On 26 October 2017, the Court of Justice of the European Union ("ECJ") dismissed appeals in the pre-stressing steel cartel case brought by four Spanish manufacturers belonging to the Spanish Celsa group (Global Steel Wire, Moreda-Riviere Trefilerías, Trefilerías Quijano and Trenzas y Cables de Acero). In the judgments, the Court rejected allegations that the General Court ("GC") had erred in upholding the Commission's infringement decision (see VBB on Competition Law, Volume 2016, No. 6, available at www.vbb.com), including in relation to the attribution of liability, the existence of a single and continuous infringement, the calculation of the fine and the applicants' ability to pay the fine (Joined Cases C-454/16 to C-456/16 P and C-458/16, Global Steel Wire and Others v Commission; Joined Cases C-457/16 and C-459/16 to C-461/16, Global Steel Wire and Others v Commission).
Under settled EU-case law, an undertaking may be held liable for violations of competition law committed by a subsidiary with a distinct legal identity, where the two nonetheless form part of a single economic unit. A subsidiary will be considered to form part of the same economic unit as its parent company where it does not determine its own market conduct independently, but instead follows the direction of its parent company. Where a parent company holds all or nearly all the capital of its subsidiary, EU law establishes a rebuttable presumption that the parent can, and in fact does, exercise decisive influence over the subsidiary's market conduct. A parent company can rebut this presumption by bringing forward sufficient evidence that its subsidiary acted autonomously on the market.
In the case at hand, the appellant companies contended that the GC had erred in law by imputing liability to Global Steel Wire (GSW) for infringements committed by several of its subsidiaries. First, they argued that the Commission had not effectively established the presumption of GSW's control over one of the infringing companies, Trefilerias Quijano (TQ), during part of the relevant period because it had failed to show that Trenzas y Cables de Acero, a company to which GSW was the successor, had controlled all or almost all of the capital of TQ during the period of the infringement. Second, the appellants contended that the GC had erred in its finding that their evidence of autonomous conduct – largely in the form of statements from company directors – was insufficient to reverse the presumption that GSW had exercised decisive influence over subsidiaries Trenzas y Cables and Tysca PSC.
In its judgment, the ECJ affirmed that the Commission's finding of decisive influence of a parent company over its subsidiary need not be exclusively based on the presumption created by the parent's control of the subsidiary's capital. Rather, it can be based on a combination of other factors taken alone, or in combination with the presumption.
The ECJ consequently held that the Commission had already established GSW's liability for the relevant time period through other means – first as successor to Trenzas y Cables de Acero, which had participated directly in the infringement, and later through its exercise of decisive influence over its wholly-owned subsidiary Trenzas y Cables and its subsidiary Tysca PSC. Consequently, the ECJ found that the Commission did not need to establish Trenzas y Cables de Acero's exercise of decisive influence over TQ to establish GSW's liability for the full period of the infringement. Moreover, the ECJ held that, while the GC had considered the probative value of the declarations the appellants had submitted in seeking to rebut GSW's presumptive exercise of decisive influence over Trenzas y Cables and Tysca PSC, it had weighed this against a variety of other factors showing the existence of a single economic unit between GSW and those subsidiaries during the relevant period.
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