The method of quantifying antitrust damages and related issues in antitrust damages actions

Korea has recently seen a rise in the number of private antitrust actions brought in Korean courts for purposes of recovering damages caused by illegal anti-competitive activities such as price-fixing, abuse of market dominance and unfair business practices. In this regard, it may be said that private antitrust action has become an important component of antitrust enforcement in Korea. Even though it is, in combination with government enforcement, a deterrent to violations of antitrust laws, it is still considered to be primarily a means for compensating those harmed by illegal anti-competitive activities. In order to recover damages in a private action,the plaintiff must prove damages caused by overcharges. However,quantifying the exact amount of antitrust overcharges is often difficult. Among the many approaches available, the econometrics analysis approach such as multiple regression analysis based on the difference in difference method is considered to be the most developed and accurate method in quantifying damages as long as there are sufficient data for the entire relevant period. In a recent private action case, in which the plaintiff sought damages against an oil cartel that supplied oil products to the Korean military, the Korean Supreme Court reversed the appellate court’s decision by pointing out that the appellate court, in the process of quantifying damages,had failed to consider all the factors affecting the price in the relevant market during and after the cartel period. This holding is interpreted as the Supreme Court’s acknowledgement of econometrics analysis based on the difference in difference method as being the most appropriate method for quantifying damages in antitrust cases.