In early April, the European Commission imposed a fine of EUR 37.3 million against Goldman Sachs for the cartel involvement of one of its portfolio companies. This is a rare case where a private equity investment company is fined for antitrust infringements of one of its portfolio companies. Two earlier cases have gone largely unnoticed outside the antitrust community since they involved much smaller cartels and less well-known investors. With this case the EU underlines its willingness to also impose fines against financial investors in its fight against cartels. On the occasion of the publication of the fines, the EU Commissioner for Competition Joaquín Almunia highlighted "the responsibility of groups of companies, up to the highest level of the corporate structure, to make sure that they fully comply with competition rules. This responsibility is the same for investment companies, who should take a careful look at the compliance culture of the companies they invest in".

The decision at hand (Case Number 39.610) concerned eleven companies in total which had, according to the findings of the Commission, participated in a ten-year price-fixing cartel for high voltage power cables. This included the Italian producer Prysmian, which was held for several years by a fund managed by Goldman Sachs.

It is the established practice of the European Commission to hold parent companies jointly and severally liable for antitrust infringements committed by subsidiaries, provided that it can be shown that the parent exercises "decisive influence" over the commercial operations of the subsidiary. In this case, there was no suggestion that Goldman Sachs had any knowledge or was directly involved in the cartel. Also, being a fund manager, the investment bank did not own the shares in Prysmian itself. However, the Commission was able to rely on links between the investment bank and the company's management to find that the former had a "decisive influence" over the latter. In particular, Goldman Sachs had appointed members to Prysmian's board for at least three years while the cartel was operating. For the Commission, this was sufficient to attribute some of the liability for the cartel to Goldman Sachs.

The Commission found that the cartel operated from at least 1999 to 2009, when it conducted dawn raids at the premises of the producers. During that period, Prysmian was initially owned by Pirelli, which then sold the company to the Goldman Sachs fund in 2005. In 2007, the fund diluted its participation to 43% and by 2010 it had sold all of its interests. Against this background, the Commission found that Pirelli and Goldman Sachs were liable (each jointly and severally with Prysmian) for approximately two-thirds and one-third, respectively, of the fine imposed on Prysmian (EUR 104.6 million).

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