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Example 4 Situation: Firms A and B are the only firms owning and leasing out tower cranes in Member State 1. From 2005 to 2015 firms A and B participated in a cartel, agreeing to increase the leasing-price of tower cranes by 80 percent. Firm C is a construction firm operating in cities throughout Member State 1. The company designs, constructs and sells residential apartments in skyscrapers to final customers. The prices of the apartments are advertised in a range of different media and locations, including on the internet, in newspapers and on street-posters. The national competition authority in Member State 1 has found the agreement on prices in the construction sector to be a violation of competition law, and their decision imposing fines on the cartel members was not appealed by firm A or B. Firm C is a direct customer of the cartel. It claims damages from the cartel members A and B. However, firms A and B have raised the passing-on defence, claiming that firm C has passed on the entire overcharge to the indirect purchasers, i.e. the final customers buying apartments in skyscrapers. Analysis: Leasing of tower cranes is one of many input costs that firm C faces when designing and constructing skyscrapers. Examples of other input costs are raw materials such as steel and concrete, labour and financial costs. Hence, it is likely that the leasing of tower cranes only constitutes a small portion of the total costs. Since the prices of the apartments are advertised broadly, firm C may incur significant price adjustment costs. However, since the cartel had a duration of 10 years, the price adjustment costs may be negligible compared to the overcharge after a certain period, eventually giving firm C the incentive to take into account the overcharge when setting prices on apartments. Hence, it may be the case that, due to the price adjustment costs, firm C may not have the incentive to pass on the overcharge in the short run. However, the incentive to pass on the overcharge may change during the infringement period. In order to assess the actual passing-on during the relevant period, the court should therefore estimate the passing-on effect based on the evidence available, for instance by using one of the methods set out in section 4.

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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.