues raised by the UK Competition Appeal Tribunal’s Judgment on the damages claim brought by supermarket retailer Sainsbury’s against payment card scheme operator MasterCard. In doing so, we have drawn on insight and analysis from the Study on the Passing-On of Overcharges recently co-authored by RBB for the European Commission.