Joris DeeneThose who are victims of anti-competitive agreements (a cartel) are in principle entitled to compensation. A ruling by the Brussels Court of Appeal of November 18, 2024 in the “Elevator Cartel Case” makes painfully clear that the burden of proof for the injured party remains particularly heavy. Even when the European Commission has officially found an infringement, the victim still has to concretely prove that his specific contracts were more expensive AND that this was the direct result of the cartel, without being able to rely on flexible presumptions of proof.
The facts: the elevator cartel and the European Union's claim
This case is in the aftermath of the well-known “elevator cartel.” In 2007, the the European Commission fined the four largest manufacturers of elevators and escalators (Otis, Kone, Schindler and ThyssenKrupp) for a total of nearly €1 billion. The Commission found that these companies had entered into prohibited price-fixing agreements and shared markets in Belgium, the Netherlands, Germany and Luxembourg, among other countries.
However, the European Union (EU) was not acting as a regulator in this proceeding, but as a private customer. Indeed, the EU itself had entered into several maintenance and modernization contracts with these manufacturers for its buildings. The EU claimed that it had overpaid prices for years due to the cartel agreements and, as an injured party, claimed damages of over €7 million (plus interest).
After the claim was dismissed at first instance, the case came before the Brussels Court of Appeal. The central question was whether the EU could show that it had suffered actual financial damage from the cartel for its specific contracts.
The decision
The Brussels Court of Appeal confirmed the rejection of the EU's claim in its ruling of Nov. 18, 2024.
The three pillars of liability: fault, damage and causation
In Belgian liability law (based on Article 1382 of the Old Civil Code - now Article 6.5 Civil Code), a plaintiff must prove three elements. In cartel cases, the difficulty lies not with the fault, but with the other two pillars.
1. The fault has been identified
When the European Commission (or a national competition authority) finds that companies have violated Article 101 of the TFEU (the cartel ban), the civil fault is established. The national court may not contradict this finding. Thus, in this case, the fault of the elevator manufacturers was undisputed.
2. Damage and causation: the stumbling blocks
The great misconception is that a proven cartel automatically means that every customer has been harmed. The Court emphasizes:
“Nevertheless, the person who feels aggrieved must still concretely prove the existence of damages (in this case, surcharges in the contracts she entered into with the cartel participants) causally related to the infringement.”
It is up to the plaintiff to show that in a hypothetical scenario without a cartel it would have paid less.
Why post-cartel price declines are not evidence
A common argument in cartel damages cases is the comparison of prices during the infringement with prices after the infringement. The EU showed that prices of similar maintenance contracts fell after the cartel was busted.
However, the Court held that correlation is not causation. Even if prices fall after the infringement period, this does not necessarily prove that the cartel caused the earlier high prices. Other factors may explain the price drop, such as:
- Technological advances (more efficient elevators).
- Modernization of facilities (making maintenance cheaper).
- Changes in the supplier's cost structure.
Without excluding these external factors, a price comparison over time cannot serve as evidence of cartel damage.
No bailout by new evidence law
The EU tried to solve its evidence problem by invoking the new law of evidence, which has been in effect since Nov. 1, 2020 (Book 8 Civil Code). The Court also decisively rejected this based on two key principles.
1. No reversal of burden of proof (Article 8.4 CC)
The court may reverse the burden of proof in “exceptional circumstances” if the application of the ordinary rules is manifestly unreasonable. The Court held that this was not the case:
- The mere failure of the plaintiff to produce the evidence is no reason to reverse the burden of proof.
- There was no information asymmetry. The EU is a large, professional player that has its own procurement files and contracts.
2. No proof by probability (Article 8.6 CC)
The new law allows facts to be proved by “probability” when certain proof is impossible or unreasonably burdensome. This too was rejected. Because the EU had its own records (contracts, negotiations), it could be expected to provide “certain proof.” Proof by probability is not a safety net for a party that cannot actually get its case.
General assumptions are not enough
An important aspect of the ruling is the rejection of general economic theories as evidence of individual damages. The Court clearly stated that damages and causation cannot be inferred from:
- The finding of infringement itself: The existence of a cartel does not prove that these particular contracts were affected.
