The economics of private enforcement of competition law

In Chapter 2 the authors discuss the contribution of economics to private enforcement of competition law in the MS of the EU. As a starting point, the Directive on Antitrust Damages Actions recognises the need for economic analysis in private enforcement cases, along with the complexity such economic analysis usually brings. Quantification of damages using the toolbox of economic analysis therefore remains a key task for claimants. The chapter is divided in three sections. In the first section, they provide a contextual overview of the relation between private and public enforcement, and the economic perspective of claimants’ right to compensation for harm inflicted by a competition law infringement. In the second section, they explain how economic experts in damages cases typically approach the assessment of the plausibility of harm. Assessment of the plausibility of harm involves a qualitative economic description of a counterfactual scenario without the infringement. The definition of the counterfactual scenario is therefore a prerequisite for the economic expert to formulate a coherent Theory of Harm. Finally, they explain how a quantitative description of a Theory of Harm leads to the quantification of damages. Considering an example of a theory of harm involving higher purchase prices, they discuss how an award for damages requires an accurate quantification which typically consists of four steps, which they describe in detail.