The Court of Justice of the European Union (ECJ) have annulled Elf Aquitaine’s liability for an illegal cartel in the market for monochloreacetic acid. Elf Aquitaine was challenging, in particular, the General Court's ruling that the Commission had been correct to attribute liability to Elf Aquitaine for the actions of its subsidiary Arkema France (formerly Atofina SA) (Arkema). The Commission had attributed joint and several liability to Elf Aquitaine on the basis that Elf Aquitaine held 98% of the shares in Arkema which was sufficient for the actions of its subsidiary to be imputed to it.
The ECJ made it clear in the judgment that the Commission must justify in full the basis upon which it rejects arguments presented by firms to counter the presumption that parent companies should be held liable for the acts of their subsidiaries. In other words, the presumption that a parent company exercises direct influence over the conduct of its subsidiary is only a presumption and can be rebutted by evidence showing the subsidiary did act independently. In this case, the ECJ did not consider the Commission had provided a sufficiently reasoned decision that responded to certain arguments submitted by Elf Aquitaine to prove Arkema had determined its conduct on the market independently and noted that the Commission had previously considered Elf Aquitaine and Arkema were not part of the same 'undertaking'.