The ECJ once again furthers private enforcement: cartel liability accepted for group companies

Today, 6 October 2021, the European Court of Justice (the ECJ) rendered an important judgment on the possibility of imputing liability for one group company’s anticompetitive conduct to another group company where the first has, but the latter has not been the addressee of a Commission decision. Following Advocate General Pitruzella’s opinion, the ECJ confirms this is possible if both companies constitute an economic unit (undertaking), for example because an anti-competitive agreement concluded by one group company concerns the same products as those marketed by another group company. This broadens the scope of the private enforcement of competition law infringements.

The Sumal case concerned the damages action of a Spanish party in respect of the Trucks cartel. The claimant had summoned a Spanish subsidiary within the Daimler group, but not also the German parent company, while only that parent company was one of the addressees of the decision of the Commission. The Spanish court had made a preliminary reference to the ECJ to clarify whether and if so, under what conditions that is possible.

The ECJ confirms that the concept of an undertaking, within the meaning of Article 101 TFEU, has the same meaning both in the context of public enforcement as well as in the context of private enforcement. This means that in private enforcement compensation can be claimed from undertakings which have participated in a cartel for the harm caused by that cartel.

Where it is established that a company belonging to such an economic unit has infringed Article 101(1) TFEU, this also establishes that the undertaking of which it is part has committed an infringement of that provision. The concept of an undertaking and, through it, that of an economic unit, then gives rise to the joint and several liability of all the entities of which the economic unit was made up at the time that the infringement was committed. Hence, where the existence of an infringement has been established as regards one group company, this also establishes the civil liability of another group company if both companies constitute an economic unit, for example because an anti-competitive agreement concluded by one group company concerns the same products as those marketed by another group company.

Although the judgment of the ECJ is geared towards the specifics of the Sumal case, i.e. the downward attribution of liability from parent company to subsidiary, we believe there is no logical reason why today’s judgment cannot be applied to also attribute liability sideways, from any group company to any other group company, as long as they constitute an economic unit (undertaking).

The judgment of the ECJ fits in nicely with its recent (and by now established) case law which fosters private enforcement and puts the binding effect of Commission decisions into perspective. Commission decisions are only binding in terms of what has been (positively) established therein and do not preclude the private enforcement of anything that has not been established therein. In Sumal, the ECJ has now confirmed this for the situation in which the Commission has not adopted any decision or did not impose a penalty on the relevant company. According to Advocate General Bobek’s opinion in Air Cargo, the same should apply in case the (geographic or temporal) scope of the Commission decision has for whatever reason been limited.

For more information, please contact Theodoor Verheij.