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Example 3 Situation: Apple juice producer A is a monopolist in the market for the production of apple juice in Member State 1, while apple juice producer B is a monopolist in the same product market in Member State 2. The cost of producing one additional batch of apple juice is constant and similar for A and B. The two apple juice producers sourced apples from C, a supplier involved in a price fixing cartel. As a consequence, both A and B faced an overcharge of EUR 6 per box of apples because they bought apples from C. A and B faced different demands from the grocery retail chains in each Member State. In Member State 1, demand was equally sensitive to a change in prices for all price levels (the demand was linear, see Box 15). In Member State 2, this was not the case. There, demand dropped ‘less and less’ (at a decreasing rate) when price increased (the demand was convex, see also Box 15). A and B claim compensation from C (the member of the cartel) for the harm resulting from the overcharge. C raises the passing-on defence, claiming that A and B have passed on half of the overcharge. Analysis: The monopolists in Member State 1 and Member State 2 faced different demand from the retail grocery chains in each Member State. Their costs when producing one additional batch of apple juice were constant. The overcharge of EUR 6 per box of apples was considered as an increase in the marginal costs for each of them. Following such a cost increase, the scope to adjust the prices upwards would have depended on how much output each would have had to sacrifice to pass on a certain amount of the cost change, i.e. to have increased prices. This is because, if the volume lost when increasing prices is relatively low, the price increase will be more attractive compared to the situation where the loss of volume is high. The loss of volume when increasing prices is related to the curvature of the demand that a monopolist faces, i.e. whether the demand is linear, convex or concave. This is also further explained in Box 15 below. Regarding the monopolist A in Member State 1, on the basis of economic theory it may be possible to argue that the monopolist has passed on half of the overcharge, i.e. EUR 3. However, as the monopolist B faced a convex demand, the remaining demand would have become less price sensitive as the price went up. Compared to A, who faces a linear demand, B would have lost less volume when increasing prices by EUR 3. This implies that B has had an incentive to pass on more than EUR 3.

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Source: EUR-Lex (Cellar) · retrieved 2026-09-25 · Text as adopted (Official Journal); later amendments are not incorporated in this text.