On 23 May 2016, the Chancery Division of the UK High Court of Justice handed down judgment in the case Iiyama Benelux BV and others v Schott AG and others [2016] (“the Iiyama case”) and held that claims for cartel damages arising from purchases of goods from outside the EU may not succeed where there is insufficient nexus to affect trade and competition within the EU. This decision marks the continuing, and indeed increasing, difficulty claimants face in bringing claims for competition damages in the UK for non-EU sales.

The claimants in the Iiyama case manufacture and sell computer monitors incorporating cathode ray tubes (“CRTs”) which had previously been the subject of two European Commission (“EC”) cartel decisions (the “Cathode Ray Tube Glass Cartel” and the “Cathode Ray Tube Cartel”) in October 2011 and December 2012. Under those decisions, the EC imposed a fine of €1,470,515,000 on seven international company groups for, between 1996 and 2006, price fixing, market sharing, exchanging sensitive commercial information and coordinating on output and customer allocation (amongst other anti-competitive activities).

The claimants sought damages for infringement of Article 101 of the Treaty on the Functioning of the EU (“TFEU”) and Article 53 of the EEA Agreement on the basis that the cartels (formed outside the EU) restricted competition within the EU and thereby allegedly caused them to pay an excess for the CRT components (purchased from outside the EU).

The claim was struck out by the UK High Court with confirmation that claims for cartel damages arising from non-EU purchases may not succeed where they lack a sufficiently close territorial connection with the EU to amount to a breach of EU competition law. The decision was reached on the grounds that there had been no direct sale by the cartelists to a customer in the EU, and despite the fact that the goods which had been initially dealt with under the cartel arrangements ended up in the hands of EU customers.

The UK’s territorial limitation on cartel damages claims appears to sit uncomfortably with the aforementioned Cathode Ray Tube Glass and Cathode Ray Tube Cartel decisions which confirm the EC’s authority to sanction cartels formed outside the EEA and involving non-EU products which are not sold within the EEA.

[View source.]