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Commission Holds Goldman Sachs Liable for Former Portfolio Company’s Antitrust Infringement

by Veronica Pinotti, Lionel Lesur, Martino SforzaNicolò di Castelnuovo

In its decision of 2 April 2014 in relation to the underground and submarine high voltage power cables cartel case (COMP/39610), the European Commission (Commission) held the parent companies of the producers involved liable, on the basis that they had exercised decisive influence over the producers. The fines levied by the Commission in this case totalled €301.6 million. One of the businesses found liable was Goldman Sachs, the former owner of Prysmian, which is one of the companies that allegedly participated in the cartel.

This case has important implications for private equity funds. It confirms that, in principle, the Commission does not view private equity funds differently to other businesses for the purpose of the application of the parental liability doctrine.

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Joint and Several Liability For Antitrust Fines: Parent Company Can Benefit From a Reduction in Its Subsidiary’s Fine

by Philip Bentley and Philipp Werner

A judgment of the EU General Court in March 2011, upheld on appeal by the Court of Justice of the European Union (CJEU) on January 22, 2013, is potentially good news for parent companies.  Where both a parent company and its subsidiary bring separate court challenges against a cartel fine for which they were held jointly and severally liable, the parent company should benefit from any reduction in fine that the court grants to the subsidiary, provided that the challenges brought by the two companies have the “same object”.  

In light of these judgments, it would appear that a parent company’s argument should be similar to that adopted by its subsidiary when challenging a fine imposed jointly and severally on both of them.  At the same time, the parent company may wish to contest the fact that it was held jointly and severally liable for the subsidiary’s infringement.  This would require the parent to demonstrate that it did not exercise a “decisive influence” over the subsidiary’s commercial policy.  Reconciling this latter argument with a challenge to the subsidiary’s fine is, however, likely to require skilful drafting of the parent company’s pleadings.

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ECJ Gets Tough with The Commission on Parental Liability

by Martina Maier and Philipp Werner

In Elf Aquitaine SA v Commission, the European Court of Justice ruled on 29 September 2011 that Elf Aquitaine was not jointly and severally liable as a parent company for the involvement of its wholly owned subsidiary in the cartel for monochloroaecetic acid.  Taken with a number of recent judgments, this suggests that European  courts are getting tougher with the Commission on parental liability.

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