- The purpose of the cartel: That the cartel sought to raise prices does not mean it succeeded with every customer.
- General studies: Referring to studies stating that cartels lead to damages in 93% of cases (and not in 7%) is insufficient. Statistics are not evidence of an individual contract.
- Market shares: That the cartel members had a large market share does not prove individual disadvantage.
Legal analysis and interpretation
This ruling demonstrates the distinction between public enforcement and private enforcement.
1. The automatic fault, but the difficult hurdle of causality
The ruling confirms the established case law that a violation of competition law (as determined by the Commission) constitutes a civil fault in itself. This eliminates the first threshold for victims. However, this does not mean that the other conditions for liability (damages and causation) are presumed.
The burden of proof on these elements remains squarely on the plaintiff. The victim must reconstruct a hypothetical scenario: what would the price have been in a market without a cartel? This requires a complex economic analysis.
2. Rejection of “public enforcement” logic in civil cases
A key point in the Court's analysis is its refusal to extend arguments from the sphere of penalty to damages.
- That a cartel's goal is to raise prices (relevant to the fine) does not prove that this goal succeeded with every customer.
- That a cartel lasted a long time and was stable does not prove that each contract was overpaid.
- Market-sharing cartels (as here) do not necessarily lead to price increases; in fact, they can lead to efficiency gains that also benefit the customer.
3. Strict application of the law of evidence (Book 8 CC).
The ruling offers an interesting perspective on the temporal effect of the new law of evidence. The Court rules that rules on burden of proof and standard of proof (such as proof by probability) affect the substantive legal position of the parties and therefore may not simply be applied retroactively to old facts.
But even under the new law, the EU catches a bone. Article 8.4 (reversal of burden of proof) is an ultimum remedium for exceptional circumstances. A big player like the EU, which has all its own contract data, cannot invoke information asymmetry. That the evidence is difficult to produce does not make it unreasonable to leave the burden of proof on the plaintiff.
4. Alternative causes break causality
The Achilles“ heel of the claim was the economic analysis. The EU showed that prices fell after the cartel. However, the defense showed that during the same period elevators were modernized and technology became more efficient. Because the EU could not rule out that the price drop was due to these external factors, causation to the cartel was not ”certain.".
What this specifically means
The impact of this ruling for various actors in commerce is significant:
- For aggrieved companies: You cannot blindly trust that a fine decision by the European Commission will result in damages. You must be prepared to invest in robust economic analyses that show that price differences are due solely to the cartel, and not to market trends, inflation or technological innovation. General statistics (such as “93% of cartels lead to price increases”) will be rejected by the courts.
- For defendants: This ruling provides strong ammunition for the defense. Even if the fault is established, the damages claim can be fended off by offering alternative explanations for price settlements (e.g., increased commodity prices, indexing, or, on the contrary, efficiency gains after the infringement period).
- For contract practice: The importance of file keeping is crucial. Keep not only contracts, but also records of negotiations and market surveys from the period of contracting. This can be essential later to prove whether there was fair market operation.
FAQ: Frequently Asked Questions
Is a fine from the European Commission sufficient evidence to claim damages?
No. The fine only proves the “fault” of the offender. As the victim, you still have to prove that you suffered financial harm as a result of that wrongdoing (the damage) and that that harm resulted directly from the breach (causation).
Does the new law of evidence make it easier to prove damages?
In theory, Book 8 of the Civil Code provides options such as proof by probability, but case law applies this very strictly. If you have the contracts and information yourself, courts will rarely allow you to lighten or reverse the burden of proof.
Can I seek damages if prices fell after the cartel?
This is an indication, but not proof. You must be able to rule out the possibility that other factors (such as technology, commodity prices or efficiency gains) caused the price drop. A thorough economic analysis is often necessary.
Conclusion
The ruling by the Brussels Court of Appeal sets the bar high for victims of competition infringements. In Belgium, the legal truth (the existence of a cartel) does not automatically lead to an economic truth (damages for the individual customer). A thorough, factual and economic substantiation of the damage claim is essential to success.
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