Update: ECJ confirms "decreasing" antitrust liability

Dec 15, 2021 Benn-Ibler Rechtsanwälte

The European Court of Justice (ECJ) had to decide whether, on the basis of the doctrine of economic unit under antitrust law, a subsidiary can also be held liable for antitrust violations of its parent company, in addition to the previous "extending" liability of the parent company for the subsidiary.

The background to the proceedings was the cartel fine imposed by the European Commission on the basis of Article 101 of the Treaty on the Functioning of the European Union (TFEU) against several truck manufacturers. Between 1997 and 2011, these manufacturers entered into agreements to increase their gross list prices for the European Economic Area. Subsequently, Sumal brought an action for damages against a Spanish subsidiary of the cartelist Daimler AG, claiming payment for the damage it had suffered, i.e. compensation for the additional purchase price paid as a result of the cartel. The Spanish provincial court then referred the question to the ECJ for clarification as to whether an action for damages against the subsidiary, i.e. "descending" liability, is possible on the basis of the anti-competitive conduct of the parent company.

The decisive factor for such liability is the existence of an economic unit of the two companies at the time of the infringement. This means that there must be an economic, legal and organisational link between the two companies. Such a unit is to be assumed even if the companies consist of different legal forms. Furthermore, it is necessary that the subsidiary had the opportunity to contribute to the anti-competitive conduct and therefore has to carry out its activities in the same economic sphere as the parent company. The victim must therefore prove that the anti-competitive agreements of the parent company concern the same products as those marketed by the subsidiary.

If a company belonging to this economic unit commits an infringement under Art 101 TFEU, the concept of economic unit leads to joint and several liability as a matter of law. Thus, both the parent company and the subsidiary can be held liable to pay damages in full.

ECJ, C-882/19 (06.10.2021)