§6.1 Introduction

(134) When there is a passing-on related price effect, this necessarily implies, at least in theory, a volume effect (105). Therefore, if the price effect is taken into account without the volume effect, this can underestimate the true harm. Hence, in order to avoid over- or under-compensation, the estimation of the volume effect is as essential as the estimation of the passing-on related price effect, provided the purchaser claims damages for loss of profit due to the volume effect (106). (135) As illustrated in Box 11 below, the volume effect refers to the loss of profit due to reduced sales that result from passing-on, i.e. less volume sold because of increased prices. In the sequential approach, mentioned above in paragraph 69, the third step of quantifying damages as a result of an overcharge is to estimate the magnitude of the volume effect. Box 11 The volume effect (136) The volume effect corresponds to the difference between q 1 and q 2. Area C represents the lost profit stemming from the loss in sales. It can be quantified by multiplying the lost volume with the profit margin (p1-c1) that the purchaser would have achieved in the absence of the infringement without any passing-on. (137) The estimation of the volume effect requires an assessment of two factors, namely (i) the change in quantity due to increased prices and (ii) the counterfactual margin. To estimate these factors it is necessary to have data on parameters other than the ones necessary for the estimation of the passing-on related price effect. Depending on the data available, different methods may be employed. As for the estimation of the passing-on related price effect, the court may take into account qualitative evidence of direct nature when estimating the volume effect (107). The existence of such evidence may play an important role when a court decides which, if any, of the different methods described in more detail below are to be used in a specific case. (138) The volume effect has, so far, only been estimated by national courts in a limited number of cases. One example is given in Box 12 below. In this case, an economic expert appointed by the court used both qualitative and quantitative data to estimate the volume effect. Box 12 Estimation of volume effects — Cheminova (2015) As explained in Box 9 above, this case concerns the sales of pesticides in Denmark. The court concluded that half of the initial overcharge was passed on by the direct purchaser. Based on the assessment of a court-appointed expert, the volume effect was estimated, as well. The expert estimated the volume effect as the counterfactual margin multiplied by the number of sales that had not been made due to the passing-on. In order to estimate the number of sales that had not been made during the infringement period, the expert used an amended version of the elasticity approach which is further explained in section 6.3 below. Since quantitative data on prices and volume was not available, the expert derived a measure of elasticity by averaging the elasticities found in 23 market studies for pesticides. Further, the expert estimated the counterfactual margin by adjusting the realised margin during the infringement period. Based on this, the court concluded that damages resulting from the volume effect were equal to 20 percent of the overcharge amount.

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