It's the "David vs. Goliath" fight: A former top German official is convinced that OPEC is fueling prices even further. In view of the sharp rise in energy prices, this is dramatic, says Armin Steinbach. The lawyer decides to sue - alone. In the interview he talks about the failure of the EU, he explains why a cartel is not a cartel - and why he is suing OPEC for no more than 50 euros.
You are currently suing the most powerful oil cartel in the world, OPEC, as a private individual - because it is what it was originally founded for: a cartel. OPEC never hid it. So how did you come up with the idea of suing the Berlin Regional Court?
Armin Steinbach: The topic has been on my mind for quite a while. Back in 2008, as a lawyer at a major American law firm, I asked myself how something could be done about this cartel. That's when I started drafting a lawsuit, and I first filed a lawsuit against OPEC ten years ago.
And what did it end up as?
First of all: At that time I was a consultant in the Ministry of Economics. The Berlin Regional Court initially accepted the lawsuit and served it on OPEC. OPEC then called the Foreign Office and asked why a German official was suing OPEC. It couldn't be. After some back and forth, I withdrew the lawsuit.
Why?
At the time, no formal pressure was put on me by my employer. That would have been even nicer. However, it became clear that I might be causing damage to the reputation of my employer.
You have been an economics professor at HEC Paris since 2021, so you are no longer in the civil service. Was that the moment when you thought about the lawsuit again?
Yes, exactly - I've also regained my license to practice law. That's why I brought my complaint from back then before the very same court. This time, too, the court decided to allow the lawsuit.
What is your complaint based on?
I believe that the cartel imposes excessive prices and thus causes enormous damage to consumers. In view of the war in Ukraine and the sharp rise in energy prices, this is particularly dramatic - if you also consider that OPEC recently spoke out against higher oil demands. It is thus further heating up prices, which would certainly not be possible without this cartel practice.
The amount in dispute is interesting. They are suing OPEC for exactly 50 euros. How does this sum come about?
I'm claiming my damage caused by the purchase of petrol and heating oil. Of course, the damage is much higher in reality. The 50 euros came about for two reasons: On the one hand, it is essentially about the matter for me. I don't want to make a profit, I want to take action against the cartel. On the other hand, I have to reckon with the fact that OPEC and the companies behind it will spare no expense and hire the most expensive lawyers and commission costly reports. So I am facing a high cost risk. By keeping the amount in dispute low, I reduce the risk that companies will be able to pass enormous costs on to me.
Surely you have many supporters for such a lawsuit...
Maybe, but I'm running this lawsuit all by myself and have no financial backers. I do all this with my private wealth.
What is the normal process path in this case?
The district court of Berlin is the first instance for me. It can sometimes take years before a decision is made in cartel cases. Once a decision has been made, an appeal can be lodged with the Higher Regional Court. After this decision, there is only the possibility of an appeal by the Federal Court of Justice.
Isn't that a question that needs to be clarified under European law?
Yes, at its core, antitrust law is about European law. Each instance therefore also has the option of involving the European Court of Justice in Luxembourg. For example, if a German court is unsure how to interpret European law, it can put a question to the European Court of Justice. There would then be a preliminary ruling that would be given back to the German court.
What difference does it actually make if OPEC is also legally referred to as a cartel?
This would have two consequences: On the one hand, every consumer could then sue OPEC and the companies behind it for damages. The result would be a wave of lawsuits with amounts in dispute worth billions. The second would be that the European Commission would have to deal with OPEC. Actually, it has to stop cartels or at least curb them. So far, however, she has not done so with OPEC because she does not want to burn her fingers politically.
Can this really lead to a fall of OPEC?
If OPEC is faced with a multi-billion dollar lawsuit, I can't imagine the cartel being sustained. OPEC would permanently continue to cause damage that it would have to compensate for.
After all, OPEC consists of individual states and their state-owned companies: Who would have to pay for the damage if I didn't even know which country the petrol I just filled up came from?
This is a very important question. My opponents are both OPEC, based in Vienna, and jointly and severally the oil companies of the OPEC member states. If successful, I could get the 50 euros either from OPEC or from the companies. You have to know that the OPEC countries have companies that are normally 100 percent state-owned - such as Saudi Arabia with Saudi Aramco, the most valuable company in the world. It is of course easier to enforce against a company. And it is also clear that Saudi Arabia will not allow anyone there to take action against Saudi-Aramco. That means I would have to look for an asset of this company in Europe, for example a refinery.
The state could also skim off the profits of the mineral oil companies - at least that's an idea that has been discussed again and again. Federal Economics Minister Robert Habeck also wants to get to grips with antitrust law and equip it "with claws and teeth". For example, it should become easier to prove violations of antitrust law. If successful, would your lawsuit prove this antitrust violation so that profits could soon be skimmed off? That would be an elegant way...
Yes and no. It aims in a similar direction, but through different channels. Mr. Habeck's project is about the national cartel authority's access to the oil companies that determine the gas station price - i.e. how the Federal Cartel Office can prove a cartel at this level. In my case, it is about the judicial determination of a cartel at the level of the crude oil market, i.e. at the upstream level. In both cases, however, it boils down to relieving consumers by preventing cartel practices.
Is the Federal Cartel Office not vigorous enough in pursuing you?
I would not pass the buck to any German authority. The mistake lies in the European Commission deliberately looking the other way.
With a dispute, the European Commission could also endanger the oil supply. Your lawsuit, if successful, could trigger the same thing, say legal experts. What do you think?
One can speculate how OPEC will react. I don't want to rule out the possibility that she could resort to sanctions. And yet I believe that the status quo cannot be the solution. We need a high-level discussion as to whether we can afford such a cartel. It would also be important in terms of climate protection.
You have to explain that...
In the medium to long term, the OPEC countries have no incentive to switch from fossil to renewable energies. They can just keep reaping their cartel profits. And as long as they can, as long as we don't break the cartel, they're not going to move forward with the fossil phaseout.
Breaking OPEC will be practically difficult. What do you think of the idea of forming a demand cartel – a kind of counterweight?
I understand the desire, but it would create more problems than solutions. For one, it doesn't address the real problem - and that is the supply shortage. And secondly, there would probably be undesired evasive reactions: the OPEC states would simply sell to other countries that would pay more.
Many transport routes cannot be changed over from one day to the next. So isn't this second effect overestimated?
It is true that the transport infrastructure is partially rigid. But if we look at liquefied gas, for example, which is distributed via large tankers around the world, a demand cartel would have fairly immediate consequences. We should definitely not underestimate that.
Finally: If you had a wish for antitrust law. What would you reform?
I don't even have any legal wishes. What we need is an apolitical European Commission – apolitical in the sense that it enforces the law and takes seriously its mandate to protect consumers from harm.
Jannik Tillar spoke to Armin Steinbach
The interview first appeared on Capital.de.
