Short Reads

General Court dismisses appeals by investor against power cable cartel fine

General Court dismisses appeals by investor against power cable carte

General Court dismisses appeals by investor against power cable cartel fine

01.08.2018 NL law

On 12 July 2018, the General Court dismissed the appeals against the fines imposed by the European Commission in the power cable cartel. The Court also confirmed the EUR 37.3 million fine levied on Goldman Sachs on the basis of its exercise of decisive influence over cable maker Prysmian through one of its funds.

Goldman Sachs nor its fund were held liable by the Commission for their direct participation in the cartel or for having knowledge of any wrongdoings of Goldman Sachs' portfolio company Prsymian. It is a well-established principle of EU competition law that parent companies can be held liable for the conduct of their subsidiaries. Moreover, where the parent company has a 100% shareholding there is a rebuttable presumption that the parent company exercises decisive influence over the conduct over the subsidiary.

In its appeal, Goldman Sachs disputed having exercised decisive influence, stating, among other things, that Prysmian was a pure financial investment and that for most of the relevant period its shareholding was less than 100%. The Court confirmed that the Commission was correct in applying the presumption of decisive influence to Goldman Sachs. The Court held that Goldman Sachs was in a similar situation to that of a sole owner of a subsidiary as it held all the voting rights in combination with a very high majority stake, even though it did not hold all the share capital.

The Court also held that the Commission had correctly taken account of other objective factors which supported the finding that Goldman Sachs exercised decisive influence over Prysmian, including its power to appoint members of the board of directors of Prysmian, the ability to call shareholder meetings and the role played by the directors of Goldman Sachs within the strategic committee of Prysmian.

The ruling of the Court shows how the concept of parental liability continues to expand. This case further highlights the importance for investors to ensure that their portfolio companies are compliant with competition law, even when they are considered as a pure financial investment. This becomes especially relevant where investors have large shareholdings and have rights that allow them to exercise decisive influence over the portfolio companies.

This article was published in the Competition Law Newsletter of August 2018. Other articles in this newsletter:

  1. European Court of Justice dismissed Orange Polska’s appeal in abuse of dominance case
  2. General Court underlines importance of Commission's duty to state reasons
  3. Google receives a second record fine of EUR 4.34 billion for imposing restrictions on Android device makers
  4. European Commission issues a new Best Practices Code for State aid control
  5. District Court in the Netherlands rules on limitation periods in CRT case
  6. Court of Appeal in the Netherlands decides to appoint independent economic experts in TenneT v ABB
  7. Belgian Court of Cassation annuls decision prohibiting pharmacists from using Google Adwords

Team

Related news

20.09.2022 EU law
Launch of Metaverse blog series

Articles - Stibbe launches a new blog series focusing on the legal challenges of the Metaverse. In our upcoming blog posts, we will discuss the legal challenges of NFTs, crypto-assets, Metaverse platforms, crypto exchanges, DAO, and many more.

Read more

28.07.2022 NL law
Zuiver commercieel belang ook gerechtvaardigd belang: Raad van State laat zich er niet over uit

Short Reads - Op 27 juli 2022 heeft de Raad van State bevestigd dat de Autoriteit Persoonsgegevens onterecht een boete van € 575.000 aan VoetbalTV heeft opgelegd. De hoop bestond dat de Afdeling antwoord zou geven op de vraag of de AP terecht of onterecht meent dat een zuiver commercieel belang géén gerechtvaardigd belang kan zijn in de zin van de Algemene Verordening Gegevensbescherming. Het antwoord op deze vraag blijft echter uit.  

Read more

03.08.2022 EU law
Gotta catch ‘em all? Upward referral of ‘killer acquisitions’ upheld

Short Reads - Companies involved in intended or completed M&A transactions falling below EU and national merger notification thresholds should beware that their deals may still catch the European Commission’s eye. The General Court has upheld the Commission’s decision to accept a national referral request regarding Illumina’s acquisition of Grail: a transaction not triggering any of the notification thresholds within the EEA.

Read more

28.07.2022 NL law
Purely commercial interest also a legitimate interest? Council of State leaves the question unanswered.

Short Reads - On 27 July 2022, the Council of State confirmed that the Dutch Data Protection Authority wrongly imposed a €575,000 fine on VoetbalTV. But the Council did not answer the question whether the AP rightly or wrongly believes that a purely commercial interest cannot be a legitimate interest within the meaning of the General Data Protection Regulation.

Read more

06.07.2022 NL law
Highest Dutch court: the postman may still ring twice?

Short Reads - The Dutch Minister of Economic Affairs and Climate Policy was wrong to unblock the ACM’s prohibited merger between postal operators PostNL and Sandd on grounds of public interest. According to the Trade and Industry Appeals Tribunal (CBb), the Minister cannot substitute the ACM’s assessment for its own when considering public interest reasons. Since the Minister did do so in this particular case, the CBb annulled the Minister’s merger clearance.

Read more