ECJ: 100% of voting rights suffice for liability for antitrust fines

Mar 3, 2021 Benn-Ibler Rechtsanwälte

The European Court of Justice (ECJ) has made clear that a parent company's liability for infringements of competition law by its subsidiary does not require that the parent company holds 100% of the shares in the subsidiary. Rather, it is sufficient if the parent company holds all voting rights.

The background to the proceedings was a cartel fine against companies in the power cable and submarine cable sectors. One of the companies concerned was owned by Goldman Sachs, with shares in the company amounting to less than 100% at the time of the competition infringement.

The Commission nevertheless ruled in the cartel decision that Goldman Sachs was also liable for the subsidiary's fine because it held all the voting rights. Goldman Sachs first contested the fine before the European General Court (EGC), which clarified that the extension of liability under EU law in the context of competition fines also applies to financial investors.

Goldman Sachs in turn challenged this ruling before the ECJ. In particular, it argued that the extension of liability was misguided because - contrary to previous ECJ case law - Goldman Sachs did not hold all the shares in the infringing company.

The ECJ stated that what is important is whether the parent company exercises decisive influence on the market behavior of the subsidiary. The previous Akzo Nobel case law had assumed this if the parent company held 100% of the capital of the subsidiary.

However, as the ECJ held in the present case, it is also sufficient if the parent company holds 100% of the voting rights.

This is because - according to the ECJ - a parent company that holds all the voting rights attached to its subsidiary's shares can exercise a decisive influence on the subsidiary's conduct in the same way as a parent company that holds all or almost all of its subsidiary's capital.

ECJ C-595/18 P