Short Reads

Court of Justice clarifies parental liability rules in the context of prescription

Court of Justice clarifies parental liability rules in the context of

Court of Justice clarifies parental liability rules in the context of prescription

01.05.2017 NL law

On 27 April 2017, the Court of Justice dismissed an appeal brought by AkzoNobel regarding its participation in the heat stabilisers infringements. The judgment clarifies the rules concerning the liability of parent companies for the unlawful conduct of their subsidiaries.

In 2009, the European Commission imposed a fine on Akzo Nobel NV and several of its subsidiaries for infringements on the heat stabilisers market. The Commission divided AkzoNobel's participation in the infringement into three separate periods. With regard to the first infringement period, the Commission attributed liability to the ultimate parent company Akzo Nobel NV because two of its subsidiaries had participated directly in the infringement (Akzo Nobel Chemicals GmbH and Akzo Chemicals BV).

In 2010, AkzoNobel brought an action before the General Court (GC) challenging, among other things, the attribution of liability to Akzo Nobel NV for the first infringement period. In its judgment, the GC ruled that while the Commission's power to impose a fine on the subsidiaries was time-barred, this did not affect the parent company's liability [see our August 2015 Newsletter]. AkzoNobel appealed this judgment before the Court of Justice.

In its appeal, AkzoNobel relied on the case Total v Commission in which the Court of Justice held that the liability of a parent company cannot exceed that of its subsidiary when its "liability is purely derivative of that of its subsidiary" and "no other factor individually reflects the conduct for which the parent company is held liable" [see our October 2015 Newsletter]. If these conditions are met, the parent company "must, in principle, benefit from any reduction in the liability of its subsidiary which has been imputed to it."

AkzoNobel argued that the Total-conditions were met and that the parent company should benefit from the fact that the Commission was time-barred from imposing a fine on the subsidiaries. The Court of Justice, however, disagreed. First, it held that Akzo Nobel NV is regarded to have carried out the anticompetitive activities in the first infringement period itself, since it formed an economic unit with its subsidiaries. Second, it ruled that because Akzo Nobel NV continued the participation in the infringement beyond the first infringement period (with another subsidiary), this justified assessing Akzo Nobel NV's liability differently from that of Akzo Nobel Chemicals GmbH and Akzo Chemicals BV.

The judgment shows that even if a parent company’s liability results exclusively from the direct participation of its subsidiary in the infringement, the parent company cannot always benefit from defences which are available to its subsidiary.

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

  1. Court of Justice allows use of evidence received from national tax authorities
  2. European Commission publishes report on effectiveness of enforcement in online hotel booking sector
  3. Dusseldorf Court confirms that Asics' online sales restrictions violate competition law
  4. Hague Court of Appeal rules on interpretation of object infringements
  5. Commercial Court of Ghent grants compensation to parallel importers for competition law infringement by Honda

Team

Related news

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?

Read more

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.

Read more

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’.

Read more

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.

Read more

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.

Read more

06.02.2020 NL law
Den Bosch Court of Appeal revives damages claims in Dutch prestressing steel litigation

Short Reads - On 28 January 2020, the Court of Appeal of Den Bosch issued a ruling in the Dutch prestressing steel litigation. In its ruling, the Court of Appeal overturned a 2016 judgment of the District Court of Limburg, in which it was held that civil damages claims brought by Deutsche Bahn were time-barred under German law (see our January 2017 newsletter).

Read more

This website uses cookies. Some of these cookies are essential for the technical functioning of our website and you cannot disable these cookies if you want to read our website. We also use functional cookies to ensure the website functions properly and analytical cookies to personalise content and to analyse our traffic. You can either accept or refuse these functional and analytical cookies.

Privacy – en cookieverklaring