The Elevators & Escalators cartel revisited in light of the Skanska case: on the impact of the effectiveness principle on the private enforcement of EU competition law

On 14 March 2019, the CJEU handed down a landmark judgment in the Skanska case. Following the opinion of AG Wahl, the CJEU found that the competition law concept of ‘undertaking’ is applicable as well in actions for damages for breaches of EU competition law. Consequently, each company that is part of the infringing economic unit can be held liable. Furthermore, the CJEU stressed the important deterrent (and possibly punitive) function of private enforcement in order to achieve the effective enforcement of the EU competition rules. Considering this, the question arises whether other fundamental principles of private law should also be reconsidered in order not to impede the effective enforcement of competition law.

The Skanska case

previous blog post elaborated on the opinion by Advocate General Wahl in the case. That post dealt with, among others matters, the competition law concept of ‘undertaking’ and the ‘principle of economic continuity’. The main facts of the case are the following.

Facts in the Skanska case

On 29 September 2009, the Finnish Supreme Administrative Court imposed fines on several undertakings that had participated in a cartel in the asphalt market. They had agreed on sharing customers, prices and tendering for contracts. Due to acquisitions, dissolutions and liquidations, some companies (hereinafter: the economic successors) received a fine on the basis of the economic continuity test. They had not participated in the Asphalt Cartel themselves but had continued the economic activity of a no-longer existing entity that participated in the infringement.

Some of those economic successors faced a damage claim by the Finnish City of Vantaa, which had concluded agreements on asphalt works within the Cartel period. The District Court ruled that, in order to ensure the effectiveness of Article 101 TFEU, the economic continuity test needed to be applied as well when determining which companies could be held liable for damages. The Court of Appeal, however, held that this was not the case, as this would run counter to some fundamental characteristics of the Finnish rules on civil liability. As in most national legal systems, those rules are based on the principle that only the legal entity that caused the damage can be held liable (notwithstanding exceptions). The Supreme Court decided to refer the case to the CJEU and request a preliminary ruling.

Key takeaways of AG Wahl’s opinion

As mentioned in the previous blog post, AG Wahl stresses that the private enforcement of EU competition law has an important deterrent function. He finds that the determination of the persons liable for anticompetitive conduct is a constitutive condition of the right to compensation. Hence, this must be determined directly on the basis of EU law (full effectiveness of Article 101 TFEU). AG Wahl therefore concludes that the competition law principle of economic continuity is to be applied when determining which companies can be held liable for damages.

Key takeaways of CJEU judgement

The CJEU judgement (14 March 2019) confirms the central reasoning of AG Wahl. It starts by referring to the full effectiveness of Article 101 TFEU, which would be put at risk if it were not open to any individual to claim damages for loss caused by competition law infringements (Kone C‑557/12, no. 21). According to the CJEU, the determination of the entity that is required to provide compensation for damage caused by an infringement of Article 101 TFEU is indeed governed directly by EU law. Those entities are the ones that are part of an economic unit, even if in law that unit consists of several (natural or legal) persons. If, from an economic point of view, the economic successor is identical to the predecessor that infringed the competition rules, he can thus be held liable for the damages caused. By extension, this is also true in the case of a parent company exercising control over a subsidiary that infringed the EU competition rules (e.g. Akzo Nobel case, C-516/15). It appears that this reasoning holds true mutatis mutandis for Article 102 TFEU.

Interestingly, one of the economic successors raised the argument that those concepts have been developed in a context of public enforcement, which cannot as such be applicable to a private enforcement setting. The CJEU, however, firmly rejected this argument, as the actions for damages are an integral part of the system for enforcement of the competition rules, which are intended to deter undertakings from engaging in anticompetitive conduct. This deterrent function would be jeopardised if undertakings could escape liability claims by simply changing their identity. The CJEU even seems to endorse a certain punitive function of the private enforcement of EU competition law.

Impact of the Skanska case on the Elevators and Escalators cartel in Belgium and the Netherlands

The importance of the far-reaching conclusions in the Skanska case becomes clear if we revise previous national case law in the Elevators and Escalators cartel in Belgium and the Netherlands. As this was a clear example of a competition law infringement where the fine was imposed during the genesis of Directive 2014/104/EU, it was considered that this case would provide the perfect opportunity to fully show the complementary role of private enforcement. Today’s case law, however, shows how the effective enforcement of EU competition law seems to collide with principles of national damages law.

Facts in the Elevators & Escalators cartel

Between at least 1995 and 2004, the companies Otis, Kone, Schindler and ThyssenKrupp operated a cartel for the installation and maintenance of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands. The EC highlighted that the effects of this cartel could continue for years. Even though the EC only needed to prove the anticompetitive object of the cartel to apply article 101 TFEU, it stressed the high likelihood that the parties’ unlawful behaviour had indeed resulted in anticompetitive effects (EC COMP/E-1/38.823, no. 589). Unfortunately, the EC did not attempt to demonstrate those effects, as it deemed it impossible to determine the relevant competitive parameters in the absence of this cartel with sufficient certainty (EC COMP/E-1/38.823, no. 660). This already highlights the difficult task of private parties when claiming for damages. Indeed, national damages law typically demands proof of those damaging effects.

