The law and economics of pass-on in price fixing cases

Cento Veljanovski’s articleThe Law and Economics of Pass-on in Price Fixing Cases” provides a critical assessment of the reasoning in Sainsbury’s Supermarkets v. MasterCard which establishes the pass-on “defence” in English law. The Competition Appeal Tribunal (CAT) set out a two-part test which it erroneously distinguished from the economists’ notion of pass-on.  It then went on the develop key elements of legal pass-on in price fixing cases. This article critically assesses the Tribunal’s judgment within a law and economics framework. It provides a rounded interpretation of pass-on as both a defence and “offence”, the different evidentiary standards and principles used, and the potential for inconsistency which could see defendants liable to claims for more than the overcharges.

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