Cartel damages and passing-on in a marketplace

Abstract

The recent EU Damages Directive establishes a set of measures to facilitate actions for damages stemming from infringements of the competition law provisions. The Directive recognizes the importance of taking into account of the "passing-on" in assessing the harm suffered by direct and indirect victims of a cartel. To our knowledge, all existing studies examine the "passing-on" in markets organized by resellers which buy products to suppliers and sell them to final consumers. In this paper we study what would be the "passing-on theory" when a cartel affects a marketplace organized by a platform which levies an ad-valorem or a per-unit commission on each sale made by affiliated suppliers to final consumers. We are interested in three main questions: (1) does the platform always suffer from the suppliers' cartel and if so, how to calculate its loss?, (2) how the platform should adjust its fee when suppliers cartelize the market? and, (3) under which business model (marketplace with a per-unit/ad-valorem fee or reseller) are consumers more protected against a cartel of suppliers?