District Court of Rotterdam confirms that investment firms may be held liable for conduct of portfolio companies

01.02.2017 NL law

On 30 January 2017, the District Court of Rotterdam upheld the ACM's decision to impose a fine on investment firm Bencis for an infringement committed by its portfolio company Meneba. In 2014, the ACM imposed fines on three investment firms for the involvement of one of their (former) portfolio companies in an alleged cartel on the Dutch flour market, including Bencis that received a fine of EUR 1,3 million [see our January 2015 Newsletter]. Only Bencis appealed the ACM's decision.

The Court agreed with the ACM that the conduct of Meneba could be attributed to its controlling shareholders on the basis of the parental liability doctrine. Under this doctrine, shareholders can be held liable if they can exercise decisive influence over their shareholdings and de facto do exercise this influence or are assumed to have done so during the period of an infringement. The Court confirmed that the relevant question is whether the portfolio companies acted independently or whether the investment firm exercised decisive influence. In this case, the Court agreed with the ACM's decision that Bencis exercised decisive influence over Meneba on the basis of the economic, organizational and legal links.

The judgment confirms that investment firms may be held liable for conduct of their portfolio companies, even in the absence of knowledge that these entities acted in an anti-competitive manner. Earlier in 2014, the European Commission fined Goldman Sachs EUR 37.3 million for the alleged involvement of one of its portfolio companies in an infringement on the market for high voltage cables. Former Commissioner Almunia stated at the time that investment companies have the same responsibility for compliance with competition rules as corporates and that they should take a careful look at the compliance culture of the companies they invest in. The District Court of Rotterdam has now confirmed that this approach also applies in Dutch competition law.

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. Court of Justice confirms the fine imposed on Toshiba and Panasonic in the cathode ray tubes cartel
4. General Court awards damages for failure to adjudicate within a reasonable time

Team

Related news

25.02.2020 BE law

International Comparative Legal Guide to Environment & Climate Change Law 2020 - European Union chapter

Articles - The ICLG to Environment & Climate Change Law 2020 covers common issues in environment and climate change laws and regulations – including environmental policy and its enforcement, environmental permits, waste, liabilities, among others – in 27 jurisdictions.

06.02.2020 NL law

The ACM may cast the net wide in cartel investigations

Short Reads - Companies beware: the ACM may not need to specify the scope of its investigation into suspected cartel infringements in as much detail as expected. On 14 January 2020, the Dutch Trade and Industry Appeals Tribunal upheld the ACM’s appeal against judgments of the Rotterdam District Court, which had quashed cartel fines imposed on cold storage operators. The operators had argued that the ACM was time-barred from pursuing a case against them, because the ACM had not suspended the prescription period by beginning investigative actions specifically related to the alleged infringements.

Team: Imran Hyder, Simone Evans

07.02.2020 BE law

Het finale Belgische ‘nationaal energie- en klimaatplan’ en de Belgische langetermijnstrategie: het geduld van de Commissie op de proef gesteld?

Articles - Op 31 december 2019 diende België, nog net op tijd, zijn definitieve nationaal energie- en klimaatplan (NEKP) in bij de Commissie. Het staat nu al vast dat het Belgische NEKP niet op applaus zal worden onthaald door de Commissie. Verder laat ook de Belgische langetermijnstrategie op zich wachten. Wat zijn de gevolgen?

06.02.2020 NL law

CDC/Kemira: Amsterdam Court of Appeal applies European principle of effectiveness to limitation periods

Short Reads - In a private enforcement case brought by CDC against Kemira, the Amsterdam Court of Appeal applies the European principle of effectiveness and rules that claims are not time-barred under Spanish, Finnish and Swedish law. With reference to the Cogeco judgment of the ECJ, the Court considers that claimants must be able to await the outcome of any administrative appeal against an infringement decision, even in relation to respondents who themselves have not filed appeals against the infringement decision.

06.02.2020 NL law

Pay-for-delay: brightened lines between object and effect restrictions

Short Reads - In its first pay-for-delay case, the ECJ has clarified the criteria determining whether settlement agreements between a patent holder of a pharmaceutical product and a generic manufacturer may have as their object or effect to restrict EU competition law. The judgment confirms the General Court’s earlier rulings in Lundbeck and Servier (see our October 2016 and December 2018 newsletters) in which it was held that pay-for-delay agreements (in these cases) constituted a restriction ‘by object’.

06.02.2020 NL law

Consumers and Sustainability: 2020 competition enforcement buzzwords

Short Reads - The ACM will include the effects of mergers on labour conditions in its review. It will also investigate excessive pricing of prescription drugs. As well as these topics, the ACM has designated the digital economy and energy transition as its 2020 focus areas. Companies can therefore expect increased enforcement to protect online consumers, and active probing of algorithms.