The European Court of Justice (ECJ) has confirmed that a parent company may be held liable for the anti-competitive behaviour of its subsidiaries, despite the absence of any involvement by the parent company itself directly in the infringement. This judgement follows an appeal brought by five companies belonging to the Akzo Nobel Group, against a decision made by the European Court of First Instance, itself upholding a previous Commission decision. The Commission had jointly and severally fined Akzo Nobel NV, along with four of its subsidiaries, €20.99 million after discovering that the subsidiaries had been involved in cartel activity constituting serious and continuous breaches of Article 81 EC.

The main consequence of the ruling is that, in order for the Commission to be able to target the parent company of cartel participants in its statement of objections, it is sufficient for the Commission to show that the parent company has a 100% shareholding in its subsidiary. The parent will then have to prove that it did not have decisive influence over its subsidiaries’ conduct by demonstrating the group companies’ separate legal and economic structure. In reality, this means that although the presumption of liability of the parent company for breach of competition law by its subsidiaries based on capital links is rebuttable, it is now becoming extremely difficult to disprove.