On 26 January 2017, the District Court of Rotterdam upheld the decision of the ACM to impose a fine, of approx. EUR 1.3 million, on a private equity firm for involvement of its portfolio company in the flour cartel. This judgment confirms that the ACM may attribute liability to and can impose fines on investment companies for competition law violations of a portfolio company.

The court held that the parental liability doctrine could also apply to private equity firms, as this doctrine is applicable to multiple companies that belong to the same chain and does not exclude investment companies. According to the court, a private equity firm manages one or more investment funds which in turn acquire participating interests in several portfolio companies. In addition, the behavior and powers of a private equity firm in such companies are not necessarily equal to those of a mere financial investor. Therefore, the relevant question is whether the portfolio company acts independently on the market or whether the private equity firm has a decisive influence over this portfolio company, as a result of which it does not act, or no longer acts, independently and should thus be considered to form a single, economic entity with the private equity firm.

In its judgment, the court confirmed the conclusion of the ACM that the portfolio company's violation could be attributed to the private equity firm as the latter had a decisive influence on the basis of economic, organizational and legal links, such as the power to nominate and appoint the president and other members of the supervisory board, influence strategic decisions of management through the supervisory board and dispose of the only priority share with which certain important decisions could be blocked.

This judgment re-emphasizes that private equity firms should be aware that the mere fact of having decisive influence over a portfolio company will generally result in liability, and thus the risk of fines, for the relevant private equity firms in a situation where such portfolio company is involved in a cartel. A close monitoring of ongoing compliance of portfolio companies is therefore advised.