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Damages

Clayton Act Section 4:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws

May sue therefore in any district court in the United States in the district in which the D resides or is found or has an agent, without respect to the amount in controversy

Treble damages: And shall recover threefold the damages by him sustained, and the cost of suit, including reasonable attorney’s fees.

Ds are jointly and severally liable for damages resulting from conspiracy: P can sue a deep pocket D and recover the full amount without chasing down each D individually

Ds have no right of contribution against fellow conspirators (Texas Industries v. Radcliff, 1981)

  • Why treble damages? ABA Antitrust Section provides 5 rationales (which collapse to 4)

(1): Provide private relief or compensation (compensation)

(2)/(3): Encourage private enforcement/deter violations (deterrence from public enforcement may be insufficient)

(4): Deprive violators of the fruits of illegal acts (unjust enrichment/restitution)

(5): Punish violators (punitive, like torts)

  • P’s burden to get damages: P must establish:

(1) Antitrust violation (Sherman Act / Clayton Act)

(2) Antitrust injury (includes causation): collusion or exclusion that harmed P

(3) Amount of damages: evolution of the law

  • 60s/70s: if P prevailed on liability, then they got what they asked for on damages
  • Modern: 2 stage trial, first liabilities then damages, both are hotly contested
  • Measures of damages (typical):

Collusion: overcharges, attempt to recover the difference in price between what P paid and what they would have paid if there wasn’t a cartel (e.g., Andreas and the lysine cartel)

Exclusion:

  • Lost profits
  • Going concern value: show reduction in the value of the firm (shareholder or enterprise value)

Methodologies:

  • Before and after: calculate difference between price before the price increase to the price before the price increase (within jurisdiction, across time)
  • Yardstick (comparison group): compare the price in the jurisdiction affected by the price increase to a jurisdiction not affected by the price increase (across jurisdiction, within time)
  • Both: economist can combine both measures

Techniques:

  • Regression: provides a way tot compute the before and after prices with a standard error (measure of uncertainty)
  • Model-based simulation: often used in the context of mergers
  • Artificial intelligence / machine-learning models: damages are computed via prediction models

Caselaw​

  • Conwood v. U.S. Tobacco (6th Cir. 2002): shows how difficult it can be to show damages and how hard it can be to reconstruct the but-for world