In a decision of December 6, 2018, the General Court of the European Union concludes that under the personal liability principle, the seller of assets or shares, although it continues to exist legally and economically at the time of the decision, will be held liable for the anticompetitive practices committed prior to the sale.
In this case, the Commission jointly sentenced Coveris and its parent company Huhtamäki Oyj for restrictive practices committed in France, on the market of polystyrene trays, between 2004 and 2005.
Coveris had appealed arguing that in 2006, i.e. after the end of the practices, Coveris had sold its assets to Ono Packaging, a third party company to the group, whereas the shares of another Portuguese subsidiary of the Huhtamäki group were sold to Ono Packaging's parent company, on the same day.
For Coveris, the Commission should have designated the purchaser, Ono Packaging, as liable for the infringement, on the principle of economic continuity.
The Court first considered that, even if after the transfer of part of its assets to Ono Packaging, Coveris had ceased to be active on the market of polystyrene trays, it nevertheless continued to exist legally and economically. Under the personal liability principle, Coveris was therefore liable for the infringement committed in France.
The Court thus concluded that the liability for anticompetitive practices follows these assets solely in the exceptional case where the legal entity which held these assets ceases to exist legally or economically, which was not the case here.
Moreover, it pointed out that companies cannot escape sanctions by modifying their identity through restructuring, sales or other legal or organizational changes. Thus, as Coveris and Ono Packaging did not have any structural ties at the time of the sale of the assets, the latter could not be sanctioned due to an intragroup transfer.
Finally, the Court underlines that charging an independent third party purchaser with an offense could only be admitted exceptionally in the name of the principle of economic continuity, for example in a transfer of assets between two companies in bad faith, seeking to escape sanctions. However, this was not the case here.
The purchaser can thus have the seller bear the fines for the anticompetitive practices committed before the sale, provided naturally that these practices did indeed cease before the sale. If they continue, the purchaser will bear the consequences thereof for the post-closing period.
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