Subsidiary
liable for competition law damages relating to parent company infringement
The ECJ has given
judgment in a preliminary ruling from a Spanish court on questions relating to
whether a subsidiary company can be held liable for damages incurred as a
result of an infringement committed by its parent company.
The ECJ ruled
that, where the existence of an infringement of Article 101(1) by a parent
company has been established, the victim may establish the civil liability of a
subsidiary of that parent company.
However, it is
necessary to prove that the subsidiary and parent constituted an economic unit. This may be established based on both the
economic, organisational and legal links that unite the two legal entities and
also the existence of a specific link between the economic activity of that
subsidiary and the subject matter of the infringement.
The ECJ also
ruled that EU law precludes a national law which provides for the possibility
of imputing liability for one company’s conduct to another company only in
circumstances where the second company controls the first company. ]
The judgment does
not ensure the success of all competition law damages actions against
subsidiaries in respect of infringements by their parents. It does, however, reflect the economic
reality that often those subsidiaries will be involved in the marketing and
sale of the cartelised products. As such
they cannot easily escape liability simply because they were not the addressee
of the Commission’s decision.
Case C-882/19 Sumal,
S.L. v Mercedes Benz Trucks España ECLI:EU:C:2021:800
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