Global Antitrust Challenges: Could EU Jurisprudence on umbrella damages and indirect purchaser claims be used as a tool for US-Courts?

The EU and U.S. differ significantly in their treatment of antitrust damage claims. Even though both share a common interest in promoting consumer welfare as a fundamental policy goal, the U.S. tends to adopt a more policy-driven and deterrence-effect approach, whereas the EU places greater emphasis on ensuring compensation for all the victims of anti-competitive conduct.

Indirect purchasers are individuals or entities that have not made direct purchases from the market affected by the price-fixing agreement, but are impacted by the inflated prices created by the cartel's actions. Umbrella damages, on the other hand, refer to damages that arise when non-cartel parties increase their own prices for their products due to the general market price elevation caused by the cartel's activities.[1] In the EU, indirect purchaser claims and umbrella damages can grant standing to “any individual” harmed by antitrust violations under Articles 101 and 102 TFEU, as a form of private enforcement.[2] In the U.S., on the other hand, no such claims can be made under federal antitrust law. Even though Section 4 of the Clayton Act uses broad language, stating that “any person (…) may sue to obtain treble damages,” the U.S. Supreme Court, in its rulings in Hanover Shoe and Illinois Brick, has strictly interpreted “any person” to mean only direct purchasers affected by cartel behavior.[3] In Illinois Brick Co. v. Illinois, the Supreme Court ruled that an indirect purchaser from a price-fixing seller or others violating antitrust law may not sue for damages under federal antitrust law.[4] This approach raises concerns about whether the U.S. framework adequately protects consumers, as claims are often relegated to state law for resolution.[5] Douglas Melamed, Principal Deputy Assistant Attorney General of the U.S. Department of Justice, aptly noted in 1998: “We live in a global economy, but we do not live in a global state.”[6] His words remain true today as cartels increasingly harm not only direct purchasers but also consumers and third parties.[7]

The EU has demonstrated a strong commitment to private antitrust enforcement, prioritizing compensation and interpreting causality in a way that ensures victims of anticompetitive conduct receive fair redress.[8] EU institutions have also shown a willingness to learn from U.S. precedents, fostering a stronger culture of private enforcement facilitated by the European Court of Justice.[9] Conversely, the U.S. remains firmly committed to its established precedent.[10] While its deterrence-focused system, including treble damages, aims to discourage violations, it often overlooks the broader harm caused by antitrust conduct.[11] This fragmented approach questions whether U.S. courts should consider EU precedents as persuasive authority to improve consumer protection and enforcement efficiency. Integrating elements of the EU model, such as its interpretation of causality and broader standing rules, could enhance the U.S. framework without directly applying foreign law. By doing so, the U.S. could better address the complexities of global antitrust challenges, ensuring fair compensation for victims while maintaining its core principles of deterrence. As the economy evolves, both the U.S. and EU must foster their cooperation by developing shared frameworks and promote a common approach in enforcement to combat global anticompetitive behavior.[12]

Laure Origer is a staff member of Fordham International Law Journal Volume XLVIII.   

[1] See Niamh Dunne, "Umbrella Effects" and Private Antitrust Enforcement, 73 Cambridge L.J. 510, 510-13 (2014).

[2] See Courage Ltd v. Crehan, Case C-453/99, Judgment of 20 September 2001, [2001] ECR I-6297.

[3] See Firat Cengiz, Antitrust Damages Actions: Lessons from American Indirect Purchasers’ Litigation, 62 Int’l & Comp. L.Q. 39, at 46-47 (2013); Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481 (1968).

[4] Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977).

[5] See In re Am. Express Antitrust Litig., 19 F.4th 127, 140 (2d Cir. 2021).

[6] See Valerie Demedts, The Future of International Competition Law Enforcement: An Assessment of the EU’s Cooperation Efforts, (2018), at 1.

[7] See Anu Bradford, Antitrust Law in Global Markets, 289 Colum. L. Sch. Faculty Scholarship 283, at 289 (2012).

[8] Cengiz, supra note 3(a), at 51 (2013).

[9] Supra note 2, at ¶ 13.

[10] Supra note 4.

[11] Id. at 2061.

[12] Cengiz, supra note 3, at 41.

This is a student blog post and in no way represents the views of the Fordham International Law Journal.