Relaxing whilst doing Competition Law is not an Oxymoron

Archive for June 16th, 2011

There´s always a first time (Parent company escapes liability for the conduct of a wholly-owned subsidiary; case T-185/06)

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Some weeks ago, in one of our competition law quizzes we asked the following question:

 ” When was the last time that a company was able to rebut the presumption on the exercise of decisive influence applicable to 100% owned subsidiaries?”

Until this morning, the correct answer was: never. 

The General Court has just issued a Judgment as a consequence of which, for the first time ever, a parent company has escaped liability for the anticompetitive conduct of a wholly owned subsidiary despite the Commission´s attempt to apply the Stora presumption.  (The English version of Judgment is not yet available; click here for the Spanish version). 

Remarkably, the General Court does not provide any guidance on the type of evidence that could be put forward in the future by parties attempting to rebut the presumption. That is because the Court did not engage in a substantive balancing exercise of the elements adduced by the applicant and by the Commission; on the contrary, its Judgment concludes that the Commission failed to address adeuately the applicant´s arguments and thereby breached its duty to provide sufficient motivation to its decisions.

In a way, the General Court is sending the Commission the same message that the Court of Justice addressed to the General Court in its Judgment on the General Química case.

In my view, this is a step in the right direction, but there´s still way to go…

Written by Alfonso Lamadrid

16 June 2011 at 12:25 pm