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Collusion theory robustly predicts non-cartel rivals to raise their price and increase their output. As the typical cartel cuts back production, its competitors are expected to gain market share during the collusive period and to lose market share in the period following the cartel's demise. We provide empirical support for this prediction by showing that it applied to the European truck cartel. We also illustrate how our analysis can be used in the prosecution stage. One truck manufacturer denied cartel participation, whereas the proposed market share test supports the European Commission's finding that this firm was, in fact, a member.

This article explores whether cartelists should be liable for losses resulting from umbrella pricing, thereby critically evaluating the ECJ’s judgment in “Kone”. Since the EU legislature did not resolve the question of liability for umbrella pricing, it has to be evaluated in accordance with national law, which must however comply with the principles of equivalence and effectiveness pursuant to Article 4(3) TEU. Therefore and in accordance with the Court’s judgment in “Courage”, the decisive criterion should be the effect a cartelist’s liability for umbrella pricing would have on effective and efficient enforcement of competition law. An analysis based on the standard model of optimal sanctioning reveals the ambivalent effect of such a liability. Thus, in view of opposing risks of systematic over- and under-deterrence and in accordance with the principle of institutional balance, the Court has to leave the EU legislature and the national legislatures, respectively, with the discretion not to provide for compensation in the case of umbrella effects.

This article explores whether cartelists should be liable for losses resulting from umbrella pricing, thereby critically evaluating the ECJ’s judgment in “Kone”. Since the EU legislature did not resolve the question of liability for umbrella pricing, it has to be evaluated in accordance with national law, which must however comply with the principles of equivalence and effectiveness pursuant to Article 4(3) TEU. Therefore and in accordance with the Court’s judgment in “Courage”, the decisive criterion should be the effect a cartelist’s liability for umbrella pricing would have on effective and efficient enforcement of competition law. An analysis based on the standard model of optimal sanctioning reveals the ambivalent effect of such a liability. Thus, in view of opposing risks of systematic over- and under-deterrence and in accordance with the principle of institutional balance, the Court has to leave the EU legislature and the national legislatures, respectively, with the discretion not to provide for compensation in the case of umbrella effects.

This article explores whether cartelists should be liable for losses resulting from umbrella pricing, thereby critically evaluating the ECJ’s judgment in “Kone”. Since the EU legislature did not resolve the question of liability for umbrella pricing, it has to be evaluated in accordance with national law, which must however comply with the principles of equivalence and effectiveness pursuant to Article 4(3) TEU. Therefore and in accordance with the Court’s judgment in “Courage”, the decisive criterion should be the effect a cartelist’s liability for umbrella pricing would have on effective and efficient enforcement of competition law. An analysis based on the standard model of optimal sanctioning reveals the ambivalent effect of such a liability. Thus, in view of opposing risks of systematic over- and under-deterrence and in accordance with the principle of institutional balance, the Court has to leave the EU legislature and the national legislatures, respectively, with the discretion not to provide for compensation in the case of umbrella effects.