Fine liability in antitrust cases is closely scrutinised by Dutch courts

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NL Law
EU Law
Expertise
EU and Competition Law

A parent company can be held liable for a subsidiary's anti-competitive conduct if the parent has exercised decisive influence over the subsidiary, because the two are then considered a single undertaking. This is why the Trade and Industry Appeals Tribunal (CBb) recently found that the ACM cannot simply rely on managing partners' civil liability to determine fine liability for a limited partnership's anti-competitive conduct.

However, the ACM can find an investment firm liable for its portfolio company's conduct based on the organisational, legal and economic links between them. The fact that the ACM fined the investment company individually, rather than jointly with the portfolio company, was no reason for the CBb to decide differently. When faced with an antitrust fine, companies are well-advised to double-check the facts used by the competition authority to reach its conclusion on 'decisive influence'.

On 19 March 2019 the CBb issued two rulings regarding the attribution of fines relating to an alleged cartel on the Dutch market between Dutch, Belgian and German milling companies. The ACM originally fined 15 milling companies for approximately EUR 82 million for a cartel infringement,

In the first case, the CBb ruled that the ACM had failed to sufficiently substantiate its imposition of fines on a limited partnership, established under German law (a ''KG''), as well as on the KG's two managing partners, for an alleged cartel infringement committed by the KG. The ACM found that because of its nature, the KG consisted of its two managing partners, and therefore, the infringement could also be attributed to the two individuals, simply in view of their capacity as managing partner of the infringing entity.

The CBb ruled that the ACM's reasoning was insufficient. In view of personal responsibility when applying punitive sanctions, the ACM cannot take the civil liability regime for managing partners as a starting point. As the two managing partners were not the only natural persons involved, the ACM should have assessed whether these two partners exercised decisive influence over the KG. This question was contested by the managing partners, and this should have given the ACM reason to further assess whether or not the managing partners had in fact exercised decisive influence over the KG. The CBb therefore ordered the ACM to remedy its omission, either by substantiating the imposition of a fine on the general partners or by annulling the fines it imposed on them.

In the second case, the CBb upheld the ACM's decision to impose a fine on an investment firm for a cartel infringement committed by its portfolio company. Having examined the economic, organisational and financial links between the portfolio company and the investment firm, the CBb agreed with the ACM that the investment firm had decisive influence over the portfolio company's conduct.

The investment firm's fine was imposed separately, in addition to the fine already imposed on the portfolio company for the same conduct. The other parent companies involved in the alleged infringement had, however, been fined jointly and severally with their subsidiaries. The CBb ruled that this did not go against the principle of equal treatment, because it had no longer been possible for the ACM to impose a joint fine on the portfolio company and the investment firm. It was only after objections by the other parent companies that the ACM had issued a supplementary statement of objections to the investment firm. As a result, it was no longer possible for the ACM to impose a joint and several fine on the investment firm and its portfolio company.

This article was published in the Competition Law Newsletter of April 2019. Other articles in this newsletter:

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