Antitrust law: Advocate General in favor of "descending" liability for damages of the cartelists' subsidiaries

Apr 28, 2021 Benn-Ibler Rechtsanwälte

In a case before the European Court of Justice (ECJ), the theory of economic unity in antitrust law could take on a new dimension: While up to now parent companies have been punished for cartel violations committed by their subsidiaries ("ascending" liability), an Advocate General of the Court of Justice now also considers a liability of subsidiaries to pay damages for cartel violations committed by their parent company ("descending" liability).

The background to the proceedings is an antitrust fine imposed by the European Commission on companies in the automotive sector.

After this penalty had been imposed, a subsidiary (itself not involved in the cartel) was confronted with a claim for damages. The plaintiff had procured trucks through the subsidiary and was now claiming the difference between the price paid and the price that would have existed if the defendant's parent company had not cartelized.

The national court referred the question to the ECJ for clarification as to whether European antitrust law allows a claim for damages against the formally "uninvolved" subsidiary.

The Advocate General handling the case has now affirmed this.

From the Advocate General's point of view, the subsidiary's liability can be based on the fact that it forms an economic unit together with the parent company. What also matters is the role of the subsidiary in the realization of the anti-competitive conduct. Therefore, the subsidiary's liability for damages can only be considered if it is active in the same economic sector and can thus contribute to the realization of the anti-competitive conduct.

The Advocate General classifies liability as joint and several, i.e. both parent company and subsidiary can be held liable for the full payment of damages. Therefore, the plaintiff has the choice of which of the companies to sue.

ECJ C-882/19, Opinion (15.04.2021)