Economic Evidence in Private Damage Claims: What lessons can be learned from the German Cement Cartel case?

Posted by D. Daniel Sokol

Niels Frank (Lademann & Associates and University of Bayreuth) and Rainer Lademann (Lademann & Associates) of summarizes Economic Evidence in Private Damage Claims: What lessons can be learned from the German Cement Cartel case?

ABSTRACT: There is only limited experience as to how judges take up economic evidence in cartel cases in Europe. In particular, econometrics is something that has only rarely been presented in court. The first time econometric evidence was presented in court in Germany was in the cement cartel case in 2009. The main points discussed in court were: How to deal with a price war period in the post-cartel period? What is the right reference period and how does it impact the model's robustness? In principle it is possible to account for these different effects using econometric techniques? However, caution is needed in introducing such changes in the mode of competition into a single estimation model as they may impact the damage estimation significantly. We argue that in order to achieve a good estimate of cartel overcharges, it is incresingly important to use several different methods when more doubts regarding the robustness of the econometric evidence exist, thereby possibly reducing the method-dependency of the results.