Joint and several liability claims for cartel damages can generally be brought at the location of a parent company, even if the antitrust-violating subsidiary is based in another European country. This was recently decided by the European Court of Justice (ECJ), enhancing the options for companies harmed by antitrust violations. Affected companies are no longer confined to pursuing legal action solely in the jurisdiction where the offending subsidiary is located.
Abuse of Market Power in Greece
The Greek Competition Commission determined that a Greek brewing company violated prohibitions against the abuse of market power under both European and Greek antitrust laws. At the relevant time, this company was 98.8% owned by Heineken, headquartered in the Netherlands. Notably, the Greek Competition Commission did not find that the parent company was involved in the antitrust violation, despite requests from the subsequent claimant to do so.
Joint and Several Liability Damages Claim in the Netherlands
A competitor, alleging harm from the established abuse of market power, sought damages from both the Greek company and its Dutch parent, Heineken, filing the claim in the Netherlands before the District Court of Amsterdam. The District Court declared itself lacking jurisdiction, stating that, according to Article 8(1) of Regulation (EU) No. 1215/2012 (Brussels Ia Regulation), there was no sufficiently close connection to warrant joint proceedings and decisions to avoid conflicting judgments in separate proceedings.
The Court of Appeal overturned this decision, instructing the District Court to reconsider its international jurisdiction. It noted that the two defendant companies were in the same factual situation, and it could not be definitively excluded that they constituted a single economic entity under antitrust law. The defendants appealed to the Supreme Court of the Netherlands, which referred the matter to the ECJ, highlighting the lack of clear jurisprudence in cases where a national competition authority has identified a unilateral infringement by a subsidiary.
The ECJ was asked to clarify:
- Whether the presumption of decisive influence by the parent company, derived from the antitrust concept of an undertaking, should be considered in establishing a close connection for jurisdictional purposes.
- Whether, in cases where decisive influence is contested, it suffices for establishing international jurisdiction that such influence cannot be preemptively ruled out.
ECJ Allows Joint Litigation at Parent Company’s Location
The ECJ ruled that, in such joint and several liability claims, a court can base its determination of international jurisdiction on the presumption of the parent company’s decisive influence. However, the defendant must be allowed the opportunity to rebut this presumption.
The purpose of Article 8(1) of the Brussels Ia Regulation is to promote orderly administration of justice and avoid parallel proceedings and conflicting decisions in different member states. This provision should be interpreted narrowly, as joint proceedings deviate from the principle that defendants should be sued in their place of domicile. The ECJ outlined the following assessment criteria:
- There must be a connection between the various claims brought by the same claimant against different defendants that makes joint proceedings necessary to prevent conflicting decisions in separate proceedings.
- The divergence in decisions must arise under the same factual and legal circumstances; mere differing outcomes are insufficient.
- The claimant must not artificially invoke or maintain joint litigation to deprive a defendant of the jurisdiction of their domicile. Such misuse of jurisdictional rules can only be established based on compelling evidence.
Consequently, the ECJ concluded that the referring court must assess, considering all relevant circumstances, whether the claims against the different defendants involve the same factual and legal situation. In antitrust contexts, this has been acknowledged, for instance, in cases against multiple companies participating at different times and locations in implementing a cartel identified as a single continuous infringement.
Similarly, this applies when claims are brought against a company and its parent on the grounds that they constitute a single economic entity. Antitrust law addresses the activities of undertakings, functionally defined by their unified economic activity, leading to joint and several liability of the individual legal entities within the undertaking for infringements committed by the entity as a whole.
The fact that the prior decision of the competition authority did not encompass all entities jointly and severally does not preclude this. Such a situation could otherwise result in conflicting decisions despite identical factual and legal circumstances. Unlike decisions by the European Commission, a national competition authority’s decision is not directly binding across all member states but can serve as prima facie evidence of an infringement.
