On 13 December 2013, the EU General Court ("GC") dismissed an appeal by Holding Slovenske elektrarne d.o.o. ("HSE") against a European Commission decision of 22 July 2009 imposing a fine of € 9.1 million on HSE for its participation in a cartel in the calcium carbide and magnesium reagents market.
In its 2009 decision, the Commission imposed fines totalling € 61.1 million on nine companies for their participation, from April 2004 until January 2007, in a cartel involving market sharing, quota fixing, customer allocation, price fixing and the exchange of commercially sensitive information in the EEA, with the exception of Spain, Ireland, Portugal and the United Kingdom (see VBB on Competition Law, Volume 2009, No. 8, available at www.vbb.com). HSE was held liable for the unlawful conduct of its subsidiary TDR-Metalurgija d.d. ("TDR") from 7 April 2004 to 20 December 2006, as the Commission found that it had exercised decisive influence over the conduct of TDR during at least this period.
On appeal, HSE argued that the Commission had erred in law in applying the presumption of parent liability based on a parent company's shareholding in its subsidiary, since HSE owned 74.44% and not 100% of the shares of TDR. HSE also argued that the Commission had erroneously included a so-called "entry fee" in the fine in accordance with the 2006 Fining Guidelines, and that such an increase was not justified as HSE had not itself been directly involved in the infringement at issue. Finally, HSE argued that the Commission had failed to take into account mitigating circumstances in its calculation of the fine, such as the fact that HSE's shareholding in TDR had been transferred to it by a decision of the Slovenian government.
The GC rejected all the arguments made by HSE, and pointed out that the Commission had not relied on the shareholding presumption in the contested decision but rather on a number of indicia showing that HSE exercised decisive influence over TDR, such as the structural and organisational links between the two companies and the fact that HSE itself presented TDR as one of the companies that comprises the HSE group. Furthermore, the GC held that since TDR formed part of the same economic unit as HSE at the time of the infringement, HSE can be held liable for the unlawful conduct of TDR in such a way that it is deemed to have committed the infringement itself. The Commission was therefore correct to impose a fine on HSE which included the entry fee. Finally, the GC held that it is irrelevant how and why HSE became the majority shareholder of TDR. The GC found that, irrespective of the reasons for the formation of the economic unit between HSE and TDR, what is relevant is that the unit in question continued to exist during the infringement period. According to the GC, the mere fact that the Slovenian public authorities decided to transfer to HSE the majority shareholding in TDR does not mean that they authorised or encouraged the unlawful conduct of TDR, and this factor can therefore not be considered a mitigating circumstance for the purpose of the calculation of the fine.
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