Full compensation and the volume effect: assessing different policy options

According to the Damages Directive victims of infringements of competition
law are entitled to full compensation. To achieve this goal overcharges,
passing-on, and volume effects should play a role in the calculation of
damages (for any purchaser who is not yet the final consumer). Whereas the
Damages Directive promotes the passing-on defence for the defendants, it
does not regulate volume effects in depth. The computation of these effects
requires information on counterfactual prices and quantities. Since this
information cannot be observed, the size of the volume effect tends to be
uncertain. This paper discusses policy-options that aspire to bring
compensation closer to full compensation, given uncertainty about the size
of the volume effect. Based on the maximin-principle, a principle for
decision-making under uncertainty, not allowing a passing-on defence
appears to be an attractive option since this may lead to the minimization of
the maximum gap between actual and full compensation.