Full compensation and the volume effect: assessing different policy options

European Competition Journal, vol. 20, pp. 367–392

Abstract

According to the Damages Directive victims of infringements of competition law are entitled to full compensation.To achieve this goal overcharges, passing-on, and volume effects should play a role in the calculation of damages (for any purchaser who is not yet the final consumer).Whereas the Damages Directive promotes the passing-on defence for the defendants, it does not regulate volume effects in depth.The computation of these effects requires information on counterfactual prices and quantities.Since this information cannot be observed, the size of the volume effect tends to be uncertain.This paper discusses policy-options that aspire to bring compensation closer to full compensation, given uncertainty about the size of the volume effect.Based on the maximin-principle, a principle for decision-making under uncertainty, not allowing a passing-on defence appears to be an attractive option since this may lead to the minimization of the maximum gap between actual and full compensation.

Authors 2

1. Franziska Weber

   Erasmus University Rotterdam

   Affiliation as printed

   Professor of Law and Economics, Rotterdam Institute of Law and Economics, Erasmus University Rotterdam, Rotterdam, Netherlands

2. Peter W. van Wijck corresponding Aachen Associate Professor of Law and Economics Leiden Law School

   Leiden University

   Affiliation as printed

   Associate Professor of Law and Economics, Leiden Law School, Leiden University, Leiden, Netherlands