§1.2 What is passing-on of overcharges?

(8) The passing-on of overcharges may occur at different levels of the supply chain. It is illustrated in Box 1 below by reference to a hypothetical example. For illustration purposes, and as a starting point for variations to further explain passing-on, the example in Box 1 sets out a relatively simple case of fixed prices for copper and the passing-on of the respective price increase in the automotive industry. In practice, passing-on can occur in even more complex supply chains, the cartelised product or service may constitute an even smaller input and the end product could be affected by more than one anti-competitive practice. Box 1 Passing-on of a price increase for copper (hypothetical example) Undertaking A is a manufacturer of copper and formed a cartel by agreeing with its competitors to fix sales prices for copper in violation of Article 101 TFEU. The agreement allowed A to charge its customers, including undertaking B, higher prices for copper. The price difference between the price actually paid and the price that would otherwise have prevailed in the absence of the infringement of EU competition law is referred to as the overcharge (9). Undertaking B is a supplier of automotive parts and used the copper it purchased from A to produce wire harnesses which it sold to car manufacturer C. After the cartel-related price increase for copper, B also increased its sales price for the wire harnesses it supplied to C. This behaviour constitutes passing-on of overcharges, in this case from B to C. Based on the definitions in the Damages Directive, A can be referred to as infringer, B as direct purchaser and C as indirect purchaser (10). (9) Again, there are more complicated examples of passing-on. Some of them are referred to in additional boxes below. The purpose of these boxes is to highlight certain aspects of passing-on and how national courts have previously approached estimating the share of overcharge which was passed on to the indirect purchaser. (10) When the direct purchaser, fully or partially, passes on the overcharge to the indirect purchaser, the latter will not only face a price effect but in many cases also reduce its demand, so that the direct purchaser sells less. The value of the sale that is lost can be referred to as the volume effect of passing-on. Its legal and economic implications are discussed in more detail below. (11) An overcharge may be passed on down an entire supply chain and can concern products or services. For example, following the example in Box 1 above, the car manufacturer C may have similarly increased the prices it charged its customer, the independent car retailer D. Subsequently, D may have also increased its end consumer price for the car in which the cartelised copper can be found. C, D and the end consumers are all indirect purchasers within the meaning of the definition of the Damages Directive (11).

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Source: EUR-Lex (Cellar) · retrieved 2026-09-07