On 15 September 2011, the General Court (the "Court") annulled a fine of EUR 31.66 million imposed by the European Commission on Koninklijke Grolsch NV ("Grolsch") for its alleged participation in a cartel between Dutch beer producers (case T-234/07 Koninklijke Grolsch NV v European Commission). The Court ruled that the evidence available to the Commission was not sufficient to establish the direct participation of Grolsch in the alleged cartel. Because the Commission had also failed to explain its reasons for attributing to Grolsch the alleged conduct of its subsidiary, the Court annulled the Commission's decision where it concerned Grolsch.

This judgment confirms that liability of a parent company for (alleged) infringements committed by a subsidiary (indirect participation) is not the same as liability of a subsidiary (direct participation). The Court also reaffirmed that parent companies must have the actual possibility to reverse the presumption that they are liable for anticompetitive conduct of their subsidiary.

Background

The European Commission conducted dawn raids at the offices of various Dutch beer brewers in March 2000. In April 2007, the Commission imposed EUR 273 million in fines on the Dutch brewers Heineken, Bavaria and Grolsch for their alleged participation in a beer cartel. The infringement found by the Commission consisted of price coordination, "incidental" coordination of other commercial conditions and "incidental" allocation of customers. The decision was to a large extent based on information provided by whistleblower InBev.

Heineken, Bavaria and Grolsch denied involvement in the alleged cartel and all three brewers appealed the Commission's decision. The Court, in its judgments of 16 June 2011, reduced the fines of Heineken and Bavaria by approximately 10%. The Court concluded, among other things, that the Commission did not demonstrate that other commercial conditions were coordinated. The judgment in the Grolsch appeal was delayed until 15 September 2011.

The Court's ruling

Grolsch's arguments included that the Commission had failed to prove that it had been directly involved in a cartel. In this respect the Court ruled that the notes of one meeting which an employee of Grolsch had attended did not evidence Grolsch's participation in a complex system of coordination during a long period.

All other evidence brought forward by the Commission concerned another legal entity. The Court did not assess this evidence (nor the detailed arguments of Grolsch against it), because this legal entity was not even mentioned in the reasoning of the decision as the direct participant.

Moreover, although the Commission apparently held Grolsch liable for the alleged infringement, the decision did not contain a detailed explanation of the facts and factors that justify the attribution of an infrin­gement allegedly committed by a subsidiary to the parent company. Under settled case law a parent company is presumed liable for the conduct of its subsidiary, but this presumption is rebuttable. By withholding the facts and factors on which the Commission based its assumption of liability in relation to Grolsch, the Commission had taken away the opportunity for Grolsch to contend this assumption.

These failures resulted in the annulment of the entire decision in relation to Grolsch.

De Brauw Blackstone Westbroek represented Grolsch in this matter.