Short Reads

Court of Justice dismisses appeals in the Calcium Carbide Cartel

Court of Justice dismisses appeals in the Calcium Carbide Cartel

Court of Justice dismisses appeals in the Calcium Carbide Cartel

01.07.2016 NL law

On 16 June 2016, the Court of Justice ("the Court") dismissed two appeals brought by Evonik Degussa GmbH ("Degussa") and SKW Stahl-Metallurgie Holding AG ("SKW Holding") concerning the Commission decision relating to the calcium carbide cartel. The Court’s judgments deal with the concept of the liability of a parent company holding all or almost all capital in a subsidiary. The judgments confirm that there is a high threshold to rebut the presumption that a parent company has actually exercised decisive influence over its subsidiary.

 

In 2009, the Commission adopted a decision relating to a price-fixing cartel on the calcium carbonate and magnesium market between 2004 and 2007. In particular, the Commission found that SKW Stahl-Metallurgie GmbH ("SKW") had participated directly in the cartel. Due to the fact that SKW was a subsidiary of Degussa between April 2004 and August 2004, and of SKW Holding between September 2004 and January 2007, the Commission also held these subsequent parent companies liable for SKW’s participation. After the General Court (“GC”) dismissed most of their grounds of appeal against the decision in 2014, both Degussa and SKW Holding appealed to the Court [see our February 2014 newsletter].

Degussa had explicitly instructed SKW not to participate in any competition law infringement. The GC, rather counter-intuitively, found that the fact that SKW participated in the infringement in contravention of Degussa's instructions was a strong indication of the actual exercise of decisive influence by Degussa over SKW. Degussa objected to this reasoning. The Court of Justice sided with Degussa, stating that although an express instruction can be a strong indication of the actual exercise of decisive influence by a parent over a subsidiary, the fact that a subsidiary does not comply with that explicit instruction cannot be regarded as such an indication. Despite this, the Court held that Degussa had failed to prove that it was SKW's normal practice not to carry out instructions from its parent company. Therefore, the Court concluded that the GC had not erred in law in finding that Degussa had failed to rebut the presumption that it exercised decisive influence over SKW.

SKW Holding argued in its appeal that its right to be heard was infringed because the Hearing Officer refused a request for a closed hearing during the administrative proceedings before the Commission. SKW Holding had wished to put forward arguments concerning the role of Degussa in the period following the sale of SKW to SKW Holding, without Degussa being present during such hearing. The Hearing Officer had refused, arguing that SKW Holding's right of defence did not take priority over that of Degussa.

The Court held that the Hearing Officer should not have refused SKW Holding's request. As Degussa was never accused of having participated in the cartel in respect of the period following the sale of SKW to SKW Holding, it was a third party to the proceedings in respect of that period. Accordingly, Degussa's right of defence would not have been harmed. Notwithstanding this error, the Court held that SKW Holding had failed to show that the outcome of the proceedings would have been different had the closed hearing been granted.

This article was published in the Competition Law Newsletter of July 2016. Other articles in this newsletter:

1. General Court confirms that the financial position of shareholders and the possibility to increase credit facilities are relevant when assessing an inability to pay request
2. General Court confirms illegality of non-compete clause in telecoms transaction
3.
District Court of Rotterdam rejects the applicability of arbitration clauses in antitrust damages litigation
4.
Update on changes in antitrust damages claims legislation in the Netherlands
5.
New maximum fines for competition law infringements in the Netherlands as of 1 July 2016
6.
General Court rules that an implicit and unlimited guarantee does not necessarily constitute State aid

Related news

02.12.2021 NL law
Google Shopping: self-preferencing is a form of abuse of dominance

Short Reads - On 10 November 2021, the General Court (GC) almost entirely dismissed Google’s action against the European Commission’s Google Shopping decision. According to the European Commission (the Commission), Google illegally favoured its own comparison shopping service by displaying it more prominently in its search results than other comparison shopping services (see our July 2017 Newsletter). The Commission found that Google was abusing its dominant position and imposed a EUR 2.42 billion.

Read more

02.12.2021 NL law
Gun jumping: beware, the Commission will take action

Short Reads - The Commission has imposed interim measures on Illumina and GRAIL. These measures include the obligation to run GRAIL by independent management. By adopting interim measures in addition to opening an investigation into whether Illumina and Grail breached the standstill obligation, the Commission has made clear it will not shy away from tough action against gun jumping during an ongoing merger review. 

Read more

02.12.2021 NL law
Back to the future – Commission publishes roadmap for green and digital challenges

Short Reads - The Commission’s Communication “A competition policy fit for new challenges” (link) (the “Communication”) identifies key areas in which competition law and policy can support European efforts in dealing with the challenges of the green and digital transitions. The document covers all areas of competition law (antitrust, merger control, and State aid) and identifies various ways in which new and existing tools can contribute to addressing these challenges.

Read more

02.12.2021 NL law
Dominant firm may refuse to supply retailer after initial delivery

Articles - The Brussels Court of Appeal has held that a dominant producer firm may have valid reasons to refuse further supplies to a retailer, despite its dominance and despite previous deliveries. The Court of Appeal stressed the freedom for any company, including dominant firms, to choose their trading partners, in particular when there are valid and objective non-discriminatory reasons to refuse further direct supplies and when the retailer has alternative sources of supply.

Read more

02.12.2021 EU law
ECJ: private enforcement in aviation sector also a national court's game

Short Reads - Recently, the ECJ ruled that national courts dealing with private enforcement cases are competent to apply EU competition law to historical behaviour in the aviation sector, regardless of public enforcement by the Commission and national competition authorities, and regardless of whether or not such authorities had authority to pursue public enforcement in the relevant period.

Read more