Allen & Overy successfully represents manufacturer also in second-instance proceedings against Schlecker insolvency administrator
14 May 2020
Schlecker's insolvency administrator asserted claims for damages in the amount of EUR 212 million plus interest running to EUR 224 million. The claim was based on fine proceedings of the German Federal Cartel Office (FCO) in which the FCO investigated an anti-competitive exchange of information among members of a working group of the trade association Markenverband e.V. (Arbeitskreis Körperpflege, Wasch- und Reinigungsmittel (KWR) (Working Group for Body Care Products, Detergents and Cleansers)).
The Frankfurt Higher Regional Court ruled that Schlecker had not suffered any damage as a consequence of the information exchange. According to the Court, the information exchange investigated by the FCO had not limited price competition among manufacturers to the detriment of the customers. The Frankfurt Higher Regional Court thus followed the line of arguments, supported by economic evidence, presented by the defendants, among them Allen & Overy for Procter & Gamble.
The court ruling is of fundamental significance for cartel damages in Germany. It continues a line of jurisprudence which addresses the nature of alleged cartel law infringements and their effects on markets (and prices) in a very differentiated manner as rightly requested by the German Federal Court of Justice (Bundesgerichtshof) in its recent ruling concerning the Rails cartel. Being only the second higher court in Germany to address the question whether or not a mere information exchange was prone to cause damage, the Higher Regional Court of Frankfurt is the first court to fully adopt the principles established by economic research, in particular the ambivalent effects of information exchanges. Depending on the individual case, information exchanges may intensify or lessen competition. In the case at hand, effects causing price increases were unlikely, based on an overall assessment of the established facts.
The Allen & Overy team comprised partner Dr. Ellen Braun, senior associate Dr. Lukas Rengier as well as associates Friederike Popot-Müller and Katalin Lehnhardt-Busche (all Antitrust, all Hamburg).