December 9, 2019

December 09, 2019

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Parental Liability For the Conduct of A Subsidiary

On Sept. 3, 2014, the Commission announced that it fined four smart card chip producers a total of EUR 138 million ($210 million) for breaching article 101 TFEU and Article 53 of the Agreement on the European Economic Area (EEA) through a number or bilateral contacts during a two year period in which they discussed prices, price trends, and production capacity.1 The Commission found that the contacts affected the parties’ responses to customer requests to lower prices.2 According to the Commission, the contacts reduced uncertainty as to each party’s behavior in the market and therefore violated article 101.

A cartel member that had revealed the existence of the cartel to the Commission was rewarded with full immunity from the imposed fine pursuant to the Commission’s Leniency Notice.3 However, even though one of the parties had divested its smart card chips subsidiary after the infringement period, the Commission nevertheless held the parent company liable. By doing so, the Commission once again underlined the principle that a leniency application by the acquirer of a business can immunize the infringer (and its new parent), but it does not shelter the former parent from its parental liability for the infringement.4


1European Commission press release Sept. 3, 2014.

2Commission Decision of Sept. 3, 2014 Case AT.39574 Smart Card Chips, not yet public http://ec.europa.eu/competition/antitrust/cases/dec_docs/39574/39574_2237_5.pdf.

3Commission notice of Dec. 8, 2006 on immunity from fines and reduction of fines in cartel cases OJ C 298.

4See also the decision of the Dutch Court of Justice Arnhem-Leeuwarden of Sept. 2, 2014 ECLI:NL:GHARL:2014:6766.

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About this Author

Teresa Charatjan, Greenberg Traurig Law Firm, Amsterdam, Corporate and European Law Litigation Attorney
Associate

Teresa Charatjan focuses her practice on national and European competition law, corporate law, and EU regulatory issues, as well as litigation and arbitration in relation to these matters.

Areas of Concentration:

  • Competition law and EU regulatory law
  • Corporate law
  • Litigation and arbitration

Professional & Community Involvement:

  • Member, Dutch Bar Association  
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Hans Urlus, Greenberg Traurig Law Firm, Amsterdam, Corporate and Litigation Law Attorney
Shareholder

Hans Urlus coordinates inbound and outbound investments with respect to China and counsels international clients in all aspects of international trade, commercial agency, franchise and distribution, with a focus on EU and national competition law, EU regulatory issues, mergers and acquisitions. He is also involved in litigation and arbitration in relation to these matters. Hans has worked in the regulatory field, including numerous cases involving the introduction of various regulated products into the EU market, and heads the German desk of the firm's Amsterdam office...

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