The deadweight loss in competition litigation seen from compensation and deterrence perspective: lessons from a Chilean price-fixing cartel

Abstract

Abstract Competition law enforcement is continuously being fine-tuned to serve two important goals: compensation and deterrence. This is true for the European Union, where the discussions about this balancing exercise are far from final and also for other parts of the world. This article focuses on a currently neglected damage component in litigation and its potential in this regard: the deadweight loss. It emerges for those consumers at the end of the supply chain that would have bought the product at the market price but for the cartel but do not acquire it at the cartelized price (anymore). Importantly, this article will outline how it can simultaneously serve both, the compensation and deterrence goals. It is a challenging damage component. However, a Chilean court in 2019 awarded final consumers compensation for the deadweight loss that others suffered aside from the price mark-up that some paid. The article exemplifies what aspects of Chilean law enabled this judgment and briefly assesses the latest European developments in collective redress in this regard.