Case law revisited: parental liability

Several claims for damages were brought following the EC decision in Belgium and the Netherlands (this post does not elaborate on proceedings in other jurisdictions, such as the one in Austria that led to the CJEU Kone judgement in 2014 on umbrella damages). Remarkably, both Belgian and Dutch courts held that parent companies could not be held liable for the actions of their subsidiaries (or the other way around) because of the mere fact that they constituted one undertaking under Article 101 TFEU (Middle Netherlands District Court 20 July 2016, ECLI:NL:RBMNE:2016:4284, no. 4.8; Brussels Commercial Court 24 April 2015, no. Because of the Skanska case, this reasoning no longer holds and national courts have to apply the concept of undertaking in damages cases as well.

Case law revisited: the effective deterrent function of private enforcement

A second and broader remark follows from the underlying principles that led AG Wahl and the CJEU to decide on the direct applicability of the concept of undertaking in national damages cases. As mentioned, they both stress the deterrent function of private enforcement as an important part of the effectiveness of the competition rules. The CJEU even hints at a punitive function. Based on this reasoning, it becomes clear that the finding of an infringement of EU competition law is personal in nature for all entities covered by the infringing ‘undertaking’ (see already CJEU, Eni C‑508/11 und Akzo Nobel C‑516/15). Consequently, both AG Wahl and the CJEU are not afraid to bypass fundamental principles of private law, such as the separation of legal entities. This raises the question whether other national private law principles might need to be applied more cautiously as well, in order not to impede the effective enforcement of EU competition law.

Considering this, it is remarkable that none of the claims for damages based on the Elevators and Escalators cartel have thus far led to damages being awarded in Belgium or the Netherlands. On the other hand, claimants typically need to prove unlawfulness, imputability, loss and (relativity of) causation (e.g. Court of Appeal of Arnhem-Leeuwarden 5 February 2019, ECLI:NL:GHARL:2019:1060, no. 5.12 [Article 17, 2 Directive 2014/104/EU introduces a rebuttable presumption of harm caused by cartel infringements, but is not yet applicable to this case]). Several claimants have not yet been able to prove their damage:

  • Belgium: the EC itself started a follow-on damages action at the Brussels Commercial Court (representing the EU) to claim compensation for the overcharge it had allegedly paid for the maintenance of elevators in buildings of the EU institutions. The Court dismissed the claim because the EC had failed “regarding each institution and each maintenance contract that relates to Belgium, to carefully demonstrate and quantify the extra costs to which the established infringement would actually have given rise” (Brussels Commercial Court 24 November 2014, appeal pending). Similarly, the same Court dismissed a claim by the Belgian State because it failed to prove the existence of a loss with sufficient certainty (Brussels Commercial Court 24 April 2015). Remarkably, both claimants put forward economic expert reports, but nevertheless failed to prove their damage.
  • Netherlands: two owners’ associations of apartment buildings brought an action for damages against Otis, yet their claim was dismissed rather quickly because they failed to prove the causal link between the invoked contracts and the Elevators and Escalators cartel, even though those contracts had been concluded within the time frame of the cartel (District Court Midden-Nederland 13 March 2013, ECLI:NL:RBMNE:2013:CA1922). In different proceedings, the claim by East West Debt B.V. (hereinafter: EWD) was dismissed as well. EWD bundled claims of 144 hospitals and care institutions, yet failed to provide sufficient facts to substantiate its claims (Court of Appeal of Arnhem-Leeuwarden 5 February 2019, ECLI:NL:GHARL:2019:1060).

Even though the reasoning of the courts in the aforementioned decisions is often understandable in light of the basic principles of tort law, it is noteworthy that none of the claimants managed to claim for damages successfully. This is the case for both economically ‘stronger’ parties (such as the EC, EWD and the Belgian State) and economically ‘weaker’ parties (such as the owners’ associations). Considering this, can we truly believe that private enforcement is carrying out its deterrent (and possibly punitive) function in light of the effective enforcement of EU competition law?


The CJEU judgement in the Skanska case removes all doubt as to whether the competition law concept of ‘undertaking’ is to be applied in private damages cases as well. This autonomous concept of EU law is directly applicable in actions for damages for infringements of EU competition rules. Furthermore, such damages actions serve an important deterrent (and possibly punitive) function in order to achieve the effective enforcement of competition law. As shown by a revision of the Dutch and Belgian follow-on cases in the Elevators and Escalators cartel, this might further lead to a necessary reconsideration of the strictness of some national law principles when dealing with such actions for damages.

by Michiel Verhulst (KU Leuven)

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