Antitrust

5 2 GENERAL PRINCIPLES Undertakings are the entities subject to liability under EU antitrust law and are identified by reference to their economic activities rather than their legal status. Furthermore, multiple corporate entities that may be legally distinct can be captured under the EU antitrust law construct of a single economic entity, and therefore, considered a single undertaking for the purposes of antitrust liability, with the parent ultimately held liable for the subsidiary's conduct. This will occur where the subsidiary forms with its parent entity "an economic unit within which [the subsidiary] has no real freedom to determine its course of action on the market" 1 and applies to all infringements of EU antitrust law, although the most notable cases on this issue relate to cartel conduct. EARLY DEVELOPMENTS In early cases, parental liability was imposed when parents specifically directed a subsidiary's anti-competitive behavior 2 or otherwise performed anti-competitive conduct through a subsidiary. 3 However, in Stora, 4 the Court of Justice established a rebuttable presumption to help adduce parental liability — namely, that parental liability arises where a parent exercises decisive influence over a subsidiary's commercial policy, which is presumed in the case of a wholly owned subsidiary. The 2009 Akzo Nobel judgment further held that decisive influence can be presumed without factually demonstrating any exercise of such influence. Such influence is identified when a subsidiary, despite having a separate legal personality, does "not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company." 5 The presumption has continually expanded, being applied in cases of: (i) almost 100% ownership (e.g., 96% ownership 6 ); (ii) a corporate family without formal legal ownership between entities; 7 and (iii) a 50:50 joint venture where the joint venture does not act independently of its parents. 8 The fact that very few claimants have successfully rebutted the presumption in practice also illustrates its broad nature. RECENT UPDATES The first of the two most recent expansions of parental liability was the April 2017 Akzo Nobel judgment. 9 Here, the European Commission (EC) held a parent company liable as its subsidiaries had directly participated in the heat stabilizers cartel. There were two separate infringement periods. The EC was procedurally time-barred from imposing fines on the subsidiaries only implicated in the first infringement period. Nevertheless, it fined the parent for this period, as well as for the second infringement period. This was on the basis that the parent was held responsible for the overall infringement because of another subsidiary implicated in the second period (which was not time-barred). The Court of Justice, despite recognizing that a parent's liability derives from that of its subsidiary, ruled that a parent may not necessarily benefit from defenses available to subsidiaries, particularly where factors justify assessing its liability separately. CARTELS 09 PA R E N T A L L I A B I L I T Y I S P R E S U M E D I N T H E C A S E O F A W H O L LY O W N E D S U B S I D I A R Y Parental Liability for EU Antitrust Infringements: New and Broad Frontiers

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