Cartels — Presumption of Decisive Influence by the Parent Company on Its Subsidiaries and Solidarity for the Payment of the Penalty: CJEU Judgment of Oct. 28, 2020, Pirelli v. Commission

On Oct. 28, 2020, the European Court of Justice ruled on one of the aspects of the proceedings relating to the power cable cartel, for which the main European, Japanese and South Korean manufacturers were fined a total of €302 million in 2014.

The court refused to rebut the presumption that a parent company exercises decisive influence over its subsidiaries and rejected in particular the following arguments: 

• That the subsidiary had a structure that allowed it to operate autonomously in the market
• That the parent company was a financial holding company, controlling several different companies and operating in several business sectors, excluding the possibility of exercising decisive influence over all its subsidiaries
• That monthly reporting by the subsidiaries to the parent company was only for informative and accounting purposes

Moreover, the Court of Justice ruled that there is no “priority” between the parent company and its subsidiaries with respect to the payment of the fine for which they are jointly liable. Therefore, the EU Commission is not allowed to grant to any co-debtor the right to challenge priority of payments.

The Court decision is available here: C‑611/18 (Pirelli & C. SpA v. Commission).

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