Limits to the private enforcement of antitrust law

Abstract

Following Regulation No. 1/2003 EC which permits the substitution of decentralised and private enforcement for centralised and public enforcement of Articles 81 and 82 EC, the European Commission in December 2005 presented a Green Paper on "damages actions for breach of the EC antitrust rules". The purpose of this initiative is to foster private tort suits by victims of anti-competitive behaviour. However, there are limits to the private enforcement of antitrust law through actions for damages, since the harm is typically shifted to a large number of final victims who are badly informed or face a rational disincentive to sue for damages.Our paper focuses on a so far neglected aspect of loss diffusion which results from hardcore price cartels. Under reasonable conditions the owners of production factors are also affected by price cartels, whereas consumers are typically affected less than is commonly assumed.