Europe: competition law - undertakings - parent company liability for subsidiary company infringements

Last year, in Gosselin Group and Stichting Administratiekantoor Portielje v Commission (Joined Cases T-208/08 and T-209/08), the General Court held that a parent company of an undertaking which had infringed Article 81 of the EC Treaty (now Article 101 of the Treaty on the Functioning of the European Union) could not be penalised by a decision implementing Article 81 if it was not an undertaking itself. The Commission appealed and yesterday Advocate-General Kokott delivered her opinion: see Commission v Stichting Administratiekantoor Portielje and Gosselin Group NV (Case C-440/11 P). In her opinion, which is not binding on the Court of Justice, the Advocate General took the view that the General Court had erred in law when it found that the parent company must itself be regarded as an undertaking. In this regard she stated (paras. 36 to 38):

For the penalisation of an undertaking for infringing the cartel rules, on the basis of Article 81 EC (now Article 101 TFEU) in conjunction with Article 23(2)(a) of Regulation No 1/2003, it is, however, irrelevant whether all the natural or legal persons who legally comprise that undertaking are themselves economically active and are therefore each to be regarded as undertakings individually. The only decisive factor is that – viewed as a whole – one undertaking has committed the infringement and that all natural or legal persons on whom a fine is imposed as the penalty for the infringement are principals of that joint undertaking, since the aim of the penalties imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 is to ensure that those persons who have a decisive influence on the undertaking involved in a cartel are called to account in accordance with the principle of personal responsibility and that the undertaking does not commit such infringements again. In terms of that objective, it is irrelevant whether the aforementioned natural or legal persons are engaged in an economic activity otherwise – that is to say, irrespective of their influence over the undertaking involved in the cartel."