ARTICLE
12 March 2025

EU's Top Court Rules That A Parent Company Can Be Sued For Follow-on Damages In Its Home Country For An Antitrust Infringement Of Its Subsidiary Committed Elsewhere

AO
A&O Shearman

Contributor

A&O Shearman was formed in 2024 via the merger of two historic firms, Allen & Overy and Shearman & Sterling. With nearly 4,000 lawyers globally, we are equally fluent in English law, U.S. law and the laws of the world’s most dynamic markets. This combination creates a new kind of law firm, one built to achieve unparalleled outcomes for our clients on their most complex, multijurisdictional matters – everywhere in the world. A firm that advises at the forefront of the forces changing the current of global business and that is unrivalled in its global strength. Our clients benefit from the collective experience of teams who work with many of the world’s most influential companies and institutions, and have a history of precedent-setting innovations. Together our lawyers advise more than a third of NYSE-listed businesses, a fifth of the NASDAQ and a notable proportion of the London Stock Exchange, the Euronext, Euronext Paris and the Tokyo and Hong Kong Stock Exchanges.
The European Court of Justice (ECJ) has held that a parent company can be sued in its place of residence, for damage suffered by a private litigant, owing to its subsidiary committing an antitrust infringement...
European Union Antitrust/Competition Law

The European Court of Justice (ECJ) has held that a parent company can be sued in its place of residence, for damage suffered by a private litigant, owing to its subsidiary committing an antitrust infringement in a different member state. It does not matter that the parent is not a party to the underlying infringement decision.

In 2014, Heineken's Greek subsidiary, Athenian Brewery (AB), was fined EUR31.5 million (around USD33m) by Greece's antitrust authority for unlawfully pressuring wholesalers and distributors into favoring its brands.

In 2017, a competitor of the subsidiary in Greece brought a follow-on action in Heineken's home country, the Netherlands, against both Heineken and AB. It was seeking joint and several liability for over EUR180m (around USD189m) in damages flowing from AB's abusive conduct. Heineken did not itself carry out operations on the Greek beer market. The Dutch Supreme Court referred the issue of jurisdiction to the ECJ.

In private damages actions, the Brussels I Regulation applies to EU disputes with an international element. A defendant can be sued in the country where it is domiciled (Article 4). Article 8(1) of the Regulation adds that, if there is a close connection between claims such that there is a risk of "irreconcilable judgments" arising from separate adjudications, the defendants can all be sued before the court in the country where one of them (the anchor defendant) is domiciled.

The question was how this provision applies where the defendants in question are part of the same corporate group—could Heineken, as AB's parent, serve as an anchor defendant?

The ECJ said yes. Applying the approach taken by the European Commission (EC) when imposing fines for breaches of EU antitrust rules, the ECJ found that a parent company can be sued in its home country, so long as it has "decisive influence" over the subsidiary that committed the antitrust infringement, i.e., the subsidiary does not decide independently its own conduct in the market but carries out the instructions given by its parent company. This would be enough to satisfy Article 8(1) of the Regulation.

Importantly, EU case law states that decisive influence can be presumed where the parent holds all or almost all of the capital in its subsidiary. However, this presumption is rebuttable and the ECJ emphasized that a parent should be given the opportunity to provide evidence to refute it.

The ruling follows previous clarifications by the ECJ on the concept of parental liability in private follow-on damages (see, for example, our alert on the Sumal case).

However, member state courts still appear to be struggling with how to apply the concept of liability in the private damages context. More ECJ preliminary rulings on similar jurisdictional issues are pending.

We expect these cases to shed even more light on the interpretation of Article 8(1) for follow-on damages actions. They may further illuminate strategic options open to litigants when deciding where to bring claims as well as associated parental/group liability risks.

You can read more about the private antitrust enforcement landscape in our upcoming global antitrust trends report as well as our EU chapter in Lexology In depth: Private Competition Enforcement (see below for full reference).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More