Parental Liability in EU Competition Law - A Fair Presumption?

Abstract

Under EU competition law, there is a presumption that a parent company with a 100% shareholding in its subsidiary company exercises decisive influence. The European Commission has the power to fine such parent company for the competition infringements of its subsidiary. Irrespective of the parent company’s personal involvement or awareness of the competition infringement, the subsidiary’s conduct is attributed to the parent and both the parent and the subsidiary are held jointly and severally liable for the infringement. This presumption can be rebutted if there is evidence that the subsidiary “acts independently on the market”. It follows in such case that the burden of proof falls on the Commission to demonstrate actual exercise of decisive influence over the day-to-day operations of the subsidiary. Also in the case where the parent does not hold 100% shareholding in its subsidiary, it is (at least in theory) for the Commission to show that the parent in fact exercises a decisive influence.

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