Case Study

LG Display Defence Reduces Claim by 93 Percent

March 25, 2024

In only the third fully litigated cartel damages trial in the UK, Granville Technology Group Ltd (in liquidation) and others v. LG Display Co. Ltd and others, the court sided with LG Display on the key issues of overcharge and passon.  

The claim originated from the 2010 finding that a group of LCD panel manufacturers infringed Article 101 of the Treaty on the Functioning of the European Union (TFEU) through engaging in a cartel, prompting Granville (a group of computer manufacturers and retailers) to seek damages in excess of £60 million. Acting in defence of LG Display, David Parker’s evidence was preferred on all material points,* resulting in the damages awarded being around 7 percent of the amount originally claimed. 

The Analysis 

In follow-on matters the existence of a cartel is not disputed: the case focused on the amount by which the cartel impacted the claimants and therefore the damages that should be awarded. This required analysis of three main issues: 

  1. estimation of overcharge 
  2. assessment of pass-on 
  3. lost volume of commerce to the claimants resulting from (i) and (ii) 

(i) Econometric estimation of overcharge 

Mr. Parker and his team identified suitable control variables, assessed how to control for the “endogeneity” of demand and considered the role and importance of statistical tests in choosing between different regression models.  

(ii) Assessment of upstream and downstream pass-on 

Mr. Parker and his team considered the importance of different types of evidence, including economic theory; whether it was necessary to trace a particular cost increase through to a particular price increase to demonstrate pass-on; what can be drawn from evidence of pass-through of other types of cost; and the extent and implications of ‘psychological price points’ for pass-on. 

(iii) Lost-volume effect resulting from pass-on of overcharge 

Mr. Parker and his team analysed the elasticity of downstream demand, the relevant margin and the extent of any sales recapture by Granville that would have taken place on other (unaffected) products. 

The Result 

The judgement, handed down on 8 February 2024, preferred the defendants’ evidence almost exclusively regarding issues (i) and (ii), which were the key material elements in this case; and favoured both sides in different aspects of issue (iii). These findings resulted in damages of approximately £4.4 million (over half of which was interest) being awarded against a claim of over £60 million.  

 * Mr. Parker joined BRG in December 2023. This engagement took place while Mr. Parker was working for a previous firm. 

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David Parker

Managing Director