Keywords

Summary



Keywords

1. Appeals – Interest in bringing proceedings – Appeal capable of procuring an advantage for the party bringing it

2. Appeals – Grounds – Ground put forward for the first time during the appeal – Inadmissibility – Appeal brought by a parent company and its subsidiaries against a judgment upholding a Commission decision imposing a fine on them – Arguments relating to the presumption that a parent company exercises decisive influence over a subsidiary where it holds 100% of the capital – Arguments developing a plea relied on before the Court of First Instance concerning the imputability to the parent company of joint and several liability – Admissibility

(Statute of the Court of Justice, Art. 58)

3. Competition – Administrative procedure – Statement of objections – Necessary content – Observance of the rights of the defence

(Council Regulation No 1/2003, Art. 23)

4. Competition – Community rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Presumption that a parent company exercises decisive influence over a subsidiary where it holds 100% of the capital

(Arts 81 EC and 82 EC; Council Regulation No 1/2003, Art. 23(2))

5. Competition – Community rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Liability of the parent company cannot be regarded as strict liability

(Arts 81 EC and 82 EC)

Summary

1. In an appeal, for an appellant to have an interest in bringing proceedings the appeal must be capable, if successful, of procuring an advantage for the party bringing it.

As regards an appeal brought by a parent company and its subsidiaries against a judgment upholding a Commission decision imposing on all the applicants joint and several liability to pay a fine on account of infringement of the competition rules, the parent company and the subsidiaries have an interest in having the judgment under appeal set aside. With regard to those subsidiaries, if the judgment under appeal were to be set aside in respect of the liability of the parent company, the position of its subsidiaries would change, in particular with regard to the implications arising from the rules of joint and several liability.

(see paras 33-35)

2. If, in an appeal, brought by a parent company and its subsidiaries against a judgment upholding a Commission decision which imposes a fine on them for infringing competition rules, the appellants rely on arguments relating to the presumption that a parent company exercises a decisive influence over a subsidiary where it holds 100% of the capital, those arguments must be regarded as developing a plea alleging that joint and several liability was wrongly imputed to the parent company, that the latter does not exercise a decisive influence over the commercial conduct of its subsidiaries and that it does not form an economic unit with them. They constitute additional arguments concerning the application of the rules on the imputability to the parent company of the conduct of its subsidiaries. If such a plea was relied on before the Court of First Instance, the subject-matter of the dispute before it has not been altered. Such arguments are therefore admissible in appeal proceedings.

(see para. 39)

3. The infringement of Community competition law must be imputed unequivocally to a legal person on whom fines may be imposed and the statement of objections must be addressed to that person. It is also necessary that the statement of objections should indicate in what capacity a legal person is called on to answer the allegations.

If the Commission intends to base its arguments on the presumption that a parent company exercises a decisive influence over a subsidiary where it holds 100% of the capital in the subsidiary, observance of the rights of defence does not require, at the stage of the statement of objections, evidence other than proof relating to the shareholding of the parent company in its subsidiary.

(see paras 57, 64)

4. The conduct of a subsidiary may be imputed to the parent company in particular when, although having a separate legal personality, that subsidiary 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, having regard in particular to the economic, organisational and legal links which tie those two legal entities. That is the case because, in such a situation, the parent company and its subsidiary form a single economic unit and therefore form a single undertaking which enables the Commission to address a decision imposing fines to the parent company, without having to establish the personal involvement of the latter in the infringement.

In the specific case in which a parent company has a 100% shareholding in a subsidiary which has infringed the Community competition rules, first, the parent company can exercise a decisive influence over the conduct of the subsidiary and, second, there is a rebuttable presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary. In those circumstances, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent exercises a decisive influence over the commercial policy of the subsidiary. The Commission will be able to regard the parent company as jointly and severally liable for the payment of the fine imposed on its subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to show that its subsidiary acts independently on the market.

The conduct of the subsidiary on the market cannot be the only factor which enables the liability of the parent company to be established, but is only one of the signs of the existence of an economic unit.

In order to ascertain whether a subsidiary determines its conduct on the market independently, account must be taken of all the relevant factors relating to economic, organisational and legal links which tie the subsidiary to the parent company, which may vary from case to case and cannot therefore be set out in an exhaustive list.

(see paras 58-61, 73-74)

5. Community competition law is based on the principle of the personal responsibility of the economic entity which has committed the infringement. If the parent company is part of an economic unit, which may consist of several legal persons, the parent company is regarded as jointly and severally liable with the other legal persons making up that unit for infringements of competition law. Even if the parent company does not participate directly in the infringement, it exercises, in such a case, a decisive influence over the subsidiaries which have participated in it. It follows that, in that context, the liability of the parent company cannot be regarded as strict liability.

(see para. 77)