The EU General Court provided a reminder on May 17, 2011, that parents are responsible for the behaviour of their subsidiary companies, since the latter are usually not treated as independent companies.
In judgments involving the Elf Aquitaine group, the court confirmed, in accordance with existing case law, that there is a rebuttable presumption that a subsidiary wholly owned by its parent company does not freely determine its own conduct on the market. Such a presumption also applies where a parent company owns almost all of the share capital of its subsidiary. Elf Aquitaine held more than 97% of the shares of its subsidiary Arkema France, and did not furnish evidence capable of rebutting the presumption of parental control. Arkema France's breaches of competition law could therefore be imputed to Elf Aquitaine.
The court also confirmed that, when setting fines, the EC has the power, but is not obliged, to impute the responsibility for an infringement committed by a subsidiary to its parent company. This issue can be important for example following a disposal, since a vendor which is treated as having controlled a former subsidiary can find itself the subject of a fine for competition law breaches of that subsidiary (for the period up to completion of the sale).