Illinois Brick Co. v. Illinois established the precedent that only direct purchasers of products and services can sue under federal antitrust law in an antitrust-related matter. However, several states have since recognized indirect purchasers’ rights to recover damages in similar matters by passing Illinois Brick repealer statutes. Brattle Principals Armando Levy and David Sunding have published an article in the California Lawyers Association (CLA) Competition Spring Journal on updates regarding retail pass-through rates, the percentage of wholesale price changes that are reflected in the retail price.
Most of the time, indirect purchaser antitrust litigations are brought as class actions. For these cases, it is necessary to prove that a price increase resulting from anticompetitive activity directly affected the direct purchasers as well as calculate the pass-through rate of these overcharges from direct purchasers to indirect purchasers. In order to obtain class certification, experts must be able to establish there was indeed pass-through of costs to all or virtually all class members.
The full article, “An Economic Treatment of Pass Through in Indirect Purchaser Antitrust Litigation,” is located below.