The theory holds that a cartel elevates market prices generally, permitting non-participants to raise prices. Purchasers from non-conspirators claim the resulting overcharge.
Circuits divide on whether the claims are cognizable.
Alternative Names:
Umbrella Effect|Umbrella Purchaser Claims
Why it Matters?
Antitrust injury and proximate cause are the principal defenses, since damages paid to a party that did not participate in the conspiracy are attenuated from the violation and several circuits have rejected the claims on Associated General Contractors grounds. Proving that a particular non-conspirator's pricing responded to the cartel rather than to independent factors is separately difficult and requires market-specific economic evidence.
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Frequently asked questions
What are the principal defenses?
What proof problem arises?
