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Court of Justice confirms the fine imposed on Toshiba and Panasonic in the cathode ray tubes cartel

Court of Justice confirms the fine imposed on Toshiba and Panasonic in the cathode ray tubes cartel

Court of Justice confirms the fine imposed on Toshiba and Panasonic in the cathode ray tubes cartel

01.02.2017 NL law

Competition Law Newsletter of February 2017

On 18 January 2017, the Court of Justice delivered its judgment on Toshiba's appeal against the General Court's ("GC") judgment of 9 September 2015, by which the GC partially annulled the European Commission's cathode ray tubes cartel decision [see our October 2015 Newsletter]. By its appeal, Toshiba claimed that it was not in a position to exercise decisive influence over its joint venture ("JV") with Panasonic throughout the duration of the infringement and that it should not be held liable for the infringement committed by the JV. The Court of Justice dismissed the appeal and confirmed the fine imposed jointly and severally on Toshiba and Panasonic.

The Court found that where it follows from the statutory provisions governing the JV that its conduct on the market was decided jointly by the parent companies, it may reasonably be concluded that the conduct was indeed determined jointly by these parents, unless there is concrete evidence showing the contrary.

The Court also held that the GC was not required to determine whether Toshiba had actually influenced the JV operational management in order to establish that Toshiba and the JV formed a single economic unit. The holder of a veto right over certain decisions must necessarily be consulted prior to the adoption of any decision which it can veto. Consequently, the mere fact that Toshiba never exercised its veto rights, should not be construed as if it did not exercise decisive influence over the conduct of the JV. Notably, the Court found that the fact that some veto rights concern the protection of a minority shareholder should not alter the conclusion.

The Court of Justice finally confirmed that the GC correctly held that factors such as the fact that Toshiba could (i) appoint one of the two directors entitled to represent the JV and (ii) prohibit the JV form taking decisions involving expenses, regardless of how relatively modest these expenses might appear in light of the JV's capital, constitute an indication of the capacity to exercise decisive influence over the JV. However, the Court did not examine whether these factors were sufficient to establish the single economic unit as that would go beyond its powers in the context of an appeal.

With its judgment, the Court of Justice has provided further clarification on the concept of a parent company's decisive influence over a joint venture and its liability for the JV's cartel law infringements. 

This article was published in the Competition Law Newsletter of February 2017. Other articles in this newsletter:

1. Court of Justice confirms Commission's approach in its first hybrid settlement case
2. Court of Justice clarifies rules on evidence in bathroom fittings cartel judgments
3. General Court awards damages for failure to adjudicate within a reasonable time
4. District Court of Rotterdam confirms that investment firms may be held liable for conduct of portfolio companies

Team

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