On 8 May 2013, in a case involving Italian company Eni, the Court of Justice of the European Union (ECJ) confirmed the well-established concept that under EU competition law the conduct of a subsidiary (such as cartel behaviour) may be imputed to its parent.
This is the case where, although having separate legal personality, that subsidiary does not autonomously determine its conduct on the market but mostly applies the instructions given to it by the parent company. Where a parent company holds all or almost all the capital in a subsidiary, there is a rebuttable presumption that the parent company does control the subsidiary in this way.
In the Eni case, the company had held, directly or indirectly, at least 99.97% of the capital in certain companies within its group, which had been active in cartels in chemicals markets. In this situation, the presumption applied. To rebut it, Eni would have had to show that the subsidiaries could act with complete autonomy not only at the operational level but also at the financial level. It failed to do this and was therefore responsible for their activities and the related cartel fine, which had been imposed by the EC in 2006.
The case provides yet another reminder that a competition compliance programme in the EU must take account of potential liability for the actions of subsidiaries. Even if the subsidiary is genuinely independently run, it is virtually impossible to rebut the presumption that the parent is not responsible for its actions under EU competition law.